Exhibit 10.88
 
MASTER REPURCHASE AGREEMENT
Dated as of November 1, 2007
Between:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., as Buyer,
and
PHH MORTGAGE CORPORATION, as Seller
 

 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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TABLE OF CONTENTS

                              Page     1.    
APPLICABILITY
    1     2.    
DEFINITIONS AND ACCOUNTING MATTERS
    1     3.    
THE TRANSACTIONS
    19     4.    
PAYMENTS; COMPUTATION; COMMITMENT AND NON-UTILIZATION FEES
    23     5.    
TAXES; TAX TREATMENT
    23     6.    
MARGIN MAINTENANCE
    25     7.    
INCOME PAYMENTS
    25     8.    
SECURITY INTEREST; BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT
    26     9.    
CONDITIONS PRECEDENT
    29     10.    
RELEASE OF PURCHASED LOANS
    33     11.    
RELIANCE
    34     12.    
REPRESENTATIONS AND WARRANTIES
    34     13.    
COVENANTS OF SELLER
    39     14.    
REPURCHASE DATE PAYMENTS
    48     15.    
REPURCHASE OF PURCHASED LOANS
    48     16.    
SUBSTITUTION
    48     17.    
EVENT OF TERMINATION
    49     18.    
EVENTS OF DEFAULT
    49     19.    
REMEDIES
    52     20.    
DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE
    55     21.    
NOTICES AND OTHER COMMUNICATIONS
    55     22.    
USE OF EMPLOYEE PLAN ASSETS
    55     23.    
INDEMNIFICATION AND EXPENSES
    55     24.    
WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS
    57     25.    
REIMBURSEMENT
    57     26.    
FURTHER ASSURANCES
    57     27.    
TERMINATION
    57     28.    
SEVERABILITY
    58     29.    
BINDING EFFECT; GOVERNING LAW
    58     30.    
AMENDMENTS
    58     31.    
SUCCESSORS AND ASSIGNS
    58     32.    
SURVIVAL
    58     33.    
CAPTIONS
    59     34.    
COUNTERPARTS
    59     35.    
SUBMISSION TO JURISDICTION; WAIVERS
    59     36.    
WAIVER OF JURY TRIAL
    59     37.    
ACKNOWLEDGEMENTS
    60     38.    
HYPOTHECATION OR PLEDGE OF PURCHASED ITEMS
    60     39.    
ASSIGNMENTS; PARTICIPATIONS
    60     40.    
SINGLE AGREEMENT
    61  

 -i- 

 

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                              Page     41.    
INTENT
    61     42.    
CONFIDENTIALITY
    62     43.    
SERVICING
    62     44.    
PERIODIC DUE DILIGENCE REVIEW
    63     45.    
SET-OFF
    64     46.    
ENTIRE AGREEMENT
    64  

         
 
        SCHEDULES    
 
       
 
  SCHEDULE 1-A   Representations and Warranties re: Loans
 
  SCHEDULE 1-B   Representations and Warranties re: Fannie Mae Loans
 
  SCHEDULE 1-C   Representations and Warranties re: Freddie Mac Loans
 
  SCHEDULE 2   Filing Jurisdictions and Offices
 
  SCHEDULE 3   Relevant States
 
  SCHEDULE 4   Subsidiaries
 
  SCHEDULE 5   Litigation
 
  SCHEDULE 6   Approved Originators
 
        EXHIBITS    
 
       
 
  EXHIBIT A   Forms of Quarterly Certification
 
  EXHIBIT B   Form of Custodial Agreement
 
  EXHIBIT C   Form of Opinion of Counsel to Seller
 
  EXHIBIT D   Form of Transaction Notice
 
  EXHIBIT E   Underwriting Guidelines
 
  EXHIBIT F   Required Fields for Servicing Transmission
 
  EXHIBIT G   Required Fields for Loan Schedule 
 
  EXHIBIT H   Form of Confidentiality Agreement
 
  EXHIBIT I   Form of Instruction Letter
 
  EXHIBIT J   Form of Master Netting Agreement
 
  EXHIBIT K   Form of Security Release Certification

 -ii- 

 

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     MASTER REPURCHASE AGREEMENT, dated as of November 1, 2007, between PHH
Mortgage Corporation, a New Jersey corporation, as seller (“Seller”), and
Greenwich Capital Financial Products, Inc., a Delaware corporation (“Buyer”,
which term shall include any “Principal” as defined and provided for in Annex
I), or as agent pursuant hereto (“Agent”).
1. APPLICABILITY
     Buyer shall, from time to time, upon the terms and conditions set forth
herein, agree to enter into transactions in which Seller transfers to Buyer
Eligible Loans against the transfer of funds by Buyer, with a simultaneous
agreement by Buyer to transfer to Seller Purchased Loans at a date certain,
against the transfer of funds by Seller. Each such transaction shall be referred
to herein as a “Transaction”, and, unless otherwise agreed in writing, shall be
governed by this Agreement.
2. DEFINITIONS AND ACCOUNTING MATTERS
     (a) Defined Terms. As used herein, the following terms have the following
meanings (all terms defined in this Section 2 or in other provisions of this
Agreement in the singular to have the same meanings when used in the plural and
vice versa):
     “Accepted Servicing Practices” shall mean with respect to any Loan, those
accepted and prudent mortgage servicing practices (including collection
procedures) of prudent mortgage lending institutions which service mortgage
loans of the same type as the Loans in the jurisdiction where the related
Mortgaged Property is located, and which are in accordance with Fannie Mae
servicing practices and procedures for MBS pool mortgages, as defined in the
Fannie Mae servicing guides including future updates, and in a manner at least
equal in quality to the servicing Seller or Seller’s designee provides to
mortgage loans which they own in their own portfolio.
     “Adjustable Rate Loan” shall mean a Loan which provides for the adjustment
of the Mortgage Interest Rate payable in respect thereto.
     “Adjustment Date” shall mean with respect to each Adjustable Rate Loan, the
date set forth in the related Note on which the Mortgage Interest Rate on the
Loan is adjusted in accordance with the terms of the Note.
     “Affiliate” shall mean, with respect to any Person, any Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, a Person shall be deemed to
be “controlled by” another if such later Person possesses, directly or
indirectly, power either (a) to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the directors (or their
equivalent) of such controlled Person, or (b) to direct or cause the direction
of the management or policies of such controlled Person, whether by contract or
otherwise.
     “Agency Guidelines” shall mean the Ginnie Mae Guidelines, the Fannie Mae
Guidelines and the Freddie Mac Guidelines, in each case as such guidelines have
been or may be amended, supplemented or otherwise modified from time to time
(i) by Ginnie Mae, Fannie Mae or Freddie Mac, as applicable, in the ordinary
course of business and, with respect to material amendments,

 

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supplements or other modifications, as to which Buyer shall not have reasonably
objected or (ii) by Ginnie Mae, Fannie Mae or Freddie Mac, as applicable, at the
request of Seller and as to which (x) Seller has given notice to Buyer of any
such material amendment, supplement or other modification and (y) Buyer shall
not have reasonably objected.
     “Agency” shall mean Ginnie Mae, Fannie Mae or Freddie Mac.
     “Agent” shall have the meaning set forth in the preamble to this Agreement.
     “Aggregate Trust Receipt” shall have the meaning set forth in the Custodial
Agreement.
     “Agreement” shall mean this Master Repurchase Agreement (including all
exhibits, schedules and other addenda hereto or thereto), as supplemented by the
Pricing Side Letter, as it may be amended, further supplemented or otherwise
modified from time to time in accordance with the terms hereof.
     “ALTA” shall mean the American Land Title Association.
     “Applicable Margin” shall have the meaning set forth in the Pricing Side
Letter.
     “Appraised Value” shall mean the value set forth in an appraisal made in
connection with the origination of the related Loan as the value of the
Mortgaged Property (or the related Cooperative Unit in the case of a Cooperative
Loan).
     “Approved Originator” means each of the mortgage loan originating
institutions listed on Schedule 6 hereto.
     “Assignment of Mortgage” shall mean, with respect to any Mortgage, an
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the assignment of the Mortgage
to Buyer.
     “Attorney Bailee Letter” shall have the meaning assigned to the term
“Bailee Letter” in the Custodial Agreement.
     “Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as
amended from time to time.
     “Best’s” shall mean Best’s Key Rating Guide, as the same shall be amended
from time to time.
     “Bishop’s Gate Facility” shall mean the liquidity facility described in
that certain Second Amended and Restated Mortgage Loan Purchase and Servicing
Agreement dated as of October 31, 2000 among Bishop’s Gate Residential Mortgage
Trust, as Buyer, PHH Mortgage Corporation, as Seller and Servicer, and PHH
Corporation, as Guarantor, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.

2

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     “Business Day” shall mean any day other than a Saturday or Sunday or other
day on which banks in New York City or the State of Connecticut are permitted or
required by law to close.
     “Cash Equivalents” shall mean (a) securities with maturities of 90 days or
less from the date of acquisition issued or fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of any commercial bank having capital
and surplus in excess of $500,000,000, (c) repurchase obligations of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than seven days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d) commercial
paper of a domestic issuer rated at least A-1 or the equivalent thereof by
Standard and Poor’s Ratings Group (“S&P”) or P-1 or the equivalent thereof by
Moody’s Investors Service, Inc. (“Moody’s”) and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s, (f) securities with maturities of
90 days or less from the date of acquisition backed by standby letters of credit
issued by any commercial bank satisfying the requirements of clause (b) of this
definition or, (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
     “Change of Control” shall mean (i) the acquisition by any Person or group
(within the meaning of the Securities Exchange Act of 1934, as amended, and the
rules of the Securities and Exchange Commission thereunder as in effect on the
Effective Date), directly or indirectly, beneficially or of record, of ownership
or control of in excess of 50% of the voting common stock of the Seller on a
fully diluted basis at any time or (ii) if at any time, individuals who at the
Effective Date constituted the Board of Directors of the Seller (together with
any new directors whose election by such Board of Directors or whose nomination
for election by the shareholders of the Seller, as the case may be, was approved
by a vote of the majority of the directors then still in office who were either
directors at the Effective Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Seller then in office.
     “Chesapeake Facility” shall mean the liquidity facility described in that
certain Base Indenture, dated as of March 7, 2006, between Chesapeake Funding
LLC (now known as Chesapeake Finance Holdings LLC), as Issuer, and JPMorgan
Chase Bank, N.A., as Indenture Trustee, as supplemented by that certain
Series 2006-1 Indenture Supplement dated as of March 7, 2006 and that certain
Series 2006-2 Indenture Supplement dated as of March 7, 2006, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
     “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time.

3

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     “Collection Account” shall mean the following account established by Seller
in accordance with Section 13(ii) for the benefit of Buyer, “Greenwich Capital
Financial Products, Inc. P&I account Account [***]”.
     “Collection Account Control Agreement” shall mean the collection account
control agreement dated as of November 1, 2007 among Buyer, Seller and The Bank
of New York, in form and substance acceptable to Buyer to be entered into with
respect to the Collection Account.
     “Combined Loan to Value Ratio” or “CLTV” shall mean (x) with respect to any
Eligible Loan, the ratio expressed as a percentage of (i) if the loan
transaction is a purchase money transaction (a) that includes an appraisal, the
initial principal amount plus the amount of any other loan which is secured by a
lien on the related Mortgaged Property, divided by the lesser of the Appraised
Value or the purchase price of the Mortgaged Property, or (b) if such
transaction does not include an appraisal, the initial principal amount plus the
amount of any other loan which is secured by a lien on the related Mortgaged
Property, divided by the purchase price of the Mortgaged Property; and (ii) if
the loan transaction is a refinance (a) that includes an appraisal, the initial
principal amount plus the amount of any other loan which is secured by a lien on
the related Mortgaged Property, divided by the Appraised Value, or (b) with
respect to any Landscape Loan that does not include an appraisal, the initial
principal amount plus the amount of any other loan which is secured by a lien on
the related Mortgaged Property, divided by the estimated value (as determined by
the related Mortgagor and confirmed by Fannie Mae) of the Mortgaged Property.
     “Commitment Fee” shall have the meaning assigned to it in Section 4(c).
     “Committed Amount” shall mean $1,000,000,000.
     “Commonly Controlled Entity” shall mean an entity, whether or not
incorporated, which is under common control with Seller within the meaning of
Section 4001 of ERISA or is part of a group which includes Seller and which is
treated as a single employer under Section 414 of the Code.
     “Confirmation” shall have the meaning assigned thereto in Section 3(a)
hereof.
     “Conforming Loan” shall mean a Loan which conforms to Agency Guidelines.
     “Consolidated Net Income” shall mean, for any period for which such amount
is being determined, the net income (loss) of the Seller or the Guarantor and
its Consolidated Subsidiaries during such period determined on a consolidated
basis for such period taken as a single accounting period in accordance with
GAAP, provided that there shall be excluded (i) income (or loss) of any Person
(other than a Consolidated Subsidiary) in which the Seller or the Guarantor or
any of its Consolidated Subsidiaries has an equity investment or comparable
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Seller or the Guarantor or its Consolidated Subsidiaries by
such Person during such period, (ii) the income (or loss) of any Person accrued
prior to the date it becomes a Consolidated Subsidiary or is merged into or
consolidated with the Seller or the Guarantor or any of its Consolidated
Subsidiaries or the Person’s assets are acquired by the Seller or the Guarantor
or any of its
                    
[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

4

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Consolidated Subsidiaries, (iii) the income of any Consolidated Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by that Consolidated Subsidiary of the income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Consolidated Subsidiary, (iv) any extraordinary after tax gains and (v) any
extraordinary pretax losses but only to the extent attributable to a write down
of financing costs relating to any existing and future indebtedness.
     “Consolidated Net Worth” shall mean, at any date of determination, all
amounts which would be included on a balance sheet of the Seller or the
Guarantor and its Consolidated Subsidiaries, as applicable, under stockholders’
equity as of such date in accordance with GAAP.
     “Consolidated Subsidiaries” shall mean the subsidiaries of the Guarantor
that are required to be consolidated with the Guarantor for financial reporting
purposes in accordance with GAAP.
     “Contractual Obligation” shall mean as to any Person, any material
provision of any agreement, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound or any material
provision of any security issued by such Person.
     “Cooperative Corporation” shall mean with respect to any Cooperative Loan,
the cooperative apartment corporation that holds legal title to the related
Cooperative Project and grants occupancy rights to units therein to stockholders
through Proprietary Leases or similar arrangements.
     “Cooperative Loan” shall mean a Loan that is secured by a First Lien on and
perfected security interest in Cooperative Shares and the related Proprietary
Lease granting exclusive rights to occupy the related Cooperative Unit in the
building owned by the related Cooperative Corporation.
     “Cooperative Project” shall mean, with respect to any Cooperative Loan, all
real property and improvements thereto and rights therein and thereto owned by a
Cooperative Corporation including without limitation the land, separate dwelling
units and all common elements.
     “Cooperative Shares” shall mean, with respect to any Cooperative Loan, the
shares of stock issued by a Cooperative Corporation and allocated to a
Cooperative Unit and represented by a stock certificate.
     “Cooperative Unit” shall mean, with respect to a Cooperative Loan, a
specific unit in a Cooperative Project.
     “Custodial Agreement” shall mean the Tri-Party Custody Agreement, dated as
of November 1, 2007, among Seller, Buyer, and Custodian as the same shall be
amended, modified or supplemented from time to time in accordance with the terms
thereof.
     “Custodian” shall mean The Bank of New York Trust Company, National
Association, or its successors and permitted assigns, or any successor custodian
appointed by the Buyer and Seller to act as custodian under this Agreement.

5

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     “Custodian Loan Transmission” shall have the meaning assigned thereto in
the Custodial Agreement.
     “Default” shall mean an Event of Default or any event, that, with the
giving of notice or the passage of time or both, would become an Event of
Default.
     “Dollars” or “$” shall mean lawful money of the United States of America.
     “Dry Loan” shall mean a first lien Loan which is underwritten in accordance
with the Underwriting Guidelines and as to which the related Mortgage File
contains all required Loan Documents.
     “Due Date” shall mean the day of the month on which the Monthly Payment is
due on a Loan, exclusive of any days of grace.
     “Due Diligence Review” shall mean the performance by Buyer of any or all of
the reviews permitted under Section 44 hereof with respect to any or all of the
Loans or Seller or related parties, as desired by Buyer from time to time.
     “Early Termination Date” shall have the meaning assigned thereto in
Section 17.
     “Effective Date” shall mean the date upon which the conditions precedent
set forth in Section 9(a) have been satisfied.
     “Electronic Tracking Agreement” shall mean the electronic tracking
agreement among Buyer, Seller, MERSCORP, Inc. and MERS, in form and substance
acceptable to Buyer to be entered into in the event that any of the Loans become
MERS Loans; provided that if no Loans are or will be MERS Loans, all references
herein to the Electronic Tracking Agreement shall be disregarded.
     “Electronic Transmission” shall mean the delivery of information in an
electronic format acceptable to the applicable recipient thereof. An Electronic
Transmission shall be considered written notice for all purposes hereof (except
when a request or notice by its terms requires execution).
     “Eligible Loan” shall have the meaning assigned thereto in the Pricing Side
Letter.
     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
     “ERISA Affiliate” shall mean any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which Seller is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which Seller is a
member.

6

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     “Escrow Payments” shall mean, with respect to any Loan, the amounts
constituting ground rents, taxes, assessments, water charges, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the Mortgagee pursuant to the terms of any Note or Mortgage
or any other document.
     “Event of Default” shall have the meaning provided in Section 18 hereof.
     “Event of Termination” shall have the meaning provided in Section 17
hereof.
     “Exception” shall have the meaning assigned thereto in the Custodial
Agreement.
     “Exception Report” shall mean the exception report prepared by the
Custodian pursuant to the Custodial Agreement.
     “Fannie Mae” shall mean Fannie Mae, or any successor thereto.
     “Fannie Mae Guidelines” shall mean the FNMA Selling and Servicing Guides
and all amendments or additions thereto.
     “Fannie Mae Loan” shall mean a Loan that meets the Fannie Mae Guidelines.
     “First Lien” shall mean with respect to each Mortgaged Property, the lien
of the mortgage, deed of trust or other instrument securing a mortgage note
which creates a first lien on the Mortgaged Property.
     “FNMA Account Bank” shall mean The Bank of New York and its successors and
assigns.
     “FNMA Direction Letter” shall mean a letter from Seller to Fannie Mae
directing Fannie Mae to deposit the purchase price and all other amounts
relating to any purchase of Landscape Loans by Fannie Mae from Seller (whether
pursuant to take-out commitments or otherwise) directly to the FNMA Loan
Purchase Account, as the same may be amended, supplemented or otherwise modified
with the prior written consent of Buyer.
     “FNMA Loan Purchase Account” shall mean the following account established
by Seller in accordance with Section 13(jj) for the benefit of Buyer, “PHH
Mortgage Corporation FNMA Loan Purchase Account; Account [***]”.
     “FNMA Loan Purchase Account Control Agreement” shall mean the account
control agreement dated as of November 1, 2007 among Buyer, Seller and the FNMA
Account Bank, in form and substance acceptable to Buyer to be entered into with
respect to the FNMA Loan Purchase Account.
     “FNMA Loan Purchase Proceeds” shall mean all amounts paid by Fannie Mae to
or upon the direction of Seller in connection with Fannie Mae’s purchase from
Seller of any Landscape Loans.
                    
[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

7

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     “FNMA Loan Purchase Proceeds—GCFP” shall mean all amounts paid by Fannie
Mae to or upon the direction of Seller in connection with Fannie Mae’s purchase
from Seller of any Landscape Loans that are subject to Transactions under this
Agreement immediately prior to such purchase.
     “Freddie Mac” shall mean Freddie Mac, or any successor thereto.
     “Freddie Mac Guidelines” shall mean the Federal Home Loan Mortgage
Corporation Seller’s Guide and the Federal Home Loan Mortgage Corporation
Servicers’ Guide and all amendments or additions thereto.
     “Freddie Mac Loan” shall mean a Loan that meets the Freddie Mac Guidelines.
     “GAAP” shall mean generally accepted accounting principles in effect from
time to time in the United States of America
     “GCFP Sub-Account” shall mean the following sub-account established by
Seller in accordance with Section 13(kk) for the benefit of Buyer, “Greenwich
Capital Financial Products, Inc. FNMA Loan Purchase Account; Account [***],
Sub-Account [***]”.
     “Ginnie Mae” shall mean the Government National Mortgage Association or any
successor thereto.
     “Ginnie Mae Guides” shall mean the GNMA Handbooks 5500.3 and all amendments
or additions thereto.
     “Governmental Authority” shall mean with respect to any Person, any nation
or government, any state or other political subdivision, agency or
instrumentality thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
court or arbitrator having jurisdiction over such Person, any of its
Subsidiaries or any of its properties.
     “Gross Margin” shall mean with respect to each Adjustable Rate Loan, the
fixed percentage amount set forth in the related Note and the Loan Schedule that
is added to the Index on each Adjustment Date in accordance with the terms of
the related Note to determine the new Mortgage Interest Rate for such Loan.
     “Guarantee” shall mean, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person or
otherwise protecting the holder of such Indebtedness against loss (whether by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, or to take-or-pay or otherwise), provided
that the term “Guarantee” shall not include (i) endorsements for collection or
deposit in the ordinary course of business, or (ii) obligations to make
servicing advances for delinquent taxes and insurance, or other obligations in
respect of a Mortgaged Property, to the extent required by Buyer. The amount of
any Guarantee of a Person shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated
liability
                    
[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

8

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in respect thereof as determined by such Person in good faith. The terms
“Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
     “Guarantor” shall mean PHH Corporation, a Maryland corporation, and its
successors and permitted assigns.
     “Guaranty” shall mean the Guaranty Agreement of the Guarantor in favor of
Buyer, dated as of November 1, 2007, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
     “Income” shall mean, with respect to any Purchased Loan at any time, any
principal and/or interest thereon and all dividends, sale proceeds (including,
without limitation, any FNMA Loan Purchase Proceeds, proceeds from the
securitization of such Purchased Loan or other disposition thereof) and other
collections and distributions thereon (including, without limitation, any
proceeds received in respect of mortgage insurance), but not including any
commitment fees, origination fees and/or servicing fees accrued in respect of
periods on or after the initial Purchase Date with respect to such Purchased
Loan or any Escrow Payments.
     “Indebtedness” shall mean (i) all indebtedness, obligations and other
liabilities of the Guarantor and it Consolidated Subsidiaries which are, at the
date as of which Indebtedness is to be determined, includable as liabilities in
a consolidated balance sheet of the Guarantor and its Consolidated Subsidiaries,
other than (w) accounts payable and accrued expenses in the ordinary course of
business, (x) current and deferred income taxes and other similar liabilities
and (y) minority interest, plus (ii) without duplicating any items included in
Indebtedness pursuant to the foregoing clause (i), the maximum aggregate amount
of all liabilities of the Guarantor and its Consolidated Subsidiaries under any
Guarantee, indemnity or similar undertaking given or assumed of, or in respect
of, the indebtedness, obligations and other liabilities, assets, revenues,
income or dividends of any Person other than the Guarantor or one of its
Consolidated Subsidiaries and (iii) all other obligations or liabilities of the
Guarantor or any of its Consolidated Subsidiaries in relation to the discharge
of the obligations of any Person other than the Guarantor or any of its
Consolidated Subsidiaries.
     “Index” shall mean with respect to each Adjustable Rate Loan, the index
identified on the related Loan Schedule and set forth in the related Note for
the purpose of calculating the interest rate thereon.
     “Instruction Letter” shall mean a letter agreement between Seller and each
Subservicer substantially in the form of Exhibit I attached hereto.
     “Insurance Proceeds” shall mean with respect to each Loan, proceeds of
insurance policies insuring the Loan or the related Mortgaged Property.
     “Interest Only Loan” means a Loan which, by its terms, requires the related
Mortgagor to make monthly payments of only accrued interest for a certain period
of time following origination. After such interest-only period, the loan terms
provide that the Mortgagor’s monthly payment will be recalculated to cover both
interest and principal so that such Loan will amortize fully on or prior to its
final payment date.

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     “Interest Period” shall mean, with respect to any Transaction, the period
commencing on the Purchase Date with respect to such Transaction and ending on
the calendar day prior to the related Repurchase Date. Notwithstanding the
foregoing, no Interest Period may end after the Termination Date.
     “Investment Company Act” shall mean the Investment Company Act of 1940, as
amended, including all rules and regulations promulgated thereunder.
     “Jumbo A Credit Loan” means a Loan originated in accordance with the
Underwriting Guidelines for Jumbo A product.
     “Landscape Loan” shall mean a Loan that substantially conforms to the
Agency Guidelines, except (i) maintenance of a PMI Policy may not be required,
(ii) such Loan may be not an FHA Loan or VA Loan and (iii) if not required by
Agency Guidelines, there may be not be an appraisal of the related Mortgage
Property.
     “LIBO Base Rate” shall mean with respect to each day on which a Transaction
is outstanding (or if such day is not a Business Day, the next succeeding
Business Day), the rate per annum equal to the rate published by Bloomberg or if
such rate is not available, the rate appearing at page 3750 of the Telerate
Screen, as one-month LIBOR on such date, and if such rate shall not be so
quoted, the rate per annum at which Buyer is offered Dollar deposits at or about
11:00 A.M., New York City time, on such date by prime banks in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations in respect of its Transactions are then being conducted for delivery
on such day for a period of one month and in an amount comparable to the amount
of the Transactions to be outstanding on such day.
     “LIBO Rate” shall mean with respect to each Interest Period pertaining to a
Transaction, a rate (reset on a monthly basis) per annum determined by Buyer in
its sole discretion in accordance with the following formula (rounded upwards to
the nearest l/100th of one percent), which rate as determined by Buyer shall be
conclusive absent manifest error by Buyer:

             
 
      LIBO Base Rate              
 
      1.00 – LIBO Reserve Requirements    

     The LIBO Rate shall be calculated on each Purchase Date and Repurchase Date
commencing with the first Purchase Date.
     “LIBO Reserve Requirements” shall mean for any Interest Period for any
Transaction, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements applicable to Buyer in effect on such
day (including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
System or other Governmental Authority having jurisdiction with respect
thereto), dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of such
Board) maintained by a member bank of such Governmental Authority. As of the
Effective Date, the LIBO Reserve Requirements shall be deemed to be zero.

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     “Lien” shall mean any mortgage, lien, pledge, charge, security interest or
similar encumbrance.
     “Loan” shall mean a first lien mortgage loan or Cooperative Loan which the
Custodian has been instructed to hold for Buyer pursuant to the Custodial
Agreement, and which Loan includes, without limitation, (i) a Note, the related
Mortgage and all other Loan Documents and (ii) all right, title and interest of
Seller in and to the Mortgaged Property covered by such Mortgage.
     “Loan Documents” shall mean, with respect to a Loan, the documents
comprising the Mortgage File for such Loan.
     “Loan Schedule” shall mean a hard copy or electronic format incorporating
the fields identified on Exhibit G, any other information required by Buyer and
any other additional information to be provided pursuant to the Custodial
Agreement.
     “Loan to Value Ratio” or “LTV” shall mean (x) with respect to any Eligible
Loan, the ratio expressed as a percentage of (i) if the loan transaction is a
purchase money transaction (a) that includes an appraisal, the initial principal
amount divided by the lesser of the Appraised Value or the purchase price of the
Mortgaged Property, or (b) if such transaction does not include an appraisal,
the initial principal amount divided by the purchase price of the Mortgaged
Property; and (ii) if the loan transaction is a refinance (a) that includes an
appraisal, the initial principal amount divided by the Appraised Value, or
(b) with respect to any Landscape Loan that does not include an appraisal, the
initial principal amount divided by the estimated value (as determined by the
related Mortgagor and confirmed by Fannie Mae) of the Mortgaged Property.
     “Margin Call” shall have the meaning assigned thereto in Section 6(a)
hereof.
     “Margin Deficit” shall have the meaning assigned thereto in Section 6(a)
hereof.
     “Market Value” shall mean the value, determined in good faith by Buyer in
its sole reasonable discretion, of the Loans if sold in their entirety to a
single third-party Buyer under circumstances in which Seller is in default under
this Agreement. Buyer’s determination of Market Value shall be conclusive upon
the parties, absent manifest error on the part of Buyer. Buyer shall have the
right to mark to market the Loans on a daily basis which Market Value with
respect to one or more of the Loans may be determined to be zero. Seller
acknowledges that Buyer’s determination of Market Value is for the limited
purpose of determining the value of Purchased Loans which are subject to
Transactions hereunder without the ability to perform customary purchaser’s due
diligence and is not necessarily equivalent to a determination of the fair
market value of the Loans achieved by obtaining competing bids in an orderly
market in which the originator/servicer is not in default under a revolving debt
facility and the bidders have adequate opportunity to perform customary loan and
servicing due diligence. The Market Value shall be deemed to be zero with
respect to each Loan that is not an Eligible Loan.
     “Master Netting Agreement” shall mean the letter agreement among Buyer,
Seller and certain Affiliates and Subsidiaries of Buyer and/or Seller, in the
form attached hereto as Exhibit J, as it may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.

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     “Material Adverse Effect” shall mean a material adverse effect on (a) the
property, business, operations or financial condition of Seller or Guarantor
(b) the ability of Seller or Guarantor to perform its obligations under any of
the Program Documents to which it is a party, (c) the validity or enforceability
of any of the Program Documents, (d) the rights and remedies of Buyer under any
of the Program Documents, (e) the timely repurchase of the Purchased Loans or
payment of other amounts payable in connection therewith, (f) the Purchased
Items in the aggregate or (g) if so specified in any provision of this Agreement
or any other Program Document, any Purchased Item.
     “Maximum Aggregate Purchase Price” shall mean the Committed Amount.
     “Maximum Mortgage Interest Rate” shall mean with respect to each Adjustable
Rate Loan, a rate that is set forth on the related Loan Schedule and in the
related Note and is the maximum interest rate to which the Mortgage Interest
Rate on such Loan may be increased on any Adjustment Date.
     “MERS” shall mean Mortgage Electronic Registration Systems, Inc., a
Delaware corporation, or any successor in interest thereto.
     “MERS Identification Number” shall mean the eighteen digit number
permanently assigned to each MERS Loan.
     “MERS Loan” shall mean any Loan as to which the related Mortgage or
Assignment of Mortgage has been recorded in the name of MERS, as agent for the
holder from time to time of the Note, and which is identified as a MERS Loan on
the related Schedule.
     “Monthly Payment” shall mean the scheduled monthly payment of principal and
interest on a Loan as adjusted in accordance with changes in the Mortgage
Interest Rate pursuant to the provisions of the Note for an Adjustable Rate
Loan.
     “Mortgage” shall mean with respect to a Loan, the mortgage, deed of trust
or other instrument, which creates a First Lien on either (i) with respect to a
Loan other than a Cooperative Loan, the fee simple or leasehold estate in such
real property or (ii) with respect to a Cooperative Loan, the Proprietary Lease
and related Cooperative Shares, which in either case secures the Note.
     “Mortgage File” shall mean, as to each Mortgage Loan subject to this
Agreement, the Required Documents and all other documents relating to such
Mortgage Loan that are held by the Custodian pursuant to the Custodial
Agreement.
     “Mortgage Interest Rate” means the annual rate of interest borne on a Note,
which shall be adjusted from time to time with respect to Adjustable Rate Loans.
     “Mortgaged Property” shall mean the real property (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing) and all other collateral securing repayment of the
debt evidenced by a Note.

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     “Mortgagee” shall mean the record holder of a Note secured by a Mortgage.
     “Mortgagor” shall mean the obligor or obligors on a Note, including any
person who has assumed or guaranteed the obligations of the obligor thereunder.
     “Multiemployer Plan” shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to be
made by Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.
     “MV Margin Amount” means, with respect to any Transaction, as of any date
of determination, the amount obtained by application of the MV Margin Percentage
to the Repurchase Price (reduced by the amount of any accrued and unpaid Price
Differential) for such Transaction as of such date.
     “MV Margin Percentage” shall have the meaning assigned thereto in the
Pricing Side Letter.
     “Negative Amortization” shall mean with respect to each Negative
Amortization Loan, that portion of interest accrued at the Mortgage Interest
Rate in any month which exceeds the Monthly Payment on the related Loan for such
month and which, pursuant to the terms of the Note, is added to the principal
balance of the Loan.
     “Negative Amortization Loan” shall mean each Loan that may be subject to
Negative Amortization.
     “Non-Utilization Fee” shall have the meaning assigned to it in
Section 4(d).
     “Note” shall mean, with respect to any Loan, the related promissory note
together with all riders thereto and amendments thereof or other evidence of
indebtedness of the related Mortgagor.
     “Notice of Termination” shall have the meaning assigned thereto in
Section 17.
     “Obligations” shall mean (a) all of Seller’s obligation to pay the
Repurchase Price on the Repurchase Date and other obligations and liabilities of
Seller to Buyer, its Affiliates, the Custodian or any other Person arising
under, or in connection with, the Program Documents or directly related to the
Purchased Loans, whether now existing or hereafter arising; (b) any and all sums
paid by Buyer or on behalf of Buyer pursuant to the Program Documents in order
to preserve any Purchased Loan or its interest therein; (c) in the event of any
proceeding for the collection or enforcement of any of Seller’s indebtedness,
obligations or liabilities referred to in clause (a), the reasonable expenses of
retaking, holding, collecting, preparing for sale, selling or otherwise
disposing of or realizing on any Purchased Loan, or of any exercise by Buyer or
any Affiliate of Buyer of its rights under the Program Documents, including
without limitation, reasonable attorneys’ fees and disbursements and court
costs; and (d) all of Seller’s indemnity obligations to Buyer pursuant to the
Program Documents.
     “Participants” shall have the meaning assigned thereto in Section 39
hereof.

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     “Payment Adjustment Date” With respect to each Negative Amortization Loan,
the date on which Monthly Payments shall be adjusted. A Payment Adjustment Date
with respect to a Negative Amortization Loan shall occur on the dates specified
on the Loan Schedule.
     “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
     “Permitted Exceptions” shall mean the following exceptions to lien
priority: (i) the lien of current real property taxes and assessments not yet
due and payable; (ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
acceptable to mortgage lending institutions generally and specifically referred
to in the lender’s title insurance policy delivered to the originator of the
Loan and (A) referred to or otherwise considered in the appraisal (if any) made
for the originator of the Loan or (B) which do not adversely affect the
appraised value of the Mortgaged Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property.
     “Person” shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).
     “Plan” shall mean an employee benefit or other plan established or
maintained by either Seller or any ERISA Affiliate and that is covered by
Title IV of ERISA, other than a Multiemployer Plan.
     “PMI Policy” or “Primary Insurance Policy” shall mean a policy of primary
mortgage guaranty insurance issued by a Qualified Insurer.
     “Post-Default Rate” shall mean, in respect of the Repurchase Price for any
Transaction or any other amount under this Agreement, or any other Program
Document that is not paid when due to Buyer (whether at stated maturity, by
acceleration or mandatory prepayment or otherwise), a rate per annum during the
period from and including the due date to but excluding the date on which such
amount is paid in full equal to 4% per annum, plus (a)(i) the Pricing Rate
otherwise applicable to such Loan or other amount, or (ii) if no Pricing Rate is
otherwise applicable, the LIBO Rate plus (b) the Applicable Margin.
     “Price Differential” shall mean, with respect to each Transaction as of any
date of determination, the aggregate amount obtained by daily application of the
Pricing Rate (or during the continuation of an Event of Default, by daily
application of the Post-Default Rate) for such Transaction to the Purchase Price
for such Transaction on a 360 day per year basis for the actual number of days
elapsed during the period commencing on (and including) the Purchase Date and
ending on (but excluding) the date of determination (reduced by any amount of
such Price Differential in respect of such period previously paid by Seller to
Buyer with respect to such Transaction).
     “Pricing Rate” shall mean the per annum percentage rate for determination
of the Price Differential as set forth in the Pricing Side Letter.

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     “Pricing Side Letter” shall mean the pricing side letter, dated as of
November 1, 2007, among Seller, Guarantor and Buyer, as the same may be amended,
supplemented or modified from time to time in accordance with the terms thereof.
     “Principal” shall have the meaning assigned thereto in Annex I.
     “Program Documents” shall mean this Agreement, the Custodial Agreement, the
Guaranty, any Servicing Agreement, the Master Netting Agreement, the Pricing
Side Letter, any Instruction Letter, the Securitization Side Letter, the
Collection Account Control Agreement, the GCFP Sub-Account Control Agreement,
the FNMA Direction Letter, the Electronic Tracking Agreement and any other
agreement entered into by Seller, on the one hand, and Buyer and/or any of its
Affiliates or Subsidiaries (or Custodian on its behalf) on the other, in
connection herewith or therewith.
     “Property” shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
     “Proprietary Lease” shall mean the lease on a Cooperative Unit evidencing
the possessory interest of the owner of the Cooperative Shares in such
Cooperative Unit.
     “Purchase Date” shall mean, with respect to each Transaction, the date on
which Purchased Loans are sold by Seller to Buyer hereunder.
     “Purchase Price” shall have the meaning assigned thereto in the Pricing
Side Letter.
     “Purchased Items” shall have the meaning assigned thereto in Section 8
hereof.
     “Purchased Loans” shall mean any of the following assets sold by Seller to
Buyer in a Transaction: the Loans, together with the related Records and
Servicing Rights, Seller’s rights under any related purchases or take-out
commitments, such other property, rights, titles or interest as are specified on
a related Transaction Notice, and all purchase or other agreements, contracts,
instruments, chattel paper, and general intangibles comprising or relating to
all of the foregoing. The term “Purchased Loans” with respect to any Transaction
at any time shall also include Additional Purchased Loans delivered pursuant to
Section 6(a) hereof and Substitute Loans delivered pursuant to Section 16
hereof.
     “Qualified Insurer” shall mean an insurance company approved as an insurer
by Fannie Mae and Freddie Mac.
     “Qualified Originator” shall mean (a) Seller, (b) any Approved Originator
and (c) any other originator of Loans; provided, that Buyer shall have the right
to reject any such other originator (in its sole discretion) by delivering
written notice to Seller fifteen (15) days prior to ceasing to accept Loans
originated by such person.
     “RBS” shall mean The Royal Bank of Scotland plc, and its successors.
     “Reacquired Loans” shall have the meaning assigned thereto in Section 16.

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     “Records” means all instruments, agreements and other books, records, and
reports and data generated by other media for the storage of information
maintained by Seller or any other person or entity with respect to a Purchased
Loan. Records shall include, without limitation, the Notes, any Mortgages, the
Mortgage Files, the Servicing File, and any other instruments necessary to
document or service a Loan that is a Purchased Loan, including, without
limitation, the complete payment and modification history of each Loan that is a
Purchased Loan.
     “Reportable Event” shall mean any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC
Reg. § 2615.
     “Repurchase Date” shall mean the date occurring on (i) the 25th day of each
month following the related Purchase Date (or if such date is not a Business
Day, the following Business Day), (ii) any other Business Day set forth in the
related Transaction Notice and/or the related Confirmation, (iii) the date
determined by application of Section 17 or Section 19 or (iv) the Termination
Date, as applicable.
     “Repurchase Price” shall mean the price at which Purchased Loans are to be
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of the outstanding Purchase Price for such Purchased Loans and the Price
Differential as of the date of such determination.
     “Required Documents” shall have the meaning set forth in the Custodial
Agreement.
     “Requirement of Law” shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
     “Rescission” shall mean the right of a Mortgagor to rescind the related
Note and related documents pursuant to applicable law.
     “Responsible Officer” shall mean, as to any Person, the chief executive
officer or, with respect to financial matters, the chief financial officer of
such Person; provided, that in the event any such officer is unavailable at any
time he or she is required to take any action hereunder, Responsible Officer
shall mean any officer authorized to act on such officer’s behalf as
demonstrated by a certificate of corporate resolution.
     “Revolving Credit Agreement” shall mean the Five Year Competitive Advance
and Revolving Credit Agreement, dated as of January 6, 2006, among Guarantor, as
Borrower, the Lenders referred to therein, Citicorp USA, Inc., as Syndication
Agent, and Bank of America, N.A., The Bank of Nova Scotia and Calyon New York
Branch, as Documentation Agents, and JPMorgan Chase Bank, N.A., as
administrative agent, as such agreement exists on the date hereof and as the
same may be further amended, modified, waived or supplemented, solely to the
extent that Buyer has given its prior written consent to such amendment,
modification, waiver or supplement.

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     “Securitization Letter” shall mean that certain letter agreement by and
between Seller and Buyer dated the date hereof, outlining rights and obligations
with respect to securitizations and whole loan sales of Loans subject to this
Agreement from time to time.
     “Security Release Certification” shall mean a security release
certification in substantially the form set forth in Exhibit K hereto.
     “Servicer” shall mean Seller in its capacity as servicer or master servicer
of the Loans.
     “Servicing Agreement” shall have the meaning provided in Section 43(c)
hereof.
     “Servicing File” shall mean with respect to each Loan, the file retained by
Seller (in its capacity as Servicer) consisting of all documents that a prudent
originator and servicer would have, including copies of the Loan Documents, all
documents necessary to document and service the Loans and any and all documents
required to be delivered pursuant to any of the Program Documents.
     “Servicing Records” shall have the meaning assigned thereto in
Section 43(b) hereof.
     “Servicing Rights” shall mean contractual, possessory or other rights of
Seller or any other Person, whether arising under the Servicing Agreement, the
Custodial Agreement or otherwise, to administer or service a Purchased Loan or
to possess related Servicing Records.
     “Servicing Transmission” shall mean a computer-readable magnetic or other
electronic format acceptable to the parties containing the information
identified on Exhibit F.
     “Single Employer Plan” shall mean any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
     “Subservicer” shall have the meaning provided in Section 43(c) hereof.
     “Subsidiary” shall mean, with respect to any Person, any corporation,
association, joint venture, partnership or other business entity (whether now
existing or hereafter organized) of which at least a majority of the voting
stock or other ownership interests having ordinary voting power for the election
of directors (or the equivalent) is, at the time of which any determination is
being made, owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.
Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Seller.
     “Substitute Loans” has the meaning assigned thereto in Section 16.
     “Tangible Net Worth” shall mean, at any date of determination, with respect
to the Guarantor, the Consolidated Net Worth of the Guarantor and its
Consolidated Subsidiaries minus the aggregate book value of all intangible
assets of the Guarantor and its Consolidated Subsidiaries, in each case as of
such date in accordance with GAAP.

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     “Termination Date” shall mean October 30, 2008, the Early Termination Date
or such earlier date on which this Agreement shall terminate in accordance with
the provisions hereof or by operation of law.
     “Transaction” has the meaning assigned thereto in Section 1.
     “Transaction Notice” shall mean a written request by Seller in the form of
Exhibit D hereto, to enter into a Transaction, in a form to be mutually agreed
upon among Seller and Buyer, which is delivered to Buyer.
     “Trust Receipt” shall have the meaning provided in the Custodial Agreement.
     “Underwriting Guidelines” shall mean the underwriting guidelines of Seller
attached as Exhibit E hereto in effect as of the date of this Agreement, as the
same may be amended, supplemented or otherwise modified from time to time
(including without limitation by the addition of any third party’s underwriting
guidelines) and, with respect only to material amendments, supplements or other
modifications, with Buyer’s prior written consent.
     “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Purchased Items is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than New York,
“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
     “USC” shall mean the United States Code, as amended.
     “Undocumented Loan Schedule” shall have the meaning provided in the
Custodial Agreement.
     “Undocumented Loan Trust Receipt” shall have the meaning provided in the
Custodial Agreement.
     “Undocumented Mortgage Loan” shall have the meaning provided in the
Custodial Agreement.
     (b) Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to Buyer hereunder shall be prepared, in accordance
with GAAP.
     (c) Interpretation. The following rules of this subsection (c) apply unless
the context requires otherwise. A gender includes all genders. Where a word or
phrase is defined, its other grammatical forms have a corresponding meaning. A
reference to a subsection, Section, Annex or Exhibit is, unless otherwise
specified, a reference to a Section of, or annex or exhibit to, this Agreement.
A reference to a party to this Agreement or another agreement or document
includes the party’s successors and permitted substitutes or assigns. A
reference to an agreement or

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document (including any Program Document) is to the agreement or document as
amended, modified, novated, supplemented or replaced, except to the extent
prohibited thereby or by any Program Document and in effect from time to time in
accordance with the terms thereof. A reference to legislation or to a provision
of legislation includes a modification or re-enactment of it, a legislative
provision substituted for it and a regulation or statutory instrument issued
under it. A reference to writing includes a facsimile transmission and any means
of reproducing words in a tangible and permanently visible form. A reference to
conduct includes, without limitation, an omission, statement or undertaking,
whether or not in writing. The words “hereof”, “herein”, “hereunder” and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement. The term “including” is not limiting and means “including
without limitation”. In the computation of periods of time from a specified date
to a later specified date, the word “from” means “from and including”, the words
“to” and “until” each mean “to but excluding”, and the word “through” means “to
and including”.
     Except where otherwise provided in this Agreement, any determination,
consent, approval, statement or certificate made or confirmed in writing with
notice to Seller by Buyer or an authorized officer of Buyer provided for in this
Agreement is conclusive and binds the parties in the absence of manifest error.
A reference to an agreement includes a security interest, guarantee, agreement
or legally enforceable arrangement whether or not in writing related to such
agreement.
     A reference to a document includes an agreement (as so defined) in writing
or a certificate, notice, instrument or document, or any information recorded in
computer disk form. Where Seller is required to provide any document to Buyer
under the terms of this Agreement, the relevant document shall be provided in
writing or printed form unless Buyer requests otherwise. At the request of
Buyer, the document shall be provided in computer disk form or both printed and
computer disk form.
     This Agreement is the result of negotiations among, and has been reviewed
by counsel to, Buyer and Seller, and is the product of all parties. In the
interpretation of this Agreement, no rule of construction shall apply to
disadvantage one party on the ground that such party proposed or was involved in
the preparation of any particular provision of this Agreement or this Agreement
itself. Except where otherwise expressly stated, Buyer may give or withhold, or
give conditionally, approvals and consents and may form opinions and make
determinations at its absolute discretion. Any requirement of good faith,
discretion or judgment by Buyer shall not be construed to require Buyer to
request or await receipt of information or documentation not immediately
available from or with respect to Seller, a servicer of the Purchased Loans, any
other Person or the Purchased Loans.
3. THE TRANSACTIONS
     (a) Subject to the terms and conditions of the Program Documents, Buyer
shall, from time to time enter into Transactions with an aggregate Purchase
Price for all Purchased Loans acquired by Buyer not to exceed the Maximum
Aggregate Purchase Price. Unless otherwise agreed, Seller shall request that
Buyer enter into a Transaction by delivering (i) a Transaction Notice
substantially in the form of Exhibit D hereto, appropriately completed, and a
Loan Schedule to Buyer and Custodian, and (ii) the Mortgage File to Custodian or
each Loan proposed

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to be included in such Transaction, which Transaction Notice and Loan
Schedule must be received no later than 5:00 p.m. (New York City time) one
Business Day prior to the requested Purchase Date. Such Transaction Notice shall
clearly indicate those Loans that are intended to be Conforming Loans, Jumbo A
Credit A Loans, Undocumented Mortgage Loans and Dry Loans and include a Loan
Schedule in respect of the Eligible Loans that Seller proposes to include in the
related Transaction. Each Transaction Notice shall specify the proposed Purchase
Date, Purchase Price, Pricing Rate and Repurchase Date (subject to
Section 3(g)). Seller agrees to repurchase from Buyer, on the same Business Day
of discovery, any Wet Loans that were previously subject to a Transaction that
do not close for any reason including, but not limited to, a Rescission. In the
event that the parties hereto desire to enter into a Transaction on terms other
than as set forth in this Agreement and the Transaction Notice, Buyer shall
deliver to Seller, in electronic or other format, a “Confirmation” specifying
such terms prior to entering into such Transaction, including, without
limitation, the Purchase Date, the Purchase Price, the Pricing Rate therefor and
the Repurchase Date. By entering in to a Transaction with Buyer, Seller consents
to the terms set forth in any related Confirmation. Any such Transaction Notice
and the related Confirmation, if any, together with this Agreement, shall
constitute conclusive evidence of the terms agreed to between Buyer and Seller
with respect to the Transaction to which the Transaction Notice and
Confirmation, if any, relates. In the event of any conflict between this
Agreement and a Confirmation, the terms of the Confirmation shall control with
respect to the related Transaction.
     (b) Pursuant to and in accordance with the terms and provisions of the
Custodial Agreement, the Custodian shall review any Required Documents delivered
to it and shall deliver to Buyer, via Electronic Transmission acceptable to
Buyer, Custodian Loan Transmissions and Exception Reports. In addition, pursuant
to and in accordance with the terms and provisions of the Custodial Agreement,
the Custodian shall deliver to Buyer on each Purchase Date and such other dates
as specified in the Custodial Agreement, one or more Trust Receipts and
Undocumented Loan Trust Receipts (each as defined in the Custodial Agreement)
relating to the Loans. The original copies of each Aggregate Trust Receipt shall
be delivered to JPMorgan Chase Bank at Four New York Plaza, Ground Floor,
Outsourcing Department, New York, New York 10004, Attention: Jennifer John for
the account of Greenwich Capital Markets, telephone number (212) 623-5953, as
agent for Buyer by overnight delivery using a nationally recognized insured
overnight delivery service.
     (c) Upon Seller’s request to enter into a Transaction pursuant to
Section 3(a), Buyer shall, assuming all conditions precedent set forth in this
Section 3 and in Sections 9(a) and (b) have been met, and provided no Default,
Event of Default or Event of Termination shall have occurred and be continuing,
not later than 2:00 p.m. (New York City time) on the requested Purchase Date, if
all conditions precedent are satisfied by 5:00 p.m. on the Business Day
preceding the requested Purchase Date, purchase the Eligible Loans included in
the related Transaction Notice by transferring, via wire transfer (pursuant to
wire transfer instructions provided by Seller on or prior to such Purchase
Date), the Purchase Price.

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     (d) Anything herein to the contrary notwithstanding, if, on or prior to the
determination of any LIBO Base Rate:
     (i) Buyer determines, which determination shall be conclusive, that
quotations of interest rates for the relevant deposits referred to in the
definition of “LIBO Base Rate” in Section 2 are not being provided in the
relevant amounts or for the relevant maturities for purposes of determining
rates of interest for Transactions as provided herein; or
     (ii) Buyer determines, which determination shall be conclusive, that the
Applicable Margin plus the relevant rate of interest referred to in the
definition of “LIBO Base Rate” in Section 2 upon the basis of which the rate of
interest for Transactions is to be determined is not likely adequately to cover
the cost to Buyer of purchasing and holding Loans hereunder; or
     (iii) it becomes unlawful for Buyer to enter into Transactions with a
Pricing Rate based on the LIBO Base Rate;
then Buyer shall give Seller prompt notice thereof and, so long as such
condition remains in effect, Buyer shall be under no obligation to purchase
Loans hereunder, and Seller shall, at its option, either repurchase such Loans
or pay a Pricing Rate at a rate per annum as determined by Buyer taking into
account the increased cost to Buyer of purchasing and holding the Loans.
     (e) Seller shall repurchase Purchased Loans from Buyer on each related
Repurchase Date. Each obligation to repurchase exists without regard to any
prior or intervening liquidation or foreclosure with respect to any Purchased
Loan. Seller is obligated to obtain the Purchased Loans from Buyer or its
designee (including the Custodian) at Seller’s expense on (or after) the related
Repurchase Date. Any amounts required to be paid to Buyer under this
Section 3(e) must be received by Buyer and the computer tape relating to the
Purchased Loans being repurchased under this Section 3(e) must be uploaded to
the Buyer’s website by 4:00 p.m. (New York City time) on the related Repurchase
Date.
     (f) Provided that the applicable conditions in Sections 9(a) and (b) have
been satisfied, a Purchased Loan that is repurchased by Seller on the Repurchase
Date shall become subject to a new Transaction. Buyer shall purchase the related
Eligible Loans pursuant to the procedures set forth in Section 3(c). For each
new Transaction, unless otherwise agreed, (y) the accrued and unpaid Price
Differential shall be settled in cash on each related Repurchase Date, and
(z) the Pricing Rate shall be as set forth in the Pricing Side Letter.
     (g) If Seller intends to repurchase any Loans on any day which is not a
Repurchase Date, Seller shall give one (1) Business Day’s prior written notice
thereof to Buyer. If such notice is given, the Repurchase Price specified in
such notice shall be due and payable on the date specified therein, together
with the Price Differential to such date on the amount prepaid. Such early
repurchases shall be in an aggregate principal amount of at least $100,000. Any
amounts required to be paid to Buyer under this Section 3(h) must be received by
Buyer, and the computer tape relating to the Purchased Loans being repurchased
under this Section 3(g) must be uploaded to the Buyer’s website, by 4:00 p.m.
(New York City time) on such date of repurchase.

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     (h) [Reserved.]
     (i) If any Requirement of Law (other than with respect to any amendment
made to Buyer’s certificate of incorporation and by-laws or other organizational
or governing documents) or any change in the interpretation or application
thereof or compliance by Buyer with any request or directive (whether or not
having the force of law) from any central bank or other Governmental Authority
made subsequent to the date hereof:
     (i) shall subject Buyer to any tax of any kind whatsoever with respect to
this Agreement or any Loans purchased pursuant to it (excluding net income
taxes) or change the basis of taxation of payments to Buyer in respect thereof;
     (ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory advance or similar requirement against assets held by deposits or
other liabilities in or for the account of Transactions or extensions of credit
by, or any other acquisition of funds by any office of Buyer which is not
otherwise included in the determination of the LIBO Base Rate hereunder;
     (iii) shall impose on Buyer any other condition;
and the result of any of the foregoing is to increase the cost to Buyer, by an
amount which Buyer deems to be material, of effecting or maintaining purchases
hereunder, or to reduce any amount receivable hereunder in respect thereof,
then, in any such case, Seller shall promptly pay Buyer such additional amount
or amounts as will compensate Buyer for such increased cost or reduced amount
receivable thereafter incurred.
     If Buyer shall have determined that the adoption of or any change in any
Requirement of Law (other than with respect to any amendment made to Buyer’s
certificate of incorporation and by-laws or other organizational or governing
documents) regarding capital adequacy or in the interpretation or application
thereof or compliance by Buyer or any corporation controlling Buyer with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof shall
have the effect of reducing the rate of return on Buyer’s or such corporation’s
capital as a consequence of its obligations hereunder to a level below that
which Buyer or such corporation but for such adoption, change or compliance
(taking into consideration Buyer’s or such corporation’s policies with respect
to capital adequacy) by an amount deemed by Buyer to be material, then from time
to time, Seller shall promptly pay to Buyer such additional amount or amounts as
will thereafter compensate Buyer for such reduction.
     If Buyer becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify Seller of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to this subsection submitted by Buyer to Seller shall be conclusive in
the absence of manifest error.

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4. PAYMENTS; COMPUTATION; COMMITMENT AND NON-UTILIZATION FEES
     (a) Payments. Except to the extent otherwise provided herein, all payments
to be made by Seller under this Agreement shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to
Buyer at the following account maintained by Buyer at JPMorgan Chase Bank
Account Number [***], For the A/C of Greenwich Capital Financial Products, Inc.,
ABA [***], Attn: Brett Kibbe, not later than 2:00 p.m., New York City time, on
the date on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day). Seller acknowledges that it has no rights of withdrawal from the
foregoing account.
     (b) Computations. The Pricing Differential shall be computed on the basis
of a 360-day year for the actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
     (c) Commitment Fee. Seller agrees to pay to Buyer a commitment fee equal to
(a) [***] multiplied by (b) the Committed Amount (the “Commitment Fee”) minus
(c) the amount of the “Work Fee” paid pursuant to the engagement letter dated as
of October 4, 2007, among the Guarantor, the Seller and the Buyer, such payment
to be made in Dollars, in immediately available funds, without deduction, set
off or counterclaim, to Buyer on the Effective Date. Buyer may, in its sole
discretion, net such Commitment Fee from the proceeds of any Purchase Price paid
to Seller.
     (d) Non-Utilization Fee. On a quarterly basis and on the Termination Date,
Buyer shall determine the average quarterly utilization during the preceding
quarter (or with respect to the Termination Date, during the period from the
date through which the last non-utilization fee calculation has been made to the
Termination Date) by Seller by dividing (a) the sum of the Purchase Prices
outstanding on each day during such period, by (b) the number of days in such
period. If such average amount determined for any period as a percentage of the
Committed Amount (the “Utilization Percentage”) is less than 30%, Seller shall
pay to Buyer on the Payment Date on or immediately succeeding such date of
calculation or Termination Date, as applicable, a non-utilization fee equal to
the product of (i) [***] per annum, times (ii) the Committed Amount, times
(iii) 1 minus the Utilization Percentage (the “Non-Utilization Fee”). If the
Utilization Percentage in any period is greater than or equal to 30%, Buyer
shall not be paid a Non-Utilization Fee for that period. All payments shall be
made to Buyer in Dollars, in immediately available funds, without deduction,
setoff or counterclaim. Buyer may, in its sole discretion, net such
Non-Utilization Fee from the proceeds of any Purchase Price paid to any Seller.
5. TAXES; TAX TREATMENT
     (a) All payments made by Seller under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities (including penalties, interest and additions to tax) with respect
thereto imposed by any Governmental Authority, excluding income
                    
[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

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taxes, branch profits taxes, franchise taxes or any other tax imposed on the net
income by the United States, a state or a foreign jurisdiction under the laws of
which Buyer is organized or of its applicable lending office, or any political
subdivision thereof (collectively, “Taxes”), all of which shall be paid by
Seller for its own account not later than the date when due. If Seller is
required by law or regulation to deduct or withhold any Taxes from or in respect
of any amount payable hereunder, it shall: (a) make such deduction or
withholding; (b) pay the amount so deducted or withheld to the appropriate
Governmental Authority not later than the date when due; (c) deliver to Buyer,
promptly, original tax receipts and other evidence satisfactory to Buyer of the
payment when due of the full amount of such Taxes; and (d) pay to Buyer such
additional amounts as may be necessary so that such Buyer receives, free and
clear of all Taxes, a net amount equal to the amount it would have received
under this Agreement, as if no such deduction or withholding had been made.
     (b) In addition, Seller agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (including, without limitation, mortgage recording taxes, transfer taxes
and similar fees) imposed by the United States or any taxing authority thereof
or therein that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
(“Other Taxes”).
     (c) Seller agrees to indemnify Buyer for the full amount of Taxes
(including additional amounts with respect thereto) and Other Taxes, and the
full amount of Taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 5, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, provided that Buyer shall
have provided Seller with evidence, reasonably satisfactory to Seller, of
payment of Taxes or Other Taxes, as the case may be.
     (d) Any Buyer that is not incorporated under the laws of the United States,
any State thereof, or the District of Columbia (a “Foreign Buyer”) shall provide
Seller with properly completed United States Internal Revenue Service (“IRS”)
Form W-8BEN or W-8ECI or any successor form prescribed by the IRS, certifying
that such Foreign Buyer is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States on or prior to the date upon which each such Foreign Buyer
becomes a Buyer. Each Foreign Buyer will resubmit the appropriate form on the
earliest of (A) the third anniversary of the prior submission or (B) on or
before the expiration of thirty (30) days after there is a “change in
circumstances” with respect to such Foreign Buyer as defined in Treas. Reg.
Section 1.1441-1(e)(4)(ii)(D). For any period with respect to which a Foreign
Buyer has failed to provide Seller with the appropriate form or other relevant
document pursuant to this Section 5(d) (unless such failure is due to a change
in treaty, law, or regulation occurring subsequent to the date on which a form
originally was required to be provided), such Foreign Buyer shall not be
entitled to any “gross-up” of Taxes or indemnification under Section 5(c) with
respect to Taxes imposed by the United States; provided, however, that should a
Foreign Buyer, which is otherwise exempt from a withholding tax, become subject
to Taxes because of its failure to deliver a form required hereunder, Seller
shall, at no cost or expense to Seller, take

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such steps as such Foreign Buyer shall reasonably request to assist such Foreign
Buyer to recover such Taxes.
     (e) Without prejudice to the survival or any other agreement of Seller
hereunder, the agreements and obligations of Seller contained in this Section 5
shall survive the termination of this Agreement. Nothing contained in this
Section 5 shall require Buyer to make available any of its tax returns or other
information that it deems to be confidential or proprietary.
     (f) Each party to this Agreement acknowledges that it is its intent for
purposes of U.S. federal, state and local income and franchise taxes to treat
each Transaction as indebtedness of Seller that is secured by the Purchased
Loans and that the Purchased Loans are owned by Seller in the absence of an
Event of Default by Seller. All parties to this Agreement agree to such
treatment and agree to take no action inconsistent with this treatment, unless
required by law.
6. MARGIN MAINTENANCE
     (a) If at any time the aggregate Market Value of all Purchased Loans
subject to all Transactions is less than the aggregate MV Margin Amount for all
such Transactions (such event, a “Margin Deficit”), then Buyer may, by notice to
Seller, require Seller in such Transactions to transfer to Buyer cash or, at
Buyer’s option (and provided Seller has additional Eligible Loans), additional
Eligible Loans (“Additional Purchased Loans”) within one (1) Business Day of
such notice by Buyer, so that the cash and aggregate Market Value of the
Purchased Loans, including any such Additional Purchased Loans, will thereupon
equal or exceed such aggregate MV Margin Amount (either requirement, a “Margin
Call”); provided that if Seller transfers cash, Buyer shall deposit such cash
into a non-interest bearing account until the next succeeding Repurchase Date.
     (b) Notice required pursuant to Section 6(a) may be given by any means
provided in Section 21 hereof. Any notice given on a Business Day at or prior to
11:00 a.m. (New York City time) shall be met, and the related Margin Call
satisfied, no later than 5:00 p.m. (New York City time) on the same Business
Day. Any notice given on a Business Day following 11:00 a.m. (New York City
time) shall be met, and the related Margin Call satisfied, no later than
1:00 p.m. (New York City time) on the following Business Day. The failure of
Buyer, on any one or more occasions, to exercise its rights under this
Section 6, shall not change or alter the terms and conditions to which this
Agreement is subject or limit the right of Buyer to do so at a later date.
Seller and Buyer each agree that a failure or delay by Buyer to exercise its
rights hereunder shall not limit or waive Buyer’s rights under this Agreement or
otherwise existing by law or in any way create additional rights for Seller.
7. INCOME PAYMENTS
     Where a particular term of a Transaction extends over the date on which
Income is paid in respect of any Purchased Loan subject to that Transaction,
such Income shall be the property of Buyer. Notwithstanding the foregoing, and
provided no Default or Event of Default has occurred and is continuing, Buyer
agrees that Seller shall be entitled to receive an amount equal to all Income
(other than any FNMA Loan Purchase Proceeds) received in respect of the

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Purchased Loans, whether by Buyer, Custodian or any servicer or any other
Person, which is not otherwise received by Seller, to the full extent it would
be so entitled if the Purchased Loans had not been sold to Buyer; provided that
any Income received by Seller while the related Transaction is outstanding shall
be deemed to be held by Seller solely in trust for Buyer pending the repurchase
on the related Repurchase Date; provided further that Seller shall hold all such
Income (other than any FNMA Loan Purchase Proceeds) in the Collection Account.
Seller shall deposit all Income (other than any FNMA Loan Purchase Proceeds)
received by it into the Collection Account within three (3) Business Days of
Seller’s receipt thereof. Seller shall direct FNMA to deposit all FNMA Loan
Purchase Proceeds directly into the FNMA Loan Purchase Account. In addition,
Seller shall direct FNMA Account Bank to deposit directly to the GCFP
Sub-Account the purchase price, and all other amounts on deposit in the FNMA
Loan Purchase Account that relate to Fannie Mae’s purchase from Seller from time
to time of Landscape Loans that are from time to time subject to Transactions
under this Agreement. Seller shall instruct FNMA Account Bank to withdraw
amounts on deposit in the GCFP Sub-Account on a daily basis and to pay such
funds to or upon the order of Buyer to the extent necessary to reduce the
aggregate outstanding Repurchase Price of all Purchased Loans sold by Seller to
Fannie Mae and all other related Obligations to zero. Provided no Default or
Event of Default has occurred, Buyer shall, as the parties may agree with
respect to any Transaction (or, in the absence of any such agreement, as Buyer
shall reasonably determine in its sole discretion), on the Repurchase Date
following the date any Income (including any FNMA Loan Purchase Proceeds—GCFP
remaining after giving effect to Buyer’s application on such Repurchase Date of
amounts on deposit in the GCFP Sub-Account as described in the immediately
preceding sentence) is received by Buyer in the Collection Account or in the
GCFP Sub-Account (or a servicer on its behalf) either (i) transfer (or permit
the servicer or Seller to transfer) to Seller such Income with respect to any
Purchased Loans subject to such Transaction, or (ii) if a Margin Deficit then
exists, apply the Income payment to reduce the amount, if any, to be transferred
to Buyer by Seller upon termination of such Transaction. Buyer shall not be
obligated to take any action pursuant to the preceding sentences (A) to the
extent that such action would result in the creation of a Margin Deficit, unless
prior thereto or simultaneously therewith Seller transfers to Buyer cash or
Additional Purchased Loans sufficient to eliminate such Margin Deficit, or
(B) if an Event of Default or Default has occurred and is then continuing at the
time such Income is paid.
8. SECURITY INTEREST; BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT
     (a) Seller and Buyer intend that the Transactions hereunder be sales to
Buyer of the Purchased Loans and not loans from Buyer to Seller secured by the
Purchased Loans. However, in order to preserve Buyer’s rights under this
Agreement in the event that a court or other forum recharacterizes the
Transactions hereunder as other than sales, and as security for Seller’s
performance of all of its Obligations and as security for Seller’s, Guarantor’s
or any of their respective Affiliate’s or Subsidiary’s performance of its
obligations under any agreement (other than the Chesapeake Facility and the
Bishop’s Gate Facility) by and among any such Person, on the one hand, and Buyer
or any of Buyer’s Affiliates, on the other hand, Seller hereby grants Buyer a
fully perfected first priority security interest in all of Seller’s rights,
title and interest in and to the following property, whether now existing or
hereafter acquired: (i) all Purchased Loans identified on a Transaction Notice
delivered by Seller to Buyer and the Custodian from time to time, (ii) any other
collateral pledged or otherwise relating to such Purchased Loans, together with
all files, material documents, instruments, surveys (if available),
certificates,

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correspondence, appraisals, computer records, computer storage media, Loan
accounting records and other books and records relating thereto, (iii) all
rights of Seller to receive from any third party or to take delivery of any
Records or other documents which constitute a part of the Mortgage File or
Servicing File, (iv) the Collection Account, the GCFP Sub-Account, all Income
relating to such Purchased Loans and all FNMA Loan Purchase Proceeds—GCFP,
(v) all mortgage guaranties and insurance (issued by governmental agencies or
otherwise) and any mortgage insurance certificate or other document evidencing
such mortgage guaranties or insurance relating to any Purchased Loans and all
claims and payments thereunder and all rights of Seller to receive from any
third party or to take delivery of any of the foregoing, (vi) all interests in
real property collateralizing any Purchased Loans, (vii) all other insurance
policies and insurance proceeds relating to any Purchased Loans or the related
Mortgaged Property and all rights of Seller to receive from any third party or
to take delivery of any of the foregoing, (viii) any purchase agreements or
other agreements, contracts or take-out commitments relating to or constituting
any or all of the foregoing and all rights to receive documentation relating
thereto, including without limitation any Agency take-out commitments, (ix) all
“accounts”, “chattel paper”, “commercial tort claims”, “deposit accounts”,
“documents,” “equipment”, “general intangibles”, “goods”, “instruments”,
“inventory”, “investment property”, “letter of credit rights”, and “securities’
accounts” as each of those terms is defined in the Uniform Commercial Code and
all cash and Cash Equivalents and all products and proceeds relating to or
constituting any or all of the foregoing, and (x) any and all replacements,
substitutions, distributions on or proceeds of any or all of the foregoing
(collectively the “Purchased Items”). Seller acknowledges and agrees that its
rights with respect to the Purchased Items (including without limitation, any
security interest Seller may have in the Purchased Loans and any other
collateral granted by Seller to Buyer pursuant to any other agreement) are and
shall continue to be at all times junior and subordinate to the rights of Buyer
hereunder.
     (b) At any time and from time to time, upon the written request of Buyer,
and at the sole expense of Seller, Seller will promptly and duly execute and
deliver, or will promptly cause to be executed and delivered, such further
instruments and documents and take such further action as Buyer may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with respect to the
Purchased Items and the liens created hereby. Seller also hereby authorizes
Buyer to file any such financing or continuation statement to the extent
permitted by applicable law. A carbon, photographic or other reproduction of
this Agreement shall be sufficient as a financing statement for filing in any
jurisdiction. This Agreement shall constitute a security agreement under
applicable law.
     (c) Seller shall not (i) change the location of its chief executive
office/chief place of business from that specified in Section 12(l) hereof,
(ii) change its name, identity or corporate structure (or the equivalent) or
change the location where it maintains its records with respect to the Purchased
Items, or (iii) reincorporate or reorganize under the laws of another
jurisdiction unless it shall have given Buyer at least 30 days prior written
notice thereof and shall have delivered to Buyer all Uniform Commercial Code
financing statements and amendments thereto as Buyer shall request and taken all
other actions deemed reasonably necessary by Buyer to continue its perfected
status in the Purchased Items with the same or better priority.

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     (d) Seller hereby irrevocably constitutes and appoints Buyer and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Seller and in the name of Seller or in its own name, from time to
time in Buyer’s discretion, for the purpose of carrying out the terms of this
Agreement, including without limitation, protecting, preserving and realizing
upon the Purchased Items, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, including without limitation, to
protect, preserve and realize upon the Purchased Items, to file such financing
statement or statements relating to the Purchased Items as Buyer at its option
may deem appropriate, and, without limiting the generality of the foregoing,
Seller hereby gives Buyer the power and right, on behalf of Seller, without
assent by, but with notice to, Seller, if an Event of Default shall have
occurred and be continuing, to do the following:
     (i) in the name of Seller, or in its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due with respect to any Purchased
Items and to file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by Buyer for the purpose
of collecting any and all such moneys due with respect to any Purchased Items
whenever payable;
     (ii) to pay or discharge taxes and Liens levied or placed on or threatened
against the Purchased Items;
     (iii) (A) to direct any party liable for any payment under any Purchased
Items to make payment of any and all moneys due or to become due thereunder
directly to Buyer or as Buyer shall direct; (B) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out of any Purchased
Items; (C) to sign and endorse any invoices, assignments, verifications, notices
and other documents in connection with any Purchased Items; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Purchased Items or any proceeds thereof
and to enforce any other right in respect of any Purchased Items; (E) to defend
any suit, action or proceeding brought against Seller with respect to any
Purchased Items; (F) to settle, compromise or adjust any suit, action or
proceeding described in clause (E) above and, in connection therewith, to give
such discharges or releases as Buyer may deem appropriate; and (G) generally, to
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any Purchased Items as fully and completely as though Buyer were the
absolute owner thereof for all purposes, and to do, at Buyer’s option and
Seller’s expense, at any time, and from time to time, all acts and things which
Buyer deems necessary to protect, preserve or realize upon the Purchased Items
and Buyer’s Liens thereon and to effect the intent of this Agreement, all as
fully and effectively as Seller might do.
          Seller hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.

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          Seller also authorizes Buyer, if an Event of Default shall have
occurred, from time to time, to execute, in connection with any sale provided
for in Section 19 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Purchased Items.
     (e) The powers conferred on Buyer hereunder are solely to protect Buyer’s
interests in the Purchased Items and shall not impose any duty upon it to
exercise any such powers. Buyer shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and neither it nor
any of its officers, directors, employees or agents shall be responsible to
Seller for any act or failure to act hereunder, except for its or their own
gross negligence or willful misconduct.
     (f) If Seller fails to perform or comply with any of its agreements
contained in the Program Documents and Buyer may itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the reasonable
out-of-pocket expenses of Buyer incurred in connection with such performance or
compliance, together with interest thereon at a rate per annum equal to the
Post-Default Rate, shall be payable by Seller to Buyer on demand and shall
constitute Obligations.
     (g) Buyer’s duty with respect to the custody, safekeeping and physical
preservation of the Purchased Items in its possession, under Section 9-207 of
the Uniform Commercial Code or otherwise, shall be to deal with it in the same
manner as Buyer deals with similar property for its own account. Neither Buyer
nor any of its directors, officers or employees shall be liable for failure to
demand, collect or realize upon all or any part of the Purchased Items or for
any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Purchased Items upon the request of Seller or otherwise.
     (h) All authorizations and agencies herein contained with respect to the
Purchased Items are irrevocable and powers coupled with an interest.
9. CONDITIONS PRECEDENT
     (a) As conditions precedent to the initial Transaction, Buyer shall have
received on or before the date on which such initial Transaction is consummated
the following, in form and substance satisfactory to Buyer and duly executed by
each party thereto (as applicable):
     (i) Program Documents. The Program Documents duly executed and delivered by
Seller thereto and being in full force and effect, free of any modification,
breach or waiver.
     (ii) Organizational Documents. A good standing certificate and certified
copies of the charter and by-laws (or equivalent documents) of Seller, in each
case dated as of a recent date, but in no event more than ten (10) days prior to
the date of such initial Transaction and of all corporate or other authority for
Seller with respect to the execution, delivery and performance of the Program
Documents and each other document to be delivered by Seller from time to time in
connection herewith (and Buyer may conclusively rely on such certificate until
it receives notice in writing from Seller to the contrary).

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     (iii) Incumbency Certificate. An incumbency certificate of the secretary of
Seller certifying the names, true signatures and titles of Seller’s
representatives duly authorized to request Transactions hereunder and to execute
the Program Documents and the other documents to be delivered thereunder;
     (iv) Legal Opinion. A legal opinion of counsel to Seller, substantially in
the form attached hereto as Exhibit C.
     (v) Filings, Registrations, Recordings. (i) Any documents (including,
without limitation, financing statements) required to be filed, registered or
recorded in order to create, in favor of Buyer, a perfected, first-priority
security interest in the Purchased Items, subject to no Liens other than those
created hereunder, shall have been properly prepared and executed for filing
(including the applicable county(ies) if Buyer determines such filings are
necessary in its reasonable discretion), registration or recording in each
office in each jurisdiction in which such filings, registrations and
recordations are required to perfect such first-priority security interest; and
(ii) UCC lien searches, dated as of a recent date, in no event more than 14 days
prior to the date of such initial Transaction, in such jurisdictions as shall be
applicable to Seller and the Purchased Items, the results of which shall be
satisfactory to Buyer.
     (vi) Fees and Expenses. Buyer shall have received all fees (including,
without limitation, the Commitment Fee) and expenses required to be paid by
Seller on or prior to the initial Purchase Date, which fees and expenses may be
netted out of any purchase proceeds paid by Buyer hereunder; provided that any
such fees or expenses shall have been billed to the Seller on or prior to the
initial Purchase Date.
     (vii) Financial Statements. Buyer shall have received the financial
statements referenced in Section 12(b).
     (viii) Underwriting Guidelines. Buyer and Seller shall have agreed upon
Seller’s current Underwriting Guidelines for Loans and Buyer shall have received
a copy thereof certified by a Responsible officer of Seller.
     (ix) Consents, Licenses, Approvals, etc. Buyer shall have received copies
certified by Seller of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by Seller of, and the
validity and enforceability of, the Loan Documents, which consents, licenses and
approvals shall be in full force and effect.
     (x) Insurance. Buyer shall have received evidence in form and substance
satisfactory to Buyer showing compliance by Seller as of such initial Purchase
Date with Section 13(v) hereof.
     (xi) Collection Account, FNMA Loan Purchase Account and GCFP Sub-Account.
Evidence of the establishment of the Collection Account, FNMA Loan Purchase
Account and GCFP Sub-Account.

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     (xii) Due Diligence. Buyer shall have received evidence in form and
substance satisfactory to Buyer with respect to a due diligence review of the
Seller.
     (xiii) Other Documents. Buyer shall have received such other documents as
Buyer or its counsel may reasonably request.
     (b) The obligation of Buyer to enter into each Transaction pursuant to this
Agreement (including the initial Transaction) is subject to the following
further conditions precedent, both immediately prior to any Transaction and also
after giving effect thereto and to the intended use thereof:
     (i) No Default, Event of Default or Event of Termination shall have
occurred and be continuing.
     (ii) Both immediately prior to entering into such Transaction and also
after giving effect thereto and to the intended use of the proceeds thereof, the
representations and warranties made by Seller in Section 12 and Schedule 1-A
hereof (and, in the case of a Fannie Mae Loan, Schedule 1-B hereof, and, in the
case of a Freddie Mac Loan, Schedule 1-C hereof) and in each of the other
Program Documents, shall be true and complete on and as of the Purchase Date in
all material respects (in the case of the representations and warranties in
Section 12(v), 12(w) and Schedules 1-A, 1-B and 1-C, solely with respect to
Loans which have not been repurchased by Seller) with the same force and effect
as if made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date). At the request of Buyer, Buyer shall have received an officer’s
certificate signed by a Responsible Officer of Seller certifying as to the truth
and accuracy of the above, which certificate shall specifically include a
statement that Seller is in compliance with all governmental licenses and
authorizations and is qualified to do business and in good standing in all
required jurisdictions except where the lack of such license and/or
authorizations would not be reasonably likely to have a Material Adverse Effect
or any Material Adverse Effect with respect to any particular Loan proposed to
be subject to such Transaction.
     (iii) The then aggregate outstanding Purchase Price for all Purchased
Loans, when added to the Purchase Price for the requested Transaction, shall not
exceed the Maximum Aggregate Purchase Price. Each Loan subject to such
Transaction shall satisfy all Eligible Loan criteria.
     (iv) Subject to Buyer’s right to perform one or more Due Diligence Reviews
pursuant to Section 44 hereof, Buyer shall have completed its Due Diligence
Review of the Mortgage File for each Loan subject to such Transaction and such
other documents, records, agreements, instruments, Mortgaged Properties or
information relating to such Loans as Buyer in its sole discretion deems
appropriate to review and such review shall be satisfactory to Buyer in its sole
discretion.
     (v) Buyer or its designee shall have received on or before the day of a
Transaction with respect to any Purchased Loans (unless otherwise specified in
this

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Agreement) the following, in form and substance satisfactory to Buyer and (if
applicable) duly executed:

  (A)   The Transaction Notice and Loan Schedule with respect to such Purchased
Loans, delivered pursuant to Section 3(a);     (B)   The Trust Receipt with
respect to such Purchased Loans (other than any such Purchased Loans consisting
of Undocumented Mortgage Loans) and the Undocumented Loan Trust Receipt with
respect to such Purchased Loans consisting of Undocumented Mortgage Loans, in
each case separately identifying such categories of Loans as Buyer may from time
to time request pursuant to the terms and provisions of the Custodial Agreement
and with the related Loan Schedule and Undocumented Loan Schedule, as
applicable, attached; and     (C)   Such certificates, customary opinions of
counsel or other documents as Buyer may reasonably request, provided that such
opinions of counsel shall not be required routinely in connection with each
Transaction but shall only be required from time to time as deemed necessary by
Buyer in its commercially reasonable judgment.

     (vi) [Reserved]
                      (vii) With respect to any Loan that was funded in the name
of or acquired by a Qualified Originator which is an Affiliate of Seller, Buyer
may, in its sole discretion, require Seller to provide evidence sufficient to
satisfy Buyer that such Loan was acquired in a legal sale, including without
limitation, an opinion, in form and substance and from an attorney, in both
cases, acceptable to Buyer in its sole discretion, that such Loan was acquired
in a legal sale.
     (viii) None of the following shall have occurred and/or be continuing:
     i. an event or events resulting in the inability of Buyer to finance its
purchases of assets with traditional counterparties at rates which would have
been reasonable prior to the occurrence of such event or events or a material
adverse change in the financial condition of Buyer which affects (or can
reasonably be expected to affect) materially and adversely the ability of Buyer
to fund its obligations under or otherwise comply with the terms of this
Agreement; or
     ii. any other event beyond the control of Buyer which Buyer reasonably
determines may result in Buyer’s inability to perform its obligations under this
Agreement including, without limitation, acts of God, strikes, lockouts, riots,
acts of war or terrorism, epidemics, nationalization, expropriation, currency
restrictions, fire, communication line failures, computer viruses, power
failures, earthquakes, or other disasters of a similar nature to the foregoing.

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     (ix) If any Loans to be purchased hereunder were acquired by Seller, such
Loans shall conform to Seller’s Underwriting Guidelines or Buyer shall have
received Underwriting Guidelines for such Loans acceptable to Buyer in its
discretion.
     (x) [Reserved.]
     (xi) If any Loans are serviced by a Subservicer, Buyer shall have received,
no later than 10:00 a.m. three (3) days prior to the requested Purchase Date for
such Loans, an Instruction Letter, executed by Seller, with the related
Servicing Agreement attached thereto, which such Servicing Agreement shall be in
form and substance acceptable to Buyer.
     (xii) In no event shall Buyer be required to enter into (A) more than one
(1) Transaction in any one Business Day, nor (B) any Transaction whose Purchase
Price would be less than $1,000,000.
     (xiii) Buyer shall have determined that all actions necessary or, in the
opinion of Buyer, desirable to maintain Buyer’s perfected interest in the
Purchased Loans and other Purchased Items have been taken, including, without
limitation, duly filed Uniform Commercial Code financing statements on Form UCC
1.
     (xiv) Seller shall have paid to Buyer all fees and expenses owed to Buyer
in accordance with this Agreement and any other Program Document.
     (xv) Buyer or its designee shall have received any other documents
reasonably requested by Buyer.
     (xvi) There is no Margin Deficit at the time immediately prior to entering
into a new Transaction.
     (xvii) With respect to each Purchased Loan that is subject to a security
interest (including any precautionary security interest) immediately prior to
the Purchase Date, Buyer shall have received a Security Release Certification
for such Purchased Loan that is duly executed by the related secured party and
Seller. Such secured party shall have filed Uniform Commercial Code termination
statements in respect of any Uniform Commercial Code filings made in respect of
such Loan, and each such release and Uniform Commercial Code termination
statement has been delivered to Buyer prior to each Transaction and to the
Custodian as part of the Mortgage File.
10. RELEASE OF PURCHASED LOANS
     Upon timely payment in full of the Repurchase Price with respect to a
Purchased Loan and all other Obligations (if any) then owing, unless a Default,
Event of Default or Event of Termination shall have occurred and be continuing,
then (a) Buyer shall be deemed to have terminated any security interest that
Buyer may have in such Purchased Loan and any Purchased Items solely related to
such Purchased Loan and (b) with respect to such Purchased Loan, Buyer shall
direct Custodian to release such Purchased Loan and any Purchased Items solely
related to such Purchased Loan to Seller and shall execute such customary
security interest release

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documents as may be reasonably requested by Seller, in each case unless such
release and termination would give rise to or perpetuate a Margin Deficit.
Notwithstanding the foregoing, Buyer shall release all Purchased Items,
notwithstanding the occurrence of an Event of Termination, upon payment in full
by Seller pursuant to Section 17 of the Repurchase Price for all Purchased Items
then subject to outstanding Transactions and payment in full of all other
Obligations then due to Buyer or any of Buyer’s Affiliates. Except as set forth
in Section 16, Seller shall give at least one (1) Business Day prior written
notice to Buyer if such repurchase shall occur on any date other than the
Repurchase Date in Section 3(h).
     If such release and termination gives rise to or perpetuates a Margin
Deficit, Buyer shall notify Seller of the amount thereof and Seller shall
thereupon satisfy the Margin Call in the manner specified in Section 6.
11. RELIANCE
     With respect to any Transaction, Buyer may conclusively rely upon, and
shall incur no liability to Seller in acting upon, any request or other
communication that Buyer reasonably believes to have been given or made by a
person authorized to enter into a Transaction on Seller’s behalf.
12. REPRESENTATIONS AND WARRANTIES
     Seller represents and warrants to Buyer that throughout the term of this
Agreement:
     (a) Existence. Seller (a) is a corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey, (b) has all
requisite corporate or other power, and has all governmental licenses,
authorizations, consents and approvals, necessary to own its assets and carry on
its business as now being or as proposed to be conducted, except where the lack
of such licenses, authorizations, consents and approvals would not be reasonably
likely to have a Material Adverse Effect, (c) is qualified to do business and is
in good standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify would not be reasonably likely (either individually or in the aggregate)
to have a Material Adverse Effect, and (d) is in compliance in all material
respects with all Requirements of Law.
     (b) Financial Condition. Seller has heretofore furnished to Buyer a copy of
its (1) consolidated balance sheet for the fiscal year ended December 31, 2006
and the related consolidated statements of income and retained earnings and of
cash flows for such fiscal year, setting forth in each case in comparative form
the figures for the previous year, with the opinion thereon of a nationally
recognized public accounting firm and (2) unaudited consolidated balance sheet
for the quarterly fiscal period(s) ended March 31, 2007 and June 30, 2007 and
the related unaudited consolidated statements of income and retained earnings
and of cash flows for it for such quarterly fiscal period(s), setting forth in
each case in comparative form the figures for the previous year. All such
financial statements are complete and correct in all material respects and
fairly present the consolidated financial condition of Seller and its
Subsidiaries and the consolidated results of their operations for the fiscal
year ended on said date, all in accordance with GAAP applied on a consistent
basis. Since December 31, 2006 there has been no

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development or event nor any prospective development or event which has had or
should reasonably be expected to have a Material Adverse Effect.
     (c) Litigation. There are no actions, suits, arbitrations, investigations
or proceedings pending or, to its knowledge, threatened against Seller or any of
its Subsidiaries or Affiliates, other than actions, suits, arbitrations,
investigations or proceedings disclosed on Schedule 5 hereto, (i) as to which
individually or in the aggregate there is a reasonable likelihood of an adverse
decision which would be reasonably likely to have a Material Adverse Effect or
(ii) which questions the validity or enforceability of any of the Program
Documents or any action to be taken in connection with the transactions
contemplated thereby and there is a reasonable likelihood of a Material Adverse
Effect or adverse decision.
     (d) No Breach. Neither (a) the execution and delivery of the Program
Documents, or (b) the consummation of the transactions therein contemplated in
compliance with the terms and provisions thereof will conflict with or result in
a breach of the charter or by-laws of Seller, or any applicable law, rule or
regulation, or any order, writ, injunction or decree of any Governmental
Authority, or other material agreement or instrument to which Seller, or any of
its Subsidiaries, is a party or by which any of them or any of their property is
bound or to which any of them or their property is subject, or constitute a
default under any such material agreement or instrument, or (except for the
Liens created pursuant to this Agreement) result in the creation or imposition
of any Lien upon any property of Seller or any of its Subsidiaries, pursuant to
the terms of any such agreement or instrument.
     (e) Action. Seller has all necessary corporate or other power, authority
and legal right to execute, deliver and perform its obligations under each of
the Program Documents to which it is a party; the execution, delivery and
performance by Seller of each of the Program Documents to which it is a party
has been duly authorized by all necessary corporate or other action on its part;
and each Program Document has been duly and validly executed and delivered by
Seller and constitutes a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefore may be brought.
     (f) Approvals. No authorizations, approvals or consents of, and no filings
or registrations with, any Governmental Authority, or any other Person, are
necessary for the execution, delivery or performance by Seller of the Program
Documents to which it is a party or for the legality, validity or enforceability
thereof, except for filings and recordings in respect of the Liens created
pursuant to this Agreement.
     (g) Taxes. Seller and its Subsidiaries have filed all Federal income tax
returns and all other material tax returns that are required to be filed by them
and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by any of them, except for (i) any such taxes, if any, that
are being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
provided or (ii) any such taxes for which an extension has been obtained in
compliance with

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applicable law. The charges, accruals and reserves on the books of Seller and
its Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of Seller, adequate. Any taxes, fees and other governmental charges
payable by Seller in connection with a Transaction and the execution and
delivery of the Program Documents have been paid.
     (h) Investment Company Act. Neither Seller nor any of its Subsidiaries is
required to register as an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended.
     (i) No Legal Bar. The execution, delivery and performance of this
Agreement, the other Program Documents, the sales hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of Seller or of any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien (other than the Liens created
hereunder) on any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation.
     (j) Compliance with Law. No practice, procedure or policy employed or
proposed to be employed by Seller in the conduct of its business violates any
law, regulation, judgment, agreement, regulatory consent, order or decree
applicable to it which, if enforced, would result in either a Material Adverse
Effect.
     (k) No Default. None of Seller, Guarantor nor any of their respective
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which should reasonably be expected to have a
Material Adverse Effect unless such default is a default under the Revolving
Credit Agreement that has been expressly waived by RBS. No Default, Event of
Default or Event of Termination described in Section 17(a)(ii) or
Section 17(a)(iii) has occurred and is continuing.
     (l) Chief Executive Office; Chief Operating Office. Seller’s chief
executive office and chief operating office on the Effective Date is located at
3000 Leadenhall Road, Mount Laurel, New Jersey 08054. During the four months
immediately preceding the Effective Date, Seller continuously conducted it
business solely in its own name at all times, did not change its name,
maintained its chief executive office in the jurisdiction in which presently
located and was organized at all times under the laws of the State of New
Jersey.
     (m) Location of Books and Records. The location where Seller keeps its
books and records including all computer tapes and records relating to the
Purchased Items is its chief executive office or chief operating office or the
offices of the Custodian.
     (n) True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of
Seller or any of its Subsidiaries to Buyer in connection with the negotiation,
preparation, delivery or performance of this Agreement and the other Program
Documents or included herein or therein or delivered pursuant hereto or thereto
or in connection herewith or therewith, when taken as a whole, do not contain
any untrue statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. There is no fact known
to a Responsible Officer of Seller that, after due inquiry,

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could reasonably be expected to have a Material Adverse Effect that has not been
disclosed herein, in the other Program Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
Buyer for use in connection with the transactions contemplated hereby or
thereby.
     (o) Consolidated Net Worth; Indebtedness Ratio. Guarantor’s Consolidated
Net Worth on the last day of any fiscal quarter is not less than the sum of
(i) $1,000,000,000 plus (ii) 25% of Consolidated Net Income, if positive, for
each fiscal quarter ended after December 31, 2004. The ratio of Indebtedness of
the Guarantor and its Consolidated Subsidiaries to Guarantor’s Tangible Net
Worth does not exceed 10.0 to 1.0.
     (p) ERISA. Each Plan to which Seller or its Subsidiaries make direct
contributions, and, to the knowledge of Seller, each other Plan and each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law. No event or
condition has occurred and is continuing as to which Seller would be under an
obligation to furnish a report to Buyer under Section 13(a)(v) hereof.
     (q) Licenses. Buyer will not be required as a result of purchasing the
Loans to be licensed, registered or approved or to obtain permits or otherwise
qualify (i) to do business in any state in which it is currently so required or
(ii) under any state or other jurisdiction’s consumer lending, fair debt
collection or other applicable state or other jurisdiction’s statute or
regulation.
     (r) Filing Jurisdictions; Relevant States. Schedule 2 sets forth all of the
jurisdictions and filing offices in which a financing statement should be filed
in order for Buyer to perfect its security interest in the Purchased Items.
Schedule 3 sets forth all of the states or other jurisdictions in which Seller
originates Loans in its own name or through brokers on the date of this
Agreement.
     (s) True Sales. Any and all interest of a Qualified Originator in, to and
under any Mortgage funded in the name of or acquired by such Qualified
Originator or seller which is an Affiliate of Seller has been sold, transferred,
conveyed and assigned to Seller pursuant to a legal sale and such Qualified
Originator retains no interest in such Loan, and if so requested by Buyer, such
sale is covered by an opinion of counsel to that effect in form and substance
acceptable to Buyer.
     (t) No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of Seller or any of its Subsidiaries has a Material Adverse Effect.
     (u) Subsidiaries. All of the Subsidiaries of Seller at the date hereof are
listed on Schedule 4 to this Agreement.
     (v) Origination and Acquisition of Loans. The Loans were originated or
acquired by Seller, and the origination and collection practices used by Seller
or Qualified Originator, as applicable, with respect to the Loans have been, in
all material respects legal, proper, prudent and customary in the residential
mortgage loan origination and servicing business, and in accordance with the
Underwriting Guidelines. With respect to Loans acquired by Seller, all such

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Loans are in conformity with the Underwriting Guidelines. Each of the Loans
complies with the representations and warranties listed in Schedule 1-A hereto
(and, in the case of Fannie Mae Loans, Schedule 1-B hereto, and, in the case of
Freddie Mac Loans, Schedule 1-C hereto).
     (w) No Adverse Selection. Seller used no selection procedures that
identified the Eligible Loans as being less desirable or valuable than other
comparable Loans owned by Seller.
     (x) Seller Solvent; Fraudulent Conveyance. As of the date hereof and
immediately after giving effect to each Transaction, the fair value of the
assets of Seller is greater than the fair value of the liabilities (including,
without limitation, contingent liabilities if and to the extent required to be
recorded as a liability on the financial statements of Seller in accordance with
GAAP) of Seller and Seller is and will be solvent, is and will be able to pay
its debts as they mature and does not and will not have an unreasonably small
capital to engage in the business in which it is engaged and proposes to engage.
Seller does not intend to incur, or believe that it has incurred, debts beyond
its ability to pay such debts as they mature. Seller is not contemplating the
commencement of insolvency, bankruptcy, liquidation or consolidation proceedings
or the appointment of a receiver, liquidator, conservator, trustee or similar
official in respect of Seller or any of its assets. Seller is not transferring
any Loans with any intent to hinder, delay or defraud any of its creditors.
     (y) No Broker. Seller has not dealt with any broker, investment banker,
agent, or other person, except for Buyer, who may be entitled to any commission
or compensation in connection with the sale of Purchased Loans pursuant to this
Agreement; provided, that if Seller has dealt with any broker, investment
banker, agent, or other person, except for Buyer, who may be entitled to any
commission or compensation in connection with the sale of Purchased Loans
pursuant to this Agreement, such commission or compensation shall have been paid
in full by Seller.
     (z) MERS. Seller is a member of MERS in good standing.
     (aa) FNMA Loan Purchase Account. Seller has directed Fannie Mae to deposit
directly into the FNMA Loan Purchase Account the purchase price and all other
amounts to be paid by Fannie Mae to or upon the direction of Seller in
connection with the purchase from time to time of Landscape Loans by Fannie Mae
from Seller. Seller has not amended, supplemented or otherwise modified in any
respect such payment and deposit directions without Buyer’s prior written
consent.
     (bb) GCFP Sub-Account. Seller has directed FNMA Account Bank to deposit
daily into the GCFP Sub-Account the purchase price and all other amounts to be
deposited by Fannie Mae into the FNMA Loan Purchase Account in connection with
Fannie Mae’s purchase from Seller from time to time of Landscape Loans that are
subject to Transactions under this Agreement immediately prior to such purchase.
Seller has not amended, supplemented or otherwise modified in any respect such
direction without Buyer’s prior written consent.

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13. COVENANTS OF SELLER
     Seller covenants and agrees with Buyer that during the term of this
Agreement:
     (a) Financial Statements and Other Information; Financial Covenants.
     Seller shall deliver to Buyer:
     (i) As soon as available and in any event within 45 days after the end of
each of the first three quarterly fiscal periods of each fiscal year of Seller,
a certification in the form of Exhibit A together with the consolidated balance
sheets of Seller and its consolidated Subsidiaries as at the end of such period
and the related unaudited consolidated statements of income and retained
earnings and of cash flows for Seller and the consolidated Subsidiaries of
Seller for such period and the portion of the fiscal year through the end of
such period, setting forth in each case in comparative form the figures for the
previous year, accompanied by a certificate of a Responsible Officer of Seller,
which certificate shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of Seller
and the Subsidiaries of Seller in accordance with GAAP, consistently applied, as
at the end of, and for, such period (subject to normal year-end audit
adjustments);
     (ii) As soon as available and in any event within 90 days after the end of
each fiscal year of Seller, the consolidated balance sheets of Seller and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for
Seller and its consolidated Subsidiaries for such year, setting forth in each
case in comparative form the figures for the previous year, accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall not be qualified as to scope of audit or
going concern and shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of Seller
and its consolidated Subsidiaries at the end of, and for, such fiscal year in
accordance with GAAP;
     (iii) From time to time such other information regarding the financial
condition, operations, or business of Seller as Buyer may reasonably request;
and
     (iv) As soon as reasonably possible, and in any event within thirty
(30) days after a Responsible Officer knows, or with respect to any Plan or
Multiemployer Plan to which Seller, or any Subsidiaries of Seller makes direct
contributions, has reason to believe, that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan has occurred or
exists, a statement signed by a senior financial officer of Seller setting forth
details respecting such event or condition and the action, if any, that Seller
or its ERISA Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC by Seller or an
ERISA Affiliate with respect to such event or condition):
     a. any reportable event, as defined in Section 4043(b) of ERISA and the
regulations issued thereunder, with respect to a Plan, as to

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which PBGC has not by regulation or otherwise waived the requirement of
Section 4043(a) of ERISA that it be notified within thirty (30) days of the
occurrence of such event (provided that a failure to meet the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA, including, without
limitation, the failure to make on or before its due date a required installment
under Section 412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code); and any request for a waiver under Section 412(d)
of the Code for any Plan;
     b. the distribution under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan or any action taken by Seller or an ERISA Affiliate to
terminate any Plan;
     c. the institution by PBGC of proceedings under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Plan, or
the receipt by Seller or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such Multiemployer
Plan;
     d. the complete or partial withdrawal from a Multiemployer Plan by Seller
or any ERISA Affiliate that results in liability under Section 4201 or 4204 of
ERISA (including the obligation to satisfy secondary liability as a result of a
purchaser default) or the receipt by Seller or any ERISA Affiliate of notice
from a Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;
     e. the institution of a proceeding by a fiduciary of any Multiemployer Plan
against Seller or any ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days; and
     f. the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss
of tax-exempt status of the trust of which such Plan is a part if Seller or an
ERISA Affiliate fails to timely provide security to such Plan in accordance with
the provisions of said Sections.
     (v) Seller will furnish to Buyer, at the time it furnishes each set of
financial statements pursuant to paragraphs (i) or (ii) above, a certificate of
a Responsible Officer of Seller to the effect that, to the best of such
Responsible Officer’s knowledge, Seller during such fiscal period or year has
observed or performed all of its covenants and other agreements, and satisfied
every material condition, contained in this Agreement and the other Program
Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default, Event of Default
or

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Event of Termination except as specified in such certificate (and, if any
Default, Event of Default or Event of Termination has occurred and is
continuing, describing the same in reasonable detail and describing the action
Seller has taken or proposes to take with respect thereto).
     (b) Litigation. Seller will promptly, and in any event within five
(5) Business Days after service of process on any of the following, give to
Buyer notice of all legal or arbitrable proceedings affecting Seller or any of
its Subsidiaries that questions or challenges the validity or enforceability of
any of the Program Documents or as to which an adverse determination would
result in a Material Adverse Effect to the extent that such legal or arbitrable
proceedings were not disclosed on Schedule 5 hereto.
     (c) Existence, Etc. Each of Seller and its Subsidiaries will:
     (i) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises;
     (ii) comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities (including, without
limitation, truth in lending, real estate settlement procedures and all
environmental laws) if failure to comply with such requirements would be
reasonably likely (either individually or in the aggregate) to have a Material
Adverse Effect;
     (iii) keep adequate records and books of account, in which complete entries
will be made in accordance with GAAP consistently applied;
     (iv) not move its chief executive office or chief operating office from the
addresses referred to in Section 12(l) unless it shall have provided Buyer
30 days prior written notice of such change;
     (v) pay and discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its Property prior
to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained; and
     (vi) permit representatives of Buyer, during normal business hours upon
three (3) Business Days’ prior written notice at a mutually desirable time or at
any time during the continuance of an Event of Default or Event of Termination,
to examine, copy and make extracts from its books and records, to inspect any of
its Properties, and to discuss its business and affairs with its officers, all
to the extent reasonably requested by Buyer.
     (d) Prohibition of Fundamental Changes. Seller shall not at any time,
directly or indirectly, (i) enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation, winding up or dissolution) or sell all or substantially
all of its assets without Buyer’s prior consent; or (ii) form or enter into any
partnership, joint venture, syndicate or other combination which would have a
Material Adverse Effect.

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     (e) Margin Deficit. If at any time there exists a Margin Deficit, Seller
shall cure the same in accordance with Section 6 hereof.
     (f) Notices. Seller shall give notice to Buyer promptly in writing of any
of the following:
     (i) Upon Seller becoming aware of, and in any event within one (1) Business
Day after the occurrence of any Default, Event of Default, Event of Termination
under Section 17(a)(ii) or Section 17(a)(iii) or any event of default, default
or event of termination under any Program Document or other material agreement
of the type specified in Section 18(q) of Seller;
     (ii) upon, and in any event within five (5) Business Days after, service of
process on Seller or any of its Subsidiaries, or any agent thereof for service
of process, in respect of any legal or arbitrable proceedings affecting Seller
or any of its Subsidiaries that (i) questions or challenges the validity or
enforceability of any of the Program Documents or (ii) is required to be
disclosed by Guarantor in its public filings pursuant to the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission as in effect from time to time thereunder;
     (iii) upon Seller becoming aware of any default related to any Purchased
Items, any Material Adverse Effect, and any event or change in circumstances
which should reasonably be expected to have a Material Adverse Effect;
     (iv) upon Seller becoming aware during the normal course of its business
that the Mortgaged Property in respect of any Loan or Loans with an aggregate
unpaid principal balance of at least $1,000,000 has been damaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty, or
otherwise damaged so as to materially and adversely affect the value of such
Loan;
     (v) upon the entry of a final, non-appealable judgment or decree against
Seller or any of its Subsidiaries in an amount in excess of $3,000,000;
     (vi) any material change in the insurance coverage required of Seller or
any other Person pursuant to any Program Document, with copy of evidence of same
attached;
     (vii) any material dispute, licensing issue, litigation, investigation,
proceeding or suspension between Seller or its Subsidiaries, on the one hand,
and any Governmental Authority or any other Person; and
     (viii) any material change in accounting policies or financial reporting
practices of Seller or its Subsidiaries.
Each notice pursuant to this Section 13(f) (other than (vi) above) shall be
accompanied by a statement of a Responsible Officer of Seller, setting forth
details of the occurrence referred to therein and stating what action Seller has
taken or proposes to take with respect thereto.

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     (g) Servicing. Except as provided in Section 43, Seller shall not permit
any Person other than Seller to service Loans without the prior written consent
of Buyer, which consent shall not be unreasonably withheld.
     (h) Underwriting Guidelines. Seller shall not permit any material
modifications to be made to the Underwriting Guidelines and shall not request
that any material modifications be made to any Agency Guidelines that will in
any case impact either Buyer or the Purchased Loans without the prior consent of
Buyer (such consent not to be unreasonably withheld); provided, however, that
the consent of Buyer shall not be required for any modifications required
pursuant to the Agency Guidelines (other than with respect to material changes
to Agency Guidelines specifically agreed to by Seller and the related Agency).
Seller agrees to deliver to Buyer copies of the Underwriting Guidelines and the
Agency Guidelines in the event that any material changes are made to the
Underwriting Guidelines or any material changes requested by Seller are made to
the Agency Guidelines, in each case following the Effective Date.
     (i) Lines of Business. Seller shall not make any material change in the
nature of its business as conducted on the date hereof.
     (j) Transactions with Affiliates. Seller will not enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of Seller’s business and (c) upon fair and reasonable terms no
less favorable to Seller than it would obtain in a comparable arm’s length
transaction with a Person which is not an Affiliate.
     (k) Defense of Title. Seller warrants and will defend the right, title and
interest of Buyer in and to all Purchased Items against all adverse claims and
demands of all Persons whomsoever.
     (l) Preservation of Purchased Items. Seller shall do all things necessary
to preserve the Purchased Items so that such Purchased Items remain subject to a
first priority perfected security interest hereunder. Without limiting the
foregoing, Seller will comply with all applicable laws, rules and regulations of
any Governmental Authority applicable to Seller or relating to the Purchased
Items and cause the Purchased Items to comply with all applicable laws, rules
and regulations of any such Governmental Authority. Seller will not allow any
default to occur for which Seller is responsible under any Purchased Items or
any Program Documents and Seller shall fully perform or cause to be performed
when due all of its obligations under any Purchased Items or the Program
Documents.
     (m) No Assignment. Seller shall not sell, assign, transfer or otherwise
dispose of, or grant any option with respect to, or pledge, hypothecate or grant
a security interest in or lien on or otherwise encumber (except pursuant to the
Program Documents), any of the Purchased Loans or any interest therein, provided
that this Section 13(m) shall not prevent any contribution, assignment, transfer
or conveyance of Purchased Loans in accordance with the Program Documents.

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     (n) Limitation on Sale of Assets. Seller shall not convey, sell, lease,
assign, transfer or otherwise dispose of (collectively, “Transfer”), all or
substantially all of its Property, business or assets (including, without
limitation, receivables and leasehold interests) whether now owned or hereafter
acquired or allow any Subsidiary to Transfer substantially all of its assets to
any Person; provided, that Seller may after prior written notice to Buyer allow
such action with respect to any Subsidiary which is not a material part of
Seller’s overall business operations.
     (o) [Reserved]
     (p) [Reserved]
     (q) Maintenance of Consolidated Net Worth. Guarantor shall not permit its
Consolidated Net Worth on the last day of any fiscal quarter to be less than the
sum of (i) $1,000,000,000 plus (ii) 25% of Consolidated Net Income, if positive,
for each fiscal quarter ended after December 31, 2004.
     (r) Maintenance of Ratio of Total Indebtedness to Tangible Net Worth.
Guarantor shall not permit the ratio of Indebtedness of the Guarantor and its
Consolidated Subsidiaries to Guarantor’s Tangible Net Worth to exceed 10.0 to
1.0.
     (s) [Reserved].
     (t) Servicing Transmission. Seller shall provide to Buyer on a monthly
basis no later than 11:00 a.m. New York City time two (2) Business Days prior to
each Repurchase Date (or such other day requested by Buyer) (i) the Servicing
Transmission, on a loan-by-loan basis and in the aggregate, with respect to the
Loans serviced hereunder by Seller which were funded prior to the first day of
the current month, summarizing Seller’s delinquency and loss experience with
respect to Loans serviced by Seller (including, in the case of the Loans, the
following categories: current, 30-59, 60-89, 90-119, 120-180 and 180+) and
(ii) any other information reasonably requested by Buyer with respect to the
Loans.
     (u) No Amendment or Compromise. Without Buyer’s prior written consent, none
of Seller or those acting on Seller’s behalf shall amend or modify, or waive any
term or condition of, or settle or compromise any claim in respect of, any item
of the Purchased Loans, any related rights or any of the Program Documents,
provided that Seller may amend or modify a Loan if such amendment or
modification does not affect the amount or timing of any payment of principal or
interest, extend its scheduled maturity date, modify its interest rate, or
constitute a cancellation or discharge of its outstanding principal balance and
does not materially and adversely affect the security afforded by the real
property, furnishings, fixtures, or equipment securing the Loan.
     (v) Maintenance of Property; Insurance. Seller shall keep all property
useful and necessary in its business in good working order and condition. Seller
shall maintain errors and omissions insurance and/or mortgage impairment
insurance and blanket bond coverage in such amounts as are in effect on the
Effective Date (as disclosed to Buyer in writing) and shall not reduce such
coverage without the written consent of Buyer, and shall also maintain such
other insurance with financially sound and reputable insurance companies, and
with respect to property and risks of a character usually maintained by entities
engaged in the same or similar

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business similarly situated, against loss, damage and liability of the kinds and
in the amounts customarily maintained by such entities; provided further that
the Seller may amend or modify a Loan in the ordinary course of business to
correct errors in accordance with Accepted Servicing Practices.
     (w) Further Identification of Purchased Items. Seller will furnish to Buyer
from time to time statements and schedules further identifying and describing
the Purchased Items and such other reports in connection with the Purchased
Items as Buyer may reasonably request, all in reasonable detail.
     (x) Loan Determined to be Defective. Upon discovery by Seller or Buyer of
any breach of any representation or warranty listed on Schedules 1-A, 1-B or 1-C
hereto applicable to any Loan, the party discovering such breach shall promptly
give notice of such discovery to the other.
     (y) [Reserved.]
     (z) Certificate of a Responsible Officer of Seller. At the time that Seller
delivers financial statements to Buyer in accordance with Section 13(a) hereof,
Seller shall forward to Buyer a certificate of a Responsible Officer of Seller
which demonstrates that Seller is in compliance with the covenants set forth in
Sections 13(q) and (r) above.
     (aa) [Reserved]
     (bb) [Reserved]
     (cc) Maintenance of Papers, Records and Files. Seller shall acquire, and
Seller shall build, maintain and have available, a complete file in accordance
with lending industry custom and practice for each Purchased Loan. Seller will
maintain all such Records not in the possession of Custodian in good and
complete condition in accordance with industry practices and preserve them
against loss or destruction.
     (i) Seller shall collect and maintain or cause to be collected and
maintained all Records relating to the Purchased Loans in accordance with
industry custom and practice, including those maintained pursuant to the
preceding subsection, and all such Records shall be in Custodian’s possession
unless Buyer otherwise approves. Seller will not cause or authorize any such
papers, records or files that are an original or an only copy to leave
Custodian’s possession, except for individual items removed in connection with
servicing a specific Loan, in which event Seller will obtain or cause to be
obtained a receipt from the Custodian for any such paper, record or file.
     (ii) For so long as Buyer has an interest in or lien on any Purchased Loan,
Seller will hold or cause to be held all related Records in trust for Buyer.
Seller shall notify, or cause to be notified, every other party holding any such
Records of the interests and liens granted hereby.
     (iii) Upon reasonable advance notice from Custodian or Buyer, Seller shall
(x) make any and all such Records available to Custodian or Buyer to examine any
such

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Records, either by its own officers or employees, or by agents or contractors,
or both, and make copies of all or any portion thereof, (y) permit Buyer or its
authorized agents to discuss the affairs, finances and accounts of Seller with
Seller’s officers who have relevant knowledge and to discuss the affairs,
finances and accounts of Seller with its independent certified public
accountants. Seller shall use reasonable efforts to cause its independent
certified public accountants to discuss such matters with Buyer.
     (dd) Maintenance of Licenses. Seller shall (i) maintain all licenses,
permits or other approvals necessary for Seller to conduct its business and to
perform its obligations under the Program Documents, (ii) remain in good
standing under the laws of each state in which it conducts business or any
Mortgage Property is located, and (iii) shall conduct its business strictly in
accordance with applicable law.
     (ee) Taxes, Etc. Seller shall pay and discharge or cause to be paid and
discharged, when due, all taxes, assessments and governmental charges or levies
imposed upon Seller or upon its income and profits or upon any of its property,
real, personal or mixed (including without limitation, the Purchased Loans) or
upon any part thereof, as well as any other lawful claims which, if unpaid,
might become a Lien upon such properties or any part thereof, except for any
such taxes, assessments and governmental charges, levies or claims as are
appropriately contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are provided. Seller shall
file on a timely basis all federal, and material state and local tax and
information returns, reports and any other information statements or schedules
required to be filed by or in respect of it.
     (ff) [Reserved.]
     (gg) Change of Fiscal Year. Seller will not at any time, directly or
indirectly, except upon sixty (60) days’ prior written notice to Buyer, change
the date on which Seller’s fiscal year begins from Seller’s current fiscal year
beginning date.
     (hh) Delivery of Servicing Rights and Servicing Records. With respect to
the Servicing Rights of each Purchased Loan, Seller shall deliver such Servicing
Rights to Buyer on the related Purchase Date. With respect to the Servicing
Records and the physical servicing of the Purchased Loans, Seller shall deliver
such Servicing Records to the designee of Buyer, within (75) days of a Purchase
Date, unless otherwise stated in writing by Buyer; provided that on each
Repurchase Date that is subject to a new Transaction, such delivery requirement
is deemed restated for such new Transaction (and the immediately preceding
delivery requirement is deemed to be rescinded) in the absence of directions to
the contrary from Buyer, and a new 75 day period is deemed to commence as of
such Repurchase Date. Seller’s transfer of the Servicing Rights and Servicing
Records under this Section shall be in accordance with customary standards in
the industry and such transfer shall include the transfer of the gross amount of
escrows held for the related mortgagors (without reduction for outstanding
advances or “negative escrows”).
     (ii) Establishment of Collection Account. Prior to the initial Purchase
Date, Seller shall establish the Collection Account for the sole and exclusive
benefit of Buyer. Seller shall segregate all amounts collected on account of the
Purchased Loans, to be held in trust for the

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benefit of Buyer, and shall remit such collections in accordance with Buyer’s
written instructions. No amounts deposited into such account shall be removed
without Buyer’s prior written consent. Seller shall follow the instructions of
Buyer with respect to the Purchased Loans and deliver to Buyer any information
with respect to the Purchased Loans reasonably requested by Buyer. Seller shall
deposit or credit to the Collection Account all items to be deposited or
credited thereto irrespective of any right of setoff or counterclaim arising in
favor of it (or any third party claiming through it) under any other agreement
or arrangement.
     (jj) Establishment of FNMA Loan Purchase Account. Prior to the initial
Purchase Date, Seller shall establish the FNMA Loan Purchase Account for the
sole and exclusive benefit of Buyer and the other lenders having an interest
therein. Seller shall direct Fannie Mae to deposit directly to the FNMA Loan
Purchase Account the purchase price, and all other amounts to be paid by Fannie
Mae in connection with its purchase of Landscape Loans from Seller from time to
time. Seller shall segregate all amounts on deposit in the FNMA Loan Purchase
Account and shall hold such amounts in trust for the benefit of Buyer and the
other lenders having an interest therein. Seller shall not amend, supplement or
otherwise modify in any respect the payment and deposit direction relating to
Buyer’s interest in the FNMA Loan Purchase Account, Landscape Loans subject to
Transactions under this Agreement from time to time or the GCFP Sub-Account
without Buyer’s prior written consent. Seller shall deposit or credit to the
FNMA Loan Purchase Account all items to be deposited or credited thereto
irrespective of any right of setoff or counterclaim arising in favor of it (or
any third party claiming through it) under any other agreement or arrangement.
     (kk) Establishment of GCFP Sub-Account. Prior to the initial Purchase Date,
Seller shall establish the GCFP Sub-Account for the sole and exclusive benefit
of Buyer. Seller shall direct FNMA Account Bank to deposit directly to the GCFP
Sub-Account the purchase price, and all other amounts on deposit in the FNMA
Loan Purchase Account that relate to Fannie Mae’s purchase from Seller from time
to time of Landscape Loans that are from time to time subject to Transactions
under this Agreement. Prior to the occurrence and continuance of a Default or an
Event of Default, Seller shall direct FNMA Account Bank with respect to the
disposition of funds on deposit in the GCFP Sub-Account irrespective of whether
such funds relate to Landscape Loans then subject to Transactions under this
Agreement. Upon the occurrence and continuance of a Default or an Event of
Default, all amounts on deposit in the GCFP Sub-Account shall be subject to
Buyer’s exclusive control and Seller’s authority to direct the disposition of
such funds shall immediately cease. Seller shall deposit or credit to the GCFP
Sub-Account all items to be deposited or credited thereto irrespective of any
right of setoff or counterclaim arising in favor of it (or any third party
claiming through it) under any other agreement or arrangement. Seller shall
segregate all amounts on deposit in the GCFP Sub-Account and shall hold such
amounts in trust for the benefit of Buyer, and shall remit all such amounts
payable to Buyer in accordance with Buyer’s written instructions. Seller shall
not amend, supplement or otherwise modify in any respect the foregoing
procedures without Buyer’s prior written consent.
     (ll) MERS. Seller will comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the MERS Loans for as
long as such Purchased Loans are registered with MERS.

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14. REPURCHASE DATE PAYMENTS
     On each Repurchase Date, Seller shall remit or shall cause to be remitted
to Buyer the Repurchase Price together with any other Obligations then due and
payable.
15. REPURCHASE OF PURCHASED LOANS
     Upon discovery by Seller of a breach of any of the representations and
warranties set forth on Schedules 1-A, 1-B or 1-C to this Agreement, Seller
shall give prompt written notice thereof to Buyer. Upon any such discovery by
Buyer, Buyer will notify Seller. It is understood and agreed that the
representations and warranties set forth in Schedules 1-A, 1-B and 1-C with
respect to the Purchased Loans shall survive delivery of the respective Mortgage
Files to the Custodian and shall inure to the benefit of Buyer. The fact that
Buyer has conducted or has failed to conduct any partial or complete due
diligence investigation in connection with its purchase of any Purchased Loan
shall not affect Buyer’s right to demand repurchase as provided under this
Agreement. Seller shall, within two (2) Business Days of the earlier of Seller’s
discovery or Seller receiving notice with respect to any Purchased Loan of
(i) any breach of a representation or warranty contained in Schedules 1-A, 1-B
or 1-C, or (ii) any failure to deliver any of the items required to be delivered
as part of the Mortgage File within the time period required for delivery
pursuant to the Custodial Agreement, promptly cure such breach or delivery
failure in all material respects. If within two (2) Business Days after the
earlier of Seller’s discovery of such breach or delivery failure or Seller
receiving notice thereof that such breach or delivery failure has not been
remedied by Seller, Seller shall promptly upon receipt of written instructions
from Buyer, at Buyer’s option, either (i) repurchase such Purchased Loan at a
purchase price equal to the Repurchase Price with respect to such Purchased Loan
by wire transfer to the account designated by Buyer, or (ii) transfer comparable
Substitute Loans to Buyer, as provided in Section 16 hereof.
16. SUBSTITUTION
     Seller may, subject to agreement with and acceptance by Buyer upon one
(1) Business Day’s notice, substitute other assets which are substantially the
same as the Purchased Loans (the “Substitute Loans”) for any Purchased Loans.
Such substitution shall be made by transfer to Buyer of such Substitute Loans
and transfer to Seller of such Purchased Loans (the “Reacquired Loans”) along
with the other information to be provided with respect to the applicable
Substitute Loan as described in the form of Transaction Notice. Upon
substitution, the Substitute Loans shall be deemed to be Purchased Loans, the
Reacquired Loans shall no longer be deemed Purchased Loans, Buyer shall be
deemed to have terminated any security interest that Buyer may have had in the
Reacquired Loans and any Purchased Items solely related to such Reacquired Loans
to Seller unless such termination and release would give rise to or perpetuate a
Margin Deficit. Concurrently with any termination and release described in this
Section 16, Buyer shall execute and deliver to Seller upon request and Buyer
hereby authorizes Seller to file and record such documents as Seller may
reasonably deem necessary or advisable in order to evidence such termination and
release.

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17. EVENT OF TERMINATION
     (a) Each of the following events shall constitute an Event of Termination
(an “Event of Termination”):
     (i) Any event having a material adverse effect, as determined by Buyer in
good faith, on (A) the property, business, operations, or financial condition of
Seller or Guarantor, (B) the ability of Seller or Guarantor to perform its
obligations under any of the Program Documents to which it is a party, (C) the
validity or enforceability of any of the Program Documents, (D) the rights and
remedies of Buyer under any of the Program Documents, (E) the timely repurchase
of the Purchased Loans or payment of other amounts payable in connection
therewith or (F) the Purchased Items in the aggregate;
     (ii) Buyer shall reasonably request, specifying the reasons for such
request, reasonable information, and/or written responses to such requests,
regarding the financial well being of Seller and such reasonable information
and/or responses shall not have been provided within three (3) Business Days of
such request; and
     (iii) Seller’s membership in MERS is terminated for any reason and such
membership shall not be reinstated within five (5) Business Days.
     (b) Upon the occurrence of an Event of Termination, Buyer shall have the
right to terminate this Agreement and all Transactions hereunder by delivering
written notice of termination to Seller (a “Notice of Termination”), in which
event (i) Buyer’s obligation to enter into new Transactions hereunder shall
immediately terminate, (ii) the aggregate outstanding Repurchase Price for all
Transactions hereunder and all other Obligations shall be due and payable on the
date that is sixty (60) days following delivery of such Notice of Termination to
Seller (such date, the “Early Termination Date”) and (iii) the Repurchase Date
for all Transactions then outstanding hereunder shall be deemed to be the Early
Termination Date.
18. EVENTS OF DEFAULT
     Each of the following events shall constitute an Event of Default (an
“Event of Default”) hereunder:
     (a) Seller fails to transfer the Purchased Loans to Buyer on the applicable
Purchase Date (provided Buyer has tendered the related Purchase Price);
     (b) Seller either fails to repurchase the Purchased Loans on the applicable
Repurchase Date or fails to perform its obligations under Section 6 or the
Guarantor fails to comply with any of its obligations under the Guaranty;
     (c) Seller shall default in the payment of any other amount payable by it
hereunder or under any other Program Document after notification by Buyer of
such default, and such default shall have continued unremedied for three
Business Days; or
     (d) any representation, warranty or certification made or deemed made
herein or in any other Program Document by Seller or any certificate furnished
to Buyer pursuant to the

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provisions thereof, shall prove to have been false or misleading in any material
respect as of the time made or furnished (other than the representations and
warranties set forth in Schedules 1-A, 1-B and 1-C which shall be considered
solely for the purpose of determining the Market Value of the Loans; unless
(i) Seller shall have made any such representations and warranties with
knowledge that they were materially false or misleading at the time made or
(ii) any such representations and warranties have been determined by Buyer in
its sole discretion to be materially false or misleading on a regular basis);
     (e) Seller shall fail to comply with the requirements of Section 13(c)(i),
Section 13(d), Section 13(f)(i) or (iii), Sections 13(k) through 13(r),
Section 13(v), Section 13(jj) or Section 13(kk) hereof; or Seller shall
otherwise fail to observe or perform any other agreement contained in this
Agreement or any other Program Document and such failure to observe or perform
shall continue unremedied for a period of five (5) Business Days;
     (f) any final, non-appealable judgment or judgments or order or orders for
the payment of money in excess of $3,000,000 in the aggregate (to the extent
that it is, in the reasonable determination of Buyer, uninsured and provided
that any insurance or other credit posted in connection with an appeal shall not
be deemed insurance for these purposes) shall be rendered against Seller or any
of Seller’s Affiliates or Subsidiaries by one or more courts, administrative
tribunals or other bodies having jurisdiction over them and the same shall not
be discharged (or provisions shall not be made for such discharge), satisfied,
or bonded, or a stay of execution thereof shall not be procured, within sixty
(60) days from the date of entry thereof and Seller or any of Seller’s
Affiliates or Subsidiaries, as applicable, shall not, within said period of
sixty (60) days, appeal therefrom and cause the execution thereof to be stayed
during such appeal;
     (g) Seller shall admit in writing its inability to, or intention not to,
perform any of Seller’s Obligations;
     (h) Seller or any of Seller’s Affiliates or Subsidiaries files a voluntary
petition in bankruptcy, seeks relief under any provision of any bankruptcy,
reorganization, moratorium, delinquency, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction whether now or
subsequently in effect; or consents to the filing of any petition against it
under any such law; or consents to the appointment of or taking possession by a
custodian, receiver, conservator, trustee, liquidator, sequestrator or similar
official for Seller or any of Seller’s Affiliates or Subsidiaries, or of all or
any part of Seller’s or Seller’s Affiliates or Subsidiaries’ Property; or makes
an assignment for the benefit of Seller or Seller’s Affiliates or Subsidiaries’
creditors;
     (i) A custodian, receiver, conservator, liquidator, trustee, sequestrator
or similar official for Seller, or any of Seller’s Affiliates or Subsidiaries,
or of any of Seller’s, or their respective Property (as a debtor or creditor
protection procedure), is appointed or takes possession of such Property; or
Seller or any of Seller’s Affiliates or Subsidiaries generally fails to pay
Seller’s or Seller’s Affiliates’ or Subsidiaries’ debts as they become due; or
Seller or any of Seller’s Affiliates or Subsidiaries is adjudicated bankrupt or
insolvent; or an order for relief is entered under the Bankruptcy Code, or any
successor or similar applicable statute, or any administrative insolvency
scheme, against Seller or any of Seller’s Affiliates or Subsidiaries; or

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any of Seller’s or Seller’s Affiliates’ or Subsidiaries’ Property is sequestered
by court or administrative order; or a petition is filed against Seller or any
of Seller’s Affiliates or Subsidiaries under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, moratorium,
delinquency or liquidation law of any jurisdiction, whether now or subsequently
in effect, and such involuntary petition is not dismissed within thirty
(30) days from the date after filing thereof;
     (j) Any Governmental Authority or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the Property of Seller or any of Seller’s Affiliates or
Subsidiaries, or shall have taken any action to displace the management of
Seller or any of Seller’s Affiliates or Subsidiaries or to curtail its authority
in the conduct of the business of any Seller or any of Seller’s Affiliates or
Subsidiaries, or takes any action in the nature of enforcement to remove, limit
or restrict the approval of Seller or any of Seller’s Affiliates or Subsidiaries
as an issuer, buyer or a seller/servicer of Loans or securities backed thereby;
     (k) Any Program Document shall for whatever reason (including an event of
default thereunder) be terminated, this Agreement shall for any reason cease to
create a valid, first priority security interest or ownership interest upon
transfer in any of the Purchased Loans or Purchased Items purported to be
covered hereby or any of Seller’s material obligations (including Seller’s
Obligations hereunder) shall cease to be in full force and effect, or the
enforceability thereof shall be contested by Seller;
     (l) Any Event of Termination shall have occurred, as determined by Buyer in
its sole discretion, and Seller shall fail to pay to Buyer on or prior to the
Early Termination Date the aggregate outstanding Repurchase Price for all
Transactions hereunder and any and all other Obligations due and owing to Buyer
or any of its Affiliates;
     (m) (i) any Person shall engage in any “prohibited transaction” (as defined
in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any material “accumulated funding deficiency” (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of Buyer or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of Buyer, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) Seller or
any Commonly Controlled Entity shall, or in the reasonable opinion of Buyer is
likely to, incur any liability in connection with a withdrawal from, or the
insolvency or reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect;

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     (n) A Change of Control of Seller shall have occurred without the prior
consent of Buyer;
     (o) Seller shall grant, or suffer to exist, any Lien on any Purchased Items
except the Liens contemplated hereby; or the Liens contemplated hereby shall
cease to be first priority perfected Liens on the Purchased Items in favor of
Buyer or shall be Liens in favor of any Person other than Buyer;
     (p) Seller or any Subsidiary or Affiliate of Seller shall default under, or
fail to perform as required under, or shall otherwise breach the terms of any
instrument, agreement or contract between Seller or such other entity, on the
one hand, and Buyer or any of Buyer’s Affiliates on the other; Seller or any
Subsidiary or Affiliate of Seller shall be a “defaulting party” or an “affected
party” in respect of an “event of default” or “termination event” (in each case
however such condition is defined) under any ISDA Master Agreement,
International Foreign Exchange and Currency Option Master Agreement, Master
Securities Forward Transaction Agreement, Cross Product Master Agreement or
similar over-the-counter dealing or netting agreement with Buyer, any of Buyer’s
Affiliates or any third party, which condition allows Buyer, Buyer’s relevant
Affiliate or such third party (if applicable, with the giving of notice or after
any grace period has elapsed) to designate an early termination date under, or
which condition is deemed to result in the termination of, one or more
transactions thereunder; or Seller or any Subsidiary or Affiliate of Seller
shall default under, or fail to perform as required under, the terms of any
repurchase agreement, loan and security agreement or similar credit facility or
agreement for borrowed funds or any other material agreement entered into by
Seller or such other entity and any third party, unless such default or failure
to perform is a default under the Revolving Credit Agreement and RBS has
expressly waived such default; and
     (q) an Event of Default shall have occurred under the Guaranty.
19. REMEDIES
     Upon the occurrence of an Event of Default, Buyer, at its option (which
option shall be deemed to have been exercised immediately upon the occurrence of
an Event of Default pursuant to Section 18(g), (h), (i) or (j) hereof), shall
have the right to exercise any or all of the following rights and remedies:
     (a) (i) The Repurchase Date for each Transaction hereunder shall, if it has
not already occurred, be deemed immediately to occur (provided that, in the
event that the Purchase Date for any Transaction has not yet occurred as of the
date of such exercise or deemed exercise, such Transaction shall be deemed
immediately canceled). Seller’s obligations hereunder to repurchase all
Purchased Loans at the Repurchase Price therefor on the Repurchase Date
(determined in accordance with the preceding sentence) in such Transactions
shall thereupon become immediately due and payable; all Income then on deposit
in the Collection Account and all Income paid after such exercise or deemed
exercise shall be remitted to and retained by Buyer and applied to the aggregate
Repurchase Price and any other amounts owing by Seller hereunder; Seller shall
immediately deliver to Buyer or its designee any and all original papers,
Servicing Records and files relating to the Purchased Loans subject to such
Transaction then in

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Seller’s possession and/or control; and all right, title and interest in and
entitlement to such Purchased Loans and Servicing Rights thereon shall be deemed
transferred to Buyer or its designee.
     (ii) Buyer shall have the right to (A) sell, on or following the Business
Day following the date on which the Repurchase Price became due and payable
pursuant to Section 19(a)(i) without notice or demand of any kind, at a public
or private sale and at such price or prices as Buyer may deem to be commercially
reasonable for cash or for future delivery without assumption of any credit
risk. Buyer may purchase any or all of the Purchased Assets at any public or
private sale. Seller shall remain liable to Buyer for any amounts that remain
owing to Buyer following a sale and/or credit under the preceding sentence. The
proceeds of any disposition of Purchased Loans shall be applied first to the
reasonable costs and expenses incurred by Buyer in connection with or as a
result of an Event of Default; second to Breakage Costs, if any, costs of cover
and/or related hedging transactions; third to the aggregate Repurchase Prices;
and fourth to all other Obligations.
     (iii) Buyer shall have the right to terminate this Agreement and declare
all obligations of Seller to be immediately due and payable, by a notice in
accordance with Section 21 hereof provided no such notice shall be required for
an Event of Default pursuant to Section 18(g),(h),(i) or (j) hereof.
     (iv) The parties recognize that it may not be possible to purchase or sell
all of the Purchased Loans on a particular Business Day, or in a transaction
with the same purchaser, or in the same manner because the market for such
Purchased Loans may not be liquid. In view of the nature of the Purchased Loans,
the parties agree that liquidation of a Transaction or the underlying Purchased
Loans does not require a public purchase or sale and that a good faith private
purchase or sale shall be deemed to have been made in a commercially reasonable
manner. Accordingly, Buyer may elect the time and manner of liquidating any
Purchased Loan and nothing contained herein shall obligate Buyer to liquidate
any Purchased Loan on the occurrence of an Event of Default or to liquidate all
Purchased Loans in the same manner or on the same Business Day or constitute a
waiver of any right or remedy of Buyer. Notwithstanding the foregoing, the
parties to this Agreement agree that the Transactions have been entered into in
consideration of and in reliance upon the fact that all Transactions hereunder
constitute a single business and contractual obligation and that each
Transaction has been entered into in consideration of the other Transactions.
     (v) To the extent permitted by applicable law, Seller waives all claims,
damages and demands it may acquire against Buyer arising out of the exercise by
Buyer of any of its rights hereunder, other than those claims, damages and
demands arising from the gross negligence or willful misconduct of Buyer. If any
notice of a proposed sale or other disposition of Purchased Items shall be
required by law, such notice shall be deemed reasonable and proper if given at
least two (2) days before such sale or other disposition.

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     (b) Seller hereby acknowledges, admits and agrees that Seller’s obligations
under this Agreement are recourse obligations of Seller to which Seller pledges
its full faith and credit. In addition to its rights hereunder, Buyer shall have
the right to proceed against any of Seller’s assets which may be in the
possession of Buyer, any of Buyer’s Affiliates or their respective designees
(including the Custodian), including the right to liquidate such assets and to
set off the proceeds against monies owed by Seller to Buyer pursuant to this
Agreement. Buyer may set off cash, the proceeds of the liquidation of the
Purchased Loans and Additional Purchased Loans, any other Purchased Items and
their proceeds and all other sums or obligations owed by Buyer to Seller against
all of Seller’s obligations to Buyer, whether under this Agreement, under a
Transaction, or under any other agreement between the parties, or otherwise,
whether or not such obligations are then due, without prejudice to Buyer’s right
to recover any deficiency.
     (c) Buyer shall have the right to obtain physical possession of the
Servicing Records and all other files of Seller relating to the Purchased Loans
and all documents relating to the Purchased Loans which are then or may
thereafter come into the possession of Seller or any third party acting for
Seller and Seller shall deliver to Buyer such assignments as Buyer shall
request.
     (d) Buyer shall have the right to direct all Persons servicing the
Purchased Loans to take such action with respect to the Purchased Loans as Buyer
determines appropriate.
     (e) Buyer shall, without regard to the adequacy of the security for the
Obligations, be entitled to the appointment of a receiver by any court having
jurisdiction, without notice, to take possession of and protect, collect,
manage, liquidate, and sell the Purchased Loans and any other Purchased Items or
any portion thereof, collect the payments due with respect to the Purchased
Loans and any other Purchased Items or any portion thereof, and do anything that
Buyer is authorized hereunder or by law to do. Seller shall pay all costs and
expenses incurred by Buyer in connection with the appointment and activities of
such receiver.
     (f) [Reserved.]
     (g) In addition to all the rights and remedies specifically provided
herein, Buyer shall have all other rights and remedies provided by applicable
federal, state, foreign, and local laws, whether existing at law, in equity or
by statute, including, without limitation, all rights and remedies available to
a purchaser or a secured party, as applicable, under the Uniform Commercial
Code.
     Except as otherwise expressly provided in this Agreement, Buyer shall have
the right to exercise any of its rights and/or remedies without presentment,
demand, protest or further notice of any kind other than as expressly set forth
herein, all of which are hereby expressly waived by Seller.
     Buyer may enforce its rights and remedies hereunder without prior judicial
process or hearing, and Seller hereby expressly waives, to the extent permitted
by law, any right Seller might otherwise have to require Buyer to enforce its
rights by judicial process. Seller also waives, to the extent permitted by law,
any defense Seller might otherwise have to the Obligations, arising from use of
nonjudicial process, enforcement and sale of all or any portion of the Purchased
Loans and any other Purchased Items or from any other election of remedies.

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Seller recognizes that nonjudicial remedies are consistent with the usages of
the trade, are responsive to commercial necessity and are the result of a
bargain at arm’s length.
     Seller shall cause all sums received by it with respect to the Purchased
Loans to be deposited with such Person as Buyer may direct after receipt
thereof. Seller shall be liable to Buyer for the amount of all expenses (plus
interest thereon at a rate equal to the Post-Default Rate) and all costs and
expenses incurred within thirty (30) days of the Event of Default in connection
with Buyer’s re-employment of funds, termination of deposits, hedging or
covering transactions related to the Purchased Loans, conduit advances and
payments for mortgage insurance.
20. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE
     No failure on the part of Buyer to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by Buyer of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. All rights and remedies of Buyer provided for
herein are cumulative and in addition to any and all other rights and remedies
provided by law, the Program Documents and the other instruments and agreements
contemplated hereby and thereby, and are not conditional or contingent on any
attempt by Buyer to exercise any of its rights under any other related document.
Buyer may exercise at any time after the occurrence of an Event of Default one
or more remedies, as they so desire, and may thereafter at any time and from
time to time exercise any other remedy or remedies.
21. NOTICES AND OTHER COMMUNICATIONS
     Except as otherwise expressly permitted by this Agreement, all notices,
requests and other communications provided for herein and under the Custodial
Agreement (including, without limitation, any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telex or telecopy) delivered to the intended
recipient at the “Address for Notices” specified below its name on the signature
pages hereof); or, as to any party, at such other address as shall be designated
by such party in a written notice to each other party. Except as otherwise
provided in this Agreement and except for notices given by Seller under
Section 3(a) (which shall be effective only on receipt), all such communications
shall be deemed to have been duly given when transmitted by telex or telecopier
or personally delivered or, in the case of a mailed notice, upon receipt, in
each case given or addressed as aforesaid.
22. USE OF EMPLOYEE PLAN ASSETS
     No assets of an employee benefit plan subject to any provision of the ERISA
shall be used by either party hereto in a Transaction.
23. INDEMNIFICATION AND EXPENSES.
     (a) Seller agrees to hold Buyer, its Affiliates and their respective
officers, directors, employees, agents and advisors (each an “Indemnified
Party”) harmless from and indemnify any Indemnified Party against all
liabilities, losses, damages, judgments, costs and expenses of any

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kind which may be imposed on, incurred by or asserted against such Indemnified
Party (collectively, the “Costs”) relating to or arising out of this Agreement,
any other Program Document or any transaction contemplated hereby or thereby, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, any other Program Document or any transaction
contemplated hereby or thereby, that, in each case, results from anything other
than any Indemnified Party’s gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Seller agrees to hold any Indemnified
Party harmless from and indemnify such Indemnified Party against all Costs with
respect to all Loans relating to or arising out of any violation or alleged
violation of any environmental law, rule or regulation or any consumer credit
laws, including without limitation laws with respect to unfair or deceptive
lending practices and predatory lending practices, the Truth in Lending Act
and/or the Real Estate Settlement Procedures Act, that, in each case, results
from anything other than such Indemnified Party’s gross negligence or willful
misconduct. In any suit, proceeding or action brought by an Indemnified Party in
connection with any Loan for any sum owing thereunder, or to enforce any
provisions of any Loan, Seller will save, indemnify and hold such Indemnified
Party harmless from and against all expense, loss or damage suffered by reason
of any defense, set-off, counterclaim, recoupment or reduction of liability
whatsoever of the account debtor or obligor thereunder, arising out of a breach
by Seller of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such account
debtor or obligor or its successors from Seller. Seller also agrees to reimburse
an Indemnified Party as and when billed by such Indemnified Party for all such
Indemnified Party’s costs and expenses incurred in connection with the
enforcement or the preservation of such Indemnified Party’s rights under this
Agreement, any other Program Document or any transaction contemplated hereby or
thereby, including without limitation the reasonable fees and disbursements of
its counsel. Seller hereby acknowledges that all Obligations of Seller under
this Agreement are recourse obligations of Seller.
     (b) Seller agrees to pay as and when billed by Buyer all of the out-of
pocket costs and expenses incurred by Buyer in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement, any other Program Document or any other documents prepared in
connection herewith or therewith. Seller agrees to pay as and when billed by
Buyer all of the out-of-pocket costs and expenses incurred in connection with
the consummation and administration of the transactions contemplated hereby and
thereby including, without limitation, (i) all the reasonable fees,
disbursements and expenses of counsel to Buyer and (ii) all the due diligence,
inspection, testing and review costs and expenses incurred by Buyer with respect
to Purchased Items under this Agreement, including, but not limited to, those
costs and expenses incurred by Buyer pursuant to Sections 23, 39 and 44 hereof.
Seller also agrees not to assert any claim against Buyer or any of its
Affiliates, or any of their respective officers, directors, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Program Documents,
the actual or proposed use of the proceeds of the Transactions, this Agreement
or any of the transactions contemplated hereby or thereby. THE FOREGOING
INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT
LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT)
OF THE INDEMNIFIED PARTIES.

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     (c) If Seller fails to pay when due any costs, expenses or other amounts
payable by it under this Agreement, including, without limitation, reasonable
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of Seller by Buyer, in its sole discretion and Seller shall remain liable for
any such payments by Buyer. No such payment by Buyer shall be deemed a waiver of
any of Buyer’s rights under the Program Documents.
     (d) Without prejudice to the survival of any other agreement of Seller
hereunder, the covenants and obligations of Seller contained in this Section 23
shall survive the payment in full of the Repurchase Price and all other amounts
payable hereunder and delivery of the Purchased Loans by Buyer against full
payment therefor.
24. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS
     Seller hereby expressly waives, to the fullest extent permitted by law,
every statute of limitation on a deficiency judgment, any reduction in the
proceeds of any Purchased Items as a result of restrictions upon Buyer or
Custodian contained in the Program Documents or any other instrument delivered
in connection therewith, and any right that it may have to direct the order in
which any of the Purchased Items shall be disposed of in the event of any
disposition pursuant hereto.
25. REIMBURSEMENT
     All sums reasonably expended by Buyer in connection with the exercise of
any right or remedy provided for herein shall be and remain Seller’s obligation
(unless and to the extent that Seller is the prevailing party in any dispute,
claim or action relating thereto). Seller agrees to pay, with interest at the
Post-Default Rate to the extent that an Event of Default has occurred, the
reasonable out of pocket expenses and reasonable attorneys’ fees incurred by
Buyer and/or Custodian in connection with the preparation, negotiation,
enforcement (including any waivers), administration and amendment of the Program
Documents (regardless of whether a Transaction is entered into hereunder), the
taking of any action, including legal action, required or permitted to be taken
by Buyer (without duplication to Buyer) and/or Custodian pursuant thereto, any
“due diligence” or loan agent reviews conducted by Buyer or on its behalf or by
refinancing or restructuring in the nature of a “workout.”
26. FURTHER ASSURANCES
     Seller agrees to do such further acts and things and to execute and deliver
to Buyer such additional assignments, acknowledgments, agreements, powers and
instruments as are reasonably required by Buyer to carry into effect the intent
and purposes of this Agreement and the other Program Documents, to perfect the
interests of Buyer in the Purchased Items or to better assure and confirm unto
Buyer its rights, powers and remedies hereunder and thereunder.
27. TERMINATION
     This Agreement shall remain in effect until the Termination Date. However,
no such termination shall affect Seller’s outstanding obligations to Buyer at
the time of such termination. Seller’s obligations under Section 3(h), 3(i),
Section 5, Section 12, Section 23 and Section 25

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and any other reimbursement or indemnity obligation of Seller to Buyer pursuant
to this Agreement or any other Program Documents shall survive the termination
hereof.
28. SEVERABILITY
     If any provision of any Program Document is declared invalid by any court
of competent jurisdiction, such invalidity shall not affect any other provision
of the Program Documents, and each Program Document shall be enforced to the
fullest extent permitted by law.
29. BINDING EFFECT; GOVERNING LAW
     This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective successors and assigns, except that Seller may not
assign or transfer any of its respective rights or obligations under this
Agreement or any other Program Document without the prior written consent of
Buyer. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF (EXCEPT FOR SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
30. AMENDMENTS
     Except as otherwise expressly provided in this Agreement, any provision of
this Agreement may be modified or supplemented only by an instrument in writing
signed by Seller and Buyer and any provision of this Agreement may be waived by
Buyer.
31. SUCCESSORS AND ASSIGNS
     This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
32. SURVIVAL
     The obligations of Seller under Sections 3(h), 3(i), 5, 23 and 25 hereof
and any other reimbursement or indemnity obligation of Seller to Buyer pursuant
to this Agreement or any other Program Document shall survive the repurchase of
the Loans hereunder and the termination of this Agreement. In addition, each
representation and warranty made, or deemed to be made by a request for a
purchase, herein or pursuant hereto shall survive the making of such
representation and warranty, and Buyer shall not be deemed to have waived, by
reason of purchasing any Loan, any Default that may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that Buyer may have had notice or knowledge or reason to believe
that such representation or warranty was false or misleading at the time such
purchase was made.

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33. CAPTIONS
     The table of contents and captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
34. COUNTERPARTS
     This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Agreement by signing any such counterpart.
35. SUBMISSION TO JURISDICTION; WAIVERS
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:
     (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND/OR ANY OTHER PROGRAM DOCUMENT, OR FOR RECOGNITION
AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
COURTS FROM ANY THEREOF;
     (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
     (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH BUYER SHALL HAVE
BEEN NOTIFIED; AND
     (D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN
ANY OTHER JURISDICTION.
36. WAIVER OF JURY TRIAL
EACH OF SELLER AND BUYER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING

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TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
37. ACKNOWLEDGEMENTS
     Seller hereby acknowledges that:
     (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Program Documents to which it is a
party;
     (b) Buyer has no fiduciary relationship to Seller; and
     (c) no joint venture exists among or between Buyer and Seller.
38. HYPOTHECATION OR PLEDGE OF PURCHASED ITEMS.
     Buyer shall have free and unrestricted use of all Loans and Purchased Items
and nothing in this Agreement shall preclude Buyer from engaging in repurchase
transactions with the Loans and Purchased Items or otherwise pledging,
repledging, transferring, hypothecating, or rehypothecating the Loans and
Purchased Items, in all cases subject to Buyer’s obligation to reconvey the
Purchased Assets (and not substitutes therefor) on the Repurchase Date. Nothing
contained in this Agreement shall obligate Buyer to segregate any Loans or
Purchased Items delivered to Buyer by Seller.
39. ASSIGNMENTS; PARTICIPATIONS.
     (a) Seller may assign any of its rights or obligations hereunder only with
the prior written consent of Buyer. Buyer may assign or transfer to any bank or
other financial institution that makes or invests in repurchase agreements or
loans or any Affiliate of Buyer all or any of its rights under this Agreement
and the other Program Documents, provided, however, that Buyer shall maintain,
for review by Seller upon written request, a register of assignees and a copy of
an executed assignment and acceptance by Buyer and assignee, specifying the
percentage or portion of such rights and obligations assigned. Seller shall
continue to take directions solely from Buyer unless otherwise notified by Buyer
in writing.
     (b) Buyer may, in accordance with applicable law, at any time sell to one
or more entities (“Participants”) participating interests in this Agreement, its
agreement to purchase Loans, or any other interest of Buyer hereunder and under
the other Program Documents. In the event of any such sale by Buyer of
participating interests to a Participant, Buyer’s obligations under this
Agreement to Seller shall remain unchanged, Buyer shall remain solely
responsible for the performance thereof and Seller shall continue to deal solely
and directly with Buyer in connection with Buyer’s rights and obligations under
this Agreement and the other Program Documents. Seller agrees that if amounts
outstanding under this Agreement are due or unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Buyer under this Agreement; provided, that such Participant shall only be
entitled to such right of set-off if it shall have agreed in the

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agreement pursuant to which it shall have acquired its participating interest to
share with Buyer the proceeds thereof. Buyer also agrees that each Participant
shall be entitled to the benefits of Sections 3(h), 3(i), 23 and 25 with respect
to its participation in the Loans and Purchased Items outstanding from time to
time; provided, that Buyer and all Participants shall be entitled to receive no
greater amount in the aggregate pursuant to such Sections than Buyer would have
been entitled to receive had no such transfer occurred.
     (c) Buyer may furnish any information concerning Seller or any of its
Subsidiaries in the possession of Buyer from time to time to assignees and
Participants (including prospective assignees and Participants) only after
notifying Seller in writing and securing signed confidentiality statements (a
form of which is attached hereto as Exhibit H) and only for the sole purpose of
evaluating assignments or participations and for no other purpose.
     (d) Seller agrees to cooperate with Buyer in connection with any such
assignment and/or participation, to execute and deliver replacement notes, and
to enter into such restatements of, and amendments, supplements and other
modifications to, this Agreement and the other Program Documents in order to
give effect to such assignment and/or participation. Seller further agrees to
furnish to any Participant identified by Buyer to Seller copies of all reports
and certificates to be delivered by Seller to Buyer hereunder, as and when
delivered to Buyer.
40. SINGLE AGREEMENT
     Seller and Buyer acknowledge that, and have entered hereinto and will enter
into each Transaction hereunder in consideration of and in reliance upon the
fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, Seller and Buyer each agree (i) to perform all of its obligations
in respect of each Transaction hereunder, and that a default in the performance
of any such obligations shall constitute a default by it in respect of all
Transactions hereunder, and (ii) that payments, deliveries and other transfers
made by any of them in respect of any Transaction shall be deemed to have been
made in consideration of payments, deliveries and other transfers in respect of
any other Transaction hereunder, and the obligations to make any such payments,
deliveries and other transfers may be applied against each other and netted.
41. INTENT
     Seller and Buyer recognize that each Transaction is a “repurchase
agreement” as that term is defined in Section 101 of Title 11 of the USC, a
“securities contract” as that term is defined in Section 741 of Title 11 of the
USC, and a “master netting agreement” as that term is defined in Section 101 of
Title 11 of the USC.
     It is understood that Buyer’s right to liquidate the Purchased Loans
delivered to it in connection with the Transactions hereunder or to accelerate
or terminate this Agreement or otherwise exercise any other remedies pursuant to
Section 19 hereof is a contractual right to liquidate, accelerate or terminate
such Transaction as described in Sections 555, 559 and 561 of Title 11 of the
USC.

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42. CONFIDENTIALITY
     The Program Documents and their respective terms, provisions, supplements
and amendments, and transactions and notices thereunder, are proprietary to
Buyer and shall be held by Seller in strict confidence and shall not be
disclosed to any third party without the consent of Buyer (such consent not to
be unreasonably withheld) except for (i) disclosure to Seller’s direct and
indirect parent companies, directors, attorneys, agents or accountants, provided
that such attorneys or accountants likewise agree to be bound by this covenant
of confidentiality, or are otherwise subject to confidentiality restrictions,
(ii) upon prior written notice to Buyer, disclosure required by law, rule,
regulation or order of a court or other regulatory body, (iii) upon prior
written notice to Buyer, disclosure to any approved hedge counterparty to the
extent necessary to obtain any Interest Rate Protection Agreement hereunder,
(iv) any disclosures or filing required under Securities and Exchange Commission
(“SEC”) or state securities’ laws or (v) such other circumstances as are
reasonably within the discretion of a public company in order to meet its
corporate obligations; provided that in the case of (ii), (iii), (iv) and
(v) Seller shall take reasonable actions to provide Buyer with prior written
notice. Notwithstanding anything herein to the contrary, each party (and each
employee, representative, or other agent of each party) may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax structure
of the transaction and all materials of any kind (including opinions or other
tax analyses) that are provided to it relating to such tax treatment and tax
structure. For this purpose, tax treatment and tax structure shall not include
(i) the identity of any existing or future party (or any Affiliate of such
party) to this Agreement or (ii) any specific pricing information or other
commercial terms, including the amount of any fees, expenses, rates or payments
arising in connection with the transactions contemplated by this Agreement.
Buyer acknowledges that this Agreement may be filed with the Securities and
Exchange Commission; provided that, Seller shall redact any pricing and other
confidential provisions, including, without limitation, the amount of any
Commitment Fee, Non-Usage Fee, Price Differential and Purchase Price from such
filed Agreement.
43. SERVICING
     (a) Seller covenants to maintain or cause the servicing of the Purchased
Loans to be maintained in conformity with Accepted Servicing Practices. In the
event that the preceding language is interpreted as constituting one or more
servicing contracts, each such servicing contract shall terminate automatically
upon the earliest of (i) an Event of Default, or (ii) the date on which all the
Obligations have been paid in full, or (iii) the transfer of servicing to any
entity approved by Buyer and the assumption thereof by such entity.
     (b) During the period Seller is servicing the Purchased Loans, (i) Seller
agrees that Buyer is the owner of all servicing records, including but not
limited to any and all servicing agreements, files, documents, records, data
bases, computer tapes, copies of computer tapes, proof of insurance coverage,
insurance policies, appraisals, other closing documentation, payment history
records, and any other records relating to or evidencing the servicing of such
Loans (the “Servicing Records”), and (ii) Seller grants Buyer a security
interest in all servicing fees and rights relating to the Purchased Loans and
all Servicing Records to secure the obligation of Seller or its designee to
service in conformity with this Section 43 and any other obligation of Seller to
Buyer. Seller covenants to safeguard such Servicing Records and to deliver them
promptly to Buyer or its designee (including the Custodian) at Buyer’s request.
It is understood

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and agreed by the parties that prior to an Event of Default, Seller shall retain
the servicing fees with respect to the Purchased Loans.
     (c) If the Loans are serviced by any other third party servicer (such third
party servicer, the “Subservicer”) Seller shall provide a copy of the related
servicing agreement with a properly executed Instruction Letter to Buyer at
least three (3) Business Days prior to the applicable Purchase Date or the date
on which the Subservicer shall begin subservicing the Loans which shall be in
the form and substance acceptable to Buyer (the “Servicing Agreement”) and shall
have obtained the written consent of Buyer for such Subservicer to subservice
the Loans.
     (d) Seller agrees that upon the occurrence of an Event of Default, Buyer
may terminate Seller in its capacity as servicer and terminate any Servicing
Agreement and Seller shall transfer such servicing to Buyer or its designee, at
no cost or expense to Buyer. In addition, Seller shall provide to Buyer an
Instruction Letter from Seller to the effect that upon the occurrence of an
Event of Default, Buyer may terminate any Subservicer or Servicing Agreement and
direct that collections with respect to the Loans be remitted in accordance with
Buyer’s instructions. Seller agrees to cooperate with Buyer in connection with
the transfer of servicing.
     (e) After the Purchase Date, until the Repurchase Date, Seller will have no
right to modify or alter the terms of the Loan or consent to the modification or
alteration of the terms of any Loan, and Seller will have no obligation or right
to repossess any Loan or substitute another Loan, except as provided in any
Custodial Agreement.
     (f) Seller shall permit Buyer to inspect upon reasonable prior written
notice at a mutually convenient time, Seller’s or its Affiliate’s servicing
facilities, as the case may be, for the purpose of satisfying Buyer that Seller
or its Affiliate, as the case may be, has the ability to service the Loans as
provided in this Agreement. In addition, with respect to any Subservicer which
is not an Affiliate of Seller, Seller shall use its best efforts to enable Buyer
to inspect the servicing facilities of such Subservicer.
44. PERIODIC DUE DILIGENCE REVIEW
     Seller acknowledges that Buyer has the right to perform continuing due
diligence reviews with respect to the Loans, for purposes of verifying
compliance with the representations, warranties, covenants and specifications
made hereunder or under any other Program Document, or otherwise, and Seller
agrees that upon reasonable (but no less than one (1) Business Day’s) prior
notice to Seller (provided that upon the occurrence of a Default or an Event of
Default, no such prior notice shall be required), Buyer or its authorized
representatives will be permitted during normal business hours to examine,
inspect, make copies of, and make extracts of, the Mortgage Files, the Servicing
Records and any and all documents, records, agreements, instruments or
information relating to such Loans in the possession, or under the control, of
Seller and/or the Custodian. Seller also shall make available to Buyer a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Mortgage Files and the Loans. Without limiting the
generality of the foregoing, Seller acknowledges that Buyer shall purchase Loans
from Seller based solely upon the information provided by Seller to Buyer

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in the Loan Schedule and the representations, warranties and covenants contained
herein, and that Buyer, at its option, has the right, at any time to conduct a
partial or complete due diligence review on some or all of the Purchased Loans,
including, without limitation, ordering new credit reports, new appraisals on
the related Mortgaged Properties and otherwise re-generating the information
used to originate such Loan. Buyer may underwrite such Loans itself or engage a
third party underwriter to perform such underwriting. Seller agrees to cooperate
with Buyer and any third party underwriter in connection with such underwriting,
including, but not limited to, providing Buyer and any third party underwriter
with access to any and all documents, records, agreements, instruments or
information relating to such Loans in the possession, or under the control, of
Seller. In addition, Buyer has the right to perform continuing Due Diligence
Reviews of Seller and its Affiliates, directors, and their respective
Subsidiaries and the officers, employees and significant shareholders thereof.
Seller and Buyer further agree that all out-of-pocket costs and expenses
incurred by Buyer in connection with Buyer’s activities pursuant to this
Section 44 shall be paid by Seller.
45. SET-OFF
     In addition to any rights and remedies of Buyer provided by this Agreement
and by law, Buyer shall have the right, without prior notice to Seller or any of
Seller’s Subsidiaries or Affiliates, any such notice being expressly waived by
Seller to the extent permitted by applicable law, upon any amount becoming due
and payable by Seller hereunder (whether at the stated maturity, by acceleration
or otherwise) to set-off and appropriate and apply against such amount any and
all Property and deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by Buyer or any Affiliate
thereof to or for the credit or the account of Seller or any of Seller’s
Subsidiaries or Affiliates (other than pursuant to the Bishop’s Gate Facility or
the Chesapeake Facility). Buyer may set-off cash, the proceeds of the
liquidation of any Purchased Items and all other sums or obligations owed by
Buyer or its Affiliates to Seller or any of Seller’s Subsidiaries or Affiliates
(other than pursuant to the Bishop’s Gate Facility or the Chesapeake Facility)
against any and all of Seller’s and any of Seller’s Subsidiary’s or Affiliate’s
obligations to Buyer or any of its Affiliates, whether under this Agreement or
under any other agreement between the parties or between Seller or any of its
Subsidiaries or Affiliates and Buyer or any Affiliate of Buyer (other than the
Bishop’s Gate Facility and the Chesapeake Facility), or otherwise, whether or
not such obligations are then due, without prejudice to Buyer’s or its
Affiliate’s right to recover any deficiency. Buyer agrees promptly to notify
Seller after any such set-off and application made by Buyer; provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
46. ENTIRE AGREEMENT
     This Agreement and the other Program Documents embody the entire agreement
and understanding of the parties hereto and thereto and supersede any and all
prior agreements, arrangements and understandings relating to the matters
provided for herein and therein. No alteration, waiver, amendments, or change or
supplement hereto shall be binding or effective unless the same is set forth in
writing by a duly authorized representative of each party hereto.

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[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
PHH MORTGAGE CORPORATION, a New Jersey corporation,
as Seller

         
By:
  /s/ Mark E. Johnson    
Name:
 
 
Mark E. Johnson    
Title:
 
 
Vice President and Treasurer    
 
 
 
   

Address for Notices:
3000 Leadenhall Road
Mail Stop PCLG
Mt. Laurel, New Jersey 08054
Attention: Mark Johnson
Telecopier No.: (856) 917-0107
Telephone No.: (856) 917-0813
with a copy to: William F. Brown, General Counsel
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., a Delaware corporation,
as Buyer and Agent, as applicable

         
By:
  /s/ Craig Eckes    
Name: Title:
 
 
Craig Eckes
Managing Director    

Address for Notices:
600 Steamboat Road
Greenwich, Connecticut 06830
Attention: Legal Department
Telecopier No.: (203) 618-2132
Telephone No.: (203) 625-2700
with a copy to: Mortgage Operations
Telecopier No.: (203) 618-2132
Telephone No.: (203) 625-2700
Signature Page to Master Repurchase Agreement