Exhibit 10.1

MASTER REPURCHASE AGREEMENT

dated as of April 10, 2017

by and between

BRANCH BANKING AND TRUST COMPANY,

as Buyer

and

INSPIRE HOME LOANS INC.,

as Seller

$25,000,000.00 Revolving Mortgage Loan Repurchase Facility

 

LOGO [g297485002.jpg]

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

Index of Defined Terms

 

1934 Act

     2-11  

Account Maintenance Fee

     10-1  

Additional Repurchase Collateral

     35-1  

Adjusted Tangible Net Worth

     2-1  

Administrative Account

     2-1  

Affiliate

     2-2  

Aged Mortgage Loan

     2-2  

Agency

     2-2  

Agency Guides

     2-2  

Agency MBS

     2-2  

Aggregate Outstanding Purchase Price

     2-2  

Agreement

     2-2  

ALTA

     2-2  

Anti-Terrorism Laws

     2-2  

Applicable Index

     2-19  

Applicable Margin

     2-20  

Appraisal

     2-2  

Approved Investor

     2-2  

Approved Loan Types

     2-3  

Approved Sublimits

     2-3  

Assignee

     23-1  

Authorized Seller Representative

     2-3  

Banking Day

     2-3  

Bankruptcy Code

     2-3  

Base Rate

     2-20  

BB&T

     1-1  

BB&T Correspondent Mortgage Loan

     2-3  

Best Efforts Commitment

     2-3  

Blocked Person

     16-3  

Buyer

     1-1  

Buyer’s Margin Amount

     7-1  

Buyer’s Margin Percentage

     2-3  

Cash Collateral Account

     2-3  

Cash Equivalents

     2-4  

Ceiling Rate

     2-20  

Certificating Custodian

     2-4  

Change Notice

     2-3  

Change of Control

     2-5  

CLTV

     2-5  

Code

     2-5  

Collateral Processing Fee

     10-1  

Commitment

     2-5  

Confidential Terms

     12-1  

Conforming Mortgage Loan

     2-5  

Contractual Obligation

     2-5  

Cumulative Loan-to-Value Ratio

     2-5  

Current Appraisal

     2-5  

Current Assets

     2-5  

Current Liabilities

     2-5  

Current Ratio

     2-5  

Custodial Account

     2-6  

Customer

     2-6  

Depository Obligations

     2-6  

Determination Date

     2-6  

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

Disqualifier

     2-6  

Dry Mortgage Loan

     2-6  

Effective Date

     2-6  

Electronic Agent

     2-6  

Electronic Tracking Agreement

     2-6  

Electronically Submitted

     2-6  

Eligibility Change Notice

     2-6  

Eligible Loan

     2-6  

Endorsement Fee

     10-1  

ERISA

     2-6  

ERISA Affiliate

     2-7  

ERISA Event

     2-7  

Event of Default

     19-1  

Extended Wet Mortgage Loan

     2-7  

Extended Wet Mortgage Loan Rate

     2-20  

Facility Papers

     2-7  

Fannie Mae

     2-7  

Fannie Mae Guide

     2-7  

FAS-91

     2-7  

FASB

     2-7  

FDIA

     35-1  

FDICIA

     35-1  

Fees

     2-7  

FHA

     2-7  

Freddie Mac

     2-7  

Freddie Mac Guide

     2-7  

GAAP

     2-8  

Ginnie Mae

     2-8  

Ginnie Mae Guide

     2-8  

Government Sponsored Loan

     2-8  

Governmental Authority

     2-8  

Guarantee

     2-8  

Guarantors

     2-8  

Guaranty

     2-8  

Hazard Insurance Policy

     2-9  

Hedging Arrangements

     2-9  

HUD

     2-9  

In Default

     2-9  

Income

     2-9  

Index

     2-19  

Intangible Assets

     2-9  

Intercreditor Agreement

     2-9  

Investments

     18-2  

Investor Commitment

     2-9  

Investor Funding Account

     2-9  

Jumbo Mortgage Loan

     2-10  

Law

     2-10  

Leverage Ratio

     2-10  

Liabilities

     2-18  

LIBOR

     2-19  

Lien

     2-10  

Liquidity

     2-10  

Loan Funding Account

     2-10  

Loan Papers

     2-10  

Loan Schedule

     2-11  

Loan-to-Value Ratio

     2-11  

 

Index - ii

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

Mandatory Commitment

     2-11  

Margin Call

     7-1  

Margin Deficit

     7-1  

Margin Market Value

     2-11  

Margin Stock

     2-11  

Market Value

     2-11  

Marketable Security

     2-11  

Master Custodial Agreement

     2-11  

Material Adverse Effect

     2-11  

Material Amount

     2-12  

MBS

     2-12  

MERS

     2-12  

MERS Designated Loan

     2-12  

MERS Procedures Manual

     2-12  

MERS® System

     2-12  

Minimum Balance

     17-6  

Mortgage

     2-12  

Mortgage Assignment

     2-12  

Mortgage Loan

     2-12  

Mortgage Note

     2-12  

Mortgaged Premises

     2-12  

Multiemployer Plan

     2-12  

Non-Usage Fee

     10-1  

Notices

     24-1  

Obligations

     2-13  

Officer’s Certificate

     2-13  

Open Transaction

     2-13  

Operating Account

     2-13  

Other Approved Facilities

     2-13  

Other Approved Facility Papers

     2-13  

Other Assets Collateral

     40-1  

Participant

     23-1  

Past Due

     2-20  

Past Due Margin

     2-20  

Past Due Rate

     2-20  

PBGC

     2-14  

Pension Funding Rules

     2-14  

Per Loan Limit

     2-14  

Permitted Encumbrances

     2-14  

Permitted Liens

     18-1  

Person

     2-14  

Plan or Pension Plan

     2-14  

Potential Default

     2-14  

Price Differential

     2-20  

Pricing Margin

     2-20  

Pricing Rate

     2-20  

Primary Obligor

     2-8  

Prime Rate

     2-19  

Principal Balance

     2-14  

Procedural Manual

     2-14  

Prohibited Transaction

     2-14  

Property

     2-14  

Purchase Date

     2-15  

Purchase Price

     2-15  

Purchase Request

     2-15  

Purchase Value

     2-15  

 

Index - iii

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

Purchased Loan

     2-15  

Purchased Loan Review Procedures

     20-2  

Purchased Loans Records

     2-15  

Purchased Loans Support

     2-15  

Rate

     2-20  

Regulation U

     2-16  

Regulation Z

     2-16  

Reinstatement Fee

     10-1  

Reportable Event

     2-16  

Repurchase Date

     2-16  

Repurchase Facility

     2-16  

Repurchase Period

     2-17  

Repurchase Price

     2-17  

Required Documents

     2-17  

Requirements of Law

     2-17  

SEC

     36-1  

Seller

     1-1  

Servicer

     2-17  

Servicing Agreement

     2-17  

Servicing Rights

     2-17  

SIPA

     2-17  

Sublimit

     2-17  

Subordinated Creditor

     2-17  

Subordinated Debt

     2-17  

Subordination Agreement

     2-18  

Subsidiary

     2-18  

Tangible Assets

     2-18  

Tangible Net Worth

     2-18  

Taxes

     8-1  

Termination Date

     2-18  

Total Assets

     2-18  

Total Liabilities

     2-18  

Transactions

     2-18  

Transfer Date

     2-18  

Type

     2-18  

UCC

     2-18  

USDA

     2-19  

VA

     2-19  

Wet Mortgage Loan

     2-19  

Wet Mortgage Loan Period

     2-19  

Wholly-Owned Subsidiary

     2-19  

Wire Transfer Fee

     10-1  

 

Index - iv

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

TABLE OF CONTENTS

 

1

  Applicability      1-1  

2

  Defined Terms      2-1     2.1    Defined Terms      2-1     2.2   
Definitions of General Application      2-1     2.3    Definitions for Price
Calculations      2-18     2.4    Other Definitional Provisions and Rules of
Interpretation      2-20  

3

  The Buyer’s Commitment      3-1     3.1    The Buyer’s Commitment to Purchase
     3-1     3.2    Expiration or Termination of the Commitment      3-1     3.3
   Changes in Product Eligibility      3-1  

4

  Initiation; Purchase Request; Termination      4-1     4.1    Seller’s
Purchase Request      4-1     4.2    Binding Transactions      4-1     4.3   
Transaction Termination      4-1     4.4    Place for Payments of Repurchase
Prices      4-2     4.5    If Repurchase Price Not Paid      4-2     4.6   
Transfer to the Buyer      4-2  

5

  Transaction Limits and Sublimits      5-1     5.1    Transaction Limits     
5-1     5.2    Transaction Sublimits      5-1  

6

  Price Differential      6-1     6.1    Pricing Rate      6-1     6.2    Price
Differential Payment Due Dates      6-1  

7

  Margin Maintenance      7-1     7.1    Margin Deficit      7-1     7.2   
Margin Call Deadline      7-1     7.3    Application of Margin Payments      7-1
 

8

  Payments to be Free of Taxes and Withholding      8-1  

9

  Income Payments      9-1  

10

  Fees      10-1     10.1    Repurchase Facility Fees and Other Fees      10-1  

11

  Security Interest      11-1  

12

  Confidentiality      12-1  

13

  Payment and Transfer      13-1     13.1    Immediately Available Funds; Notice
to the Buyer      13-1     13.2    Payments to the Buyer      13-1     13.3   
If Payment Not Made When Due      13-1     13.4    Mandatory Payment of
Repurchase Prices      13-1     13.5    Optional Prepayment of Repurchase Prices
     13-1     13.6    Distribution of Payments      13-2  

14

  Segregation of Documents Relating to Purchased Loans      14-1  

15

  Conditions Precedent      15-1     15.1    Initial Purchase      15-1     15.2
   Each Purchase      15-2     15.3    General      15-3  

16

  Representations and Warranties      16-1     16.1    General Representations
and Warranties      16-1     16.2    Special Representations and Warranties
Relating to the Purchased Loans      16-3  

17

  Affirmative Covenants      17-1  

 

TOC - i

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

  17.1    Reports to the Buyer      17-1     17.2    Maintenance of Existence
and Properties; Compliance with Laws; Maintenance of Agency Status      17-3    
17.3    Inspection of Property; Books and Records      17-3     17.4   
Insurance      17-3     17.5    Payment of Taxes and Claims      17-4     17.6
   Other Accounts      17-4     17.7    Further Documents      17-4     17.8   
Operational Procedures      17-4     17.9    Closing Instructions      17-4    
17.10    ERISA      17-4     17.11    Promptly Correct Escrow Imbalances     
17-4     17.12    MERS      17-5     17.13    Special Affirmative Covenants
Concerning Purchased Loans      17-5     17.14    Cash Collateral Account     
17-6     17.15    Certificating Custodian; Custodial Account      17-6     17.16
   Intercreditor Agreements      17-6     17.17    Post Closing      17-6  

18

  Negative Covenants      18-1     18.1    Liens      18-1     18.2    Other
Indebtedness      18-1     18.3    Change of Business      18-1     18.4   
Change of Control      18-1     18.5    Fundamental Changes      18-1     18.6
   Investments      18-2     18.7    Guarantees      18-2     18.8   
Restrictive Agreements      18-2     18.9    Payment of Dividends and Other
Payments      18-2     18.10    Transactions with Affiliates      18-3     18.11
   Effectiveness of Investor Commitments      18-3     18.12    VA Guaranties
and FHA Insurance      18-3     18.13    Transfer to Affiliates      18-3    
18.14    Margin Regulations      18-3     18.15    Change of Legal Name;
Jurisdiction of Organization; Principal Place of Business and Chief Executive
Office; Location of Records      18-3     18.16    Amendments to Material
Documents      18-3     18.17    Subordinated Debt      18-3     18.18   
Negative Pledge      18-3     18.19    Financial Covenants      18-4     18.20
   Servicing Rights      18-4  

19

  Events of Default; Event of Termination      19-1     19.1    Events of
Default      19-1     19.2    Transaction and Commitment Termination      19-3  
  19.3    Termination by the Buyer      19-3     19.4    Remedies      19-3    
19.5    Liability for Expenses and Damages      19-4     19.6    Liability for
Interest      19-5     19.7    Setoff      19-5     19.8    Other Rights     
19-5     19.9    Limitation on Liability of the Buyer      19-5  

20

  Servicing and Custody of the Purchased Loans      20-1     20.1    Servicing
for the Buyer      20-1     20.2    Servicing Standard and Reports      20-1    
20.3    Servicing Termination or Succession      20-2     20.4    Delivery of
Purchased Loan Documentation      20-2     20.5    Buyer’s Review of the
Purchased Loans; Certifications      20-2     20.6    Release of the Required
Documents      20-2  

 

TOC - ii

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

21

  Payment of Expenses; Indemnity      21-1     21.1    Expenses; Indemnification
     21-1  

22

  Single Agreement      22-1  

23

  Participation; Assignment      23-1     23.1    Participation; Assignment     
23-1  

24

  Notices and Other Communications      24-1  

25

  Further Assurances      25-1  

26

  Buyer as Attorney-in-Fact      26-1  

27

 

Payments by Wire Transfers

     27-1     27.1    Wires to the Seller      27-1     27.2    Wires to the
Buyer      27-1  

28

  Entire Agreement; Severability; Inconsistencies      28-1  

29

  Benefit of the Agreement; Termination      29-1     29.1    Benefit of the
Agreement      29-1     29.2    Remedies Exception      29-1     29.3   
Agreement Commencement; Termination      29-1  

30

  Counterparts      30-1  

31

  Governing Law, Jurisdiction and Venue      31-1     31.1    Governing Law,
Jurisdiction and Venue      31-1     31.2    Arbitration      31-1  

32

  Waiver of Jury Trial      32-1  

33

  Relationship of the Parties      33-1  

34

  No Waivers, Etc.      34-1  

35

  Intent      35-1     35.1    Transactions are Repurchase Agreements, Master
Netting Agreements and Securities Contracts      35-1     35.2    Contractual
Rights, Etc.      35-1     35.3    FDIA      35-1     35.4    Agreement is a
Netting Contract      35-1     35.5    Security Interest in Certain Assets Which
are Deemed Part of a Purchased Loan      35-1     35.6    Tax and Accounting
Treatment      35-2  

36

  Disclosure Relating to Certain Federal Protections      36-1     36.1   
Parties not Protected by SIPA      36-1     36.2    SIPA Does Not Protect
Government Securities Broker or Dealer Counterparty      36-1     36.3   
Transaction Funds Are Not Insured Deposits      36-1  

37

  USA Patriot Act Notification      37-1  

38

  No Consequential Damages      38-1  

39

  Survival      39-1  

40

  Security Interest in the Cash Collateral Account      40-1  

 

TOC - iii

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

MASTER REPURCHASE AGREEMENT

This MASTER REPURCHASE AGREEMENT, dated as of April 10, 2017 (this “Agreement”),
is by and between INSPIRE HOME LOANS INC., a Delaware corporation (the
“Seller”), and BRANCH BANKING AND TRUST COMPANY, a North Carolina banking
corporation (“Buyer” or “BB&T”).

1 Applicability

The Seller desires to obtain, and the Buyer agrees to provide, a revolving
mortgage loan repurchase facility pursuant to which, from time to time and upon
the terms and conditions herein set forth, the parties hereto may enter into
Transactions (as defined in Section 2.2) with respect to certain Eligible Loans
(as defined in Section 2.2).

The parties hereby specifically declare that it is their intention that this
Agreement and all of the purchases and repurchases of Eligible Loans made
pursuant hereto are to be treated as repurchase transactions, a repurchase
agreement or securities contract under the Bankruptcy Code (as defined in
Section 2.2), including all rights that accrue to the Buyer by virtue of
sections 362(b), 546, 555, 559, 561 and 562 and all other sections of the
Bankruptcy Code. This Agreement also contains lien provisions with respect to
the Purchased Loans (as defined in Section 2.2) so that if, contrary to the
intent of the parties, any court of competent jurisdiction characterizes any
Transaction as a financing, rather than a purchase, under applicable Law,
including the applicable provisions of the Bankruptcy Code, the Buyer is deemed
to have a first priority perfected security interest in and to the Purchased
Loans to secure the payment and performance of all of the Obligations (as
defined in Section 2.2).

In consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto further agree to the matters set forth
herein below.

 

1-1

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

2 Defined Terms

2.1 Defined Terms. Except where otherwise specifically stated, capitalized terms
used in this Agreement and the other Facility Papers have the meanings assigned
to them below or elsewhere in this Agreement.

2.2 Definitions of General Application. The terms defined in this Section are
generally applicable. For convenience of reference, terms relating only to the
calculation of pricing and payment of Price Differential are defined in Section
2.3.

“1934 Act” is defined in the definition of “Marketable Security”.

“Adjusted Tangible Net Worth” means, as of any date of determination thereof, an
amount equal to the following:

 

  (a) the sum of the following, all determined in accordance with GAAP:

(i) Tangible Net Worth as of such date,

(ii) Subordinated Debt as of such date, and

(iii) if the Seller retains mortgage servicing rights, the least of the
following as of such date: (A) 75 basis points (0.75%) multiplied by the total
unpaid principal balance of the Seller’s retained mortgage servicing portfolio,
(B) the value of the Seller’s retained mortgage servicing rights, as listed on
the most recent balance sheet delivered by the Seller to the Buyer, or (C) the
value of the Seller’s retained mortgage servicing rights based on the most
recent third party servicing valuation delivered to the Buyer pursuant to
Section 17.1(xvii) of this Agreement (provided that if such valuation is not
timely delivered under Section 17.1(xvii), such value shall be $0.00 or such
other amount as the Buyer may determine in its sole and absolute discretion);

minus

 

  (b) the sum of the following, all determined in accordance with GAAP:

(i) any note or other receivables from or advances made to the Seller’s
Affiliates, officers, directors, stockholders, managers, members, partners or
other equity owners as of such date,

(ii) investments made in Seller’s Affiliates as of such date, and

(iii) any employee advances as of such date.

“Administrative Account” means, if an account number is set forth in Appendix 1,
Item 2.2.1, such account, and if not, any account hereafter so titled, and in
each case, maintained from time to time in the name of the Seller with the Buyer
at the office of the Buyer set forth in Appendix 1, Item 24.2, which account may
be used, at the Buyer’s sole good faith discretion, for among other things, to
segregate certain funds of the Seller from monies on deposit in the Seller’s
other accounts maintained with the Buyer and/or to hold certain funds of the
Seller in reserve for payment of the Obligations, in each case, pending the
disbursement or application of such funds in accordance with the provisions
hereof. Upon the occurrence of any Potential Default or Event of Default, if an
Administrative Account has not previously been established and remained open,
the Buyer at its sole discretion may require that an Administrative Account be
so established without the consent of the Seller (and the Buyer is hereby
authorized by the Seller to establish such account). The Administrative Account
shall be a “blocked account” under the Buyer’s sole control and the Seller shall
not have access to monies on deposit therein until, and except to the extent of
(if any), the transfer from time to time of such monies to the Operating Account
in accordance with the provisions hereof. The term “Administrative Account”
shall be deemed to include any substitute or replacement account at the Buyer.

 

2-1

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

“Affiliate” means and includes, with respect to a specified Person, any other
Person directly or indirectly controlling, controlled by or under common control
with, such Person, whether through the ownership of voting securities, by
contract or otherwise.

“Aged Mortgage Loan” is defined in Annex C.

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

“Agency Guides” means the Freddie Mac Guide, the Fannie Mae Guide and the Ginnie
Mae Guide.

“Agency MBS” means an MBS guaranteed or issued by Fannie Mae, Freddie Mac or
Ginnie Mae, in each case representing, secured or backed by a pool of Mortgage
Loans consisting of any Mortgage Loan that is a Purchased Loan at the time of
formation of the related pool.

“Aggregate Outstanding Purchase Price” means as of any Determination Date, an
amount equal to the sum of the Purchase Prices for all Purchased Loans funded
under all Open Transactions as of such date.

“Agreement” means this Agreement (including all Appendices, Annexes, Schedules
and Exhibits hereto), as amended, modified, supplemented or restated from time
to time.

“ALTA” means the American Land Title Association or any successor thereto.

“Anti-Terrorism Laws” means any laws relating to terrorism or money laundering,
including Executive Order No. 13224 and the USA Patriot Act.

“Appraisal” means an appraisal by a licensed appraiser selected in accordance
with Agency guidelines and not identified to the Seller as an unacceptable
appraiser by an Agency or any Approved Investor, and who is experienced in
estimating the value of property of that same type in the community where it is
located, and who — unless approved by the Buyer on a case-by-case basis — is not
an employee or Affiliate of the Seller, or related as a parent, sibling, spouse,
child or first cousin to any such Person, a signed copy of the written report of
which appraisal is in the possession of the Seller or the applicable Servicer.

“Approved Investor” means any of the Persons listed in a schedule of investors,
which schedule is provided by the Seller to the Buyer, and which Persons must be
approved as Approved Investors by the Buyer, in its sole discretion. At the
request of the Seller, the Buyer, in its sole discretion, may from time to time
agree in writing to add Persons to the schedule of Approved Investors and each
Person approved by the Buyer shall be an Approved Investor as of the date of
such approval (the Buyer’s written approval must be given before any trades may
be performed with such investor). By written notice to the Seller, the Buyer, in
its sole discretion based on its evaluation of the creditworthiness or funding
ability of any Approved Investor listed on the schedule of Approved Investors,
may remove an Approved Investor from such schedule. Such removal shall become
effective immediately upon written notice from the Buyer; provided, that if any
Investor Commitment of such Approved Investor is then in effect and such
Approved Investor, in the reasonable judgment of the Buyer, is able to fund such
Investor Commitment, such Approved Investor shall continue to be an Approved
Investor for ninety (90) days after the date of such notice with respect to
(a) Purchased Loans owned by the Buyer at the time of such notice and allocated
to such Investor Commitment and (b) Mortgage Loans that the Seller has committed
to fund (and that, upon closing, will be Eligible Loans) prior to the time of
such notice and allocated to such Investor Commitment; and provided further,
that such removal shall become effective immediately at any time prior to the
expiration of such ninety (90) day period if the Buyer in its reasonable
judgment believes that such Approved Investor is unable to fund its Investor
Commitment. Following the addition or removal of any Person as an Approved
Investor in accordance with the provisions hereof, the schedule of Approved
Investors shall be deemed automatically updated to include the addition or
removal of such Person.

“Approved Loan Types” means the categories of mortgage loan products approved by
the Buyer for Transactions under this Agreement as listed in Appendix 2,
Item 2.2.2.1.

 

2-2

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

“Approved Sublimits” means the categories of Sublimits approved by the Buyer as
listed in Appendix 2, Item 2.2.2.2. There is an Approved Sublimit for each
Approved Loan Type. Each Approved Sublimit relates to that portion of the
Repurchase Facility available for the purchase of Eligible Loans of the
corresponding Approved Loan Type, as more fully set forth in Section 5.2.

“Assignee” is defined in Section 23.1(ii).

“Authorized Seller Representative” means a representative of the Seller duly
authorized and designated by all requisite action on the part of the Seller’s
governing body to act on behalf of the Seller in connection with the Repurchase
Facility, including, without limitation, to execute and/or deliver on behalf of
the Seller any of the Facility Papers and any certificate, schedule or other
document contemplated or required by this Agreement or the other Facility Papers
and to designate from time to time other individuals who are authorized to act
on behalf of the Seller in connection herewith and therewith. A list of
Authorized Seller Representatives is set forth in Appendix 1, Item 2.2.2, and
such list is current as of the effective date set forth in Appendix 1. Such list
is provided by the Seller to the Buyer and may be relied upon thereby. The
Seller will provide an updated list of Authorized Seller Representatives to the
Buyer promptly following each addition to or subtraction from such list, in a
form substantially similar to Schedule CN (“Change Notice”), and the Buyer shall
be entitled to rely on each such list until such Change Notice is received by
the Buyer.

“Banking Day” means any day other than a Saturday, Sunday and any other day on
which banks in Orlando, Florida are required or authorized to close.

“Bankruptcy Code” means Title 11 of the United States Code, as amended from time
to time.

“BB&T Correspondent Mortgage Loan” if identified as an Approved Loan Type in
Appendix 2, Item 2.2.2.1, is defined in Annex E. If “BB&T Correspondent Mortgage
Loan” is not identified as an Approved Loan Type in Appendix 2, Item 2.2.2.1,
then this definition shall be inapplicable.

“Best Efforts Commitment” shall mean a bona fide, current, unfilled and
unexpired written commitment held by the Seller from an Approved Investor to
purchase Mortgage Loans or, if applicable, an Agency MBS, in form and substance
satisfactory to the Buyer in its sole discretion, (a) that specifies (i) the
type or item(s) of Mortgage Loans or, if applicable, Agency MBS to be purchased,
(ii) a purchase date or purchase deadline date, and (iii) a purchase price or
the criteria by which the purchase price will be determined, and (b) that is a
so-called “best efforts” commitment, under which the Seller has the right, but
is not obligated, to sell such Mortgage Loan(s) or, if applicable, Agency MBS.

“Blocked Person” is defined in Section 16.1(xiv)(b).

“Buyer” means Branch Banking and Trust Company, a North Carolina banking
corporation, and its successors and assigns.

“Buyer’s Margin Amount” is defined in Section 7.1.

“Buyer’s Margin Percentage” means, with respect to all Eligible Loans of a
particular Approved Loan Type, the percentage in the chart set forth in Appendix
2, Item 2.2.2.3 applicable to Mortgage Loans of such Type.

“Cash Collateral Account” means, if an account number is set forth in Appendix
1, Item 2.2.3, such account, and any other money market or other deposit account
(which may be a certificate of deposit issued by the Buyer and owned by the
Seller if permitted by the Buyer in the Buyer’s sole discretion), or any
combination thereof acceptable to the Buyer in its sole discretion, in each
case, maintained from time to time in the name of the Seller with the Buyer at
the office of the Buyer set forth in Appendix 1, Item 24.2, into which the
Seller shall deposit and maintain cash collateral as security for the
Obligations. The term “Cash Collateral Account” shall include any and all funds
at any time held in such account(s), any and all rights of the Seller to
insurance payments made in respect of such account(s), any and all replacements
for such account(s) and any and all proceeds of such account(s). The Cash
Collateral Account shall be “blocked account(s)” under the Buyer’s sole control
and the Seller shall not have

 

2-3

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

access to any monies on deposit therein until the Obligations have been repaid
in full and the Commitment has been terminated. The Cash Collateral Account
shall not be subject to deductions, set-off or any other right in favor of any
Person other than the Buyer. The Cash Collateral Account is in addition to, as
applicable, the Administrative Account, the Investor Funding Account, the Loan
Funding Account, the Operating Account and the Custodial Account. The term “Cash
Collateral Account” shall be deemed to include any substitute or replacement
account at the Buyer.

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

(i) debt securities (a) issued or directly and unconditionally guaranteed as to
interest and principal by the United States government, or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case having a stated maturity
date twelve (12) months or less after such day;

(ii) debt securities issued by (and as direct obligations of) any state of the
United States or of the District of Columbia, or any political subdivision of
any such state (or district) or any public instrumentality thereof, in each case
having a short-term rating of A-1 by Standard & Poor’s (a division of The
McGraw-Hill Companies), Prime-1 by Moody’s Investors Service, Inc. or the
equivalent rating by another nationally-recognized ratings service acceptable to
the Buyer, which debt securities must have a stated maturity date twelve
(12) months or less after such day;

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

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

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

(vi) shares of any money market mutual fund that (a) has substantially all of
its assets invested continuously in the types of investments referred to in
clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000.00,
and (c) has the highest rating obtainable from either Standard & Poor’s (a
division of The McGraw-Hill Companies), Moody’s Investors Service, Inc., or
another nationally-recognized ratings service acceptable to the Buyer.

“Certificating Custodian” means any Person acting as the Seller’s “document
custodian”, “custodian” or “certificating custodian”, as such terms are used in
the Agency Guides, for purposes of (a) certifying that the documentation
relating to Mortgage Loans received by such Person from the Seller is complete
and acceptable under an applicable Agency Guide for purposes of including such
Mortgage Loan in a pool of Mortgage Loans in which Agency MBS will represent
interests and (b) holding such documentation following formation of such pools
and issuance of such Agency MBS. The Certificating Custodian shall at all times
meet the eligibility requirements set in the applicable Agency Guide(s) and be a
party to an Agency custodial agreement among the applicable Agency, the Seller
and the Certificating Custodian. Initially, the Certificating Custodian is as
set forth in Appendix 1, Item 2.2.4. Before appointing, or once one is
appointed, making any change in the Certificating Custodian, the Seller shall
obtain the prior approval of the Buyer. At any time that there is more than one
Certificating Custodian, references in this Agreement to the “Certificating
Custodian” shall mean any or all Certificating Custodians, as applicable.

 

2-4

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

“Change of Control” means the occurrence of any one or more of the following
events without the prior written consent of the Buyer:

(a) Parkway Financial Group ceases to own or control (which ownership and
control may be direct or indirect) at least 80% of the voting capital stock of
the Seller;

(b) Century Communities, Inc. ceases to own or control (which ownership and
control may be direct or indirect) at least 80% of the voting capital stock of
the Seller; or

(c) the Person(s) set forth in Appendix 1, Item 2.2.5 cease(s) to be (an)
officer(s) of Seller with the same title and with substantially the same
responsibilities and job functions as he, she or they has or have as of the date
hereof.

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

“Collateral Processing Fee” means the fee payable by the Seller to the Buyer
pursuant to Section 10.1(i).

“Commitment” means the Buyer’s commitment under Section 3.1 to fund
Transactions, subject to Section 5.2 and each of the other provisions of this
Agreement, and not to exceed, in any event, the aggregate amount set forth in
Appendix 2, Item 2.2.2.4.

“Conforming Mortgage Loan” is defined in Annex A.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or undertaking to which
such Person is a party or by which it or any of its property is bound.

“Cumulative Loan-to-Value Ratio” or “CLTV” means, as to any Mortgage Loan, the
ratio (expressed as a percentage) of (i) the aggregate principal amount of all
indebtedness, including the principal amount of the indebtedness relating to
such Mortgage Loan and any permitted prior indebtedness, secured (or to be
secured) by the Mortgaged Premises, to (ii) the appraised value of said
Mortgaged Premises determined by a Current Appraisal acceptable to the Buyer;
final determination of Cumulative Loan-to-Value Ratio shall be made by the Buyer
in its sole and absolute discretion and shall be conclusive and binding upon the
parties absent manifest error.

“Current Appraisal” means an Appraisal dated no earlier than thirty (30) days
(or such longer period, if any, as the Buyer shall approve) before the relevant
Determination Date.

“Current Assets” means those assets of the Seller set forth on its balance
sheet, prepared in accordance with GAAP, as current assets, excluding, however,
any such asset that is a loan or advance to or a receivable due from an
Affiliate of the Seller or from an employee, officer, director, member, or
manager of the Seller or an Affiliate of the Seller.

“Current Liabilities” means those Liabilities of the Seller set forth on its
balance sheet, prepared in accordance with GAAP, as current liabilities.

“Current Ratio” means, as of any date of determination thereof, the ratio of
(a) Current Assets as of such date to (b) Current Liabilities as of such date.

“Custodial Account” means, collectively, a securities custodial account (or
accounts), together with any related cash settlement account (or accounts), in
each case established and maintained with the Buyer or such other party as the
Buyer may direct (i.e., the custodian) for the purpose of holding all Agency MBS
and the settlement proceeds thereof until such settlement proceeds (or the
portion thereof to be remitted to the Buyer) shall be transferred to the
Investor Funding Account pursuant to the Master Custodial Agreement. Except as
otherwise specifically set forth in the Master Custodial Agreement, the
Custodial Account shall be a “no access” account to the

 

2-5

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

Seller maintained in the custodian’s or nominee name (i.e., as bailee of, and
custodian for, the Buyer) for the benefit of the Buyer. The Buyer shall have
exclusive control over the disposition of all Agency MBS and funds held in the
Custodial Account, and the Seller shall not have any right to transfer, trade or
otherwise direct the disposition of such Agency MBS or funds held in the
Custodial Account, except, in each case, as otherwise specifically set forth in
the Master Custodial Agreement.

“Customer” means the Person or Persons obligated to pay the indebtedness that is
the subject of a Mortgage Loan, including any guarantor of such indebtedness.

“Depository Obligations” means any and all debts, obligations and liabilities of
the Seller to the Buyer and any of its Affiliates arising out of or in
connection with the Buyer’s and/or any such Affiliate’s role as a depository
bank for the Seller including, but not limited to, any and all overdrafts
(provided, however, nothing herein shall be construed to require the Buyer or
any of its Affiliates to permit any overdrafts).

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

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

“Dry Mortgage Loan” means an Eligible Loan acquired or originated by the Seller
that has been closed and funded and qualifies without exception as an Eligible
Loan, including satisfying the requirement that all of its Required Documents
have been delivered to the Buyer.

“Effective Date” means such date as set forth in Appendix 1, Item 2.2.6.

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

“Electronically Submitted” means submitted via an electronic download to the
Buyer’s secure website or such other site designated by the Buyer, in a form and
format that the Buyer has approved and with respect to which the Buyer is not
required to enter any data manually.

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

“Eligibility Change Notice” means a written notice (sent by email or otherwise)
from the Buyer to the Seller substantially in the form of Exhibit B.

“Eligible Loan” is defined on Schedule EL.

“Endorsement Fee” means the fee payable by the Seller to the Buyer pursuant to
Section 10.1(ii).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and the rulings issued
thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Seller within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of the Seller or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which the Seller or any
ERISA Affiliate was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or the Seller or any ERISA Affiliate incurred a cessation of operations
that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by the Seller or any ERISA Affiliate from a
Multiemployer Plan or

 

2-6

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

receipt by the Seller or any ERISA Affiliate of notice from the Multiemployer
Plan that the Multiemployer Plan is in critical or endangered status, in
reorganization or insolvent; (d) the filing by the Seller or any ERISA Affiliate
of a notice of intent to terminate a Pension Plan under a distress termination
under Section 4041 of ERISA, (e) receipt by Seller or any ERISA Affiliate of
notice from the PBGC of the institution by the PBGC of proceedings to terminate
a Pension Plan; (f) receipt by the Seller or any ERISA Affiliate of notice from
the PBGC of the appointment of a trustee to administer a Pension Plan; (g) the
determination by an actuary for the Pension Plan that the Pension Plan is
considered an at-risk plan within the meaning of Section 430 of the Code or
Section 303 of ERISA, or (h) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA and claims for benefit and funding obligations in the ordinary course,
upon the Seller or any ERISA Affiliate.

“Event of Default” is defined in Section 19.1.

“Extended Wet Mortgage Loan” means a Wet Mortgage Loan as to which the Buyer has
agreed to extend the Wet Mortgage Loan Period.

“Facility Papers” means and includes this Agreement, the Electronic Tracking
Agreement, the Master Custodial Agreement (if applicable), each Guaranty (if
applicable) and any financing statements or continuation statements or
amendments or other papers now or hereafter authorized, executed or issued
pursuant to this Agreement (excluding any Hedging Arrangements relating to the
Obligations entered into with any counterparty that was the Buyer or an
Affiliate thereof at the time such Hedging Arrangement was entered into), and
any renewal, extension, rearrangement, increase, supplement, modification or
restatement of any of them.

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

“Fannie Mae Guide” means, collectively, the “Selling Guide” and the “Servicing
Guide” published by Fannie Mae, as modified, amended, supplemented or restated
from time to time.

“FAS-91” means Statement No. 91 under the Statements of Financial Accounting
Standards issued by FASB, as modified or amended from time to time.

“FASB” means the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants and any successor thereto.

“Fees” means any and all of the fees described in Article 10.

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

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

“Freddie Mac Guide” means the “Sellers’ & Servicers’ Guide” published by Freddie
Mac, as modified, amended, supplemented or restated from time to time.

“GAAP” means, for any day, generally accepted accounting principles, applied on
a consistent basis, stated in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants, or
in statements and pronouncements of the Financial Accounting Standards Board or
in such other statements by another entity or entities as may be approved by a
significant segment of the accounting profession, that are applicable to the
circumstances for that day. The requirement that such principles be applied on a
consistent basis means that the accounting principles observed in a current
period shall be comparable in all material respects to those applied in an
earlier period, with the exception of changes in application to which the
Seller’s independent certified public accountants have agreed and which changes
and their effects are summarized in the subject company’s financial statements
following such changes. If (a) during the term of this Agreement any change(s)
in such principles occur(s) which materially changes the meaning or effect of
any provision of this Agreement and (b) the Seller or the Buyer regard such
change(s) as adverse to their respective interests, then upon written notice by
the Seller to the Buyer, or by the Buyer to the Seller, the parties to this
Agreement shall negotiate

 

2-7

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

promptly and in good faith a supplement or amendment to this Agreement to
achieve as nearly as possible preservation and continuity of the business
substance of this Agreement in light of such change; provided that the Buyer
shall not be obligated to commence, continue or conclude any such negotiation or
to execute any such supplement or amendment after any Potential Default has
occurred (other than a Potential Default caused by such change) and before it
has been cured or after any Event of Default has occurred (other than an Event
of Default caused by such change) that the Buyer has not declared in writing to
have been cured or waived.

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

“Ginnie Mae Guide” means collectively, the “Ginnie Mae I Mortgage-Backed
Securities Guide” and the “Ginnie Mae II Mortgage-Backed Securities Guide”
published by HUD, as modified, amended, supplemented or restated from time to
time.

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

“Government Sponsored Loan” means a Mortgage Loan issued, guaranteed, sponsored
or otherwise underwritten to conform to the requirements of FHA, VA or any other
state or federal governmental program.

“Guarantee” or “guarantee” of or by any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any indebtedness or other obligation of any
other Person (the “Primary Obligor”) in any manner, whether directly or
indirectly and including any obligation, direct or indirect, of the guarantor
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such indebtedness of other obligation or (d) as an account party
or applicant in respect of any letter of credit or letter of guaranty issued in
support of such indebtedness or obligation; provided, that the term “Guarantee”
shall not include endorsements for collection of deposits in the ordinary course
of business with respect to checks or other items for collection. The term
“Guarantee” used as a verb has a corresponding meaning.

“Guarantor(s)” means, if applicable, jointly and severally, those guarantor(s)
whose names are set forth in Appendix 1, Item 2.2.7, and any other Person who
now or hereafter guarantees all or any portion of the Obligations, and their
respective legal representatives, successors and permitted assigns. Each of the
Guarantors shall be a “Guarantor”.

“Guaranty” means the agreement(s), titled and dated as of such date set forth in
Appendix 1, Item 2.2.8, if any, and any other guaranty agreement now or
hereafter executed by Guarantors, or any of them, in favor of the Buyer, and all
modifications, amendments, reaffirmations or replacements thereof or additions
thereto.

“Hazard Insurance Policy” means, with respect to each Purchased Loan, the policy
of fire and extended coverage insurance required by Section 17.13(ii)(a) to be
maintained for the related Mortgaged Premises’ improvements (and, if the related
Mortgaged Premises are located in a federally-designated special flood area,
federal flood insurance issued in accordance with the Flood Disaster Protection
Act of 1973, as amended from time to time, or, if repealed, any superseding
legislation governing similar insurance coverage, or similar coverage against
loss sustained by floods or similar hazards that conforms to the flood insurance
requirements prescribed by Fannie Mae guidelines, which may be provided under a
separate insurance policy), which insurance may be a blanket mortgage impairment
policy maintained by the Seller or such Purchased Loan’s Servicer, if
applicable, in accordance with the terms and conditions of Section 17.13(ii)(b).

 

2-8

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

“Hedging Arrangements” means any agreement or other arrangement (including
without limitation, an interest rate swap agreement, an interest cap agreement,
and a forward sale agreement) entered into by the Seller to protect itself
against changes in interest rates or the market value of assets.

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

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

“Income” means, with respect to any Purchased Loan on any day, all payments of
principal, interest, fees and other distributions thereon or proceeds thereof
paid by or on behalf of the applicable Customer.

“Intangible Assets” means those assets of the Seller which are (a) deferred
assets, other than prepaid insurance and prepaid taxes; (b) patents and
applications therefor, copyrights, trademarks, service marks, trade names,
copyright, trademark, service mark and trade name registrations and
applications, goodwill, franchises, permits, experimental expenses and other
similar assets which would be classified as “intangible assets” under GAAP;
(c) treasury stock (or its equivalent) and any write-up of the value of any
assets after the date of the Seller ’s most recent year end financial statements
provided to the Buyer; (d) Servicing Rights; and (e) any other assets which
would be classified as “intangible assets” under GAAP.

“Intercreditor Agreement” means a written intercreditor/interparty agreement in
form and substance satisfactory to and approved by the Buyer that sets forth the
relative rights and priorities of the parties thereto with respect to certain
collateral or other assets pledged or assigned to them by the Seller, which
collateral or other assets may be shared or not among the parties thereto from
time to time, and includes all amendments, supplements or restatements thereto
or thereof.

“Investor Commitment” means a Best Efforts Commitment or a Mandatory Commitment.

“Investor Funding Account” means such account, the number of which is set forth
in Appendix 1, Item 2.2.9, maintained in the name of the Seller with the Buyer
at the office of the Buyer set forth in Appendix 1, Item 24.2, into which
Repurchase Price payments from the Seller or for the Seller’s account by
Approved Investors, settlement of Income collections from Purchased Loans and
settlement proceeds from the sale of Agency MBS (via transfer from the Custodial
Account) shall be deposited and applied to reduce the Repurchase Prices of such
Purchased Loans in accordance with Section 4.4. The Investor Funding Account
shall be a “blocked account” under the Buyer’s sole control and the Seller shall
not have access to monies on deposit therein until transfer from time to time of
surplus monies (after payment of Transactions) to the Operating Account in
accordance with the provisions hereof. The Investor Funding Account shall not be
subject to deductions, set-off or any other right in favor of any Person other
than the Buyer. The term “Investor Funding Account” shall be deemed to include
any substitute or replacement account at the Buyer.

“Jumbo Mortgage Loan” if identified as an Approved Loan Type in Appendix 2,
Item 2.2.2.1, is defined in Annex D. If “Jumbo Mortgage Loan” is not identified
as an Approved Loan Type in Appendix 2, Item 2.2.2.1, then this definition shall
be inapplicable.

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

“Leverage Ratio” means, as of any date of determination thereof, the ratio of
(a) Total Liabilities as of such date, plus any outstanding balances on early
purchase, early payment, off-balance sheet or like facilities normally excluded
from liabilities under GAAP as of such date, less Subordinated Debt as of such
date, to (b) Adjusted Tangible Net Worth as of such date, all determined in
accordance with GAAP except as otherwise provided herein.

 

2-9

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

“Liabilities” is defined in the definition of “Total Liabilities”.

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

“Liquidity” means, as of any date of determination thereof, an amount equal to
the Seller’s cash and Cash Equivalents on hand and unencumbered (excluding any
cash and Cash Equivalents held in any escrow account, reserve account and/or
collateral account and any amount by which the Seller-related escrow and MIP
liabilities exceed the escrow and MIP assets in escrow and MIP accounts
maintained by the Seller) as of such date, plus, if applicable, cash of the
Seller pledged against the Repurchase Facility as of such date, as long as such
cash is held in a deposit account (including, without limitation, the Cash
Collateral Account) maintained by the Seller with the Buyer, plus, if
applicable, the balance (if any) of the Seller’s cash swept against the
Repurchase Facility (pursuant to a sweep agreement between the Seller and the
Buyer) as of such date which is available to be repaid to the Seller by the
Buyer.

“Loan Funding Account” means such account, the number of which is as set forth
in Appendix 1, Item 2.2.10, maintained in name of the Seller with the Buyer at
the office of the Buyer set forth in Appendix 1, Item 24.2, into which (i) the
proceeds of Transactions may be deposited upon disbursement by the Buyer (and
used solely to cover wires requested by the Seller from the Loan Funding Account
solely for the purpose of funding Purchased Loans hereunder), (ii) the amounts
withdrawn from the Operating Account to cover the difference between (x) the
amount of all items drawn on the Loan Funding Account, including wire transfers
to originate or acquire Mortgage Loans to be sold to the Buyer, and (y) the
amount of the Purchase Price, if any, paid by the Buyer for such Mortgage Loans,
may be deposited pending disbursement, and/or (iii) amounts withdrawn from the
Operating Account for the payment to the Buyer of Repurchase Prices of Purchased
Loans or Buyer’s Margin Amounts may be deposited pending application to the
applicable Obligation. The Loan Funding Account shall be a “blocked account”
under the Buyer’s sole control and the Seller shall not have access to monies on
deposit therein until the wire transfer from time to time of such monies
therefrom is actually completed in accordance with the provisions hereof. The
Loan Funding Account shall not be subject to deductions, set-off or any other
right in favor of any Person other than the Buyer. The term “Loan Funding
Account” shall be deemed to include any substitute or replacement account at the
Buyer.

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

“Loan Schedule” means a schedule of Eligible Loans, in a form acceptable to the
Buyer, which identifies each Eligible Loan purchased or to be purchased (as the
context requires) from the Seller by the Buyer in a proposed or executed (as the
context requires) Transaction.

“Loan-to-Value Ratio” means, with respect to any Mortgage Loan, the ratio of
(a) the principal amount of such Mortgage Loan outstanding at the origination
thereof to (b) the appraised value of the Mortgaged Premises securing such
Mortgage Loan (as set forth in the Appraisal delivered in connection with the
origination of such Mortgage Loan).

“Mandatory Commitment” shall mean a bona fide, current, unfilled and unexpired
written commitment held by the Seller from an Approved Investor to purchase
Mortgage Loans or, if applicable, an Agency MBS, in form and substance
satisfactory to the Buyer in its sole discretion, (a) that specifies (i) the
type or item(s) of Mortgage Loans

 

2-10

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

or, if applicable, Agency MBS to be purchased, (ii) a purchase date or purchase
deadline date, and (iii) a purchase price or the criteria by which the purchase
price will be determined, and (b) that is a so-called “mandatory” commitment,
under which the Seller is obligated to sell such Mortgage Loan(s) or, if
applicable, Agency MBS.

“Margin Call” is defined in Section 7.1.

“Margin Deficit” is defined in Section 7.1.

“Margin Market Value” means, with respect to any Purchased Loan, the product of
(A) the Market Value of such Purchased Loan and (B) the Buyer’s Margin
Percentage of such Purchased Loan.

“Margin Stock” has the meaning assigned to that term in Regulation U as in
effect from time to time.

“Market Value” means what the Buyer reasonably determines the market value of
any Purchased Loan to be, taking into account customary factors, including
current market conditions and the fact that such Purchased Loan may be sold or
otherwise disposed of under circumstances where the Seller is in default under
this Agreement or where the Seller is in default under a relevant Servicing
Agreement. The Buyer’s determination of Market Value hereunder shall be
conclusive and binding upon the parties, absent manifest error.

“Marketable Security” means an equity or debt security (including a mutual fund)
that meets all of the following requirements: (a) such security is listed on a
national securities exchange or freely traded in the over-the-counter market;
(b) such security is not subject to resale restrictions, either under securities
laws or contractual agreements, even though other securities of the same class
may be freely marketable; (c) the issuer of such security has a long-term rating
of BBB- by Standard & Poor’s (a division of The McGraw-Hill Companies), Baa3 by
Moody’s Investors Service, Inc. or the equivalent rating by another
nationally-recognized ratings service acceptable to the Buyer; and (d) such
security is not considered a “penny stock” under the Securities Exchange Act of
1934, as amended (the “1934 Act”).

“Master Custodial Agreement” means, if applicable, a written master clearing and
custodial agreement, securities account control agreement or similar agreement
(however titled) among the Buyer, the Seller, the custodian a party thereto (or
such other securities intermediary as shall be acceptable to the Buyer in its
sole and absolute discretion), as custodian, and such other parties (if any) as
the Buyer may permit, in a form and substance acceptable to the Seller and the
Buyer, as it may be supplemented, amended, restated or replaced from time to
time.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property, operations, financial condition or results of operations of
the Seller and, if applicable, its Subsidiaries, taken as a whole, (b) the
ability of the Seller to pay and perform the Obligations, or (c) the Buyer’s
rights in respect of any of the Purchased Loans.

“Material Amount” means, at any time, ten percent (10%) or more of Tangible Net
Worth (determined based on the most recent monthly balance sheet delivered to
the Buyer pursuant to Section 17.1(ii)).

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

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

“MERS Designated Loan” means a Purchased Loan registered to the Seller on the
MERS® System.

 

2-11

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

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

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

“Minimum Balance” is defined in Section 17.14.

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

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

“Mortgage Loan” means any loan evidenced by a Mortgage Note and includes all
right, title and interest of the lender or mortgagee of such Mortgage Loan as a
holder of both the beneficial and legal title to such Mortgage Loan, including
(i) all loan documents, files and records of the lender or mortgagee for such
Mortgage Loan, including the Loan Papers, (ii) the monthly payments, any
prepayments, insurance and other proceeds, (iii) the rights to service such
Mortgage Loan and (iv) all other rights, interests, benefits, security,
proceeds, remedies and claims in favor or for the benefit of the lender or
mortgagee arising out of or in connection with such Mortgage Loan.

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

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

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Seller or any ERISA Affiliate makes or
is obligated to make contributions, or has any continuing liability.

“Non-Usage Fee” means the fee payable by the Seller to the Buyer pursuant to
Section 10.1(iii).

“Notices” is defined in Article 24.

“Obligations” means (a) all of the Seller’s obligations and liabilities to the
Buyer and any of its Affiliates (whether now existing or hereafter arising,
voluntary or involuntary, whether or not jointly owed with others, direct or
indirect, absolute or contingent, liquidated or unliquidated, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred) whether under or arising out of this Agreement or any of the other
Facility Papers and/or any other documents or agreements to which the Seller, on
the one hand, is a party with the Buyer and/or any of its Affiliates, on the
other hand, and whether related to the Repurchase Facility or any other facility
or arrangement between the Seller and the Buyer and/or any of its Affiliates,
including without limitation, all Repurchase Prices, Price Differentials
(including any interest equivalent accruing after the filing of any petition in
bankruptcy or the commencement of any insolvency, reorganization or like
proceeding relating to the Seller, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), all reimbursement
obligations, fees, indemnification and reimbursement payments, costs and
expenses (including all fees, costs and expenses of counsel to the Buyer,
incurred pursuant to or in connection with this Agreement or any other Facility
Papers, whether incurred at trial, on appeal, in bankruptcy, or otherwise),
together with all renewals, extensions, modifications and refinancings thereof,
and (b) all obligations of the Seller, monetary or otherwise, under any Hedging
Arrangements relating to the obligations referred to in the preceding clause
(a) entered into with the Buyer (or an Affiliate thereof), and (c) any and all
Depository Obligations.

 

2-12

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

“Officer’s Certificate” means a certificate executed on behalf of the Seller by
its chief executive officer, president, chief financial officer, treasurer, any
of its executive vice presidents or senior vice presidents, its company
secretary, its controller, its manager or such other Persons as shall be
acceptable to the Buyer.

“Open Transaction” means a Transaction in which the Buyer has purchased and paid
for the related Purchased Loan(s) but the Seller has not repurchased said
Purchased Loan(s), and “Open” means that the subject Transaction is an Open
Transaction.

“Operating Account” means such account, the number of which is set forth in
Appendix 1, Item 2.2.11, maintained in name of the Seller with the Buyer at the
office of the Buyer set forth in Appendix 1, Item 24.2, used by the Seller in
the operation of the Seller’s business and into which surplus funds (after
payment of Transactions) transferred from the Investor Funding Account shall be
deposited and made available to the Seller. The Seller irrevocably authorizes
the Buyer, which authorization shall remain in effect until all Obligations are
fully and finally paid, (i) to withdraw funds on any day for transfer to the
Loan Funding Account to cover the difference between (x) the amount of all items
drawn on the Loan Funding Account, including wire transfers to originate or
acquire Mortgage Loans to be sold to the Buyer, and (y) the amount of the
Purchase Price, if any, paid by the Buyer for such Mortgage Loans, (ii) to
withdraw funds on any day for transfer to the Investor Funding Account to cover
the difference (if negative) between (x) the sale proceeds received from the
purchaser of any Purchased Loan or Agency MBS, as applicable, and (y) the full
amount of the Repurchase Price(s) owed to the Buyer for such Purchased Loan or
for all of the Purchased Loans supporting such Agency MBS, as applicable,
(iii) to withdraw funds from time to time for payment to the Buyer of Price
Differential and Fees when due, (iv) to withdraw funds on any day in an amount
equal to the aggregate Repurchase Prices of all Purchased Loans that are Past
Due on that day, (v) to withdraw funds from time to time in connection with any
Margin Call for payment to the Buyer of any Buyer’s Margin Amount when due, and
(vi) to, while any Potential Default or Event of Default exists, set off from
amounts held in such account any amounts owed to the Buyer on account of the
Obligations. The term “Operating Account” shall be deemed to include any
substitute or replacement account at the Buyer. The Operating Account shall be
subject to set off by the Buyer.

“Other Approved Facilities” means the existing facilities, if any, listed in
Appendix 2, Item 2.18.2.

“Other Approved Facility Papers” means, if applicable, the agreements and
documents (and any amendments, supplements and restatements thereof) executed in
connection with the Other Approved Facilities.

“Other Assets Collateral” is defined in Article 40.

“Participant” is defined in Section 23.1(i).

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA and any successor thereto.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Protection Act of 2006, as amended, Section 412 of the Code
and Section 302 of ERISA, each as in effect prior to the Pension Protection Act
of 2006, as amended, and, thereafter, Section 412, 430, and 436 of the Code and
Sections 302 and 303 of ERISA.

“Per Loan Limit” is defined on Schedule EL.

“Permitted Encumbrances” means, in respect of the Mortgaged Premises securing a
Mortgage Loan, (i) tax Liens for real property taxes and government-improvement
assessments that are not delinquent; (ii) easements and restrictions that do not
materially and adversely affect the title to or marketability of such Mortgaged
Premises or prohibit or interfere with the use of such Mortgaged Premises as a
one-to-four family residential dwelling; (iii) reservations as to oil, gas or
mineral rights, provided such rights do not include the right to remove
buildings or other material improvements on or near the surface of such
Mortgaged Premises or to mine or drill on the surface thereof or otherwise enter
the surface for purposes of mining, drilling or exploring for, or producing,
transporting or

 

2-13

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

otherwise handling oil, gas or other minerals of any kind; (iv) agreements for
the installation, maintenance or repair of public utilities, provided such
agreements do not create or evidence Liens on such Mortgaged Premises or
authorize or permit any Person to file or acquire claims or Liens against such
Mortgaged Premises; and (v) such other exceptions (if any) as are acceptable
under relevant Agency guidelines; provided that any encumbrance that is not
permitted pursuant to the standards of any relevant Investor Commitment by which
the subject Mortgage Loan is covered shall not be a Permitted Encumbrance.

“Permitted Liens” is defined in Section 18.1.

“Person” means and includes any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization, government or any political subdivision, department, agency or
instrumentality of any government.

“Plan or Pension Plan” means any “employee pension benefit plan”, as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) that is maintained,
contributed to or required to be contributed to by the Seller and any ERISA
Affiliate and is either covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Code.

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

“Principal Balance” means, for any day, the unpaid principal balance of a
Purchased Loan on that day.

“Procedural Manual” means the internally prepared manual of BB&T’s Mortgage
Warehouse Lending Division setting forth the administrative and operational
procedures of such division for certain matters related to the handling,
requirements and monitoring of Purchase Requests and Transactions, as the same
may be modified, amended, supplemented or restated from time to time.

“Prohibited Transaction” means any transaction described in section 406 of ERISA
that is not exempt by reason of section 408 of ERISA or the transitional rules
set forth in section 414(c) of ERISA and any transaction described in section
4975(c)(1) of the Code that is not exempt by reason of section 4975(c)(2) or
section 4975(d) of the Code, or the transitional rules of section 2003(c) of
ERISA.

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

“Purchase Date” means, for each Transaction, the date the Buyer funds the
purchase of the applicable Purchased Loan(s) (including, without limitation, any
Purchased Loan that is a Wet Mortgage Loan).

“Purchase Price” means (i) on the relevant Purchase Date, the price at which a
Purchased Loan in a Transaction is sold by the Seller to the Buyer, such price
being equal to the Purchase Value of such Purchased Loan, and (ii) thereafter,
except where the Buyer and the Seller agree in writing otherwise, a price equal
to the Purchase Value of such Purchased Loans decreased by amounts theretofore
paid by the Seller in respect of such Transaction (as determined by the Buyer)
to the Buyer pursuant to the terms hereof, including Sections 4.3, 7.1 and 13.4
(absent manifest error, the Buyer’s determination of same being conclusive and
binding).

“Purchase Request” means a request from the Seller to enter into a Transaction
with the Buyer, in the form set forth or provided for in the Procedural Manual
(or another form acceptable to the Buyer), and, if applicable, a request to wire
transfer the related Purchase Price to a designated account as set forth
therein, as more particularly described in the Procedural Manual, Electronically
Submitted or, if it cannot be Electronically Submitted, by facsimile pursuant to
Article 4. The term “Purchase Request” shall also include the Loan Schedule for
the related Eligible Loan being purchased by the Buyer under such Transaction.

 

2-14

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

“Purchase Value” means, with respect to all Eligible Loans of a particular
Approved Loan Type, the value set forth in Appendix 2, Item 2.2.2.3 applicable
to Mortgage Loans of such Type.

“Purchased Loan” means a Mortgage Loan sold by the Seller to the Buyer under the
Repurchase Facility. In addition, the term “Purchased Loans” shall also include
all assets and properties described in EXHIBIT A of Schedule 11.

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

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

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

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

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

(iv) all of the Seller’s rights, to the extent assignable, in, to and under any
and all commitments issued by (1) Ginnie Mae, Fannie Mae, Freddie Mac, another
mortgage company or any other investor or the Buyer or a securities issuer to
guarantee, purchase or invest in any of the Purchased Loans or any MBS based on
or backed by any of them or (2) any broker or investor to purchase any MBS,
whether evidenced by book entry or certificate, representing or secured by any
interest in any of the Purchased Loans, together with the proceeds arising from
or pursuant to any and all such commitments;

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

 

2-15

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

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

(vii) all tax, insurance, maintenance fee and other escrow deposits or payments
made by the Customers under such Purchased Loans (the Buyer acknowledges that
the Seller’s rights in such deposits are limited to the rights of an escrow
agent and such other rights, if any, in and to such deposits as are accorded by
the Purchased Loans and related papers).

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

“Regulation Z” means Regulation Z promulgated by the Bureau of Consumer
Financial Protection (or any successor thereto), 12 C.F.R. Part 1026, or any
other regulation when promulgated to replace the prior Regulation Z and having
substantially the same function.

“Reinstatement Fee” means the fee payable by the Seller to the Buyer pursuant to
Section 10.1(iv).

“Reportable Event” means any of the events set forth in section 4043(b) of ERISA
or the regulations thereunder, a withdrawal from a Plan described in section
4063 of ERISA, a cessation of operations described in section 4062(e) of ERISA,
an amendment to a Plan necessitating the posting of security under section
401(a)(29) of the Code, or a failure to make a payment required by section
430(j) of the Code and section 302(e) of ERISA when due.

“Repurchase Date” means (i) upon demand by the Seller or (ii) if earlier, the
date on which the Seller is required to repurchase a Purchased Loan from the
Buyer, being the earliest of (A) the date on which an Approved Investor is
required to purchase such Purchased Loan, or if applicable, the related Agency
MBS; (B) the last day of the Repurchase Period with respect to such Purchased
Loan; or (C) any date determined by application of the provisions of Sections
4.3 or 19.

“Repurchase Facility” means the revolving mortgage loan repurchase facility
provided to the Seller by the Buyer pursuant to this Agreement.

“Repurchase Period” means, with respect to any Purchased Loan, the period
commencing on the applicable Purchase Date or Transfer Date, as applicable, and
ending on the first to occur of: (A) the expiration of the period set forth in
Appendix 2, Item 2.2.2.3 as being the standard Repurchase Period for the
Approved Loan Type that applies to such Purchased Loan; (B) the expiration of
the Investor Commitment for such Mortgage Loan (or if applicable, the related
Agency MBS) or certificate covering the same or rejection by the Approved
Investor under the Investor Commitment for such Mortgage Loan (or if applicable,
the related Agency MBS) for purchase unless, in either case, within ten
(10) Banking Days thereafter such Mortgage Loan (or if applicable, the related
Agency MBS) becomes covered by a new Investor Commitment; or (C) if applicable,
ten (10) days after redelivery by the Buyer to the Seller of any non-conforming
instrument or document for correction unless the Seller has completed the
correction thereof and delivered the same to the Buyer within such ten-day
period. In no event shall the Repurchase Period for any Transaction exceed 364
days after the applicable Purchase Date or Transfer Date, and the foregoing
shall not constitute authorization or approval to extend the applicable
Repurchase Period for any Transaction up to such number of days if the
applicable Repurchase Period is for a shorter period of time pursuant to any of
the above clauses (A) through (C).

“Repurchase Price” means the price at which a Purchased Loan is to be resold by
the Buyer to the Seller on the applicable Repurchase Date, which will be
determined in each case as the sum of (x) the Purchase Price, (y) the accrued
and unpaid Price Differential as of the date of such determination, and (z) any
accrued and unpaid Fees, expenses and indemnity amounts.

 

2-16

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

“Required Documents” means all of the Loan Papers that must be delivered to the
Buyer (in the case of Dry Mortgage Loans, prior to the related Purchase Date
and, in the case of Wet Mortgage Loans, on or before the seventh (7th) Banking
Day after the related Purchase Date) in order for any particular Purchased Loan
to have or continue to have Market Value. The Procedural Manual lists the
Required Documents.

“Requirements of Law” means as to any Person the formation or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation, or a final and binding determination of an arbitrator or a
determination of 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.

“Servicer” means, collectively, with respect to each Purchased Loan, any Person
who owns or holds the rights to service such Purchased Loan (the “Servicing
Rights”), and any Person who as a servicer or subservicer is primarily
responsible for performing the servicing functions for such Purchased Loan,
which is identified in a Real Estate Settlement Procedures Act of 1974, 12
U.S.C. § 2602, as amended, notification letter as the Person to whom the
applicable Customer sends scheduled loan payments.

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

“Servicing Rights” is defined in the definition of “Servicer”.

“SIPA” means the Securities Investors Protection Act of 1970, 15 U.S.C. § 78a
et. seq., as amended.

“Sublimit” means one or more (as the context requires) of the concentration
limits under the Repurchase Facility described in Article 5.

“Subordinated Creditor” means each creditor holding indebtedness or other
obligations of the Seller that are subordinated to the Obligations pursuant to
the terms and conditions of the Subordination Agreement applicable to such
creditor.

“Subordinated Debt” means any indebtedness of the Seller subordinated in writing
pursuant to a Subordination Agreement to the Obligations on terms and conditions
satisfactory in all respects to the Buyer, in its sole discretion, including
without limitation, with respect to interest rates, payment terms, maturities,
amortization schedules, collateral, covenants, defaults, remedies, and
subordination provisions, as evidenced by the written approval of the Buyer.

“Subordination Agreement” means a written subordination agreement in form and
substance satisfactory to and approved by the Buyer that subordinates (x) the
debts and obligations identified therein owing by the Seller to the Person
signing such Subordination Agreement as a creditor, to (y) the Obligations, in
both right of payment and lien priority, including standstill and blockage
provisions approved by the Buyer.

“Subsidiary” means, with respect to any Person (herein referred to as the
“parent”), any corporation, association or other business entity of which more
than fifty percent (50%) of the securities or other ownership interests having
ordinary voting power is, or with respect to which rights to control management
(pursuant to any contract or other agreement or otherwise) are, at the time as
of which any determination is being made, owned, controlled or held by the
parent or one or more subsidiaries of the parent.

“Tangible Assets” means all assets of the Seller, determined in accordance with
GAAP, but excluding Intangible Assets.

“Tangible Net Worth” means, as of any date of determination thereof, an amount
equal to the difference between (a) Tangible Assets as of such date and
(b) Total Liabilities as of such date, all determined in accordance with GAAP.

“Taxes” is defined in Article 8.

 

2-17

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

“Termination Date” means the earlier of (i) the date set forth on Appendix 2,
Item 2.2.2.5 or (ii) the date when the Buyer’s Commitment is terminated pursuant
to this Agreement or by operation of Law.

“Total Assets” means all assets of the Seller, determined in accordance with
GAAP.

“Total Liabilities” or “Liabilities” means, as of any date of determination
thereof, all liabilities and obligations of the Seller, determined in accordance
with GAAP, and includes, without limitation, Current Liabilities and all
indebtedness or other obligations for borrowed money or for the deferred
purchase price of property or services as of such date.

“Transactions” means transactions in which the Seller sells, transfers, assigns
and conveys to the Buyer all of the Seller’s right, title and interest in and to
certain Eligible Loans, against the transfer of funds by the Buyer, subject to a
simultaneous agreement by the Seller to repurchase from the Buyer such Eligible
Loans (i) upon written notice to the Buyer by the Seller, (ii) on a prescribed
date in the future, (iii) upon the occurrence of prescribed events or (iv) on
the Termination Date, against the transfer of funds by the Seller, all as more
fully set forth in, and subject to the terms and conditions of, this Agreement,
and each such transaction is referred to herein as a “Transaction”.

“Transfer Date” means with respect to any Transaction entered into under the
Aged Mortgage Loans Sublimit (if applicable), the date upon which such Mortgage
Loan is transferred from its original Sublimit to the Aged Mortgage Loans
Sublimit.

“Type” means (a) when used in respect of any Mortgage Loan, any Eligible Loan or
any Purchased Loan, the specific Approved Loan Type applicable thereto, and
(b) when used in respect of any Sublimit, the specific Approved Sublimit
applicable thereto.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of Florida; provided, that if by reason of mandatory provisions of Law,
the perfection or the effect of perfection or non-perfection of any security
interest granted or deemed granted pursuant to this Agreement or the
continuation, renewal or enforcement thereof is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of Florida,
the term “UCC” 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.

“USDA” means the United States Department of Agriculture, and any successor
thereof.

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

“Wet Mortgage Loan” is defined in Annex B.

“Wet Mortgage Loan Period” means, with respect to a Wet Mortgage Loan, the seven
(7) Banking Day period, commencing on the Purchase Date, by which the Seller
must deliver to the Buyer the Required Documents and, if requested by the Buyer,
the other Loan Papers for such Mortgage Loan.

“Wholly-Owned Subsidiary” means any Subsidiary, all of the stock or ownership
interests of every class of which shall, at the time as of which any
determination is being made, be owned by the Seller either directly or through a
Wholly-Owned Subsidiary.

2.3 Definitions for Price Calculations. For convenience of reference,
definitions used in provisions relating to calculation of the applicable Pricing
Rate and payment of Price Differential are grouped together in this Section 2.3.

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

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

“Extended Wet Mortgage Loan Rate” is defined in the definition of “Rate”.

 

2-18

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

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

(i) “Applicable Index” which means, with respect to all Eligible Loans of a
particular Approved Loan Type, the index in the chart set forth in Appendix 2,
Item 2.2.3.1 applicable to Mortgage Loans of such Type, and with respect to all
Extended Wet Mortgage Loans and Past Due Mortgage Loans, the index set forth
therefor in such chart.

(ii) “LIBOR”, which means, for any day on which a Transaction is Open, the rate
appearing on the display designated as Reuters Screen LIBOR 01 Page (or on any
successor or substitute page, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page, as determined by the Buyer from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m. on that day, as the rate
for delivery on that day of one (1) month U.S. dollar deposits of One Million
Dollars ($1,000,000) or, if not so reported on such service for any reason, then
on any other interest rate reporting service of recognized standing designated
in writing by the Buyer to the Seller, as the one-month LIBOR, adjusted daily
with each change in the one-month LIBOR; provided, however, in no event shall
such rate be less than a floor rate per annum equal to the percentage set forth
in Appendix 2, Item 2.2.3.2, which floor rate is subject to change at any time
upon written notice from the Buyer. If LIBOR determined as provided above would
be less than zero percent (0.0%), then LIBOR shall be deemed to be zero percent
(0.0%). Any Price Differential based on LIBOR shall be (a) calculated on a 360
day basis applied for the actual number of days for which the Transaction to
which it applies is Open (i.e., on a 365/360 (or 366/360 in a leap year) day
basis) and (b) adjusted daily with each change in LIBOR.

(iii) The “Prime Rate”, which means the rate of interest per annum publicly
announced from time to time by BB&T as its prime rate; provided, however, in no
event shall such rate be less than a floor rate per annum equal to the
percentage set forth in Appendix 2, Item 2.2.3.3, which floor rate is subject to
change at any time upon written notice from the Buyer. Each change in the Prime
Rate shall be effective from and including the date such change is publicly
announced as being effective. The Prime Rate is a reference rate and is not
necessarily the lowest rate. Any Price Differential based on the Prime Rate
shall be (a) calculated on a 360 day basis applied for the actual number of days
for which the transaction to which it applies is Open (i.e. on a 365/360 (or
366/360 in a leap year) day basis) and (b) adjusted daily with each change in
the Prime Rate.

Should any issue ever arise in any forum or under any circumstances as to the
amount of any Index for any then-current or any prior day, a certificate of the
chief credit officer of BB&T, stating such Index for that day, absent manifest
error, shall conclusively establish what the Index was for that day.

“Past Due” means that the Seller has not repurchased the subject Purchased Loan
on or before its Repurchase Date.

“Past Due Rate” is defined in the definition of “Rate”.

“Price Differential” means, with respect to any Transaction hereunder for any
day, the aggregate amount obtained by daily multiplication, for each day,
commencing on (and including) the Purchase Date and ending on (but excluding)
such date of determination, of (i) the Pricing Rate applicable to such
Transaction on such day, by (ii) the Purchase Price for such Transaction on such
day, reduced by the amount of Price Differential theretofore paid by the Seller
to the Buyer with respect to such Transaction. Absent manifest error, the
Buyer’s determination of the Price Differential shall be conclusive and binding.

“Pricing Margin” means the pricing rate margin to be added to a specified Index
to determine a Rate. The margins used in this Agreement, to the extent
applicable, are: (A) the “Applicable Margin”, which means, (1) with respect to
all Eligible Loans of a particular Approved Loan Type, the percentage set forth
in Appendix 2, Item 2.2.3.1 applicable to Mortgage Loans of such Type; and
(2) for Extended Wet Mortgage Loans, the percentage set forth therefor in
Appendix 2, Item 2.2.3.1; and (B) the “Past Due Margin”, which means the
percentage set forth therefor in Appendix 2, Item 2.2.3.1.

 

2-19

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

“Pricing Rate” means the Rate for determination of Price Differential, and shall
be for all Open Transactions the Rates applicable to each of the Open
Transactions; provided, that if on any day the applicable Rate for any such
Transaction as a whole or the aggregate of all Open Transactions determined as
provided above shall exceed the relevant Ceiling Rate for that day, then the
Rate therefor shall be reset to the Ceiling Rate on that day for that day.

“Rate” means the Pricing Rate (R) to be multiplied by the Purchase Price (P) of
the Purchased Loans in each Open Transaction for the relevant time period (T) to
determine Price Differential (I). Each Rate is stated as a per annum rate and is
the sum of an Index and a Pricing Margin. The Rates used in this Agreement are:

(i) The “Base Rate” which, for each day on which the relevant Transaction is
Open, is a rate per annum equal to the lesser of:

(a) the sum of (x) the Applicable Index for that day and (y) the Applicable
Margin; or

(b) the Ceiling Rate for that day;

(ii) The “Ceiling Rate” which means, on any day, the maximum nonusurious rate of
interest permitted for that day by applicable Law, stated as a rate per annum;

(iii) The “Extended Wet Mortgage Loan Rate” which means, with respect to an
Extended Wet Mortgage Loan, for each day that the applicable Wet Mortgage Loan
Period has been extended by the Buyer, a rate per annum equal to the sum of
(x) the Applicable Index for that day and (y) the Applicable Margin; and

(iv) The “Past Due Rate” which means, for any day after the Repurchase Date for
the relevant Transaction, the lesser of:

(a) the sum of (x) the Applicable Index for that day and (y) the Past Due
Margin; and

(b) the Ceiling Rate for that day.

Each determination by the Buyer of any Rate, absent manifest error, shall be
conclusive and binding.

2.4 Other Definitional Provisions and Rules of Interpretation.

(i) Accounting terms not otherwise defined shall have the meanings given them
under GAAP; provided, that for purposes of determining compliance with any
covenant set forth in Section 18.19, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement applied on a basis
consistent with the financial statements referred to in Section 16.1(iv)(a); and
further provided, that if the Seller notifies the Buyer that the Seller wishes
to amend any covenant in Section 18.19 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Buyer notifies the Seller that
the Buyer wishes to amend Section 18.19 for such purpose), then the Seller’s
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Seller and the Buyer.

(ii) All terms not otherwise defined herein or by GAAP, which terms are defined
in the UCC, shall have the meanings assigned to them in the UCC.

(iii) Unless the context requires otherwise: (a) defined terms may be used in
the singular or the plural, and any pronoun shall include the corresponding
masculine, feminine and neuter forms; (b) any definition of or reference to any
agreement, instrument or other document shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other
Facility Paper); (c)

 

2-20

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

any reference to any Person shall be construed to include such Person’s
successors and assigns; (d) the words “hereto”, “herein”, “hereof” and
“hereunder”, and words of similar import when used in any Facility Paper, shall
be construed to refer to such Facility Paper in its entirety and not to any
particular provision hereof or thereof; (e) all references in a Facility Paper
to Sections, Exhibits, Appendices and Schedules shall be construed to refer to
Sections of, and Exhibits, Appendices and Schedules to, the Facility Paper in
which such references appear; (f) any reference to any law shall include all
statutory and regulatory rules, regulations, orders and provisions
consolidating, amending, replacing or interpreting such law, and any references
to any law or regulation shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time; and (g) the
words “asset” and “property” shall be construed to have the same meaning and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.

(iv) Except where otherwise specified, all times of day used in the Facility
Papers are local (U.S. Eastern Time Zone) times in Orlando, Florida.

(v) Unless otherwise expressly indicated, in the computation of periods of time
from a specified date to a later 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”.

(vi) Unless the context plainly otherwise requires (e.g., if preceded by the
word “not”), wherever the word “including” or a similar word is used in the
Facility Papers, it shall be read as if it were written, “including by way of
example but without in any way limiting the generality of the foregoing concept
or description”.

(vii) Captions and section headings appearing in this Agreement and in the other
Facility Papers are included for convenience of reference only and shall not
affect the interpretation of this Agreement or any other Facility Paper.

(viii) The parties acknowledge and agree that if, pursuant to any separate
written custodial, escrow or similar agreement (referred to in this clause
(viii) as a “custodial agreement”) entered into by the Buyer and in effect
during the term of this Agreement, the Buyer has expressly appointed or
designated a third party custodian on the Buyer’s behalf as bailee of, and
custodian for, the Buyer (referred to in this clause (viii) as “Buyer’s
custodian”) to take delivery or maintain custody or possession of the Required
Documents and/or other Loan Papers with respect to one or more Purchased Loans,
and the Seller is required under the terms of such custodial agreement to
deliver such Required Documents and/or other Loan Papers directly to Buyer’s
custodian, then delivery to, or custody or possession by, Buyer’s custodian of
such Required Documents and/or other Loan Papers in accordance with the terms of
such custodial agreement shall constitute delivery to, or custody or possession
by, the Buyer of such Required Documents and/or other Loan Papers for purposes
of the provisions of this Agreement that require delivery to, or custody or
possession by, the Buyer of such Required Documents and/or other Loan Papers,
unless and until the Seller is otherwise directed by the Buyer. The parties also
acknowledge that a custodial agreement or a Master Custodial Agreement may
include procedures for the delivery, review, processing and/or release of
Purchased Loans, the Required Documents and other Loan Papers related thereto,
and/or Agency MBS. The parties hereby agree that, to the extent of any
inconsistency (but solely to the extent of such inconsistency) in such
procedures set forth in any custodial agreement or Master Custodial Agreement
and the corresponding provisions of Sections 20.4, 20.5 and/or 20.6 of this
Agreement, the procedures set forth in such custodial agreement or Master
Custodial Agreement, as applicable, shall control.

(ix) Each of the Buyer and the Seller has had the opportunity to review this
Agreement and the other Facility Papers with counsel of its choice, and this
Agreement and the other Facility Papers are the product of discussions and
negotiations between the Buyer and the Seller. Accordingly, this Agreement and
the other Facility Papers are not intended to be construed against the Buyer
merely on account of the Buyer’s involvement in the preparation of such
documents.

 

2-21

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

3 The Buyer’s Commitment

3.1 The Buyer’s Commitment to Purchase. Subject to the terms and conditions of
this Agreement, and provided the conditions precedent set forth in Article 15
have been satisfied and no Potential Default or Event of Default has occurred
that the Buyer has not declared in writing to have been cured or waived (or, if
one has occurred and not been so declared cured or waived, if the Buyer, in its
sole discretion and with or without waiving such Potential Default or Event of
Default, has elected in writing that Transactions under this Agreement shall
continue nonetheless), the Buyer agrees to make revolving purchases of Eligible
Loans, until the Termination Date, so long as the Aggregate Outstanding Purchase
Price does not exceed, subject to Article 5 and Section 7.1, the Commitment.

3.2 Expiration or Termination of the Commitment. Unless extended in writing or
terminated earlier in accordance with this Agreement, the Buyer’s Commitment
shall automatically expire at the close of business (A) on the date set forth in
clause (i) of the definition of Termination Date, without any requirement for
notice or any other action by the Buyer or any other Person, or (B) on any date
prior to the date set forth in clause (i) of the definition of Termination Date
as may be determined by the Buyer, in its sole discretion, upon not less than 6
months’ notice to the Seller that the Buyer intends to exit the warehouse
lending business, in each case subject to earlier termination as set forth in
Section 19.2. The Buyer’s Commitment may not be reduced in part by the Seller,
but may be terminated in its entirety at any time by the Seller upon at least
one hundred twenty (120) days’ prior irrevocable notice to the Buyer, provided
all Obligations are paid in full on or prior to such Termination Date.

3.3 Changes in Product Eligibility. The Buyer may from time to time, in the
exercise of the Buyer’s reasonable discretion based on, among other things,
prevailing market conditions or changes in the Buyer’s internal underwriting
standards and without the consent of the Seller, revise the definition of
Eligible Loans (making certain Mortgage Loans ineligible for purchase
hereunder); revise or delete (making certain Mortgage Loans ineligible for
purchase hereunder) the definition of Approved Loan Types, one or more of the
categories of Mortgage Loans thereunder and/or the underlying definitions for
Mortgage Loans of a specific Approved Loan Type; and/or add, revise or delete
other mortgage loan product types based on market conditions, by delivery to the
Seller of an Eligibility Change Notice. Each Eligibility Change Notice shall be
effective as of the effective date set forth therein, provided such effective
date shall not be earlier than the date of the Seller’s receipt of the
Eligibility Change Notice, and provided further that the revisions effectuated
pursuant to the Eligibility Change Notice shall not be applicable to Mortgage
Loans in the Seller’s pipeline as of such effective date (i.e., Mortgage Loans
that have been committed by the Seller as of such effective date but that have
not yet closed). Notwithstanding the foregoing, the Buyer’s failure to deliver
an Eligibility Change Notice to the Seller shall not prevent the Buyer from
revising or deleting the aforementioned definitions.

 

3-1

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

4 Initiation; Purchase Request; Termination

4.1 Seller’s Purchase Request.

(i) Any request to enter into a Transaction shall be made by notice to the Buyer
at the initiation of the Seller. To request a Transaction, the Seller shall
provide the Buyer with a Purchase Request (Electronically Submitted or by
facsimile). Each Purchase Request shall identify the informational requirements
set forth in the Procedural Manual.

(ii) If the Seller submits a Purchase Request and:

(a) it is received by the time set forth on Appendix 1, Item 4.1.1 on the
proposed Purchase Date, and all of the conditions precedent to funding set forth
in this Agreement are satisfied (including those set forth in Section 3.1, this
Section 4.1, and Section 15.2), then the Buyer shall fund the Transaction
covered by such Purchase Request on such date; or

(b) it is not received until after the time set forth on Appendix 1, Item 4.1.1
on the proposed Purchase Date, and all of the conditions precedent to funding
set forth in this Agreement are satisfied (including those set forth in
Section 3.1, this Section 4.1, and Section 15.2), then the Buyer shall fund the
Transaction covered by such Purchase Request on the next succeeding Banking Day.

(iii) The Buyer and the Seller hereby acknowledge that Transactions with respect
to Wet Mortgage Loans include Transactions to which the Buyer delivers funds to
the applicable title agent or closing attorney closing such Wet Mortgage Loan
prior to the receipt by the Buyer or its custodian of the Required Documents for
such Wet Mortgage Loan, subject to the Wet Mortgage Loans Sublimit and the
applicable Repurchase Period.

4.2 Binding Transactions. Upon Buyer’s receipt of a Purchase Request, the
Transaction requested by the Seller under such Purchase Request shall become
binding and irrevocable on the Seller. The Buyer shall be entitled to rely on
the accuracy, and may act without liability upon the basis, of each Purchase
Request made by the Seller without further investigation or inquiry. In each
case, the Seller waives the right to dispute or hold the Buyer in any way
responsible for any errors or omissions in any Purchase Request. By delivering a
Purchase Request to the Buyer, the Seller shall be deemed to represent and
warrant to the Buyer that all of the representations and warranties in this
Agreement and in the other Facility Papers are true and correct with the same
force and effect as if made on the date of such Purchase Request and that no
Potential Default or Event of Default has occurred and is continuing. The Buyer
reserves the right in its good faith discretion to review and reduce the Buyer’s
Margin Percentage at any time with respect to any Transaction. Notwithstanding
anything contained herein to the contrary, in no event will the Buyer be
obligated, at any time after the date hereof, to fund the purchase of any
Eligible Loans originated by any third party correspondent of the Seller and
purchased by the Seller from such third party correspondent. The Buyer may
change its procedures for funding requests for Transactions from time to time
upon not less than three (3) Banking Days’ prior notice to the Seller. In the
event of any conflict between the terms of a Purchase Request and this
Agreement, this Agreement shall prevail.

4.3 Transaction Termination.

(i) Automatic Termination. The Seller shall repurchase each Purchased Loan from
the Buyer on the applicable Repurchase Date at the applicable Repurchase Price.
Each Transaction will automatically terminate on the earlier of (x) the date
when the subject Purchased Loans (or if applicable, the related Agency MBS) are
purchased by Approved Investors or (y) the Termination Date.

(ii) How Terminations will be Effected. Termination of every Transaction will be
effected by (x) the Buyer’s reconveyance to the Seller or its designee of the
Purchased Loans and payment of any Income in respect thereof received by the
Buyer and not previously either paid to the Seller or applied as a credit to the
Obligations, against (y) payment by the Seller (or, by an Approved Investor on
behalf of the Seller, if payment is being made in connection with an Investor
Commitment) to the Buyer of the Repurchase Price therefor. The Seller (or, an
Approved Investor on behalf of the Seller, if payment is being made in
connection with an Investor Commitment)

 

4-1

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

shall pay the Repurchase Price to the Buyer on the Repurchase Date, by not later
than the time required for payments to be received by the Buyer under
Section 13.2, by delivering immediately available funds to the account referred
to in Section 4.4. Notwithstanding the foregoing, the portion of the Repurchase
Price attributable to accrued and unpaid Price Differential as of such
Repurchase Date shall not be due until the earlier of:

(a) the Termination Date; or

(b) the date such Price Differential becomes due under Section 6.2 (i.e., the
15th day of the applicable calendar month, unless otherwise directed by the
Buyer).

The Buyer’s practice is to deliver to the Seller (electronically or otherwise),
on or before the eighth (8th) day of each calendar month, an invoice for the
accrued and unpaid Price Differential as of the end of the previous calendar
month (including, without limitation, accrued and unpaid Price Differential
attributable to Transactions that terminated during such previous calendar
month), and for certain Fees attributable to the previous calendar month.
Notwithstanding such practice, any failure or delay by the Buyer in delivering
any such invoice, or any inaccuracy in any such invoice, shall not affect the
Obligations. The Buyer is authorized by the Seller to debit amounts on deposit
in the Operating Account (or any of the Seller’s other accounts maintained with
the Buyer) for payment of Price Differential and Fees when due. The Buyer shall
have the sole right of withdrawal with regard to funds from time to time in the
Investor Funding Account and shall periodically transfer any excess funds
remaining in the Investor Funding Account to the Operating Account after payment
of the Repurchase Prices and other amounts due the Buyer hereunder.

4.4 Place for Payments of Repurchase Prices. All Repurchase Price payments,
whether attributable to Purchase Price or Price Differential, shall be paid
directly to the Buyer by wire transfer to:

Branch Banking and Trust Company

The address set forth in Appendix 1, Item 24.2

ABA No.: 053101121

For Credit to: The Seller whose name is set forth on Appendix 1, Item 4.4.1

Investor Funding Account No.: Such account number as set forth in Appendix 1,
Item 2.2.9

Such wire shall also specify the last name(s) of each Customer and loan
number(s) for the applicable Mortgage Loan(s); provided, however, the Buyer may
change the wire transfer instructions from time to time by written notice to the
Seller.

4.5 If Repurchase Price Not Paid. If the Seller fails for any reason to
repurchase any one or more Purchased Loans on the applicable Repurchase Date in
the manner and by the time specified in Sections 4.3 and 4.4, in addition to the
Buyer’s other rights and remedies set forth herein, the Buyer is hereby
specifically and irrevocably authorized to withdraw the Seller’s cleared funds
from the Operating Account (or any of the Seller’s other accounts maintained
with the Buyer) in an amount equal to the sum of the Repurchase Prices of all
Purchased Loans that are Past Due on that day and apply such funds withdrawn to
the payment of the Repurchase Prices of such Purchased Loans in such order and
manner as the Buyer may elect. The foregoing authorization shall remain in
effect until all amounts in respect of the Obligations are paid to the Buyer.

4.6 Transfer to the Buyer. On the Purchase Date for each Transaction, ownership
of the Purchased Loans shall be transferred to the Buyer against the
simultaneous transfer by the Buyer of the Purchase Price to the Loan Funding
Account for the benefit of the Seller, simultaneously with the delivery to the
Buyer of the Purchased Loans relating to each Transaction. With respect to the
Purchased Loans being sold by the Seller on a Purchase Date, effective upon
payment of the Purchase Price therefor, the Seller hereby sells, transfers,
conveys and assigns to the Buyer, subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Purchased Loans together
with all right, title and interest in and to the products and proceeds related
thereto. The foregoing assignment, transfer and conveyance does not constitute
and is not intended to result in any assumption by the Buyer of any obligation
of the Seller to the Customer(s), insurers or any other Person in connection
with any Purchased Loan, the Purchased Loans Records or the Purchased Loans
Support therefor, any insurance policies or any agreement or instrument relating
to any of them. The Loan Schedule included with the Purchase Request submitted
to the Buyer in connection with each Transaction is incorporated by reference
into this Agreement and

 

4-2

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

made an integral part hereof, provided that such Loan Schedule shall be replaced
by the Loan Schedule or other list or schedule sent or made available (which may
be by email or other electronic means) by the Buyer to the Seller listing only
those Mortgage Loans which the Buyer has agreed to purchase in such Transaction
(and thereby have become Purchased Loans). For purposes of identifying each and
every Purchased Loan as of any Determination Date, the Buyer is hereby
authorized to maintain a list or schedule identifying all Purchased Loans then
subject to this Agreement, or otherwise to record such information in the
Buyer’s internal records, and any such list, schedule or other recordation shall
constitute, absent manifest error, conclusive evidence of the accuracy of the
information so recorded; provided that the failure to make a notation or the
inaccuracy of any notation shall not limit or otherwise affect the Obligations.

 

4-3

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

5 Transaction Limits and Sublimits

5.1 Transaction Limits. Each Transaction shall be subject to the Sublimits as
provided in Section 5.2. No Transaction will be executed if after giving effect
to such Transaction, the Aggregate Outstanding Purchase Price exceeds or would
exceed the lesser of the Commitment or the aggregate Margin Market Value of all
Purchased Loans as of the applicable Purchase Date. Further, notwithstanding
anything to the contrary herein, no Transaction shall be entered into with
respect to any Mortgage Loan in excess of the Purchase Price of such Mortgage
Loan, or if after giving effect to such Transaction, the Purchase Price of the
applicable Purchased Loan exceeds or would exceed the Margin Market Value of
such Purchased Loan as of the applicable Purchase Date.

5.2 Transaction Sublimits.

(i) The various sublimits listed in Appendix 2, Item 2.2.2.2 (i.e., the Approved
Sublimits) shall also be applicable to Transactions hereunder. With respect to
Purchased Loans of each specific Approved Loan Type, the Aggregate Outstanding
Purchase Price of such Purchased Loans shall not at any time exceed the
applicable maximum amount of the corresponding specific Approved Sublimit, as
set forth in the table in Appendix 2, Item 2.5.2.1. Unless otherwise provided in
such table, the maximum amount of each Approved Sublimit shall be the lesser of:
(1) the maximum dollar amount specified therefor in such table or (2) the
percentage of the Commitment specified therefor in such table.

(ii) If as of any Determination Date any of such Sublimits shall be exceeded, by
notice to the Seller the Buyer may demand that the Seller repurchase from the
Buyer so many Purchased Loans of the relevant Type as shall be required to
reduce the Aggregate Outstanding Purchase Price of Purchased Loans of that Type
to a level that does not exceed the relevant Sublimit, and the Seller shall pay
to the Buyer the Repurchase Price for each such Purchased Loan within one
(1) Banking Day after such demand. If no Event of Default has occurred and is
then continuing, upon the Buyer’s receipt of such Repurchase Prices, the Buyer
shall reconvey to the Seller the Purchased Loans for which the Buyer has been
paid such Repurchase Prices, but only to the extent that the conveyance from the
Buyer to the Seller of such Purchased Loans pursuant to this Section 5.2 does
not cause or result in a Margin Deficit pursuant to Section 7.1.

 

5-1

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

6 Price Differential

6.1 Pricing Rate. Subject to the following rules, and as contemplated in the
definition of Pricing Rate, the Pricing Rate to be applied to the Purchase Price
of a Purchased Loan to determine the Price Differential in all Open Transactions
on any day when no Event of Default has occurred and is continuing shall be the
Base Rate for that day and for that Type of Purchased Loan. Any change in the
Pricing Rate due to a change in the Index shall be effective at the beginning of
the Banking Day on which any such change is announced. Notwithstanding the
foregoing, if the Buyer, in its sole discretion, (i) extends the Wet Mortgage
Loan Period with respect to a Wet Mortgage Loan, then the Pricing Rate to be
applied to such Wet Mortgage Loan during such extended period of time may, at
the Buyer’s election, be increased to the Extended Wet Mortgage Loan Rate; or
(ii) extends the Repurchase Period with respect to any Past Due Purchased Loan,
then, in addition to any payments required to be made by the Seller pursuant to
Section 13.4, the Pricing Rate to be applied to such Past Due Purchased Loan
during such extended period of time may, at the Buyer’s election, be increased
to the lesser of the (i) Past Due Rate or (ii) Ceiling Rate, from (and
including) the day immediately following the Repurchase Date for each such Past
Due Purchased Loan and until (but excluding) the date on which such Past Due
Purchased Loan is repurchased by the Seller by payment to the Buyer of the full
Repurchase Price in immediately available funds. The foregoing notwithstanding,
if any Purchased Loan is Past Due for more than ten (10) days, the Buyer, at its
option, may elect, without notice to the Seller, to utilize the Ceiling Rate as
the Pricing Rate for such Past Due Purchased Loan for each day that such
Purchased Loan is Past Due.

6.2 Price Differential Payment Due Dates. The Price Differential on each Open
Transaction accrued and unpaid as of the end of each calendar month shall be due
and payable, whether or not such Transaction is still Open on such payment date,
on or before the fifteenth (15th) day of the immediately following month, unless
otherwise directed by the Buyer. With respect to any Price Differential not paid
by the Seller on or before the due date therefor, the Pricing Rate may, at the
Buyer’s election, be increased, for all Open Transactions, to the Past Due Rate,
from (and including) the day immediately following the original payment due date
for such Price Differential and until (but excluding) the date on which all
outstanding Price Differential is paid in full in immediately available funds.
The foregoing notwithstanding, if any payment of Price Differential is more than
ten (10) days past due, the Buyer, at its option, may elect, without notice to
the Seller, to utilize the Ceiling Rate as the Pricing Rate for all Open
Transactions for each day that such payment of Price Differential is past due.
All accrued and unpaid Price Differential on all Transactions shall be due and
payable on the Termination Date.

 

6-1

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

7 Margin Maintenance

7.1 Margin Deficit. If at any time the Margin Market Value of a Purchased Loan
is less than the unpaid Purchase Price outstanding for such Purchased Loan (such
deficiency referred to hereinafter as a “Margin Deficit”), then by notice to the
Seller (a “Margin Call”), the Buyer, in its sole and absolute discretion, may
require the Seller to pay to the Buyer, in immediately available funds, the
difference between the Margin Market Value of such Purchased Loan and the unpaid
Purchase Price outstanding for such Purchased Loan (such difference referred to
hereinafter as the “Buyer’s Margin Amount”).

7.2 Margin Call Deadline. If the Buyer notifies the Seller of a Margin Call at
or before noon (or such other time as the parties may mutually agree) on any
Banking Day, then the Seller shall make the payment required in Section 7.1 by
5:00 p.m. on the same Banking Day (or such other time as the parties may
mutually agree).

7.3 Application of Margin Payments. Any payment to the Buyer pursuant to
Section 7.1 shall be applied by the Buyer to reduce the Repurchase Price of the
applicable Transaction(s) in accordance with Section 13.6.

 

7-1

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

8 Payments to be Free of Taxes and Withholding

All payments made by the Seller under this Agreement and the other Facility
Papers shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding, in the case of the Buyer, net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Buyer as a result of a
present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and the Buyer (excluding a connection arising
solely from the Buyer having executed, delivered, performed its obligations or
received a payment under, or enforced, this Agreement or the other Facility
Papers) or any political subdivision or taxing authority thereof or therein (all
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called “Taxes”). If any Taxes are required to be
withheld from any amounts payable to the Buyer hereunder or under other Facility
Papers, the amounts so payable to the Buyer shall be increased to the extent
necessary to yield to the Buyer (after payment of all Taxes) interest (or its
equivalent) or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the other Facility Papers. Whenever any
Taxes are payable by the Seller, as promptly as possible thereafter the Seller
shall send to the Buyer a certified copy of an original official receipt
received by the Seller showing payment thereof. If the Seller fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to the
Buyer the required receipts or other required documentary evidence, the Seller
shall indemnify the Buyer for any incremental taxes, interest or penalties that
may become payable by the Buyer as a result of any such failure. The agreements
in this subsection shall survive the termination of this Agreement and the
payment of the amounts payable hereunder and under the other Facility Papers.

 

8-1

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

9 Income Payments

Notwithstanding that the parties hereto intend that the Transactions be sales to
the Buyer of the Purchased Loans, unless (i) otherwise mutually agreed by the
Buyer and the Seller (in which event Income related to a Purchased Loan shall be
paid in accordance with their agreement), or (ii) an Event of Default or
Potential Default shall have occurred and be continuing (in which event, all
Income related to a Purchased Loan shall be paid to the Buyer to be applied
towards payment of the Obligations), the Buyer agrees that the Seller or its
designee shall be entitled to receive and retain all Income related to a
Purchased Loan to the full extent the Seller (or its designee) would have been
so entitled if the Purchased Loans had not been sold to the Buyer.
Notwithstanding the foregoing: (x) any Income received by the Seller (or its
designee) from a Purchased Loan while the related Transaction is outstanding
shall be deemed to be held by the Seller (or its designee) solely in trust for
Buyer pending the payment of the Repurchase Price in respect of such Transaction
and the repurchase of the related Purchased Loans; and (y) if required by the
Buyer in its sole and absolute discretion, the Seller shall place any Income
received by the Seller (or its designee) from a Purchased Loan while the related
Transaction is outstanding in a separate segregated account of the Seller
wherein no other funds of the Seller are held.

 

9-1

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

10 Fees

10.1 Repurchase Facility Fees and Other Fees.

(i) The Seller agrees to pay to the Buyer a collateral processing fee (the
“Collateral Processing Fee”) in the amount set forth in Appendix 2,
Item 2.10.1.1 for each Mortgage Loan submitted to the Buyer in connection with a
Purchase Request or otherwise submitted to the Buyer. Unless otherwise directed
by the Buyer, the Collateral Processing Fee shall be payable monthly in arrears,
on or before the fifteenth (15th) day of each calendar month, based upon the
prior month’s activity.

(ii) The Seller agrees to pay to the Buyer an endorsement fee (the “Endorsement
Fee”) in the amount set forth in Appendix 2, Item 2.10.1.2 for each Mortgage
Loan that the Buyer endorses on behalf of the Seller because such Mortgage Loan
is missing the Seller’s endorsement when it is submitted to the Buyer. Unless
otherwise directed by the Buyer, the Endorsement Fee shall be payable monthly in
arrears, on or before the fifteenth (15th) day of each calendar month, based
upon the prior month’s activity.

(iii) If, at any time, the average daily amount outstanding under the Repurchase
Facility for any fiscal quarter of the Seller then ended is less than the
percentage set forth in Appendix 2, Item 2.10.1.3 of the average daily
availability under the Repurchase Facility for such fiscal quarter, the Seller
shall pay to the Buyer, if charged by the Buyer in its discretion, a non-usage
fee (the “Non-Usage Fee”) at a rate per annum equal to the percentage set forth
in Appendix 2, Item 2.10.1.4 on the difference between (i) the percentage set
forth in Appendix 2, Item 2.10.1.3 of the average daily availability under the
Repurchase Facility for such fiscal quarter and (ii) the average daily amount
outstanding under the Repurchase Facility for such fiscal quarter. If applicable
at any time or from time to time, unless otherwise directed by the Buyer, such
Non-Usage Fee shall be payable quarterly in arrears on or before the fifteenth
(15th) day of each calendar quarter, based upon the prior fiscal quarter’s
activity.

(iv) The Seller agrees to pay to the Buyer, if charged by the Buyer in its sole
discretion, a reinstatement fee (the “Reinstatement Fee”) in the amount set
forth in Appendix 2, Item 2.10.1.5 for each Purchased Loan that has been shipped
to an Approved Investor for purchase and been returned unpurchased. Unless
otherwise directed by the Buyer, the Reinstatement Fee, if any, shall be payable
monthly in arrears, on or before the fifteenth (15th) day of each calendar
month, based upon the prior month’s activity.

(v) The Seller agrees to pay to the Buyer, if charged by the Buyer in its sole
discretion, a wire transfer fee (the “Wire Transfer Fee”) in the amount set
forth in Appendix 2, Item 2.10.1.6 for each outgoing wire transfer made by the
Buyer on behalf of the Seller. Unless otherwise directed by the Buyer, the Wire
Transfer Fee, if any, shall be payable monthly in arrears, on or before the
fifteenth (15th) day of each calendar month, based upon the prior month’s
activity.

(vi) The Seller agrees to pay to the Buyer each month an account maintenance fee
(the “Account Maintenance Fee”) in the amount set forth in Appendix 2,
Item 2.10.1.7. Unless otherwise directed by the Buyer, the Account Maintenance
Fee shall be payable monthly in arrears, on or before the fifteenth (15th) day
of each calendar month. The Account Maintenance Fee shall be payable in addition
to any other fees related to deposit accounts charged by the Buyer to the Seller
under other agreements between the Buyer and the Seller, including, without
limitation, agreements regarding the opening or maintenance of deposit accounts
maintained by the Seller with the Buyer.

(vii) In addition to the foregoing fees set forth in this Section 10.1, the
Seller agrees to pay to the Buyer, the additional fees, if any, described in
Appendix 2, Item 2.10.1.8, promptly following receipt by the Seller of a
statement from the Buyer therefor.

(viii) In addition to the foregoing fees, the Seller shall pay or reimburse the
Buyer for any transaction fees payable to MERS in connection with the
registration of mortgage assignments to the Buyer for the benefit of the Buyer
if the Seller uses MERS and, further, shall pay all pass-through costs in
connection with the purchase of Mortgage Loans under any Sublimit under the
Repurchase Facility for Aged Mortgage Loans (recording costs, etc.).

 

10-1

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

(ix) The fees set forth in this Section 10.1, once paid, shall not be refundable
under any circumstances.

(x) A statement for each Fee described in this Section 10.1 may be included with
or be a part of a monthly billing statement delivered by the Buyer to the
Seller. Failure of the Buyer to deliver such statement to the Seller shall not
affect the Seller’s obligation to pay any such Fee.

 

10-2

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

11 Security Interest

Although the parties intend that, subject to and not inconsistent with Article
35, all Transactions be sales and purchases and not loans (other than for
accounting and tax purposes), if any one or more Transactions are
recharacterized as loans by a court of competent jurisdiction, the Seller shall
be conclusively deemed, as security for the payment and performance by the
Seller of its obligations under each such recharacterized Transaction, to have
pledged and granted to the Buyer a security interest in and a Lien on, all of
the Purchased Loans with respect to all such recharacterized Transactions and
all Income and proceeds from the Purchased Loans that are the subject matter of
such recharacterized Transactions, including the Purchased Loans Support and all
of the property, rights and other items described in the definition of “Mortgage
Loan” in Section 2.2 for each such Purchased Loan, and for that purpose the
Seller hereby grants the Buyer a security interest in and a Lien on the property
described on the copy of Exhibit A to the UCC financing statement or UCC-3
Amendment, as applicable, to be filed by the Buyer that is attached as Schedule
11, and this Agreement shall constitute a security agreement. In the event of
recharacterization of the purchases made hereunder as a financing, the Buyer
shall have all the rights and remedies of a secured party under the UCC and any
other applicable Law, in addition to all rights provided for in this Agreement
and the other Facility Papers. The Seller agrees to do such things as applicable
Law requires to maintain the security interest of the Buyer so granted in all of
the Purchased Loans with respect to all such recharacterized Transactions and
all Income and proceeds from the Purchased Loans that are the subject matter of
such recharacterized Transactions as a perfected first priority Lien at all
times. The Seller hereby authorizes the Buyer to file any financing or
continuation statements, and any amendments thereto or terminations thereof, as
the Buyer shall deem necessary or appropriate, under the applicable UCC to
perfect or continue such security interest in any and all applicable filing
offices, and agrees to make or cause to be made by any Person such book entries
and control agreements with respect to the Purchased Loans as the Buyer may
reasonably require or request from time to time to perfect or continue
perfection of the security interests granted or required to be granted to the
Buyer pursuant to this Agreement. The Seller shall also execute and deliver to
the Buyer such further instruments of sale, pledge or assignment or transfer,
and such powers of attorney, as shall be reasonably required by the Buyer from
time to time, and shall do and perform all matters and things necessary or
desirable to be done or observed, for the purpose of effectively creating,
maintaining and preserving the security and benefits intended to be afforded the
Buyer under this Agreement and the other Facility Papers. The Seller shall pay
all customary fees and expenses associated with perfecting such security
interest including the costs of filing financing and continuation statements,
and any amendments thereto or terminations thereof, under the UCC and recording
assignments of Mortgages as and when required by the Buyer, in its reasonable
discretion.

 

11-1

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

12 Confidentiality

The parties hereby acknowledge and agree that all written or computer readable
information provided by one party to any other regarding the terms set forth in
any of the Facility Papers or the Transactions contemplated thereby (the
“Confidential Terms”) shall be kept confidential and shall not be divulged to
any Person (other than Affiliates and Subsidiaries thereof) without the prior
written consent of such other party except to the extent that (i) such Person is
a party to this Agreement, or an Affiliate, division, or parent holding company
of a party, or a director, officer, employee or agent (including an accountant,
legal counsel and other advisor) of a party or such Affiliate, division or
parent holding company, (ii) in such party’s opinion it is necessary to do so in
working with legal counsel, auditors, taxing authorities or other governmental
agencies or regulatory bodies or in order to comply with any applicable federal
or state laws, regulations or orders (including, without limitation, a
subpoena), (iii) any of the Confidential Terms are in the public domain other
than due to a breach of this covenant, or become available to the applicable
party on a non-confidential basis from a source not known by such party to be
bound by a confidentiality obligation with respect to such Confidential Terms,
or become known by the applicable party prior to their disclosure to such party
by another party to this Agreement, or were independently generated by the
applicable party (or any of its officers, directors, employees, agents or
representatives) without reliance on the Confidential Terms, (iv) in the event
of an Event of Default, the Buyer reasonably determines such information to be
necessary or desirable to disclose in connection with the marketing and sales of
the Purchased Loans or otherwise to enforce or exercise the Buyer’s rights
hereunder, (v) to the extent the Buyer deems necessary or appropriate, in
connection with an assignment or participation under Article 23 or in connection
with any hedging transaction related to Purchased Loans, or (vi) to the extent
the Buyer deems necessary or appropriate, in connection with carrying out the
Buyer’s express obligations under this Agreement and the other Facility Papers
(including providing to Approved Investors documentation and information related
to the Purchased Loans, and the Seller hereby agrees that the Buyer shall in no
way be liable for disclosures made, or any other use, by any Approved Investor
of any Confidential Terms). Notwithstanding the foregoing or anything to the
contrary contained herein or in any other Facility Paper, the parties may
disclose to any and all Persons, without limitation of any kind, the U.S.
federal, state and local tax treatment of the Transactions, any fact that may be
relevant to understanding the U.S. federal, state and local tax treatment of the
Transactions, and all materials of any kind (including opinions or other tax
analyses) relating to such U.S. federal, state and local tax treatment and that
may be relevant to understanding such tax treatment; provided that the Seller
may not disclose (except as provided in clauses (i) through (vi) of this Article
12) the name of or identifying information with respect to the Buyer or any
pricing terms (including the Pricing Rate, Fees as described in Section 10 and
Purchase Price) or other nonpublic business or financial information (including
any sublimits and financial covenants) that is unrelated to the U.S. federal,
state and local tax treatment of the Transactions and is not relevant to
understanding the U.S. federal, state and local tax treatment of the
Transactions, without the prior written consent of the Buyer. The provisions set
forth in this Article 12 shall survive the termination of this Agreement for a
period of one (1) year following such termination.

 

12-1

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

13 Payment and Transfer

13.1 Immediately Available Funds; Notice to the Buyer. Unless otherwise mutually
agreed, all transfers of funds hereunder shall be in immediately available
funds.

13.2 Payments to the Buyer. Except as otherwise specifically provided in this
Agreement, all payments required of the Seller by this Agreement or the other
Facility Papers to be made to the Buyer shall be paid (i) to the Buyer for
deposit in the Investor Funding Account, (ii) by not later than 12:00 p.m. on
the day when due, it being expressly agreed and understood that if a payment is
received after 12:00 p.m. by the Buyer, such payment will be deemed to have been
made on the next succeeding Banking Day, and any Price Differential accruing
with respect thereto thereon shall be payable at the then applicable Pricing
Rate during such extension; provided, however, that the Buyer, in its sole and
absolute discretion, may treat any payments received via wire transfer before
5:00 p.m. as having been received by the Buyer on the same Banking Day as
receipt of such funds if (A) the Seller has sufficiently identified to the Buyer
the Transaction and related Purchased Loans to which such payment relates (by
the last name(s) of each Customer and loan number(s)) prior to 12:00 p.m. noon
on the next Banking Day after receipt of such funds, and (B) the transfer is
actually confirmed by the Buyer as being credited to the Buyer’s account with
the Federal Reserve Bank on the Banking Day of the receipt of such funds, and
(iii) without setoff, counterclaim or deduction, in lawful money of the United
States of America in immediately available funds at the principal office of the
Buyer set forth in Appendix 1, Item 24.2, or by fed funds wire transfer to:

Branch Banking and Trust Company

The address set forth in Appendix 1, Item 24.2

ABA No.: 053101121

For Credit to: The Seller whose name is set forth on Appendix 1, Item 4.4.1

Investor Funding Account No.: Such account number as set forth on Appendix 1,
Item 2.2.9

or at such other place or account as the Buyer shall designate from time to
time. Whenever any payment to be made under this Agreement or any of the other
Facility Papers shall be stated to be due on a day that is not a Banking Day,
the due date for that payment shall be automatically extended to the next day
that is a Banking Day, and (if applicable) Price Differential at the applicable
Rate (determined in accordance with this Agreement) shall continue to accrue
during the period of such extension.

Notwithstanding the foregoing, in the event that the Seller and the Buyer are
parties to a cash sweep agreement relating to the Repurchase Facility, such cash
sweep agreement may, among other things, provide for cash sweep cut-off times
which are different than the cut-off times set forth above, and alter the
payment dating arrangements described above. To the extent of any conflict
between the terms of this Agreement and the terms of any such cash sweep
agreement, such cash sweep agreement shall control.

13.3 If Payment Not Made When Due. If and to the extent any payment is not made
when due under this Agreement or any of the other Facility Papers, the Seller
authorizes the Buyer then or at any time thereafter to charge any amounts so due
and unpaid against any or all of the Seller’s accounts with the Buyer; provided
that such right to charge the Seller’s accounts shall not apply to any escrow,
trust or other deposit accounts designated as being held by the Seller on behalf
of third party owners of the escrowed funds other than Affiliates of the Seller.
The Buyer agrees to use reasonable efforts to promptly advise the Seller of any
charge made pursuant to this Section 13.3, but its failure to do so will not
affect the validity or collectability of such charge. This Section 13.3 shall
not limit any of the Buyer’s other rights and remedies set forth in this
Agreement.

13.4 Mandatory Payment of Repurchase Prices. The Seller shall pay to the Buyer
as and when due all mandatory payments required under this Agreement, including,
but not limited to, those under Sections 4.3 and 7.1 and Articles 6, 9 and 10.

13.5 Optional Prepayment of Repurchase Prices. The Seller shall have the right
at any time and from time to time to prepay outstanding Transactions of any
Type, in whole, but not in part, without premium or penalty and without prior
written notice to the Buyer, and such prepayment shall reduce the Repurchase
Prices related to such Transactions; provided, however, each partial prepayment
shall be in an amount sufficient to pay the

 

13-1

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

Repurchase Price for the particular Purchased Loan related to such Transaction
and the Seller shall, at the time of making such prepayment, designate the
Transaction being prepaid. If the Seller fails to make such a designation, any
funds received as a prepayment pursuant to this Section 13.5 shall be applied to
the Obligations in such order as the Buyer, in its sole good faith discretion,
may determine.

13.6 Distribution of Payments.

(i) Prior to the occurrence of an Event of Default and acceleration of all
Obligations or termination of the Commitment, all amounts received on any day by
the Buyer in respect of Repurchase Prices (other than the Price Differential)
for related Transactions shall be applied by the Buyer as follows: first, to pay
the Transactions outstanding and due and payable on such day pursuant to
Section 13.4 and any other Sections hereunder; second, to prepay the
Transactions outstanding and due and payable on such day pursuant to
Section 13.5; and third, the balance, if any (provided, that no Potential
Default or Event of Default has occurred and is continuing), to the Seller by
transfer to the Operating Account. If any Potential Default or Event of Default
has occurred and is continuing, but the Obligations have not yet been
accelerated pursuant to Section 19.2, all amounts remaining after making the
applications required by clauses first and second above shall be applied to the
payment of outstanding Transactions and/or other outstanding Obligations, in
such order as the Buyer may determine.

(ii) Following (a) the occurrence of an Event of Default and acceleration of all
Obligations or (b) termination of the Commitment, all amounts received by the
Buyer hereunder and under the other Facility Papers shall be disbursed by the
Buyer as follows: first, to the Buyer to reimburse the Buyer for all fees, costs
and expenses set forth in Section 21.1 reasonably incurred by the Buyer in
connection with an Event of Default or otherwise payable to the Buyer under the
Facility Papers; second, to the Buyer to pay the Price Differential on all
Transactions and Fees due the Buyer; third, to the Buyer to pay the Purchase
Prices on all outstanding Transactions in such order and amounts as the Buyer,
in its sole discretion, may determine; fourth, to the Buyer to pay all remaining
unpaid Obligations; and fifth, any remaining amounts, to the Seller by transfer
to the Operating Account, or to such other account as the Seller may direct in
writing for such purpose.

 

13-2

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

14 Segregation of Documents Relating to Purchased Loans

All documents relating to Purchased Loans in the possession of the Seller or its
designee (including any Servicer) shall be segregated from other documents and
securities in its or its designee’s possession and shall be identified as being
owned by the Buyer (which shall be referenced in the relevant books and records
as “Branch Banking and Trust Company, as Buyer”) and subject to this Agreement.
Segregation may be accomplished by appropriate identification of ownership on
the books and records of the holder of such documents, including MERS, a
documents custodian, a financial or securities intermediary or a clearing
corporation. All of the Seller’s right, title and interest in the Purchased
Loans shall vest in and pass to the Buyer on the Purchase Date and nothing in
this Agreement shall preclude the Buyer from engaging with others in repurchase
transactions with the Purchased Loans or otherwise selling, transferring,
pledging or hypothecating the Purchased Loans, but no such transaction shall
relieve the Buyer of its obligations to transfer Purchased Loans to the Seller
pursuant to Articles 4 or 19. The Buyer, at its sole discretion, reserves the
right to request any or all documents with respect to any Purchased Loan be
delivered to the Buyer within one (1) Banking Day following the Buyer’s request.

 

14-1

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

15 Conditions Precedent

15.1 Initial Purchase. The obligation of the Buyer to make purchases under this
Agreement is subject to the Seller’s fulfillment of the following conditions
precedent:

(i) the Buyer shall have received (or be satisfied that it will receive by such
deadline as the Buyer shall specify) the following, all of which are
satisfactory in form and content to the Buyer:

(a) this Agreement duly executed by the Seller;

(b) if applicable, the Electronic Tracking Agreement duly executed by the
Seller, MERS, the Electronic Agent and the Buyer;

(c) if applicable, the Master Custodial Agreement duly executed by the Seller
and all other parties thereto, together with evidence satisfactory to the Buyer
that the Custodial Account has been opened;

(d) the UCC financing statements or UCC-3 Amendment, as applicable, for the
Purchased Loans duly authorized by the Seller;

(e) a current UCC, judgment and tax lien search report from the applicable state
and county offices where the Seller is located;

(f) copies of the Seller’s (i) formation documents certified by the Secretary of
State of the state of its formation and (ii) operating documents and all
amendments certified by its secretary or assistant secretary, manager or member,
as the case may be, as well as any other information required by Section 326 of
the USA Patriot Act or necessary for the Buyer to verify the identity of the
Seller as required by Section 326 of the USA Patriot Act in accordance with the
requirements summarized in the notice given in Section 37;

(g) a certificate of existence and good standing for the Seller issued by the
Secretary of State of the state in which such Person is formed and, if required
by the Buyer, a certificate of existence or foreign authority and good standing
for the Seller issued by the Secretary of State of each jurisdiction in which
the Seller conducts business and is required to qualify to do business;

(h) original resolutions of the Seller’s board of directors, governing body,
manager or member, as the case may be, certified as of the initial Purchase Date
hereunder by the Seller’s secretary or assistant secretary, manager or member,
as applicable, authorizing the execution, delivery and performance by the Seller
of this Agreement and all other Facility Papers to be delivered by the Seller
pursuant to this Agreement;

(i) a certificate of the Seller’s secretary or assistant secretary, manager or
member, as the case may be, as to (i) the incumbency of the Authorized Seller
Representatives of the Seller executing this Agreement and all other Facility
Papers executed or to be executed by or on behalf of the Seller and (ii) the
authenticity of their signatures — and specimens of their signatures shall be
included in such certificate or set forth on an exhibit attached to it — (the
Buyer shall be entitled to rely on that certificate until the Seller has
furnished a new certificate to the Buyer), and certifying that attached to such
certificate are true and correct copies of all amendments to the Seller’s
formation and operating documents since its inception;

(j) an Officer’s Certificate for the Seller dated the date of this Agreement and
certifying truthfully that, (i) the Seller is in compliance with all the terms
and provisions set forth in the Agreement on its part to be observed and
performed and no Potential Default or Event of Default has occurred, is
continuing and, after giving effect to the transactions contemplated under the
Repurchase Facility pursuant to the Agreement on the date hereof, shall occur as
a result of entering into such transactions, (ii) all of the representations and
warranties made by the Seller in the Facility Papers are true and correct as of
the date of this Agreement, and (iii) there has been no Material Adverse Effect
since the date of the financial statements referred in Section 16.1(iv)(a);

 

15-1

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

(k) copies of an errors and omissions insurance policy or mortgage impairment
insurance policy and blanket bond coverage policy, or certificates in lieu of
policies, providing such insurance coverage as is acceptable to the Buyer and
otherwise customary for members of the Seller’s industry;

(l) a favorable written opinion of counsel to the Seller (and the Guarantor(s),
if applicable) dated as of the date of this Agreement, addressed to the Buyer
and in form and substance reasonably satisfactory to the Buyer and its legal
counsel, stating that the Buyer, its successors and assigns can rely on it;

(m) evidence reasonably satisfactory to the Buyer (i) as to the due filing and
recording in all appropriate offices of all UCC financing statements or UCC-3
Amendment, as applicable, (ii) if there are any Purchased Loans that require the
Buyer’s interest to be noted by book entry, that such book entry has been duly
made and (iii) if there is any “investment property” under the UCC or any other
applicable Law, that such instruments as are necessary to give the Buyer
“control” of such investment property have been duly executed by the Seller and
the relevant securities intermediary;

(n) evidence satisfactory to the Buyer that the Investor Funding Account, the
Loan Funding Account, the Administrative Account, the Operating Account, the
Custodial Account, and the Cash Collateral Account, as applicable, remain open
or have been opened;

(o) the most currently available month-end financial statements for the Seller,
all in reasonable detail and certified by Seller’s chief financial officer that,
to the best of his or her knowledge, such financial statements were prepared in
accordance with GAAP and present fairly in all material respects the Seller’s
financial condition as of the date thereof and the results of its operations for
the period covered, subject, however, to adjustments required by FAS-91 and
normal year-end audit adjustments and the omission of notes to the financial
statements;

(p) the Guaranty, if any, duly executed by the Guarantors;

(q) if required by the Buyer, satisfactory results from a Buyer-conducted
internal client review of the Seller; and

(r) such other documents or opinions as the Buyer or its counsel may request.

15.2 Each Purchase. The obligations of the Buyer to enter into Transactions
under this Agreement are also subject to the satisfaction, in the sole
discretion of the Buyer, as of each Purchase Date, of each of the following
additional conditions precedent:

(i) The Seller shall have delivered to the Buyer a Purchase Request for the
Purchased Loans to be purchased in the manner described in Article 4.

(ii) If not previously delivered pursuant to Section 15.1(i), and certain
Purchased Loans are registered with MERS, the Electronic Tracking Agreement duly
executed by the Seller, MERS, the Electronic Agent and the Buyer.

(iii) With regard to any Transaction, unless otherwise permitted by the Buyer,
prior to entering into any Transaction to fund the purchase of Eligible Loans
which are to be sold directly to Fannie Mae, Freddie Mac or Ginnie Mae, the
Buyer shall have received a fully executed tri-party agreement (or agreements)
by and among the Seller, the Buyer and Fannie Mae, Freddie Mac or Ginnie Mae, as
applicable (including without limitation, in the case of Fannie Mae, the Fannie
Mae approved form of the triparty wiring instruction agreement), pursuant to
which Fannie Mae, Freddie Mac or Ginnie Mae, as applicable, agrees to send all
cash proceeds of Eligible Loans sold by the Seller to Fannie Mae, Freddie Mac or
Ginnie Mae, as applicable, directly to the Investor Funding Account.

 

15-2

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

(iv) If applicable and not previously delivered pursuant to Section 15.1(i),
with regard to any Transaction, unless otherwise permitted by the Buyer, prior
to entering into any Transaction to fund the purchase of Eligible Loans which
are to be pooled for the issuance and sale of an Agency MBS (as opposed to a
whole loan sale) to an Approved Investor, the Master Custodial Agreement duly
executed by the Seller and all other parties thereto, together with evidence
satisfactory to the Buyer that the Custodial Account has been opened.

(v) The representations and warranties contained in this Agreement and the other
Facility Papers shall be true and correct in all material respects as if made on
and as of each Purchase Date unless specifically stated to relate to an earlier
date, and by submitting to the Buyer a Purchase Request, the Seller (and if
applicable, each Guarantor) shall be deemed to have restated such
representations and warranties as of the date of submission of such Purchase
Request.

(vi) The Seller shall have performed all agreements to be performed by it under
this Agreement and all other Facility Papers, as well as under all Investor
Commitments that the Seller has represented to the Buyer cover any of the
Purchased Loans, and after the requested Transaction shall have been executed,
no Potential Default or Event of Default will exist that the Buyer has not
declared in writing to have been waived or cured, and no default or event of
default will exist under any such Investor Commitments.

(vii) The Seller shall not have incurred any liabilities in violation of this
Agreement, including, without limitation, Sections 18.2 hereof. Further, the
Seller shall not have incurred any liabilities that, individually or in the
aggregate, have or could reasonably be expected to have, a Material Adverse
Effect.

(viii) Since the date of the last fiscal year end or interim financial
statements delivered by the Seller to the Buyer, no Material Adverse Effect
shall have occurred in the Seller’s business, financial condition or results of
operations, as determined by the Buyer, in its sole good faith discretion.

(ix) The Seller shall have paid the Fees then due and payable in accordance with
Article 10.

(x) No Potential Default or Event of Default shall have occurred that the Buyer
has not declared in writing to have been waived or cured, and by submitting to
the Buyer a Purchase Request, the Seller shall be deemed to have represented as
to the absence of any Potential Default or Event of Default as of the date of
submission of such Purchase Request.

(xi) The requested Transaction will not result in the violation of any
applicable Law.

(xii) After giving effect to the funding of the requested Transaction, the
Aggregate Outstanding Purchase Prices would not exceed any of the limitations
set forth this Agreement.

(xiii) The Buyer shall have received such other documents, if any, as the Buyer
or its counsel may request.

15.3 General. Each condition in this Agreement including, without limitation,
those set forth in Sections 15.1 and 15.2, is material to the transactions
contemplated by this Agreement, and time is of the essence with respect to each
such condition. The Buyer, in its sole discretion, may enter into Transactions
without all conditions being satisfied. However, the Buyer’s funding of such
Transaction shall not constitute a waiver of the requirement that each condition
be satisfied as a prerequisite for any subsequent Transaction, unless the Buyer
specifically waives a condition in writing.

 

15-3

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

16 Representations and Warranties

16.1 General Representations and Warranties. As an inducement to the Buyer to
enter into this Agreement and to purchase Eligible Loans as provided herein, the
Seller represents and warrants to the Buyer that:

(i) Existence; Compliance with Law and Contractual Obligations. The Seller
(a) is duly organized and validly existing and is in good standing under the
laws of the state of its organization and in each jurisdiction where its
ownership of property or conduct of business requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect;
(b) has the power and authority and the legal right to own and operate its
property and to conduct business in the manner in which it does and proposes so
to do; and (c) is not in violation of any requirement of law or any Contractual
Obligation if such violation could have a Material Adverse Effect.

(ii) Power; Authorization; Enforceable Obligations. The Seller has the power and
authority to execute, deliver and perform the Facility Papers to which it is a
party and to sell Eligible Loans and use the proceeds thereof and has taken all
necessary corporate or other entity action to authorize the execution, delivery
and performance of the Facility Papers, the selling of Eligible Loans and the
use of the proceeds thereof. The Facility Papers have been duly executed and
delivered on behalf of the Seller and constitute legal, valid and binding
obligations of the Seller enforceable against it in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency and other similar laws affecting creditors’ rights
generally and by general principles of equity.

(iii) No Legal or Contractual Bar. The execution, delivery and performance of
the Facility Papers, the selling of Eligible Loans hereunder and the use of the
proceeds thereof do not and will not (a) violate any requirement of law or any
Contractual Obligation of the Seller, (b) except as contemplated by this
Agreement, require any license, consent, authorization, approval or any other
action by, or any notice to or filing or registration with, any Governmental
Authority or any other Person or (c) result in the creation or imposition of any
Lien on any asset of the Seller except as contemplated by the Facility Papers.

(iv) Financial Information.

(a) The audited consolidated and consolidating balance sheet of the Seller as at
the date set forth in Appendix 2, Item 2.16.1.1 and the related audited
consolidated and consolidating statements of income, retained earnings and cash
flows for the fiscal year then ended, including in each case the related
schedules and notes, and the unaudited, management-prepared balance sheet of the
Seller as at the date set forth in Appendix 2, Item 2.16.1.2 and the related
statements of income, retained earnings and cash flows for the period then
ended, true copies of which have been previously delivered to the Buyer, are
complete and correct and fairly present the financial condition of the Seller as
at the date thereof and the results of operations and cash flows for each such
period, in accordance with GAAP applied on a consistent basis.

(b) The Seller has no material liability of any kind, whether accrued,
contingent, absolute, determined, determinable or otherwise, and no condition,
situation or set of circumstances exists that could be reasonably expected to
result in such a liability, in each case that is not reflected in the most
recent balance sheet referred to in Section 16.1(iv)(a) or will not be reflected
in the most recent balance sheet delivered to the Buyer pursuant to
Section 17.1(i) or, if applicable, Section 17.1(ii).

(c) Since the date of the most recent financial statements referred to in
Section 16.1(iv)(a), no Material Adverse Effect has occurred in the business,
financial condition or results of operations of the Seller.

(v) No Material Litigation. There is no litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority pending or, to the
knowledge of the Seller, threatened by or against the Seller, or against any of
the Seller’s properties or revenues which, individually or in the aggregate, if
adversely determined, could have a Material Adverse Effect.

 

16-1

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

(vi) Taxes. The Seller has filed or caused to be filed all tax returns that are
required to be filed and has paid all taxes shown to be due and payable on such
returns or on any assessments made against it or any of its property other than
taxes and assessments that are being contested in good faith by appropriate
proceedings and as to which the Seller has established adequate reserves in
conformance with GAAP.

(vii) Investment Company Act. The Seller is not, and is not controlled by, an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

(viii) Subsidiaries; Ownership. Except as set forth in Appendix 1, Item 16.1.1,
the Seller has no Subsidiaries. The issued and outstanding capital stock,
membership interests or such other form of ownership interest, as applicable, of
the Seller and its Subsidiaries is owned, beneficially and of record, by the
Persons listed in Appendix 1, Item 16.1.2 in the amounts and percentage
interests set forth opposite such Persons’ names.

(ix) Use of Proceeds. The Purchase Price proceeds of all Transactions entered
into under the various Sublimits hereunder shall be used by the Seller solely
for the purpose of originating or acquiring Eligible Loans of an Approved Loan
Type.

(x) ERISA. There have been no ERISA Events that are continuing and either singly
or in the aggregate would reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Seller each Pension Plan has been
administered with the applicable provisions of ERISA and the Code, and there are
no pending or, to the best knowledge of the Seller, threatened claims, actions
or lawsuits, or action by a Governmental Authority, with respect to any Pension
Plan (other than claims for benefits and funding obligations in the ordinary
course and PBGC premiums due but not delinquent), except where such
non-compliance, claim, lawsuit or action either singly or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. No
termination of a Pension Plan has occurred, and no Lien in favor of the PBGC or
a Pension Plan has arisen, which would reasonably be expected to have a Material
Adverse Effect. The present value of all accrued benefits under each Pension
Plan (based on those assumptions used to fund such Pension Plan) did not, as of
the last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Pension Plan
allocable to such accrued benefits by an amount that could reasonably be
expected to have a Material Adverse Effect. The Seller and each ERISA Affiliate
have met all applicable requirements under the Pension Funding Rules with
respect to each Pension Plan except where the failure to meet such requirements
would not reasonably be expected to have a Material Adverse Effect. Neither the
Seller nor any ERISA Affiliate has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a Material Adverse Effect.

(xi) Agency Approvals; Compliance with Agency Guides. The Seller is an approved
seller(issuer)/servicer and an approved lender of the Agency(ies) set forth in
Appendix 1, Item 16.1.3, in each case, in good standing. Further, the Seller is
in compliance with the terms and requirements of each Agency Guide applicable to
it.

(xii) Principal Place of Business. The Seller’s principal place of business and
chief executive office and the place where its records concerning the Purchased
Loans are kept and the Seller’s organizational number are set forth in Appendix
1, Item 16.1.4.

(xiii) Seller’s Legal and Trade Names. Except as set forth in Appendix 1,
Item 16.1.5, the Seller has not changed the name of the Seller indicated on the
public record of the Seller’s jurisdiction of organization or used or transacted
business under any fictitious or trade name in the five-year period preceding
the effective date set forth in Appendix 1.

(xiv) Anti-Terrorism Laws.

(a) Neither the Seller nor any Affiliate of the Seller is in violation of any
Anti-Terrorism Law or engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

16-2

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

(b) Neither the Seller nor any Affiliate of the Seller, or their respective
agents acting or benefiting in any capacity in connection with the Repurchase
Facility or other transactions hereunder, is any of the following (each a
“Blocked Person”):

(1) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224;

(2) a Person owned or controlled by, or acting for or on behalf of, any Person
that is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224;

(3) a Person or entity with which any bank or other financial institution is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;

(4) a Person or entity that commits, threatens or conspires to commit or
supports “terrorism” as defined in Executive Order No. 13224;

(5) a Person or entity that is named as a “specially designated national” on the
most current list published by the U.S. Treasury Department Office of Foreign
Asset Control at its official website or any replacement website or other
replacement official publication of such list; or

(6) a Person or entity who is affiliated with a Person or entity listed above.

Neither the Seller nor, to the knowledge of the Seller, any of its agents acting
in any capacity in connection with the Repurchase Facility or other transactions
hereunder (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person or (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to Executive Order
No. 13224.

(xv) No Agreements for Redemption. The Seller is not subject to any agreement
(including, without limitation, a stockholders’ agreement, members’ agreement or
similar agreement) that would obligate the Seller to purchase or redeem any of
its capital stock, membership interests or other ownership interests, as
applicable, under any circumstances. Further, no capital stock, membership
interest or other ownership interest, as applicable, of the Seller is otherwise
redeemable at the option of the holder thereof, upon any specified event, or
upon any date certain.

16.2 Special Representations and Warranties Relating to the Purchased Loans. As
of the related Purchase Date, for each Purchased Loan the Seller makes the
following representations and warranties to the Buyer:

(i) Each Purchased Loan is an Eligible Loan and all statements set forth in
Schedule EL with respect thereto are true and correct.

(ii) Each Purchased Loan will on the Purchase Date therefor meet the
requirements for an Approved Loan Type of Eligible Loan.

(iii) The Seller has delivered (or caused to be delivered) to the Buyer a
Purchase Request covering each Purchased Loan to be purchased. The information
with respect to each Purchased Loan set forth in the related Purchase Request
and the Loan Schedule a part thereof was, is and/or shall be (as applicable)
true, correct and complete in all material respects as of the date of such
Purchase Request and Loan Schedule and as of the Purchase Date.

(iv) All Required Documents for each Purchased Loan (except Wet Mortgage Loans)
will be transmitted as of the applicable Purchase Date to the Buyer with the
Purchase Request with which it is submitted for purchase.

 

16-3

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

(v) The Seller is the sole legal and equitable owner (except in the case of MERS
Designated Loans, as to which MERS, as nominee for the Seller and its successors
and assigns, is the record owner), free and clear of all Liens other than
Permitted Encumbrances, of all Eligible Loans to be sold to the Buyer by the
Seller pursuant to this Agreement.

(vi) Immediately prior to the sale of each Purchased Loan to the Buyer, the
Seller had good and marketable title to such Purchased Loan and the full right,
power and authority to sell each Purchased Loan to the Buyer; immediately upon
the funding of the Transaction with respect thereto on the related Purchase
Date, the Seller has sold all of the Seller’s right, title and interest in each
Purchased Loan to the Buyer and the Buyer is the owner thereof; and each
Purchased Loan sold and to be sold to the Buyer by the Seller under this
Agreement or pursuant to it may be further sold, resold, assigned and reassigned
to any Person or Persons without any requirement for the further consent of the
Seller or the consent of any other party to any of the Loan Papers or obligated
in respect of any Purchased Loan, subject to the obligation to reconvey such
Purchased Loan pursuant to Articles 4, 14, and 19.

(vii) Each of the Purchased Loans sold to the Buyer by the Seller (and its Loan
Papers and, if applicable, each Agency MBS): (i) complies in all material
respects with all of the requirements of this Agreement, all Requirements of Law
relating to each Purchased Loan and Agency MBS and with the terms and
requirements of each Agency Guide applicable thereto, including, without
limitation, the origination, issuance and administration thereof, and will
continue to comply therewith at all times the relevant Transaction is Open, and
(ii) is genuine in all respects, as appearing on its face or as represented in
the books and records of the Seller, and is what it purports to be.

(viii) At all times such Purchased Loan will be free and clear of all liens,
encumbrances, charges, rights and interests of any kind (other than Investor
Commitments), except the Buyer’s first priority perfected ownership interests
and Liens in favor of the Buyer hereunder.

(ix) The Seller has complied and will continue to comply in all material
respects with all of the requirements in this Agreement, all Requirements of Law
relating to each Purchased Loan, and if applicable, each Agency MBS, and with
all terms and requirements of all Agency Guides relating to each Purchased Loan,
and if applicable, each Agency MBS.

(x) The Seller has no knowledge of any circumstances or conditions with respect
to the Mortgage, the Mortgaged Premises or the Customer in respect of any
Purchased Loan (other than the Customer’s credit standing) that can reasonably
be expected to cause private institutional investors that regularly invest in
Mortgage Loans similar to such Purchased Loan to regard such Purchased Loan as
an unacceptable investment or adversely affect the value or marketability of
such Purchased Loan to other similar institutional investors.

(xi) The Seller used no selection procedures that identified the Eligible Loans
relating to a Transaction as being less desirable or valuable than other
comparable assets in the Seller’s portfolio on the related Purchase Date, and no
Purchased Loan was selected for inclusion in a Transaction on any basis that was
intended to adversely affect the Buyer.

 

16-4

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

17 Affirmative Covenants

The Seller agrees that, for so long as either (i) there are any Purchased Loans
that have not been repurchased by the Seller or (ii) any of the Obligations
remain to be paid or performed under this Agreement or any of the other Facility
Papers:

17.1 Reports to the Buyer. The Seller shall furnish or cause to be furnished to
the Buyer directly:

(i) Annual Financial Statements. As soon as available and in any event within
ninety (90) days after the end of each fiscal year of the Seller, an audited
consolidated and consolidating balance sheet of the Seller as at the end of such
year and the related audited consolidated and consolidating statement of income,
and audited consolidated statements of retained earnings and cash flows of the
Seller for such fiscal year, setting forth in each case in comparative form the
figures as of the end of and for the previous fiscal year, all in reasonable
detail and accompanied by a report thereon of the Seller’s independent public
accountants, which accountants shall be acceptable to the Buyer. Such
accountants’ report shall be unqualified as to scope of audit (which audit shall
occur no less than annually) and shall not be qualified as to going concern, and
shall state that such financial statements present fairly the financial
condition as at the end of such fiscal year, and the results of operations and
cash flows for such fiscal year, of the Seller in accordance with GAAP
consistently applied.

(ii) Monthly Financial Statements. As soon as available and in any event within
forty-five (45) days after the end of each calendar month, a balance sheet of
the Seller as at the end of such calendar month and the related statements of
income and retained earnings of the Seller for such calendar month and the
portion of the fiscal year ended at the end of such calendar month, all in
reasonable detail and certified by the chief financial officer (or equivalent)
of the Seller that they are complete and correct and that they present fairly
the financial condition as at the end of such month, and the results of
operations and cash flows for such month and such portion of the fiscal year, of
the Seller in accordance with GAAP consistently applied (subject to normal
year-end adjustments). If requested by the Buyer, the Seller shall include in
such financial statements information on monthly production volume in dollars
and units and on the Seller’s servicing portfolio (if applicable), and further,
shall detail any additional Liabilities incurred by the Seller during the
reporting period.

(iii) Compliance Certificate. Together with the financial statements required
pursuant to subsections (i) and (ii) of this Section 17.1, a certificate (in
substantially the form of Exhibit A) of the chief financial officer of the
Seller (A) to the effect that, based upon a review of the activities of the
Seller and such financial statements during the period covered thereby, no
Potential Default or Event of Default exists, or if a Potential Default or an
Event of Default exists, specifying the nature thereof and the Seller’s proposed
response thereto, and (B) demonstrating in reasonable detail whether there has
been compliance as at the end of such fiscal year or such month with the
applicable financial covenants set forth in Section 18.19.

(iv) Notice of Default. Promptly after the occurrence of a Potential Default or
an Event of Default, a certificate of the chief financial officer (or
equivalent) of the Seller specifying the nature thereof and the Seller’s
proposed response thereto.

(v) Loss Qualification. Promptly after the occurrence thereof, notice of any
Purchased Loan that ceases to be an Eligible Loan.

(vi) Secondary Market Position Reports. If any Mortgage Loan is not sold to an
Approved Investor on a “best efforts” basis, on Monday of each week, and on such
other days as the Buyer may reasonably request, a secondary market position
report prepared by the Seller, in the form of and containing the information
required by the Buyer, including without limitation, detailed loan/investor
information, together with weighted average commitment value, dated as of the
Friday preceding such Monday or as of such other day.

(vii) Delinquency Reports. Prompt notice if any of the Purchased Loans become In
Default.

 

17-1

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

(viii) Litigation. Promptly after the occurrence thereof and in any event within
five (5) days after the Seller knows or has reason to know of the occurrence
thereof, notice of the institution of or any material adverse development in any
action, suit or proceeding or any governmental investigation or any arbitration,
before any court or arbitrator or any governmental or administrative body,
agency or official, against the Seller or any material property of the Seller,
in each case if such action, suit, proceeding, investigation or arbitration,
individually or together with one or more other actions, suits, proceedings,
investigations or arbitrations, could result in liabilities to the Seller in
excess of the Material Amount.

(ix) Material Adverse Conditions. Prompt notice of any condition, development or
event that has or results in, or could reasonably be expected to have or result
in, a Material Adverse Effect.

(x) Change of Control. Promptly after obtaining knowledge of any actual or
proposed Change of Control, notice thereof, together with a description of the
nature and the date or proposed date thereof.

(xi) Mergers and Acquisitions. Promptly, upon entering into any agreement to
purchase or acquire, or permitting any of its Subsidiaries to enter into any
agreement to purchase or acquire, any or all of the assets or business of any
Person (whether such purchase or acquisition shall be by means of merger, stock
purchase, asset purchase or otherwise), notice thereof, together with a copy of
the agreement.

(xii) Other Liabilities. Promptly, upon creating, incurring, assuming, suffering
to exist or otherwise becoming liable in respect of, or permitting any of its
Subsidiaries to create, incur, assume, suffer to exist or otherwise become
liable in respect of, any Liabilities (including all new warehouse facilities)
in an aggregate principal amount exceeding the amount as set forth in Appendix
2, Item 2.17.1.1 annually (other than under the existing Other Approved
Facilities, if any, and current trade payables, tax liabilities and expense
accruals, in each case incurred or recorded in the ordinary course of the
Seller’s business), notice thereof. At the Buyer’s request, the Seller also
shall deliver to the Buyer copies of the evidence of such indebtedness and other
material documentation related thereto.

(xiii) Formation of Subsidiaries. Promptly upon forming any Subsidiary, notice
thereof, together with written disclosure of whether such Subsidiary is a
Wholly-Owned Subsidiary and copies of such Subsidiary’s organizational
documents.

(xiv) Personal Financial Statements. As soon as available and in any event
within thirty (30) days of the annual anniversary date of each Guarantor’s
original personal financial statement delivered to the Buyer, if such
requirement is identified in Appendix 1, Item 17.1.1 as applicable, the Seller
shall cause each Guarantor to deliver to the Buyer an updated personal financial
statement of such Guarantor as of such annual anniversary date prepared on a
Buyer-approved financial statement form for individuals with spouse joinder or
waiver, where applicable, and certified by such Guarantor as complete and
correct.

(xv) Tax Returns. As soon as available and in any event within forty-five
(45) days of filing same, if such requirement is identified in Appendix 1,
Item 17.1.2 as applicable, the Seller shall cause each Guarantor to deliver to
the Buyer copies of the completed federal income tax returns, including all
schedules, of such Guarantor and, if requested by the Buyer from time to time,
of the Seller.

(xvi) Other Information. Promptly, such additional financial and other
information, including financial statements of the Seller, each Guarantor or any
Approved Investor (other than an Agency), and such information regarding the
Purchased Loans as the Buyer may from time to time reasonably request, including
such information as is necessary for the Buyer to grant participations in its
interests in Transactions hereunder.

(xvii) Servicing Valuations and Reports.

(a) If identified in Appendix 1, Item 17.1.3 as applicable, as soon as
available, and in any event no later than within the period set forth in
Appendix 1, Item 17.1.4, a report of the value of the Seller’s servicing
portfolio, as determined by an independent third party, and delinquencies of
such portfolio.

(b) If identified in Appendix 1, Item 17.1.3 as applicable, as soon as available
and in any event no later than within the period set forth in Appendix 1,
Item 17.1.4, an internally-prepared valuation of the Seller’s servicing
portfolio, together with information on such portfolio’s defaults, run-offs, and
similar characteristics, and such other information as may be reasonably
requested by the Buyer regarding such portfolio.

 

17-2

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

(xviii) Changes in Accounting; Fiscal Year. Promptly after making any
significant changes in accounting treatment or reporting practices, or promptly
after changing its fiscal year to end on a day other than the date set forth in
Appendix 1, Item 17.1.5, notice of such events. If the Seller changes its fiscal
year, the Seller also shall provide to the Buyer such financial and other
information as the Buyer shall reasonably request in connection with such change
(including, without limitation, an interim audited financial statement), it
being acknowledged by the Seller that the Buyer desires to have an audited
financial statement of the Seller covering each 12-month period that the
Repurchase Facility is in place.

17.2 Maintenance of Existence and Properties; Compliance with Laws; Maintenance
of Agency Status. The Seller shall preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its legal existence and all rights,
privileges, licenses, approvals, franchises, properties and assets material to
the normal conduct of its business; comply, and cause each of its Subsidiaries
to comply, in all material respects with all Contractual Obligations and
Requirements of Law, except when the failure to so comply would not have a
Material Adverse Effect; maintain at all times its status as an approved
seller(issuer)/servicer or an approved lender, as the case may be, of each
Agency set forth in Appendix 1, Item 16.1.3 in good standing; and comply with
the terms and requirements of each Agency Guide applicable to it.

17.3 Inspection of Property; Books and Records. The Seller shall keep, and cause
each of its Subsidiaries (if any) to keep, proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities, and permit representatives of the Buyer (at no
cost to the Seller unless an Event of Default has occurred and is continuing) to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records during normal business hours, upon reasonable advance
notice and as often as may reasonably be desired by the Buyer, and to discuss
the business, operations, properties and financial and other condition of the
Seller and its Subsidiaries with officers and employees of such parties, and
with their independent certified public accountants. From time to time, the
Buyer will be allowed to conduct financial, compliance and operational audits at
the Seller’s office during normal business hours, as well as the Buyer’s
periodic audit of the Seller’s operations and the Purchased Loans (including,
without limitation, periodic third party audits requested by the Buyer and/or
satisfactory internal reviews of the Seller conducted by the Buyer), and the
Seller shall pay the reasonable fees and costs associated with all such audits.

Without limiting the foregoing, the Seller acknowledges that between 90 and 180
days after the Effective Date, the Buyer intends to cause a third party
operations audit to be conducted on the Seller’s operations. The Seller
understands that such audit will be conducted by a third party selected by the
Buyer, and the Seller expressly consents to such audit. The results of such
audit must be acceptable to the Buyer. The Seller shall pay the reasonable fees
and costs associated with such audit.

17.4 Insurance. The Seller shall maintain or cause to be maintained with
financially sound and reputable insurers, insurance with respect to its
properties and business, and the properties and business of its Subsidiaries (if
any), against loss or damage of the kinds customarily insured against by
reputable companies in the same or similar businesses, such insurance to be of
such types and in such amounts (with such deductible amounts) as is customary
for such companies under similar circumstances, including errors and omissions
coverage and fidelity coverage in form and substance and in such amounts
acceptable under Agency guidelines and acceptable to the Buyer and with a
minimum term of one year, and furnish the Buyer on request (i) copies of all
policies (each of which shall be issued by a company reasonably acceptable to
the Buyer, contain a provision for thirty (30) days prior written notice to the
Buyer of any cancellation, non-renewal or modification thereof, name the Buyer
as an additional insured, and, unless not permitted under the applicable policy,
name the Buyer as direct loss payee with right of action) at the following
address:

Branch Banking and Trust Company

Mortgage Warehouse Lending Division

The address set forth in Appendix 1, Item 24.2

 

17-3

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

together with proof of payment of the applicable premiums and (ii) full
information as to all such insurance. The Seller shall at all times maintain a
fidelity bond with, among other things, such endorsements as the Buyer shall
request, including, without limitation, an endorsement for theft of warehouse
provider’s money and collateral, covering all employees who handle money or
documents in an amount and issued by a company acceptable to the Buyer, naming
the Buyer as the “direct loss payee with right of action” and protecting the
Buyer against loss due to double selling, assigning or transferring or other
fraud involving the Purchased Loans.

17.5 Payment of Taxes and Claims. The Seller shall pay, and cause each of its
Subsidiaries (if any) to pay, (i) all taxes, assessments and governmental
charges imposed upon it or upon its property, and (ii) all genuine claims
(including claims for labor, materials, supplies or services) that might, if
unpaid, become a Lien upon its property, unless, in each case, the validity or
amount thereof is being contested in good faith by appropriate proceedings and
the Seller or such Subsidiary has maintained adequate reserves in accordance
with GAAP with respect thereto or has posted a bond in respect thereof
satisfactory to the Buyer.

17.6 Other Accounts. The Seller shall maintain the Administrative Account, the
Investor Funding Account, the Loan Funding Account, the Operating Account, and
the Cash Collateral Account, as applicable, with the Buyer, which accounts shall
be maintained in a manner acceptable to the Buyer. The Seller further agrees
that it shall at all times maintain in the Operating Account (a) sufficient
funds to pay the difference between (i) the amount of all items drawn on the
Loan Funding Account, including wire transfers to originate or acquire Mortgage
Loans to be sold to the Buyer, and (ii) the amount of the Purchase Price, if
any, paid by the Buyer, which proceeds the Seller acknowledges that the Buyer is
not obligated to pay unless and until all conditions thereto as set forth in
Article 15 have been satisfied by the Seller, and (b) sufficient funds to pay,
as required by Section 20.6, the difference (if negative) between (i) the sale
proceeds received in the Investor Funding Account from the purchaser of any
Purchased Loan or Agency MBS, as applicable, and (ii) the full amount of the
Repurchase Price(s) owed to the Buyer for such Purchased Loan or for all of the
Purchased Loans supporting such Agency MBS, as applicable. The Seller further
acknowledges and agrees that the Buyer shall not be obligated to pay any items
at any time drawn on any of the Seller’s accounts maintained with the Buyer if
such payment would result in an overdraft in any such account and that the Buyer
shall not incur any liability to the Seller or any other Person for refusing to
make any such wire transfer or for returning unpaid any such items.

17.7 Further Documents. The Seller shall execute and deliver or cause to be
executed and delivered to the Buyer from time to time such confirmatory or
supplementary security agreements, financing statements, reaffirmations and
consents and such other documents, instruments or agreements as the Buyer may
reasonably request, that are in the Buyer’s reasonable judgment necessary or
desirable to obtain for the Buyer the benefit of the Facility Papers.

17.8 Operational Procedures. The Seller shall follow and abide by, in all
material respects, the operational procedures set forth in the Procedural
Manual.

17.9 Closing Instructions. With respect to each closing for which the Seller
requests a Transaction hereunder, the Seller shall provide closing instructions
to the closing agent requiring the closing agent to return all funds to the
Buyer if the closing does not take place as scheduled. The Seller shall use
commercially reasonable efforts to cause each closing agent to countersign such
closing instructions and return them with the closing package to the Seller.

17.10 ERISA. The Seller shall, and to the extent practicable shall cause each of
its ERISA Affiliates to: (a) maintain each Pension Plan in compliance with the
applicable provisions of ERISA, the Code and other applicable federal or state
law; and (b) make all required contributions to any Pension Plan subject to
Section 412 or Section 430 of the Code and all contributions required of the
Seller and its ERISA Affiliates to any Multiemployer Plan subject to Section 431
of the Code; except in each such instance in clause (a) or (b) where the failure
to do so, either singly or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.

17.11 Promptly Correct Escrow Imbalances. By no later than seven (7) Banking
Days after learning (from any source) of any material imbalance in any escrow
account(s) maintained by the Seller, the Seller will fully and completely
correct and eliminate such imbalance.

 

17-4

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

17.12 MERS. The Seller will:

(i) be a “Member” (as defined in the MERS Procedures Manual) in the MERS®
System;

(ii) maintain the Electronic Tracking Agreement in full force and effect and
timely perform all of its obligations thereunder;

(iii) provide the Buyer with copies of any new MERS Procedures Manual or
agreement or any amendment, supplement or other modification of any MERS
Procedures Manual or agreement (other than the Electronic Tracking Agreement);

(iv) not amend, terminate or revoke, or enter into any agreement that is
inconsistent with or contradicts any provision of, the Electronic Tracking
Agreement;

(v) identify to the Buyer each Purchased Loan that is registered in the MERS®
System, at the earlier of the time it is so registered or the time it is
purchased or deemed purchased hereunder, as so registered;

(vi) at the request of the Buyer, take such actions as may be requested by the
Buyer to:

(a) transfer beneficial ownership of any Purchased Loan to the Buyer as “Interim
Funder” and/or “Associated Member” (as such terms are defined in the Electronic
Tracking Agreement) or as any other category, as the Buyer may deem necessary
and proper, on the MERS® System; or

(b) de-register or re-register any Purchased Loan on, or withdraw any Purchased
Loan from, the MERS® System;

(vii) provide the Buyer with copies of any or all of the following reports with
respect to the Purchased Loans registered on the MERS® System at the request of
the Buyer:

(a) Co-existing Security Interest (MERS form IA);

(b) Release of Security Interest by Interim Funder (MERS form IB);

(c) Interim Funder Rejects (MERS form IC);

(d) Paid in Full Verification (MERS form DK); and

(e) such other reports as the Buyer may reasonably request to verify the status
of any Purchased Loan on the MERS® System; and

(viii) notify the Buyer of any withdrawal or deemed withdrawal of the Seller’s
membership in the MERS® System or any deregistration of any Purchased Loan
previously registered on the MERS® System.

17.13 Special Affirmative Covenants Concerning Purchased Loans.

(i) The Seller will defend the right, title and interest of the Buyer in and to
the Purchased Loans against the claims and demands of all Persons whomsoever.

(ii) The Seller will ensure that the Mortgaged Premises securing each Purchased
Loan are continuously insured against casualty loss as follows:

(a) the Seller shall cause to be maintained with respect to each Purchased Loan,
one or more Hazard Insurance Policies which provide, at a minimum, the same
coverage as a standard form fire and extended coverage insurance policy that is
customarily required by other creditors for residential real estate located in
the same general geographic area and state that secures that Purchased Loan,
issued by a company authorized to

 

17-5

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

issue such policies in the state in which the related residential real estate is
located and in an amount not less than (x) the maximum insurable value of the
improvements to such residential real estate or (y) the principal balance due
from the Customer(s) under the related Purchased Loan, whichever is less;
provided, that the amount of coverage provided by each Hazard Insurance Policy
shall be sufficient to avoid the application of any coinsurance clause for
partial losses, although such Hazard Insurance Policies may provide for
customary deductible amounts. Each Hazard Insurance Policy shall contain a
standard loss payee clause in favor of the Seller and its successors and
assigns. If any Customer obligated on any Purchased Loan fails to pay any
premiums on the Hazard Insurance Policy for the related property, the Seller
shall pay such premiums out of its own funds and may separately add the amount
so paid to the applicable Customer’s obligation as provided by the relevant Loan
Papers, but shall not add that amount to the remaining principal balance of that
Purchased Loan; and

(b) the Seller may, in lieu of causing individual Hazard Insurance Policies to
be maintained with respect to each Mortgaged Premises pursuant to
Section 17.13(ii)(a), and shall, to the extent that the related Loan Papers do
not require the Customer(s) obligated on them to maintain a Hazard Insurance
Policy with respect to the related Mortgaged Premises, maintain one or more
blanket insurance policies covering losses on the Seller’s interest in the
Purchased Loans resulting from the absence or insufficiency of individual Hazard
Insurance Policies. The Seller shall pay the premium for such policy on the
basis described therein and shall pay from its own funds any deductible amount
with respect to claims under such blanket insurance policy relating to the
Purchased Loans. However, the Seller shall not be required to deposit any
deductible amount with respect to claims under individual Hazard Insurance
Policies maintained pursuant to Section 17.13(ii)(a). If the insurer under such
blanket insurance policy shall cease to be acceptable to the Buyer, the Seller
shall exercise its best reasonable efforts to obtain from another insurer a
replacement policy comparable to such policy.

17.14 Cash Collateral Account. The Seller shall maintain the Cash Collateral
Account with the Buyer, which account(s) shall at all times be maintained in a
manner acceptable to the Buyer. On or before the date set forth in Appendix 2,
Item 2.17.14.1, the Seller shall deposit no less than the amount set forth in
Appendix 2, Item 2.17.14.2 (the “Minimum Balance”) into the Cash Collateral
Account. If at any time after such date, and for whatever reason, the funds on
deposit in the Cash Collateral Account shall be less than the Minimum Balance,
the Seller shall immediately deposit additional funds in the Cash Collateral
Account to bring the balance thereof to an amount that is no less than the
Minimum Balance.

17.15 Certificating Custodian; Custodial Account. The Seller shall provide the
Buyer with at least sixty (60) days prior written notice of any proposed initial
appointment of, or change in, as applicable, the Certificating Custodian, and in
connection therewith, if the Buyer’s consent to such initial appointment or
change, as applicable, is given, the Seller shall make any revisions to its
warehousing procedures that are requested by the Buyer or that are required to
satisfy the Buyer’s operations policies in place at such time, including, if
requested or required by the Buyer, furnishing or causing to be furnished to the
Buyer custodial and/or intercreditor agreements, in form and substance
satisfactory to the Buyer, from the Seller’s proposed Certificating Custodian.
Further, if applicable, the Seller shall at all times maintain the Custodial
Account in a manner acceptable to the Buyer and comply with its obligations
under the Master Custodial Agreement.

17.16 Intercreditor Agreements. With respect to any mortgage loan warehouse
facility or other similar financing obtained by the Seller (other than the
Repurchase Facility), if requested by the Buyer in its sole discretion, the
Seller shall use its best efforts to cause the provider of such mortgage loan
warehouse facility to enter into an Intercreditor Agreement with the Buyer, in
form and substance satisfactory to the Buyer. The Seller acknowledges that, as
of the effective date set forth in Appendix 2, the Intercreditor Agreement(s),
if any, listed in Appendix 2, Item 2.17.16.1, are in place and are applicable to
the Repurchase Facility.

17.17 Post Closing. The Seller shall deliver to the Buyer each of the items
identified in Appendix 1, Item 17.17.1 within the time period specified therefor
as set forth in Appendix 1, Item 17.17.1.

 

17-6

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

18 Negative Covenants

The Seller agrees that until all of the Purchased Loans have been repurchased by
the Seller and none of the Seller’s Obligations remain to be paid or performed
under this Agreement or any of the other Facility Papers, the Seller shall not,
either directly or indirectly:

18.1 Liens. Create, incur, assume or suffer to exist, or permit any Subsidiary
to create, incur, assume or suffer to exist, any Lien upon its properties,
assets or revenues now owned or hereafter acquired, except (the Liens described
in the following clauses (i) through (v), collectively, the “Permitted Liens”):

(i) Liens created or permitted by this Agreement or any of the other Facility
Papers, including without limitation, Permitted Encumbrances;

(ii) Liens created under any of the Other Approved Facility Papers, if any;
provided, that notwithstanding anything to the contrary contained herein, such
Liens shall not encumber at any time any properties, assets or revenues of the
Seller which are purchased by the Buyer under this Agreement and/or otherwise
secure the Obligations pursuant to the Facility Papers and none of such Liens
shall be a “blanket” lien or security interest on the Seller’s other assets;

(iii) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings; provided, that adequate reserves with respect thereto
are maintained on the books of the Seller in conformity with GAAP;

(iv) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
lessors’, landlords’ or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 60 days or that are
being contested in good faith by appropriate proceedings; or

(v) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements not to
exceed $50,000.00 in the aggregate.

18.2 Other Indebtedness. Create, incur, assume or suffer to exist or otherwise
become liable in respect of any Liabilities in excess of the amount set forth in
Appendix 2, Item 2.17.1.1 in the aggregate annually (other than under the Other
Approved Facilities, if any, and current trade payables, tax liabilities and
expense accruals, in each case incurred or recorded in the ordinary course of
the Seller’s business) without the Buyer’s prior written consent. Without
limiting the foregoing, any new mortgage loan warehouse facility or other
similar financing entered into by the Seller shall be deemed to be an “Other
Approved Facility” for purposes of this Agreement, and shall not require the
Buyer’s prior written consent, so long as (A) the Seller enters into such
warehouse or similar financing without breaching any of the covenants set forth
in this Agreement (including, without limitation, the covenants set forth in
Sections 18.1(ii) and 18.19 of this Agreement) or otherwise violating the terms
of this Agreement; (B) no Potential Default or Event of Default shall exist at
the time the Seller enters into such warehouse or similar financing; (C) no
Potential Default or Event of Default shall be caused by the Seller entering
into such warehouse or similar financing; and (D) the Seller complies with the
notice requirements set forth in Section 17.1(xii) in connection with its
entering into such warehouse or similar financing.

18.3 Change of Business. Engage in or permit any Subsidiary to engage in any
type of business that is unrelated to the mortgage banking and lending business
and the servicing of Mortgage Loans.

18.4 Change of Control. Suffer or permit any Change of Control.

18.5 Fundamental Changes. Merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell, lease,
transfer or otherwise dispose of (in a single transaction or a series of
transactions) all or substantially all of its assets (in each case, whether now
owned or hereafter acquired), or purchase all or substantially all of the assets
of another Person, or liquidate or dissolve; provided, that if at the time
thereof and immediately after giving effect thereto, no Potential Default or
Event of Default shall have occurred and be continuing, the Seller may merge
with a Person if the Seller is the surviving Person, or may purchase all or
substantially all of the assets of another Person.

 

18-1

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

18.6 Investments. Make any advance, loan, extension of credit or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or make any other
investment in, any Person (collectively, “Investments”), except:

(i) Mortgage Loans made in the ordinary course of the Seller’s business, and
related mortgage-backed securities;

(ii) extensions of trade credit and accounts receivable generated in the
ordinary course of business;

(iii) Investments as reflected in the most recent financial statement referenced
in Section 16.1(iv)(a);

(iv) Investments in cash or Cash Equivalents;

(v) Investments in Marketable Securities that are made in the ordinary course of
the Seller’s business for treasury management purposes; provided, that prior to
and immediately after giving effect to any such Investment, no Potential Default
or Event of Default shall have occurred and be continuing;

(vi) Hedging Arrangements entered into by the Seller to protect the Seller and
the Buyer against changes in the value of its Mortgage Loans or any of its other
assets;

(vii) formation of new Subsidiaries; provided, if required by the Buyer, such
Subsidiaries execute a Guarantee of the Obligations in favor of the Buyer in
form and substance satisfactory to the Buyer; and

(viii) loans, advances or commission draws to employees, officers, directors or
managers of the Seller in the ordinary course of business for travel, relocation
and related expenses.

18.7 Guarantees. Guarantee, endorse or otherwise become secondarily liable for
or upon the obligations of any other Person, except by endorsement for deposit
in the ordinary course of business.

18.8 Restrictive Agreements. Enter into, incur or permit to exist any agreement
that prohibits, restricts or imposes any condition upon the ability of the
Seller to create, incur or permit any Lien upon any of its assets or properties,
whether now owned or hereafter acquired, or of any Subsidiary to declare or pay
dividends or distributions, as applicable, or to make loans or other advances to
the Seller, directly or indirectly.

18.9 Payment of Dividends and Other Payments.

(i) Declare or pay any dividend or distribution, as applicable, on its capital
stock, membership interests or such other form of ownership interest, now or
hereafter outstanding (except dividends or distributions payable solely in
shares of the capital stock, additional membership interests or additional
ownership interests, as applicable, of the Seller), or make any other
distribution to its owners, whether in cash, property or securities unless, in
each instance, the Seller is in compliance with the financial covenants
contained in Section 18.19 and all other covenants contained herein, both before
and after giving effect thereto, and no Potential Default or Event of Default
has occurred and is continuing, or would result after giving effect thereto; or

(ii) Purchase or redeem any of its capital stock, membership interests or other
ownership interests, as applicable, unless, in each instance, the Seller is in
compliance with the financial covenants contained in Section 18.19 and all other
covenants contained herein, both before and after giving effect thereto, and no
Potential Default or Event of Default has occurred and is continuing, or would
result after giving effect thereto.

 

18-2

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

18.10 Transactions with Affiliates. Enter into, or permit any of its
Subsidiaries directly or indirectly to enter into, any transaction (including
the purchase, sale, lease or exchange of any property, the making or borrowing
of any loan or the rendering of any service) with any Affiliate on terms, in
each instance, that are less favorable to the Seller or such Subsidiary than
those that might be obtained at the time from Persons which are not Affiliates.
Nothing in this section shall prevent the Seller from paying Parkway Financial
Group or Century Communities, Inc. customary fees for administrative and
managerial services provided to the Seller in the ordinary course of business.

18.11 Effectiveness of Investor Commitments. Amend, void, reduce, modify,
violate, terminate or commit any act that would in any way adversely affect any
Investor Commitment covering a Purchased Loan; provided, however, that this
Section shall not prohibit the Seller from substituting one Investor Commitment
covering a Purchased Loan with another Investor Commitment covering the same
Purchased Loan (which second Investor Commitment shall be acceptable to the
Buyer), as long as no Disqualifier exists with respect to such Purchased Loan or
results from such substitution.

18.12 VA Guaranties and FHA Insurance. Commit any act that would invalidate any
VA guarantee or FHA insurance relating to any Mortgage Loan constituting a
Purchased Loan.

18.13 Transfer to Affiliates. Sell, assign or otherwise transfer any of its
assets, or permit any of its Subsidiaries to sell, assign or otherwise transfer
any of their respective assets, to any Affiliate of the Seller without the prior
written consent of the Buyer.

18.14 Margin Regulations. Use any or all of the proceeds of any Transaction
(i) to purchase or carry Margin Stock or extend credit to others for the purpose
of purchasing or carrying Margin Stock or (ii) in any manner that will violate
or be inconsistent with the provisions of Regulation U.

18.15 Change of Legal Name; Jurisdiction of Organization; Principal Place of
Business and Chief Executive Office; Location of Records. Change its legal name
unless it has given or caused to be given to the Buyer at least thirty
(30) days’ prior written notice thereof. Change its jurisdiction of organization
from the State set forth in Appendix 1, Item 18.15.1 or its principal place of
business and chief executive office and the place where its records concerning
the Purchased Loans are kept as set forth in Appendix 1, Item 16.1.4 unless it
has given or caused to be given to the Buyer at least thirty (30) days’ prior
written notice thereof and then, only if (i) the new jurisdiction and/or
location is in the United States, and (ii) the Seller has taken all actions
requested by the Buyer to maintain the perfected interest in the Purchased
Loans.

18.16 Amendments to Material Documents. Amend, modify or waive any of its rights
in a manner materially adverse to the Buyer, as determined by the Buyer, in the
Buyer’s sole discretion, under (a) its certificate or articles of incorporation
or organization, its bylaws or operating agreement, as applicable, or any other
organizational documents or (b) any material contract if, in either case, any
such amendment, modification or waiver, would cause a change in the financial
condition of the Seller or any of its Subsidiaries in a Material Amount or
otherwise cause a Material Adverse Effect.

18.17 Subordinated Debt. Make any payment to a Subordinated Creditor on any
Subordinated Debt (a) which would cause a violation of the Subordination
Agreement related to such Subordinated Debt, (b) which would cause a violation
of any of the financial covenants contained in Section 18.19, or (c) if any
Potential Default or Event of Default has occurred and is continuing or would
result after giving effect thereto. Prior to making any such payment, the Seller
shall provide the Buyer with a certificate of the Seller’s chief financial
officer attesting, to the satisfaction of the Buyer, that the Seller, following
the making of such payment, will be in compliance with each of the foregoing
financial covenants. No Subordination Agreement shall be amended, supplemented
or restated without the prior written consent of the Buyer, which consent may be
withheld thereby, in its sole and absolute discretion.

18.18 Negative Pledge. Permit any owner of the Seller to pledge, collaterally
assign, or otherwise encumber in favor of any third party Person any capital
stock, membership interests or such other form of ownership interests, as
applicable, such owner holds of the Seller, without the Buyer’s prior written
consent in each instance.

 

18-3

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

18.19 Financial Covenants. Cause or permit the violation of any of the following
financial covenants, all of which shall be determined with respect to the Seller
only and not on a consolidated basis:

(i) Adjusted Tangible Net Worth. Adjusted Tangible Net Worth, tested monthly as
at the end of each calendar month, shall be not less than the amount set forth
in Appendix 2, Item 2.18.19.1.

(ii) Leverage Ratio. The Leverage Ratio, tested monthly as at the end of each
calendar month, shall be not greater than the ratio set forth in Appendix 2,
Item 2.18.19.2.

(iii) Current Ratio. The Current Ratio, tested monthly as at the end of each
calendar month, shall be not less than the ratio set forth in Appendix 2, Item
2.18.19.3.

(iv) Minimum Liquidity. The Seller’s Liquidity, tested monthly as at the end of
each calendar month, shall be not less than the amount set forth in Appendix 2,
Item 2.18.19.4.

(v) Net Income. The Seller’s net income, determined in accordance with GAAP, for
the period set forth in Appendix 2, Item 2.18.19.5, shall be not less than the
amount set forth in Appendix 2, Item 2.18.19.6.

(vi) Other Financial Covenants. Any violation of or non-compliance with any of
the additional financial covenants (if any) set forth in Appendix 2, Item
2.18.19.7.

18.20 Servicing Rights. At no time shall the Seller sell, transfer, assign,
convey, pledge, mortgage or hypothecate or attempt to sell, transfer, assign,
convey, pledge, mortgage or hypothecate any Servicing Rights related to the
Purchased Loans to any Person other than the Buyer, except as contemplated in
the Investor Commitment which has been assigned to the Buyer pursuant to this
Agreement.

 

18-4

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

19 Events of Default; Event of Termination

19.1 Events of Default. If one or more of the following events (each an “Event
of Default”) shall have occurred and be continuing, each shall be and constitute
an Event of Default hereunder:

(i) Payments. The Seller shall fail to make any payment of Repurchase Price when
due or shall fail to pay within five (5) Banking Days after the due date
therefor any Price Differential, Fees or other Obligations under any of the
Facility Papers.

(ii) Covenants Without Notice. The Seller shall fail to observe or perform any
covenant or agreement contained in Sections 17.1(iv), 17.1(xii), 17.2, 17.4,
17.6, 17.8, 17.9, 17.11, 17.14, 17.15, 17.17, and Article 18 (other than
Section 18.4); provided, that any violation of Section 18.1 that is attributable
to the existence of an involuntary Lien on any Purchased Loan shall not
constitute an Event of Default until thirty (30) days after the imposition
thereof if at all times during such thirty (30) day period (i) the Seller is
making a diligent effort by appropriate means to remove such Lien and (ii) such
Lien does not have a Material Adverse Effect.

(iii) Covenants With Five Day Grace Period. The Seller shall fail to observe or
perform any covenant or agreement contained in Section 17.1 (other than those
referred to in Section 19.1(ii)), 17.3, 17.5, 17.7, 17.10, 17.12, 17.13 or
17.16, and such failure shall remain unremedied for five (5) Banking Days after
oral notice thereof to an Authorized Seller Representative (which shall be
confirmed in writing before the end of such five (5) Banking Day period).

(iv) Covenants With Thirty Day Grace Period. The Seller shall fail to observe or
perform any covenant or agreement contained in any Facility Papers, other than
those referred to in Sections 19.1(i), 19.1(ii), 19.1(iii), and, if capable of
being remedied, such failure shall remain unremedied for thirty (30) days after
the earlier of (i) the Seller’s obtaining knowledge thereof or (ii) written
notice thereof shall have been given to the Seller by the Buyer; provided, that
(x) if such failure is capable of being remedied but only in a period of more
than thirty (30) days, then such failure shall not constitute an Event of
Default until ninety (90) days after the earlier of the above dates if the
Seller is making a diligent effort by appropriate means to observe or perform
such covenant and (y) failure to observe or perform such covenant does not have
a Material Adverse Effect.

(v) Representations. Any representation, warranty or statement made or deemed to
be made by the Seller or any of its officers, managers or members or any
Guarantor or any of its officers, managers or members or the Authorized Seller
Representatives under or in connection with any Facility Papers shall have been
inaccurate, incomplete or incorrect in any material respect (without duplication
of any materiality qualifier contained in such representation, warranty or
statement) when made or deemed to be made.

(vi) Non-Payment of Other Liabilities. The Seller or any Guarantor shall fail to
make any payment of principal of or interest on any of its liabilities (other
than the Obligations under any of the Facility Papers), including without
limitation under the Other Approved Facility Papers, when due (whether at stated
maturity, by acceleration, on demand or otherwise) after giving effect to any
applicable grace period, unless there is a bona fide dispute with regard to such
payment which is being contested in good faith by the Seller or such Guarantor,
as applicable.

(vii) Defaults Under Other Agreements. The Seller or any Guarantor shall fail to
observe or perform, in any material respect, any covenant or agreement contained
in any agreement or instrument relating to any of its liabilities (other than
the Obligations under any of the Facility Papers), including without limitation
under any of the Other Approved Facility Papers, within any applicable grace
period, or any other event shall occur if the effect of such failure or other
event is to accelerate, or to permit the holder of such liabilities or any other
Person to accelerate, the maturity of such liabilities; or any such liabilities
shall be required to be prepaid (other than by a regularly scheduled required
prepayment) in whole or in part prior to their stated maturity, unless there is
a bona fide dispute with regard to such acceleration or required prepayment
which is being contested in good faith by the Seller or such Guarantor, as
applicable.

 

19-1

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

(viii) Bankruptcy. The Seller or any Guarantor shall commence a voluntary case
under the Bankruptcy Code; or any involuntary case is commenced against the
Seller or any Guarantor and the petition is not dismissed within sixty (60) days
after commencement of such case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or any substantial part of the
property of the Seller or any Guarantor; or the Seller or any Guarantor
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law or there is commenced against the Seller or any Guarantor any such
proceeding that remains undismissed for a period of sixty (60) days; or the
Seller or any Guarantor is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the
Seller or any Guarantor shall fail to pay, or shall state that it or he is
unable to pay, or shall be unable to pay, its or his debts generally as they
become due; or the Seller or any Guarantor shall call a meeting of its or his
creditors with a view to arranging a composition or adjustment of its or his
debts; or the Seller or any Guarantor shall by any act or failure to act
indicate its or his consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other entity action is taken by the Seller or any
Guarantor for the purpose of effecting any of the foregoing.

(ix) Money Judgment. One or more judgments or orders for the payment of money
exceeding $100,000.00 in the aggregate shall be rendered against the Seller or
any Guarantor and such judgment or order shall continue unsatisfied (in the case
of a money judgment) and in effect for a period of thirty (30) days during which
execution shall not be effectively stayed or deferred (whether by action of a
court, by agreement or otherwise).

(x) ERISA. (i) Any ERISA Event or a Prohibited Transaction shall occur with
respect to any Plan; (ii) a notice of intent to terminate a Plan under
Section 4041 of ERISA shall be filed; (iii) a notice shall be received by the
plan administrator of a Plan that the PBGC has instituted proceedings to
terminate a Plan or appoint a trustee to administer a Plan; (iv) any other event
or condition shall exist that might, in the opinion of the Buyer, constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan; (v) the Seller or any ERISA Affiliate
shall withdraw from or incur liability, including excise tax, in connection with
a Multiemployer Plan under circumstances that the Buyer determine could have a
Material Adverse Effect; and in case of the occurrence of any event or condition
described in clauses (i) through (v) above, such event or condition together
with all other such events or conditions, if any, could subject the Seller to
any tax, penalty or other liabilities in the aggregate material in relation to
the business, operations, property or financial or other condition of the
Seller.

(xi) Dissolution; Death, etc. The Seller or any Guarantor that is not a natural
person shall commence dissolution proceedings or otherwise shall cease operation
of its business as conducted on the date hereof, or any Guarantor that is a
natural person shall die or become incapacitated.

(xii) Change of Control. Any Change of Control shall occur.

(xiii) Adverse Changes. Any Material Adverse Effect shall occur with respect to
the Seller or any of its Subsidiaries, as determined by the Buyer, it its
reasonable discretion.

(xiv) Failure to Pass Audit. The Buyer, for any reason, shall be dissatisfied
with the results of any operational or financial audit undertaken by it pursuant
to Section 17.3.

(xv) Insecurity. The Buyer, in the exercise of good faith, shall deem itself to
be insecure with respect to the Seller’s ability to pay the Obligations as and
when due or to materially comply with and perform any of the covenants,
agreements, or obligations of the Seller hereunder.

(xvi) Interests in the Purchased Loans. The Buyer shall cease for any reason
(other than pursuant to the terms of this Agreement) to have valid, perfected
and first priority ownership interests in the Purchased Loans, or any Person
shall take any action to discontinue or to assert the invalidity or
unenforceability of such ownership interests.

 

19-2

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

(xvii) Default Under Guaranty. Any Guarantor shall fail to meet or comply with
any term or condition of his or its respective Guaranty or shall seek to cancel
or revoke his or its respective Guaranty for any reason whatsoever or shall
default in the payment or performance of any obligations thereunder to the
Buyer.

(xviii) Default Under Other Facility Papers. Any default or event of default
shall occur under any of the other Facility Papers, subject to any applicable
notice requirements and the expiration of any applicable grace periods provided
therein.

(xix) Recharacterization of this Agreement. Either (i) this Agreement shall for
any reason not cause, or shall cease to cause, the Buyer to be the owner of all
Purchased Loans or, if recharacterized as a secured financing, secured party
with respect to all Purchased Loans, in each case, free of any adverse claim,
liens and other rights of others (other than as granted or disclosed herein),
(ii) if a Transaction is recharacterized as a secured financing, this Agreement
and the other Facility Papers with respect to such Transaction shall for any
reason fail or cease to create a valid and perfected first priority security
interest in favor of the Buyer in all of the related Purchased Loans for such
Transaction, or (iii) if this Agreement or any other Facility Paper shall cease
to be in full force and effect or if its enforceability is disputed or
challenged by the Seller.

19.2 Transaction and Commitment Termination. If an Event of Default shall have
occurred and be continuing, then, at the option of the Buyer (which option shall
be deemed to have been exercised, even if no notice is given, immediately upon
the occurrence of an Event of Default specified in Sections 19.1(viii) or (xi))
the Buyer may terminate the Commitment and declare, by written notice to the
Seller, the Repurchase Date for each Transaction hereunder as deemed immediately
to have occurred.

19.3 Termination by the Buyer. If the Buyer is deemed to have exercised the
option to terminate Transactions referred to in Section 19.2, (i) the Seller’s
obligations hereunder to repurchase all Purchased Loans in such Transactions
shall thereupon become immediately due and payable, (ii) to the extent permitted
by applicable Law, the Repurchase Price with respect to each Transaction shall
be increased by the aggregate amount obtained by daily multiplication of (x) the
Ceiling Rate by (y) the Purchase Price for such Transaction as of the Repurchase
Date as determined pursuant to Section 19.2 (decreased as of any day by (A) any
amounts retained by the Buyer with respect to such Purchase Price pursuant to
clause (iii) of this Section 19.3, (B) any proceeds from the sale of Purchased
Loans pursuant to clause (a) of Section 19.4(i), and (C) any amounts credited to
the account of the Seller pursuant to clause (b) of Section 19.4(i)) on a three
hundred sixty (360) day per year basis for the actual number of days during the
period from and including the date of the Event of Default giving rise to such
option to but excluding the date of payment of the Repurchase Price as so
increased, (iii) all Income paid after such exercise or deemed exercise shall be
payable to and retained by the Buyer and applied to the aggregate unpaid
Repurchase Prices owed by the Seller and (iv) the Seller shall immediately
deliver to the Buyer any documents and Purchased Loans Records relating to
Purchased Loans subject to such Transactions then in the Seller’s or Servicer’s
possession.

19.4 Remedies. Upon the occurrence and during the continuance of an Event of
Default, whether or not the Buyer has exercised any of its rights pursuant to
Sections 19.2 and 19.3, the Buyer, without prior notice to the Seller, may:

(i) (a) immediately sell, in a recognized market at such price or prices as the
Buyer may, in its sole discretion, deem satisfactory, any or all Purchased Loans
and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any
other amounts owing by the Seller hereunder (provided, however, that with
respect to any particular Purchased Loan so sold, if the net sales proceeds
received by the Buyer from such sale exceed the Repurchase Price attributable to
such Purchased Loan, the Buyer, in its sole and absolute discretion, may hold
the excess in the Administrative Account or in a reserve account in the Buyer’s
name as security for the Obligations, instead of applying such excess to the
Obligations upon receipt of the same), or (b) in the Buyer’s sole and absolute
discretion elect, in lieu of selling all or a portion of such Purchased Loans,
to give the Seller credit for such Purchased Loans in an amount equal to the
Market Value therefor on such date against the aggregate unpaid Repurchase
Prices and any other amounts owing by the Seller hereunder, and the Seller shall
no longer have a right to repurchase such Purchased Loans hereunder;

 

19-3

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

(ii) notify all obligors in respect of the Purchased Loans that the Purchased
Loans have been sold to the Buyer, and that all payments thereon are to be made
directly to the Buyer or such other party as may be designated thereby; and

(iii) exercise from time to time any and all other remedies available under
applicable Law including, but not limited to, those of a purchaser or secured
party under the UCC.

The Seller acknowledges that Mortgage Loans are customarily sold on a recognized
market. The Seller waives any right it may have to prior notice of the sale of
any Purchased Loans, and agrees that the Buyer may purchase any Purchased Loans
at a private sale thereof.

Upon any sale or other disposition pursuant to this Agreement, the Buyer shall
have the right to deliver, assign and transfer to the purchaser thereof the
Purchased Loans or portion thereof so sold or disposed of and all proceeds
thereof shall be promptly transmitted to the Buyer. Each purchaser at any such
sale or other disposition shall hold the Purchased Loans, free from any claim or
right of whatever kind, including any equity or right of redemption of the
Seller, and the Seller specifically waives (to the extent permitted by law) all
rights of redemption, stay or appraisal that it has or may have under any rule
of law or statute now existing or hereafter adopted. The Buyer is hereby granted
a license or other right to use, without charge, the Seller’s computer programs,
other programs, labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Purchased Loans, in
advertising for sale and selling any Purchased Loans, and the Seller’s rights
under all licenses and all other agreements related to the foregoing shall inure
to the Buyer’s benefit until the Obligations are paid in full and the Buyer’s
Commitment is terminated. Nothing herein contained shall be construed as an
assumption by the Buyer or its appointee of any liability of the Seller with
respect to any of the Purchased Loans, and the Seller shall be and remain
responsible for all such liabilities.

Any notice pursuant to any Requirements of Law of any sale, public or private,
of all or any part of the Purchased Loans shall be deemed in all circumstances
to have been given in a commercially reasonable manner if sent at least five
(5) Banking Days prior to such sale by mail to the Seller at its address set
forth herein. The Buyer shall not be obligated to make any sale pursuant to any
such notice. If permissible under the UCC or other applicable Law, the Buyer
will endeavor to sell any Purchased Loan which is subject to a current Investor
Commitment to the Approved Investor which issued such Investor Commitment prior
to offering such Purchased Loan for sale (either public or private) to another
purchaser. At any such sale the Purchased Loans may be sold in one lot as an
entirety or in separate lots or parcels. In the case of any sale of all or any
part of the Purchased Loans for credit or for future delivery, the Purchased
Loans so sold may be retained by the Buyer until the selling price is paid by
the purchaser thereof, but the Buyer shall not incur any liability in case of
the failure of such purchaser to take up and pay for the Purchased Loans so
sold, and in case of any such failure, such Purchased Loans may again be sold
under and pursuant to the provisions hereof. The Seller hereby appoints the
Buyer or the Buyer’s designee as the Seller’s attorney-in-fact with the power of
substitution, and with the power to execute all conveyances, assignments and
transfers of the Purchased Loans sold pursuant hereto in the name and stead of
the Seller. The Seller shall, if so requested by the Buyer, ratify and confirm
any sale or sales by executing and delivering to the Buyer, or to such purchaser
or purchasers, all such documents as may, in the judgment of the Buyer, be
advisable for such purpose. All acts of such attorney or designee are hereby
ratified and approved by the Seller, and such attorney or designee shall not be
liable for any acts of omission or commission, nor for any error of judgment or
mistake of fact or law in accordance with this Agreement. The power of attorney
hereby granted is irrevocable and coupled with an interest while any of the
Obligations remain unsatisfied.

19.5 Liability for Expenses and Damages. The Seller shall be liable to the Buyer
for (i) the amount of all reasonable legal or other expenses incurred by the
Buyer in connection with or as a result of an Event of Default and collecting
and enforcing its rights in the Purchased Loans, whether or not suit is brought
and whether incurred with trial, rehearing, retrial, appeal or bankruptcy,
(ii) damages in an amount equal to the reasonable cost (including all fees,
expenses and commissions) of entering into replacement transactions and entering
into or terminating hedge transactions in connection with or as a result of an
Event of Default and (iii) any other reasonable loss, damage, cost or expense
directly arising or resulting from the occurrence of an Event of Default.

 

19-4

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

19.6 Liability for Interest. To the extent permitted by applicable Law, the
Seller shall be liable to the Buyer for interest on any amounts owing by the
Seller under Section 19.5, from the date the Seller becomes liable for such
amounts until such amounts are (i) paid in full by the Seller or (ii) satisfied
in full by the exercise of the Buyer’s rights hereunder. Interest on any sum
payable by the Seller to the Buyer under this Section 19.6 shall be at a rate
equal to the Ceiling Rate.

19.7 Setoff. The Buyer may set off against the Obligations any funds or debts
owing to the Seller by the Buyer including, but not limited to, any funds in any
deposit account, savings certificate or other instrument now or hereafter
maintained by the Seller with the Buyer or any of its Affiliates. The Seller
hereby confirms the Buyer’s right of lien and setoff and nothing in this
Agreement shall be deemed to constitute any waiver or prohibition thereof.

19.8 Other Rights. The rights, powers and remedies of the Buyer under this
Agreement shall be in addition to all rights, powers and remedies given to the
Buyer by virtue of any applicable Law, all of which rights, powers and remedies
shall be cumulative and may be exercised successively or concurrently without
impairing the Buyer’s interest in the Purchased Loans.

19.9 Limitation on Liability of the Buyer. It is expressly agreed by the Seller
that, anything herein to the contrary notwithstanding, the Seller shall remain
liable to observe and perform all the conditions, duties and obligations to be
observed and performed by it relating to the Purchased Loans, and the Seller
shall perform all of its duties and obligations thereunder, all in accordance
with and pursuant to the terms and provisions relating thereto. The Buyer shall
not have any obligation or liability under any instrument, agreement, contract
or other document by reason of or arising out of this Agreement or the granting
of a security interest in any instrument, agreement, contract or other document
to the Buyer or the receipt by the Buyer of any payment relating to any of the
foregoing pursuant hereto, nor shall the Buyer be required or obligated in any
manner to perform or fulfill any of the obligations of the Seller thereunder, or
to make any payment, or to make any inquiry as to the nature or the sufficiency
of any payment received by it or the sufficiency of any performance by any party
thereunder, or to present or file any claim, or to take any action to collect or
enforce any performance or the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

19-5

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

20 Servicing and Custody of the Purchased Loans

20.1 Servicing for the Buyer.

(i) The definition of Purchased Loan in Section 2.2 includes all assets and
properties described in Exhibit A of Schedule 11. Exhibit A of Schedule 11
includes in (a)(5) all Servicing Rights in respect of any of the Purchased
Loans. The Seller is selling the Purchased Loans on a servicing released basis.
Therefore, the Buyer owns the Servicing Rights in reference to the Purchased
Loans. The purchase price which the Buyer is paying for the Purchased Loans is
determined in part by the fact that the Buyer is receiving ownership of the
Servicing Rights which will enable the Buyer to liquidate and transfer the
Servicing Rights as part of the Purchased Loans in the event that the Seller
fails to perform its obligations under this Agreement, and in part to compensate
the Seller for servicing the Purchased Loans on an interim basis on behalf of
the Buyer.

(ii) It is the intent of the Seller and the Buyer that the Servicing Rights are
an integral non-severable part of this Agreement. The Buyer’s ability to re-sell
the Servicing Rights is necessary in order for the Buyer to realize full value
from re-sale of the Purchased Loans to another party, which the Buyer has the
right to do if the Seller does not perform its obligations under this Agreement.
If the Buyer is deemed to hold a security interest in the Servicing Rights under
Section 35.5 of this Agreement, the ability of the Buyer to re-sell the
Servicing Rights is necessary in order for the Buyer to realize full value from
enforcement of its security interest in the Servicing Rights and its re-sale of
the Purchased Loans to another party, which the Buyer has the right to do if the
Seller does not perform its obligations under this Agreement.

(iii) The Buyer, as owner of the Servicing Rights, hereby designates the Seller
as the Servicer until further notice from the Buyer. No Purchased Loan may be
serviced or subserviced at any time during the term of this Agreement by any
Person other than the Seller except with the Buyer’s prior written consent,
which consent may be withheld. Any subservicer of a Purchased Loan shall be
required by the Seller to service the Purchased Loans in accordance with, and
comply with the servicing requirements set forth under, this Agreement and shall
execute a subservicing agreement, which shall be satisfactory to the Buyer and
include an acknowledgment and agreement to, among other things, the Buyer’s
interest in the Purchased Loans and the rights and benefits related thereto, to
the Buyer’s status as an intended third party beneficiary under such
subservicing agreement with rights and benefits (but not any obligations)
thereunder, including without limitation the right to terminate the subservicing
agreement as it relates to the Purchased Loans and demand transfer of all
servicing records from such subservicer at any time and at no cost to the Buyer,
to the assignment of Seller’s rights and benefits under the subservicing
agreement as it relates to the Purchased Loans to the Buyer, and to take
direction from the Buyer in respect of a release of the servicing related to any
Purchased Loan being serviced by such subservicer. Notwithstanding any of the
provisions of the subservicing agreement or arrangement between the Seller and a
subservicer, the Seller shall not be relieved of its obligations to the Buyer
and its successors and assigns and shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Purchased Loans and the Seller shall remain responsible for
all acts and omissions of a subservicer as fully as if such acts and omissions
were those of the Seller. If required by the Buyer, the Seller shall cause the
subservicer to execute and deliver a separate side letter setting forth the
foregoing acknowledgements.

20.2 Servicing Standard and Reports. The Servicer shall service and administer
each Purchased Loan by exercising the same care that the Servicer customarily
employs and exercises in servicing and administering mortgage loans for its own
account, in accordance with (i) the generally accepted servicing practices of
prudent mortgage lending institutions for the same type of Mortgage Loan in the
jurisdiction where the related Mortgaged Premises are located, and (ii) the
requirements of all applicable Laws and the terms of the related Mortgage Loan
documents, and giving due consideration to the Buyer’s reliance on the Servicer.
The Seller or Servicer, if applicable, will promptly provide, or cause to be
provided, to the Buyer such periodic reports, data files, information and such
other Purchased Loans Records as requested by the Buyer with respect to all
Purchased Loans then funded under any Transaction hereunder. The Seller or
Servicer, if applicable, shall deliver to the Buyer upon request thereby no
later than the fifteenth (15th) day of each month an electronic copy of the
servicing records of any Purchased Loan, in a form mutually acceptable to each
of them, with the data and information effective as of the last day of the
immediately preceding calendar month.

 

20-1

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

20.3 Servicing Termination or Succession. At any time the servicing for the
Purchased Loans shall be subject to the following:

(i) if the Seller or any of its Affiliates is the Servicer for any Purchased
Loans, then the Buyer, in its sole discretion, may (i) in connection with the
sale of such Purchased Loans, sell such loans on a servicing released basis and
transfer the related Servicing Rights to another Person as designated by the
Buyer, or (ii) terminate the Seller or Servicer, if applicable, of the Purchased
Loans with or without cause and transfer the servicing to another Person as
designated by the Buyer, in each case without payment to the Servicer of any
termination fee or any other costs or expenses; and

(ii) if the Buyer elects to effectuate a transfer of servicing to a designee of
the Buyer after the occurrence of an Event of Default, the Seller or Servicer,
if applicable, will pay any costs and expenses required to effectuate such
transfer.

20.4 Delivery of Purchased Loan Documentation. Except in the case of Wet
Mortgage Loans, at the time of each Purchase Request under the Repurchase
Facility, the Seller shall deliver or cause to be delivered to the Buyer the
Required Documents and, if requested by the Buyer at any time, the other Loan
Papers. In addition, if requested by the Buyer at any time, the Seller
immediately shall (i) record the assignment in favor of the Buyer of the
Mortgage and/or any security agreements related to any Purchased Loan acquired
in connection with a Transaction in the appropriate recording office and pay all
recording fees, charges and taxes in connection therewith and (ii) execute and
deliver to the Buyer any and all other documents which are, in the opinion of
the Buyer or its counsel, necessary so as to evidence or perfect the Buyer’s
ownership interests in the Purchased Loans including, but not limited to,
execution of appropriate UCC-1 financing statements to be filed with the
appropriate filing officer in the state of the Seller’s organization and with
the appropriate filing officers in such other jurisdictions where any of the
Purchased Loans are or may be located. All documentation relating to or
constituting each Purchased Loan delivered at any time to the Buyer under this
Agreement shall be held by the Buyer in a suitable depository maintained and
controlled solely by the Buyer.

20.5 Buyer’s Review of the Purchased Loans; Certifications. Upon any receipt of
Required Documents for any item of the Purchased Loans, the Buyer shall review
the same in accordance with the Purchased Loan review procedures from time to
time set forth in the Procedural Manual (the “Purchased Loan Review
Procedures”). If the Buyer notes any exception in such review, the Buyer shall
follow the directions set forth with respect to such exception in the Purchased
Loan Review Procedures. In the event that the Seller was requested to deliver
Loan Papers other than the Required Documents with respect to a Purchased Loan,
the Buyer shall review and verify such Loan Papers consistent with the review
procedures of the Buyer described in this Section 20.5.

20.6 Release of the Required Documents.

(i) Unless an Event of Default has occurred and is continuing, and upon written
request of the Seller, the Buyer may release to the Seller (or, in the case of
clause (iii) of this paragraph, permit the Seller to release) (i) documentation
relating to Purchased Loans (other than Aged Mortgage Loans) against a trust
receipt or bailee letter executed by the Seller in form and substance acceptable
to the Buyer, in its sole discretion, with all blanks completed in conformity
therewith, (ii) documentation relating to Aged Mortgage Loans against a trust
receipt or bailee letter executed by the Seller in form and substance acceptable
to the Buyer, in its sole discretion, with all blanks completed in conformity
therewith, and (iii) to an attorney, trustee or other third party prosecuting
foreclosure proceedings on behalf of the Buyer, documentation relating to
Purchased Loans that are Aged Mortgage Loans against a trust receipt or bailee
letter executed by such attorney, trustee or other third party in form and
substance acceptable to the Buyer, in its sole discretion, with all blanks
completed in conformity therewith. The Seller hereby represents and warrants to
the Buyer that (A) any request for release of the Purchased Loans (other than
Aged Mortgage Loans) pursuant to this Section 20.6(i) shall be solely for the
purposes of correcting clerical or other non-substantial documentation problems
in preparation for returning such Purchased Loans to the Buyer for ultimate sale
or exchange, (B) any request for release of Aged Mortgage Loans pursuant to this
Section 20.6(i) both to the Seller and to any attorney, trustee or other third
party acting on behalf of the Buyer in the prosecution of foreclosure
proceedings shall be solely for the purposes of prosecuting foreclosure
proceedings relating to such Purchased Loans, and (C) the Seller shall request
such release in compliance with all of the terms and conditions of such release
set forth herein.

 

20-2

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

(ii) Unless an Event of Default has occurred and is continuing, the Buyer shall
release (i) Purchased Loans (other than Aged Mortgage Loans) to Approved
Investors for purchase and (ii) Aged Mortgage Loans to purchasers thereof. Any
transmittal of documentation for (i) Purchased Loans (other than Aged Mortgage
Loans) in the possession of the Buyer in connection with the sale thereof to an
Approved Investor (other than an Agency) or (ii) Aged Mortgage Loans in the
possession of the Buyer in connection with the sale thereof to a purchaser, in
each case, shall be under cover of a bailment letter in form and substance
acceptable to the Buyer, in its sole discretion, with all blanks completed in
conformity therewith. Any transmittal of documentation for Purchased Loans in
connection with the sale thereof to any Agency for inclusion as whole Purchased
Loans in their respective loan portfolios shall be under cover of a bailment
letter in form and substance acceptable to the Buyer, in its sole discretion,
with all blanks completed in conformity therewith, or such other forms, duly
executed, if necessary, by the Seller, in lieu of the foregoing that any Agency
may require pursuant to their respective Agency Guides. In each case of
transmittal of documentation relating to such Purchased Loans pursuant to this
subsection, the recipient thereof shall be required to return such documentation
to the Buyer if such Purchased Loans are not purchased and the proceeds
therefrom paid in accordance with Section 20.6(iv) within forty-five (45) days
after such recipient’s receipt of such documentation or, if earlier, the
expiration of the applicable Investor Commitment; provided, however, the Buyer
may allow, in its sole and absolute discretion, a shipped Purchased Loan to
remain with an Approved Investor subsequent to such 45-day period if there is
legitimate reason for the delay in return or in purchase and payment. In such
case, the Buyer is hereby authorized by the Seller (but not obligated) to send a
“bailee violation letter” to such Approved Investor and, if the documentation is
then not promptly returned to the Buyer or the purchase and payment of such
Purchased Loan is then not promptly completed, the Seller shall immediately pay
the Transactions related thereto. With respect to transmittal of documentation
relating to Purchased Loans (other than Aged Mortgage Loans), before the Buyer
delivers documentation pursuant to this Section 20.6(ii), the Seller shall have
delivered such forms, duly executed by the Seller, required under the applicable
Agency Guides or Investor Commitments to effect delivery to an Agency or any
other Approved Investor of such Purchased Loans and payment therefor in
accordance with the instructions of the Buyer.

(iii) Unless an Event of Default has occurred and is continuing, and provided
that the Master Custodial Agreement is in full force and effect and the
Custodial Account is open, the Buyer shall, subject to the terms and conditions
of this Section 20.6(iii), release Purchased Loans in connection with the
formation of a pool of Mortgage Loans supporting an Agency MBS. Any transmittal
of documentation for such Purchased Loans in the possession of the Buyer shall
be to the Certificating Custodian and, if the Buyer is not then the
Certificating Custodian, shall be under cover of a bailment letter in the form
required by the Buyer, with all blanks completed in conformity therewith, or
such other forms in lieu of the foregoing that the applicable Agency requires
pursuant to its Agency Guide, duly executed, if necessary, by the Seller. If the
Certificating Custodian is other than the Buyer, the Certificating Custodian
shall: (i) immediately return to the Buyer all documentation relating to any
Purchased Loan released to the Certificating Custodian under this
Section 20.6(iii) if such Purchased Loan is not purchased and the proceeds
therefrom paid in accordance with Section 20.6(iv) or the related Agency MBS has
not been issued within forty-five (45) days after the Certificating Custodian’s
receipt of such documentation, provided, however, the Buyer may allow, in its
sole and absolute discretion, a shipped Purchased Loan to remain with the
Certificating Custodian subsequent to such 45-day period if there is a
legitimate reason for the delay in purchase and payment or issuance (in such
case, the Buyer is hereby authorized by the Seller (but not obligated) to send a
“bailee violation letter” to the Certificating Custodian if the Certificating
Custodian is not the Buyer and, if the documentation is then not promptly
returned to the Buyer or the issuance of the Agency MBS is not promptly
completed, the Seller shall immediately pay the Transaction related thereto);
and (ii) segregate and properly identify all such documentation as the property
of the Buyer. With respect to transmittal of documentation relating to Purchased
Loans, before the Buyer delivers documentation pursuant to this
Section 20.6(iii), the Seller shall have delivered such forms, duly executed by
the Seller, as required under the applicable Agency Guides or Investor
Commitments to effect delivery to the Certificating Custodian of such Purchased
Loans and payment therefor in accordance with the instructions of the Buyer
(including, but not limited to, those contained in the Master Custodial
Agreement). The Seller further agrees to (x) enter into such arrangements and
agreements with the Buyer, the Certificating Custodian and each applicable
Agency as may be necessary or desirable to facilitate the issuance of MBS under
the mortgage-backed securities programs of such Agency and (y) conform its
procedures relating to the formation of such pools and the delivery of such
forms and certifications required by each applicable Agency, to accommodate the
procedures

 

20-3

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

established by the Buyer from time to time with respect thereto that are in
conformity with the respective rules and regulations of each applicable Agency
and maintaining the perfection and priority of the Buyer’s ownership interest in
the applicable Purchased Loans and related Agency MBS and the proceeds thereof.
All Agency MBS that are backed by any Purchased Loan for which the Repurchase
Price has not been paid in full at the time of the issuance of such Agency MBS
shall be held in the Custodial Account and the Buyer shall have an ownership
interest therein. The Seller agrees that the custodian (or its nominee) under
the Master Custodial Agreement (for the benefit of the Buyer) shall be listed as
the only subscriber, owner and/or registered holder, as applicable, and only
Person authorized to take delivery of any Agency MBS, and upon the issuance of
each Agency MBS, the Seller shall deliver, or cause the applicable Agency to
deliver, such Agency MBS directly to the custodian (or its nominee) under the
Master Custodial Agreement. Except as otherwise expressly provided in the Master
Custodial Agreement, the Buyer shall have exclusive control over the disposition
of all Agency MBS held in the Custodial Account, and the Seller shall not have
any right to transfer, trade or otherwise direct the disposition of such Agency
MBS. Subject to the terms and conditions of this Agreement and the Master
Custodial Agreement, upon the issuance of an Agency MBS, the ownership interests
of the Buyer in the underlying Purchased Loans shall cease, and the ownership of
the related Agency MBS and the proceeds thereof shall be substituted therefor
and vested in the Buyer.

(iv) Unless an Event of Default or Potential Default has occurred and is
continuing, the Seller, in connection with the sale of any Purchased Loans, may
obtain the release of the ownership interest in the applicable Purchased Loan by
paying to the Buyer, for application to the Obligations in accordance with this
Agreement, the Repurchase Price for such Type of Purchased Loan (determined as
of the applicable Repurchase Date therefor) to be released and the Seller shall
not at any time instruct any such Approved Investor to remit any sale proceeds
directly or indirectly to the Seller or accept any such proceeds directly or
indirectly from any Approved Investor and shall immediately notify such Approved
Investor and the Buyer of the attempted remittance and the wire transfer
instruction information related to the Investor Funding Account. All amounts
payable on account of the sale of Purchased Loans (other than Aged Mortgage
Loans) by the Seller are to be paid directly by the applicable Approved Investor
to the Investor Funding Account for the benefit of the Buyer and the Seller
shall so instruct each such applicable Approved Investor. All amounts payable on
account of the sale of Aged Mortgage Loans by the Seller and all foreclosure
proceeds are to be paid directly by the applicable purchaser or bailee to the
Investor Funding Account for the benefit of the Buyer and the Seller shall so
instruct such purchaser or bailee, and Seller shall not at any time instruct any
such purchaser or bailee to remit any sale proceeds directly or indirectly to
Seller or accept any such proceeds directly or indirectly from any purchaser or
bailee and shall immediately notify such purchaser or bailee and the Buyer of
the attempted remittance and the wire transfer instruction information related
to the Investor Funding Account. To the extent that the sale proceeds received
from the purchaser or bailee of a Purchased Loan are less than the full amount
owed to the Buyer therefor (a “shortfall”), the Seller shall pay such shortfall
to the Buyer prior to or concurrently with the payment of such sale proceeds and
prior to the release of the Buyer’s interest in the affected Purchased Loan.
Upon receipt of the full amount of the Repurchase Price for each Purchased Loan
from a purchaser or bailee thereof and/or the Seller in accordance with this
Section 20.6(iv), the Buyer’s interest in the affected Purchased Loan shall be
automatically released, and deemed reconveyed to the Seller, free and clear of
any liens, encumbrances, and claims with no further action necessary.

(v) Unless an Event of Default or Potential Default has occurred and is
continuing, the Seller, in connection with the sale of any Agency MBS, may
obtain the release of the ownership interest in the applicable Agency MBS by
paying to the Buyer, for application to the Obligations in accordance with this
Agreement, the aggregate Repurchase Price for all Purchased Loans supporting
such Agency MBS (determined as of the applicable Repurchase Date) to be released
and the Seller shall not at any time instruct any such Approved Investor to
remit any sale proceeds directly or indirectly to the Seller or accept any such
proceeds directly or indirectly from any Approved Investor and shall immediately
notify such Approved Investor and the Buyer of the attempted remittance and the
wire transfer instruction information related to the Custodial Account (unless
another account shall be designated by the Buyer). All amounts payable on
account of the sale of Agency MBS by the Seller are to be paid directly by the
applicable Approved Investor to the Custodial Account (unless another account
shall be designated by the Buyer) for the benefit of the Buyer and the Seller
shall so instruct each such applicable Approved Investor. To the extent that the
sale proceeds received by the Buyer from the purchaser of an Agency MBS are less
than the full amount owed to the Buyer therefor (a “shortfall”), the Seller
shall pay such shortfall to the Buyer prior to or concurrently with the payment
of such sale proceeds and prior to the release of the Buyer’s interest in the
affected Agency MBS. Upon receipt of the full amount of the aggregate Repurchase
Price for all Purchased Loans supporting the applicable Agency MBS from a
purchaser thereof and/or the Seller in accordance with this

 

20-4

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

Section 20.6(v), the Buyer’s interest in the affected Agency MBS shall be
automatically released. The Buyer will, upon satisfaction of all the Buyer’s
requirements in connection therewith, arrange for the transfer of any Agency MBS
in which the Buyer has an ownership interest to an Approved Investor (including
any of the Agencies), or the nominee thereof, in accordance with the terms of
the applicable Investor Commitment, trade or settlement. In each such case, the
Seller agrees to provide the Buyer and the Person acting as custodian under the
Master Custodial Agreement with written designation of such purchasers and
Approved Investors, together with the appropriate instructions for crediting
such purchasers’ and investors’ respective accounts. Except to the extent (if
any) expressly provided otherwise in the Master Custodial Agreement, all
deliveries of Agency MBS to such Approved Investors shall be made only “against
payment” by such Approved Investors to the Custodial Account (unless another
account shall be designated by the Buyer), in immediately available funds, of
the full purchase price of such Agency MBS, in accordance with the terms of such
Investor Commitments, trades or settlements.

(vi) Unless an Event of Default has occurred and is continuing, the Buyer may
take such steps in addition to those set forth above as it may be reasonably
recommended from time to time by the Seller in writing that are not inconsistent
with the provisions of this Agreement and that the Seller deems necessary to
enable the Seller to perform and comply with Investor Commitments, trades and
settlements and with other agreements for the sale or other disposition in whole
or in part of Purchased Loans, and if applicable, Agency MBS.

 

20-5

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

21 Payment of Expenses; Indemnity

21.1 Expenses; Indemnification.

(i) The Seller shall:

(a) (1) pay all reasonable out-of-pocket costs and expenses of the Buyer in the
administration (both before and after the execution hereof and including advice
of counsel as to the rights and duties of the Buyer with respect thereto) of,
and in connection with the preparation, execution and delivery of, this
Agreement and the other Facility Papers, and (2) pay all reasonable
out-of-pocket costs and expenses of the Buyer in the preservation of rights
under, enforcement of, and, after the occurrence of a Potential Default or an
Event of Default, the refinancing, the renegotiating or the restructuring of,
this Agreement and the other Facility Papers and the documents and instruments
referred to herein and therein including in connection with any bankruptcy,
insolvency, liquidation, reorganization or similar proceeding and any amendment,
waiver or consent relating hereto and thereto (including the reasonable fees and
disbursements of counsel (including allocated costs of internal counsel) for the
Buyer) and, in each case, the Buyer is authorized by the Seller to debit amounts
on deposit in the Operating Account or any of the Seller’s other accounts
maintained with the Buyer for payment of all such costs and expenses, including
the reasonable fees and disbursements of counsel;

(b) pay and hold harmless the Buyer from and against any and all present and
future stamp, documentary, and other similar taxes with respect to this
Agreement and any other Facility Papers, any collateral described therein, or
any payments due thereunder, and save the Buyer harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes; and

(c) indemnify the Buyer and its officers, directors, employees, and
representatives from, and hold each of them harmless against, any and all
out-of-pocket costs, losses, liabilities, claims, damages or expenses actually
incurred by any of them (whether or not any of them is designated a party
thereto) arising out of or by reason of any investigation, litigation or other
proceeding related to any actual or proposed use by the Seller of the proceeds
or any of the Transactions or the Seller’s entering into and performing of the
Facility Papers, including the reasonable fees and disbursements of counsel
(including allocated costs of internal counsel) incurred in connection with any
such investigation, litigation or other proceeding and the claims of any third
parties, including any assignees; provided, that the Buyer shall not have the
right to be indemnified hereunder for its own gross negligence or willful
misconduct.

(ii) All amounts due under this Section 21.1 shall be payable promptly after
written demand therefor. A certificate of the Buyer setting forth in reasonable
detail any amount or amounts which the Buyer is entitled to receive pursuant to
this Section 21.1 shall be delivered to the Seller and shall be conclusive and
binding absent manifest error. If and to the extent that the obligations of the
Seller under this Section 21.1 are unenforceable for any reason, the Seller
hereby agrees to make the maximum contribution to the payment and satisfaction
of such obligations that is permissible under applicable Law.

 

21-1

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

22 Single Agreement

The Buyer and the Seller acknowledge that, and have entered into this Agreement
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.

 

22-1

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

23 Participation; Assignment

23.1 Participation; Assignment.

(i) Participations. The Buyer may, without notice to or consent from the Seller
or any other Person, sell participations in all or any part of any Transactions
entered into by the Buyer or the Buyer’s Commitment or any other interest of the
Buyer in the Facility Papers to any Person (each, a “Participant”), in which
event the Participant shall not have any direct rights against the Seller or the
Purchased Loans under the Facility Papers or any other document delivered in
connection herewith (Participant’s rights against the Buyer in respect of such
participation to be those set forth in the agreement executed by the Buyer in
favor of Participant relating thereto).

(ii) Assignments. The Buyer may at any time and from time to time sell, assign,
transfer, pledge or convey all or any portion of its rights and/or delegate all
or any portion of its obligations under this Agreement and the other Facility
Papers (including, without limitation, all Transactions entered into by the
Buyer to fund specific Purchased Loans or the Buyer’s Commitment or any other
interest of the Buyer in the Facility Papers) to any Person, including, without
limitation, Affiliates of the Buyer (each, an “Assignee”), without notice to or
consent from the Seller or any other Person, in all cases subject to the
Assignee’s obligation to convey the Purchased Loans (and not substitutes
thereof) on the applicable Repurchase Date. The Buyer and the Seller hereby
agree that upon any such sale, assignment, transfer, pledge, conveyance or
delegation by the Buyer, the Assignee shall have, to the extent of such sale,
assignment, transfer, pledge or conveyance, the same rights and benefits as it
would have if it were the Buyer under the Facility Papers; provided, that the
Seller shall not have any duty to recognize the Assignee absent receipt by it of
notice of such sale, assignment, transfer, pledge, conveyance or delegation.

(iii) The Buyer may at any time pledge all or any portion of its rights under
the Facility Papers to a Federal Reserve Bank. No such pledge shall release the
Buyer from its obligations hereunder.

(iv) In connection with any such sale, assignment, transfer, pledge or
conveyance permitted hereunder, the Seller authorizes the Buyer to disclose to
any Assignee or Participant and to any prospective Assignee or Participant, any
and all information in the Buyer’s possession concerning the Seller, the
Transactions or the Purchased Loans.

 

23-1

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

24 Notices and Other Communications

All notices, demands, consents, requests and other communications required or
permitted to be given or made hereunder (collectively, “Notices”), except, as
otherwise specifically provided in this Agreement, shall be in writing and shall
be either (a) delivered in person, (b) mailed, by certified, registered or
express mail, postage prepaid, addressed to the respective parties hereto at
their respective addresses specified below, (c) sent in a prepaid overnight
delivery envelope via a nationally-recognized courier service (such as Federal
Express, United Parcel Service or DHL Worldwide Express) that provides weekday
next-Banking Day delivery service to the addressee’s location, (d) faxed to
their respective fax numbers (with a paper copy mailed the same day as
aforesaid) as hereinafter set forth, or (e) delivered electronically to an email
address hereinafter set forth; provided, that any party may change its address
or other contact information for notice by designating such party’s new address
or other contact information in a Notice to the sending party given at least
five (5) Banking Days before it shall become effective. All Notices shall be
conclusively deemed to have been properly given or served when received in
person, regardless of how sent. Regardless of when received, all Notices shall
be conclusively deemed to have been properly given or served if addressed in
accordance with this Section 24 and (1) if mailed, on the third (3rd) Banking
Day after being deposited in the mails, or (2) if sent by nationally-recognized
courier service, on the next Banking Day or (3) if faxed or emailed before the
close of business at the recipient’s location on a Banking Day, when faxed or
emailed, or if faxed or emailed after the close of business at the recipient’s
location or on a day that is not a Banking Day, on the next Banking Day
thereafter — to the fax number or email address set forth below (provided, that,
if a fax is sent, a paper copy is mailed on the same day as aforesaid),
provided, that if any such faxed or emailed notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Banking Day for the recipient:

If to the Seller:

The name and address, telephone, facsimile number

and email address of Seller and contact person and title

hereof as set forth

in Appendix 1, Item 24.1

If to the Buyer:

The name and address, telephone, facsimile number

and email address of Buyer and contact person and title

hereof as set forth

in Appendix 1, Item 24.2

with an additional copy to:

The name and address, telephone, facsimile number

and email address of Buyer and contact person and title

hereof as set forth

in Appendix 1, Item 24.3

 

24-1

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

25 Further Assurances

At any time and from time to time, at the sole expense of the Seller, the Seller
shall promptly provide such further reasonable assurances, documents and
agreements and undertake such actions as the Buyer may reasonably request in
order to effect the purposes of this Agreement, including the assignment,
conveyance and transfer of all right, title and interest of each Purchased Loan
from the Seller to the Buyer, or to otherwise obtain or preserve the benefits or
rights granted under this Agreement.

 

25-1

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

26 Buyer as Attorney-in-Fact

The Buyer is hereby appointed the attorney-in-fact of the Seller for the purpose
of carrying out the provisions of this Agreement and taking any action and
executing any instruments or documents that the Buyer may deem reasonably
necessary or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest, although the Buyer
agrees not to exercise its rights under this power of attorney unless, in its
opinion or the opinion of its legal counsel, a Potential Default or an Event of
Default has occurred. Without limiting the generality of the foregoing, but
subject to Section 20.3, the Buyer shall have the right and power during the
occurrence and continuation of any Event of Default to receive, endorse, collect
and control all checks or instruments made payable to the order of the Seller
and all other forms of payment to the Seller that represent any payment on
account of the principal of or interest on or proceeds from any of the Purchased
Loans and to give full discharge for the same. Notwithstanding anything
contained herein, in no event shall the Buyer be required to make any
presentment, demand or protest, or give any notice, and the Buyer need not take
any action to preserve any rights against any prior party or any other Person in
connection with the Obligations or with respect to the Purchased Loans.

 

26-1

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

27 Payments by Wire Transfers

27.1 Wires to the Seller. Any amounts to be transferred by the Buyer to the
Seller hereunder shall be sent by journal entry (or wire transfer) in
immediately available funds to the Loan Funding Account as follows:

Bank: Branch Banking and Trust Company

ABA No.: 053101121

For Credit to: The Seller whose name is set forth on Appendix 1, Item 4.4.1

Loan Funding Account No.: Such account number set forth in Appendix 1,
Item 2.2.10

27.2 Wires to the Buyer. Any amounts to be transferred by the Seller to the
Buyer hereunder shall be sent by wire transfer in immediately available funds to
the Investor Funding Account as follows (provided that the Buyer may change the
wire transfer instructions from time to time by written notice to the Seller):

Branch Banking and Trust Company

ABA No.: 053101121

Attention: Mortgage Warehouse Lending Division

Phone: (407) 835-6700

For Credit to: The Seller whose name is set forth on Appendix 1, Item 4.4.1

Investor Funding Account No.: Such account number set forth in Appendix 1,
Item 2.2.9

 

27-1

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

28 Entire Agreement; Severability; Inconsistencies

This Agreement supersedes any existing agreements between the parties containing
general terms and conditions for repurchase transactions concerning the
Purchased Loans. This Agreement may not be amended, restated, modified or
supplemented unless such amendment, restatement, modification or supplement is
set forth in a writing signed by all of the parties hereto; provided, however,
that the Seller expressly acknowledges and agrees that the definition of
Eligible Loans as set forth in Schedule EL and the definition of Approved Loan
Types (including the underlying definitions for Mortgage Loans of a specific
Approved Loan Type) (e.g., the definitions of Conforming Mortgage Loan, Wet
Mortgage Loan, Aged Mortgage Loan, Jumbo Mortgage Loan, and/or BB&T
Correspondent Mortgage Loan, as applicable, as set forth in Annexes A through E,
respectively) may be amended, restated, modified or supplemented by the Buyer,
in its sole and absolute discretion, without any further act or consent on the
part of the Seller or any other Person, upon delivery of an Eligibility Change
Notice to the Seller. Each provision and agreement herein shall be treated as
separate and independent from any other provision or agreement herein and shall
be enforceable notwithstanding the unenforceability of any such other provision
or agreement. If there is any conflict or inconsistency between any of the terms
or provisions of this Agreement and any of the other Facility Papers, this
Agreement shall govern and control. If there is any conflict between any
provision of this Agreement and any later supplement, amendment, restatement or
replacement of it, then the latter shall govern and control.

 

28-1

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

29 Benefit of the Agreement; Termination

29.1 Benefit of the Agreement. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided, that the Seller may not assign or transfer any of
its interest or delegate any of its obligations under the Facility Papers
without the prior written consent of the Buyer and any such assignment or
transfer without the prior written consent of the Buyer shall be null and void.

29.2 Remedies Exception. Section 29.1 shall not preclude a party from assigning,
charging or otherwise dealing with all or any part of its interest in any sum
payable to it under Article 19.

29.3 Agreement Commencement; Termination. This Agreement shall commence and
become effective as of the Effective Date; provided, that each of the conditions
precedent in Section 15.1(i) has been satisfied. Subject to payment of all
Obligations, this Agreement and all Open Transactions hereunder shall terminate,
automatically and without any requirement for notice, on the Termination Date;
provided, that this Agreement and any Open Transactions may be extended in
writing by the Buyer, in its sole and absolute discretion.

 

29-1

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

30 Counterparts

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

 

30-1

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

31 Governing Law, Jurisdiction and Venue

31.1 Governing Law, Jurisdiction and Venue. This Agreement and the other
Facility Papers shall be governed by and construed in accordance with the laws
of the State of Florida (without reference to its conflicts of laws principles)
and the United States of America from time to time in effect. Any legal action
with respect to this Agreement or the other Facility Papers shall be brought in
the United States District Court for the Middle District of Florida or the
Southern District of Florida, or the state courts located in Orange County,
Florida, or Miami-Dade County, Florida, and the Seller hereby accepts and
unconditionally submits to the jurisdiction of such courts. The Seller hereby
waives any objection to the laying of venue based on the grounds of inconvenient
forum with respect thereto.

31.2 Arbitration. IN THE EVENT ANY DISPUTE SHOULD ARISE UNDER THIS AGREEMENT,
THE REPURCHASE FACILITY, ANY OF THE FACILITY PAPERS, OR ANY OTHER ASPECT OF ANY
TRANSACTION BETWEEN THE BUYER AND THE SELLER, WHETHER OR NOT SPECIFICALLY
RELATING TO ANY OF THE FACILITY PAPERS, SAID DISPUTE OR ANY PORTION THEREOF
WILL, AT THE BUYER’S SOLE ELECTION, AS APPLICABLE, BE RESOLVED THROUGH BINDING
ARBITRATION IN ORANGE COUNTY, FLORIDA OR MIAMI-DADE COUNTY, FLORIDA, AND IN
ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION.

 

31-1

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

32 Waiver of Jury Trial

EACH OF THE SELLER AND THE BUYER HEREBY (I) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (II) WAIVES ANY RIGHT
TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND
VOLUNTARILY, BY EACH OF THE SELLER AND THE BUYER, AND THIS WAIVER IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT OF A
JURY TRIAL WOULD OTHERWISE ACCRUE. THE BUYER IS HEREBY AUTHORIZED AND REQUESTED
TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT
MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF THE
FOREGOING WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, THE SELLER HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE BUYER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, TO ANY STOCKHOLDER, DIRECTOR, OFFICER OR REPRESENTATIVE
OF THE SELLER THAT THE BUYER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION.

 

32-1

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

33 Relationship of the Parties

This Agreement provides for the sale by the Seller and the purchase by the Buyer
of Eligible Loans and the obligation of the Seller to repurchase them upon
termination of each Transaction. The relationship between the Seller and the
Buyer is limited to that of seller and purchaser on the one hand and purchaser
and reseller on the other. The provisions in this Agreement and the other
Facility Papers for compliance with financial covenants and delivery of
financial statements are intended solely for the benefit of the Buyer including
the Buyer’s interest in assuring repurchase of Purchased Loans at the
termination of each Transaction, and nothing contained in this Agreement or any
of the other Facility Papers shall be construed as permitting or obligating the
Buyer to act as a financial or business advisor or consultant to the Seller, as
permitting or obligating the Buyer to control the Seller or to conduct the
Seller’s operations, as creating any fiduciary obligation on the part of the
Buyer to the Seller, or as creating any joint venture, agency or other
relationship between the parties other than as explicitly and specifically
stated in this Agreement. The Seller acknowledges that it has had the
opportunity to obtain the advice of experienced counsel of its own choosing in
connection with the negotiation and execution of this Agreement and the other
Facility Papers and to obtain the advice of such counsel with respect to all
matters contained in the Facility Papers including the provision for waiver of
trial by jury. The Seller further acknowledges that it is experienced with
respect to financial and credit matters and has made its own independent
decisions to apply to the Buyer to enter into this Agreement, and to execute and
deliver this Agreement and the other Facility Papers.

 

33-1

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

34 No Waivers, Etc.

No express or implied waiver of any Event of Default by the Buyer shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder. Except as otherwise expressly provided herein, no
modification or waiver of any provision of this Agreement and no consent by any
party to a departure herefrom shall be effective unless and until such shall be
in writing and duly executed by the Seller and the Buyer.

 

34-1

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

35 Intent

35.1 Transactions are Repurchase Agreements, Master Netting Agreements and
Securities Contracts. The parties intend and acknowledge that each Transaction
is a “repurchase agreement” and a “master netting agreement” as each such term
is defined in section 101 of the Bankruptcy Code (except insofar as the type of
Eligible Loans subject to such Transaction or the term of such Transaction would
render such definition inapplicable), and a “securities contract” as that term
is defined in section 741 of the Bankruptcy Code (except insofar as the type of
assets subject to such Transaction would render such definition inapplicable).
The Buyer and the Seller agree that it is their mutual intent that the
Transactions executed under this Agreement shall qualify for safe harbor
treatment provided by the above referenced sections of the Bankruptcy Code and,
to that end, the Seller agrees that, from time to time upon the written request
of the Buyer, the Seller will prepare, execute and deliver any supplements,
modifications, addendums or other documents as may be necessary or desirable, in
the Buyer’s good faith discretion, in order to cause this Agreement and the
Transactions contemplated hereby to qualify as, comply with the provisions of,
or otherwise satisfy, maintain or preserve the criteria for safe harbor
treatment under such sections of the Bankruptcy Code; provided, however, that
the Buyer’s failure to request, or the Buyer’s or the Seller’s failure to
execute, such supplements, modifications, addendums or other documents does not
in any way alter or otherwise change the intention of the parties hereto that
this Agreement and the Transactions hereunder are safe harbored under the
Bankruptcy Code. If, notwithstanding the foregoing, the Buyer’s enforcement of
any right or remedy is stayed by operation of the Bankruptcy Code, the Seller
hereby agrees, that, in the event a proceeding under Title 11 of the Bankruptcy
Code, either voluntary or involuntary, is commenced by or against the Seller,
that the Seller will not oppose or object to any motion or other pleading by the
Buyer seeking relief from the automatic stay imposed by 11 U.S.C. § 362 to
enforce any right or remedy the Buyer has with respect to the Purchased Loans
and the funds related thereto, whether under this Agreement or otherwise. In
addition, the Seller hereby consents to and agrees that the Seller will not
oppose any motions that may be filed by the Buyer regarding possession, control
or servicing of the Purchased Loans including, but not limited to, a motion by
the Buyer seeking an order (a) directing turnover and/or disbursement of
Purchased Loans and the funds related thereto to the Buyer, and (b) directing
continued performance by the Seller of the terms of this Agreement.

35.2 Contractual Rights, Etc. The Buyer’s right to liquidate Eligible Loans
delivered to it in connection with Transactions hereunder or to exercise any
other remedies pursuant to Section 19, is a contractual right to liquidate,
terminate or accelerate such Transaction as described in sections 362(b)(6) and
(7), 546(e) and (f), 555, 559 and 561 of the Bankruptcy Code.

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

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

35.5 Security Interest in Certain Assets Which are Deemed Part of a Purchased
Loan. To the extent that a court of competent jurisdiction determines that
certain assets which are deemed part of a Purchased Loan do not fall within the
definition of a “repurchase agreement” under sections 101(47)(A)(i) and/or
(iv) of the Bankruptcy Code or a “securities contract” under sections
741(7)(A)(i) or (viii) of the Bankruptcy Code (the “Additional Repurchase
Assets”), then the parties hereto agree that to secure payment of its
Obligations hereunder the Seller shall have pledged to the Buyer, and granted to
the Buyer, a security interest in and a Lien on, Seller’s right, title and
interest in and to all of such Additional Repurchase Assets and in any products
and proceeds related thereto (collectively, the “Additional Repurchase
Collateral”), whether now owned or hereafter acquired, subject to no other Liens
except for Permitted Liens, and, only with respect to such Additional Repurchase
Collateral, this Agreement shall constitute a security agreement or arrangement
or other credit enhancement related to a repurchase agreement

 

35-1

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

as defined under section 101(47)(A)(v) of the Bankruptcy Code and/or a security
agreement or arrangement or other credit enhancement related to a securities
contract as defined under section 741(7)(A)(xi) of the Bankruptcy Code and this
Agreement shall create a continuing security interest in the Additional
Repurchase Collateral which shall remain in full force and effect until full and
final payment of all Obligations. The Seller agrees to do such things as
applicable Law requires to maintain the security interest of the Buyer so
granted in all of the Additional Repurchase Collateral that are the subject
matter of such court determination as a perfected first priority Lien at all
times and to preserve and protect the Additional Repurchase Collateral. The
Seller hereby authorizes the Buyer to file any financing or continuation
statements under the applicable UCC to perfect or continue such security
interest in any and all applicable filing offices. The Seller shall pay all
customary fees and expenses associated with perfecting such security interest
including the costs of filing financing and continuation statements under the
UCC as and when required by the Buyer, in its reasonable discretion. In addition
to all other rights and remedies granted to the Buyer in this Agreement or in
any other Facility Paper or by applicable law, the Buyer shall have all of the
rights and remedies of a secured party under the UCC (whether or not the UCC
applies to the affected Additional Repurchase Collateral). The Seller shall be
liable for all reasonable expenses of retaking, holding, preparing for sale, or
the like, and all reasonable attorneys’ fees (including without limitation
attorney’s fees for services in a bankruptcy or appeal), legal expenses, and
other costs and expenses incurred by the Buyer in connection with the collection
of the Obligations and the enforcement of the Buyer’s rights under this
Agreement. The Seller shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Additional Repurchase Collateral applied to
the Obligations are insufficient to pay the Obligations in full. The Buyer may
apply the Additional Repurchase Collateral against the Obligations as provided
in this Agreement and the other Facility Papers. The Seller waives all rights of
marshalling, valuation, and appraisal in respect of the Collateral. Any cash
held by the Buyer as Additional Repurchase Collateral and all cash proceeds
received by the Buyer in respect of any sale of, collection from, or other
realization upon all or any part of the Additional Repurchase Collateral may, in
the good faith discretion of the Buyer, be held by the Buyer in a separate
reserve account in the name of the Buyer for the benefit of the Seller as
collateral for, and then or at any time thereafter applied in whole or in part
against, the Obligations in the order permitted by this Agreement and the other
Facility Papers. Any surplus of such cash or cash proceeds and interest accrued
thereon, if any, held by the Buyer and remaining after payment in full of all
the Obligations shall be promptly paid over to the Seller or to whomsoever may
be lawfully entitled to receive such surplus; provided, that the Buyer shall
have no obligation to invest or otherwise pay interest on any amounts held by it
in connection with or pursuant to this Agreement. The provisions of this
Section 35.5 shall not amend or modify or conflict or be inconsistent with the
intent of the parties as otherwise expressed in the Agreement, including without
limitation Articles 1, 11 and 35.

35.6 Tax and Accounting Treatment. Each party to this Agreement acknowledges
that it is its intent for (i) U.S. federal, state and local income and franchise
tax purposes to treat each Transaction as indebtedness of the Seller that is
secured by the Purchased Loans and that the Purchased Loans are owned by the
Seller in the absence of an Event of Default by the Seller, and (ii) accounting
purposes to treat each Transaction as a secured financing. All parties to this
Agreement agree to such treatment and agree to take no action inconsistent with
these treatments, unless required by law.

 

35-2

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

36 Disclosure Relating to Certain Federal Protections

The parties hereto acknowledge that they have been, advised that:

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

36.2 SIPA Does Not Protect Government Securities Broker or Dealer Counterparty.
In the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Transaction hereunder.

36.3 Transaction Funds Are Not Insured Deposits. In the case of Transactions in
which one of the parties is a financial institution, funds held by such
financial institution pursuant to a Transaction hereunder are not a deposit and
therefore are not insured by the Federal Deposit Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable. Nothing in the
foregoing sentence shall be construed as a waiver by any party to this Agreement
of any deposit insurance coverage that may be applicable to such party’s deposit
accounts at any FDIC-insured or NCUA-insured financial institution.

 

36-1

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

37 USA Patriot Act Notification

The Buyer hereby notifies the Seller that, pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), the Buyer is required to obtain, verify and record information that
identifies the Seller, including the Seller’s name and address and other
information, that will allow them to identify the Seller in accordance with said
Act.

 

37-1

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

38 No Consequential Damages

WITH REGARD TO ANY ACTION, COUNTERCLAIM OR PROCEEDING UNDER THIS AGREEMENT,
UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER OR NOT SUCH
DAMAGES ARE CAUSED BY THE FAULT OR NEGLIGENCE OF THE FIRST PARTY AND WHETHER OR
NOT THE FIRST PARTY IS NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

 

38-1

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

39 Survival

All covenants, agreements, representations and warranties made by the Seller
herein and in any certificate delivered pursuant hereto shall survive the
entering into the Transactions regardless of any investigation made by the Buyer
and of the Buyer’s access to any information and shall continue in full force
and effect so long as any Obligation is outstanding and unpaid. In addition to
the provisions of Article 8, the Seller’s obligations under Section 21.1 and any
other indemnification obligations of the Seller or other obligations that so
provide shall survive the termination of this Agreement for any reason
whatsoever and payment of the Obligations.

 

39-1

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

40 Security Interest in the Cash Collateral Account

Upon the establishment of any Cash Collateral Account, the provisions of this
Article 40 shall apply:

Notwithstanding anything to the contrary herein, to secure payment of its
Obligations hereunder the Seller hereby pledges to the Buyer, and grants to the
Buyer, a security interest in and a Lien on, all of the Seller’s right, title
and interest in and to and under the Cash Collateral Account and any and all
cash and other sums at any time on deposit therein and all products and proceeds
thereof or related thereto (collectively, the “Other Assets Collateral”),
whether now existing or hereafter arising, subject to no other Liens, and, only
with respect to such Other Assets Collateral, this Agreement shall constitute a
security agreement or arrangement or other credit enhancement related to a
repurchase agreement as defined under section 101(47)(A)(v) of the Bankruptcy
Code and/or a security agreement or arrangement or other credit enhancement
related to a securities contract as defined under section 741(7)(A)(xi) of the
Bankruptcy Code and this Agreement shall create a continuing security interest
in the Other Assets Collateral which shall remain in full force and effect until
full and final payment of all Obligations. The Seller agrees to do such things
as applicable Law requires to maintain the security interest of the Buyer so
granted in the Other Assets Collateral as a perfected first priority Lien at all
times and to preserve and protect the Other Assets Collateral. The Seller hereby
authorizes the Buyer to file any financing or continuation statements under the
applicable UCC to perfect or continue the perfection of such security interest
in any and all applicable filing offices. The Seller shall pay all customary
fees and expenses associated with perfecting such security interest including
the costs of filing financing and continuation statements under the UCC as and
when required by the Buyer, in its reasonable discretion. In addition to all
other rights and remedies granted to the Buyer in this Agreement or in any other
Facility Paper or by applicable Law, the Buyer shall have all of the rights and
remedies of a secured party under the UCC (whether or not the UCC applies to the
Other Assets Collateral). The Seller shall be liable for all reasonable expenses
of retaking, holding, preparing for sale, or the like, and all reasonable
attorneys’ fees (including without limitation attorney’s fees for services in a
bankruptcy or appeal), legal expenses, and other costs and expenses incurred by
the Buyer in connection with the collection of the Obligations and the
enforcement of the Buyer’s rights under this Agreement. The Seller shall remain
liable for any deficiency if the proceeds of any sale or other disposition of
the Other Assets Collateral applied to the Obligations are insufficient to pay
the Obligations in full. The Buyer may apply the Other Assets Collateral against
the Obligations as provided in this Agreement and the other Facility Papers. The
Seller waives all rights of marshalling, valuation, and appraisal in respect of
the Other Assets Collateral. Any cash held by the Buyer as Other Assets
Collateral (including, without limitation, cash held in the Cash Collateral
Account) and all cash proceeds received by the Buyer in respect of any sale of,
collection from, or other realization upon all or any part of the Buyer’s
collateral under this Agreement may, in the good faith discretion of the Buyer,
be held by the Buyer in a separate reserve account (including, without
limitation, the Cash Collateral Account) in the name of the Buyer for the
benefit of the Seller as collateral for, and then or at any time thereafter
applied in whole or in part against, the Obligations in the order permitted by
this Agreement and the other Facility Papers. Any surplus of such cash or cash
proceeds and interest accrued thereon, if any, held by the Buyer and remaining
after payment in full of all the Obligations shall be promptly paid over to the
Seller or to whomsoever may be lawfully entitled to receive such surplus;
provided, that the Buyer shall have no obligation to invest or otherwise pay
interest on any amounts held by it in connection with or pursuant to this
Agreement. The provisions of this Article 40 shall not amend or modify or
conflict or be inconsistent with the intent of the parties as otherwise
expressed in the Agreement, including without limitation Articles 1, 11 and 35.

[The remainder of this page is intentionally blank; signature pages follow]

 

40-1

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the first date set forth in the Preamble.

 

INSPIRE HOME LOANS INC.,

as the Seller

By:   /s/ James Palda Name:   James Palda Title:   President

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

BRANCH BANKING AND TRUST COMPANY, as the Buyer By:   /s/ Daryl Hardy Name:  
Daryl Hardy Title:   VP

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

APPENDIX 1

TO MASTER REPURCHASE AGREEMENT

(Effective as of the Effective Date)

MRA Cross-Referenced Data

 

    

Item #

  

Data Input

    Administrative Account Number    2.2.1    Not applicable as of the Effective
Date Authorized Seller Representatives    2.2.2    Name   Title       James
Palda   President       Lauren Ingersoll   Secretary       Cherie Edborg  
Treasurer Cash Collateral Account Number    2.2.3      Certificating Custodian
   2.2.4    Not applicable as of the Effective Date
Change of Control: Name(s) of Key Officers    2.2.5    James Palda Effective
Date    2.2.6    April 10, 2017 Guarantor(s) Names    2.2.7    Not applicable as
of the Effective Date Name & Date of Guaranty Agreement    2.2.8    Not
applicable as of the Effective Date Investor Funding Account Number    2.2.9   
Loan Funding Account Number    2.2.10    Operating Account Number    2.2.11   
Purchase Request Cutoff Time    4.1.1    Noon, except such cutoff time shall be
4:00 p.m. if the Purchase Request is Electronically Submitted Name of Seller   
4.4.1    Inspire Home Loans Inc. Subsidiaries    16.1.1    The Subsidiaries are
as follows:

 

APPENDIX 1-1

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

Subsidiary

  

Place of organization

  

The Seller’s percentage

of capital stock or

equity ownership

Operating Subsidiaries

  

NONE

   N/A    N/A

Single Purpose Finance Subsidiaries

  

NONE

   N/A    N/A

 

Ownership    16.1.2    The ownership of Seller is as follows:

 

Owner(s) of Seller

   Owner’s Percentage of Capital Stock
or Equity Ownership  

Parkway Financial Group*

     100 % 

 

* Parkway Financial Group is owned 100% by Century Communities, Inc.

 

Agency Approvals    16.1.3    FHA Principal Place of Business    16.1.4   
Principal Executive Office:       19600 Fairchild Road, Suite 200       Irvine,
CA 92612       Records concerning Purchased Loans at:       19600 Fairchild
Road, Suite 200       Irvine, CA 92612       The Seller’s Organizational Number:
      6178326 Name Changes &Trade Names    16.1.5    None Personal Financial
Statements    17.1.1    Not applicable Tax Returns    17.1.2    Not applicable

 

APPENDIX 1-2

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

Servicing Valuations and Reports    17.1.3    Not applicable as of the effective
date of this Appendix 1; provided, however, that if the Seller begins to retain
mortgage servicing rights after such effective date, the Buyer shall have the
right to require periodic servicing valuations, delinquency reports, and related
information. Servicing Valuation/Report Cycles    17.1.4    Not applicable as of
the effective date of this Appendix 1; provided, however, that if the Seller
begins to retain mortgage servicing rights after such effective date, the Buyer
shall have the right to determine the cycles on which the Seller must deliver
periodic servicing valuations, delinquency reports, and related information.
Seller’s Fiscal Year-End    17.1.5    December 31 Post-Closing Deliverables   
17.17.1    None State of Organization    18.15.1    Delaware Seller’s Name,
Address, Telephone, Facsimile Number, Email Address and Name and Title of
Contact Person    24.1   

Inspire Home Loans Inc.

19600 Fairchild Road, Suite 200

Irvine, CA 92612

      Attention: James Palda, President       Telephone: (949) 420-9766      
Facsimile: (702) 924-5779       Email: jim.palda@inspirehomeloans.com Buyer’s
Name, Address, Telephone,    24.2    Branch Banking and Trust Company Facsimile
Number, Email Address       Mortgage Warehouse Lending Division and Name and
Title of Contact Person       102 W. Pineloch Avenue, Suite 18       Orlando, FL
32806      

Attention: Julie S. Glass, Senior Vice

                    President/Managing Director

      Telephone: (407) 835-6700       Facsimile: (407) 812-9184       Email:
jglass@bbandt.com       with an additional copy to:       Branch Banking and
Trust Company       Mortgage Warehouse Lending Division       1425 Seminole
Trail, 3rd Floor       Charlottesville, VA 22901       Attention: Samuel W.
Bryan, Senior Vice President       Telephone: (434) 422-9613       Facsimile:
(434) 973-9237       Email: sbryan@bbandt.com

 

APPENDIX 1-3

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

Buyer’s Attorney’s Name, Address, Telephone, Facsimile Number, and Email Address
and Name and Title of Contact Person    24.3       

Bradley Arant Boult Cummings LLP

One Federal Place

1819 Fifth Avenue North

      Birmingham, AL 35203       Attention: L. Susan Doss, Esq.       Telephone:
(205) 521-8635       Facsimile: (205) 488-6635       Email: sdoss@bradley.com

 

APPENDIX 1-4

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

APPENDIX 2

TO MASTER REPURCHASE AGREEMENT

(Effective as of the Effective Date)

MRA Cross-Referenced Data

 

    

Item #

  

Data Input

Approved Loan Types    2.2.2.1   

•    Conforming Mortgage Loans (as defined in Annex A)

     

•    Wet Mortgage Loans (as defined in Annex B)

     

•    Aged Mortgage Loans (as defined in Annex C)

     

•    Jumbo Mortgage Loans (as defined in Annex D)

     

•    BB&T Correspondent Mortgage Loans (as defined in Annex E)

Approved Sublimits    2.2.2.2   

•    Conforming Mortgage Loans Sublimit

     

•    Wet Mortgage Loans Sublimit

     

•    Aged Mortgage Loans Sublimit

     

•    Jumbo Mortgage Loans Sublimit

     

•    BB&T Correspondent Mortgage Loan Sublimit

Buyer’s Margin Percentage, Purchase

Value and Repurchase Period

   2.2.2.3   

The Buyer’s Margin Percentages, Purchase

     

Values and standard Repurchase Periods are as set forth in the chart below:

 

Type of Mortgage

Loan

  

Buyer’s Margin Percentage

  

Purchase Value

  

Standard

Repurchase Period

Conforming Mortgage Loans    98%    (A) the Buyer’s Margin Percentage for
Conforming Mortgage Loans multiplied by (B) the lesser of (1) the purchase price
to be paid by an Approved Investor in the Investor Commitment applicable to such
Mortgage Loan, or (2) the Principal Balance of such Mortgage Loan    sixty (60)
days after the applicable Purchase Date Wet Mortgage Loans    The percentage
applicable to the underlying Type of Mortgage Loan funded by the relevant
Transaction    The amount equal to the Purchase Value applicable to the
underlying Type of Mortgage Loan funded by the relevant Transaction    seven (7)
days after the applicable Purchase Date

 

APPENDIX 2-1

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

Aged Mortgage Loans    (A) if such Mortgage Loan was originally a Conforming
Mortgage Loan or a BB&T Correspondent Mortgage Loan that also met the
definitional requirements of a Conforming Mortgage Loan, 90%, except 85% if the
Cumulative Loan-to-Value Ratio of such Mortgage Loan is more than 100% and such
Mortgage Loan is a Government Sponsored Loan; or (B) if such Mortgage Loan was
originally a Jumbo Mortgage Loan or a BB&T Correspondent Mortgage Loan that also
met the definitional requirements of a Jumbo Mortgage Loan, 90%, except 85% if
the Cumulative Loan-to-Value Ratio of such Mortgage Loan is more than 95%    (A)
the Buyer’s Margin Percentage for Aged Mortgage Loans multiplied by (B) the
lesser of (1) the outstanding Purchase Price of such Mortgage Loan immediately
prior to the transfer of such Mortgage Loan to the Aged Mortgage Loans Sublimit
from the applicable other Approved Sublimit, or (2) if an Investor Commitment
applies to such Aged Mortgage Loan, the purchase price to be paid by an Approved
Investor for such Aged Mortgage Loan under such Investor Commitment    thirty
(30) days after the applicable Transfer Date Jumbo Mortgage Loans    97%, except
90% if the Cumulative Loan-to-Value Ratio is more than 95%    (A) the Buyer’s
Margin Percentage for Jumbo Mortgage Loans multiplied by (B) the lesser of (1)
the purchase price to be paid by an Approved Investor in the Investor Commitment
applicable to such Mortgage Loan, or (2) the Principal Balance of such Mortgage
Loan    sixty (60) days after the applicable Purchase Date BB&T Correspondent
Mortgage Loans    (A) if such Mortgage Loan also meets the definitional
requirements of a Conforming Mortgage Loan, 98%; or (B) if such Mortgage Loan
also meets the definitional requirements of a Jumbo Mortgage Loan, 97%, except
90% if the Cumulative Loan-to-Value Ratio is more than 95%    (A) the Buyer’s
Margin Percentage for BB&T Correspondent Mortgage Loans multiplied by (B) the
lesser of (1) the purchase price to be paid by the Buyer in the Investor
Commitment applicable to such Mortgage Loan, or (2) the Principal Balance of
such Mortgage Loan    sixty (60) days after the applicable Purchase Date

 

Commitment Amount    2.2.2.4    $25,000,000.00 Termination Date    2.2.2.5   
April 9, 2018

Applicable Index & Index Reset Period and

Applicable Margins

   2.2.3.1    The Applicable Indexes (and reset periods) and Applicable Margins
are as set forth in the chart below:

 

APPENDIX 2-2

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

Type of Mortgage Loan

  

Applicable Index &

Index Reset Period

  

Applicable Margin (or, with respect to Past
Due Mortgage Loans,

the Past Due Margin)

Conforming Mortgage Loans, Wet Mortgage Loans, Jumbo Mortgage Loans    LIBOR,
floating daily    2.625% (262.5 basis points) Aged Mortgage Loans    Prime Rate,
floating daily    1.00% (100 basis points) BB&T Correspondent Mortgage Loans   
LIBOR, floating daily    2.375% (237.5 basis points) Extended Wet Mortgage Loans
and Past Due Mortgage Loans    Prime Rate, floating daily    3.00% (300 basis
points)

 

LIBOR Floor Rate    2.2.3.2            0.00% (zero basis points).
Notwithstanding anything in this Agreement to the contrary, the LIBOR Floor Rate
shall never be less than zero percent (0.0%). Prime Floor Rate   
2.2.3.3            5.50% (550 basis points) Sublimit Maximum Amounts   
2.5.2.1            The maximum amount of each Approved Sublimit is as set forth
in the table below:

 

Sublimit

  

Maximum Amount is the lesser of (A) or (B)

  

Dollar Amount (A)

  

Percentage of Commitment (B)

Conforming Mortgage Loans Sublimit

   $25,000,000.00    100%

Wet Mortgage Loans Sublimit

  

$15,000,000.00

on the first five and last five Banking Days of each month, and

$12,500,000.00

at all other times

  

60%

on the first five and last

five Banking Days of each

month, and

50%

at all other times

Aged Mortgage Loans Sublimit

   $1,250,000.00    5%

Jumbo Mortgage Loans Sublimit

   $3,750,000.00    15%

BB&T Correspondent Mortgage Loans Sublimit

   $12,500,000.00    50%

 

APPENDIX 2-3

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

Collateral Processing Fee

   2.10.1.1    $45.00 per Mortgage Loan

Endorsement Fee

   2.10.1.2    $10.00

Non-Usage Average Daily Availability Rate

   2.10.1.3    fifty percent (50%)**

Non-Usage Fee Rate

   2.10.1.4    0.125% (12.50 basis points)**

 

** Notwithstanding the foregoing, the Buyer waives the Non-Usage Fee for each
calendar quarter through and including the calendar quarter ending on
September 30, 2017. The Buyer will first have the right to charge the Non-Usage
Fee (if the Non-Usage Fee is then due and payable in accordance with this
Agreement) with respect to the calendar quarter ending on December 31, 2017.

 

Reinstatement Fee

   2.10.1.5    $5.00

Wire Transfer Fee

   2.10.1.6    $10.00 per outgoing wire transfer

Account Maintenance Fee

   2.10.1.7    Not applicable

Other Fees

   2.10.1.8    Not applicable

Date of Latest Audited Financial Statements

   2.16.1.1    December 31, 2016

Date of Latest Unaudited Financial Statements

   2.16.1.2    January 31, 2017

Maximum Liability Amount

   2.17.1.1    $500,000.00

Beginning Date of Minimum Balance

   2.17.14.1    The Effective Date

Requirement (Cash Collateral Account)

     

Minimum Balance (Cash Collateral Account)

   2.17.14.2    The greater of (a) $750,000.00 or (b) three percent (3%) of the
Commitment amount

Intercreditor Agreements

   2.17.16.1    None in effect as of the Effective Date

Other Approved Facilities

   2.18.2    None in place as of the Effective Date

 

APPENDIX 2-4

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

Adjusted Tangible Net Worth

   2.18.19.1    $4,000,000.00

Leverage Ratio

   2.18.19.2    12.0:1.0

Current Ratio

   2.18.19.3    1.0:1.0

Minimum Liquidity Amount

   2.18.19.4    $1,500,000.00

Net Income Testing Period

   2.18.19.5    for the previous calendar quarter, tested quarterly as at the
end of each calendar quarter***

Net Income Amount

   2.18.19.6    $1.00***

 

*** Notwithstanding the foregoing, the Buyer shall not test the Net Income
covenant for any calendar quarter through and including the calendar quarter
ending on June 30, 2017. The Buyer will first test the Net Income covenant with
respect to the calendar quarter ending on September 30, 2017.

 

Additional Financial Covenants

   2.18.19.7    Not applicable

Per Loan Limit

   2.EL.1    $1,000,000.00

 

APPENDIX 2-5

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

EXHIBIT A

FORM OF OFFICER’S CERTIFICATE WITH COMPUTATIONS

TO SHOW COMPLIANCE OR NON-COMPLIANCE WITH

CERTAIN FINANCIAL COVENANTS

 

BUYER:    BRANCH BANKING AND TRUST COMPANY SELLER:    INSPIRE HOME LOANS INC.
SUBJECT PERIOD:    {            } ended {            } DATE:    {            }

This certificate is delivered to the Buyer under that certain Master Repurchase
Agreement dated as of April 10, 2017 (as supplemented, amended or restated from
time to time, the “Repurchase Agreement”), by and between the Seller and the
Buyer from time to time party thereto. Unless they are otherwise defined in this
certificate, terms defined in the Repurchase Agreement have the same meanings
here as there.

The undersigned officer of the Seller certifies to the Buyer that on the date of
this certificate:

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

2. The Seller’s financial statements that are attached to this certificate were
prepared in accordance with GAAP (except that interim — i.e., other than annual
— financial statements exclude notes to financial statements and statements of
changes to stockholders’ (or owners’) equity and are subject to year-end
adjustments) and (subject to the aforesaid proviso as to interim financial
statements) present fairly the Seller’s financial condition and results of
operations as of {                    , 20            }, for that month (the
“Subject Period”) and for the year to that date.

3. The undersigned officer of the Seller supervised a review of the Seller’s
activities during the Subject Period in respect of the following matters and has
determined the following: (a) except to the extent that (i) a representation or
warranty speaks to a specific date or (ii) the facts on which a representation
or warranty is based have changed by transactions or conditions contemplated or
expressly permitted by the Facility Papers, the representations and warranties
of the Seller in the Repurchase Agreement and the other Facility Papers are true
and correct in all material respects, other than the changes, if any, described
on the attached Annex A; (b) the Seller has complied with all of its obligations
under the Facility Papers, other than the deviations, if any, described on the
attached Annex A; (c) no Event of Default has occurred that has not been
declared by the Buyer in writing to have been cured or waived, and no Potential
Default has occurred that has not been cured before it became an Event of
Default, other than those Events of Default and/or Potential Defaults, if any,
described on the attached Annex A and (d) whether there has been compliance by
the Seller with the financial covenants in Section 18.19 of the Repurchase
Agreement is accurately calculated on the attached Annex A.

 

INSPIRE HOME LOANS INC. By:     Name:     Title:    

 

Ex. A-1

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

ANNEX A TO OFFICER’S CERTIFICATE

1. Describe deviations from representations, if any — clause 3(a) of attached
Officer’s Certificate — if none, so state:

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

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

4. Calculate compliance with covenants in Section 18 — clause 3(d) of attached
Officer’s Certificate:

(a) Adjusted Tangible Net Worth. Adjusted Tangible Net Worth, tested monthly as
at the end of each calendar month, to be not less than $4,000,000.00.

(b) Leverage Ratio. Leverage Ratio, tested monthly as at the end of each
calendar month, to be not greater than 12.0:1.0.

(c) Current Ratio. Current Ratio, tested monthly as at the end of each calendar
month, to be not less than 1.0:1.0.

(d) Minimum Liquidity. The Seller’s Liquidity, tested monthly as at the end of
each calendar month, to be not less than $1,500,000.00.

(e) Net Income. The Seller’s net income, determined in accordance with GAAP, for
the previous calendar quarter, tested quarterly as at the end of each calendar
quarter, to be not less than $1.00.

(f) The Seller has not declared or paid any dividend or distribution, as
applicable, directly or indirectly to the Seller’s stockholders (or other equity
owners) when, or immediately after, the payment of which, any Potential Default
or Event of Default existed.

(g) The Seller has not directly or indirectly made any advance to (or declined
or deferred any payment due from) any stockholder (or other equity owner) where
at the time of or immediately after such action any Potential Default or Event
of Default existed or would exist.

 

Ex. A-2

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

EXHIBIT B

ELIGIBILITY CHANGE NOTICE

{Date}

Inspire Home Loans Inc.

19600 Fairchild Road, Suite 200

Irvine, CA 92612

Attention: James Palda, President

Dear Mr. Palda:

Pursuant to that certain Master Repurchase Agreement, dated as of April 10,
2017, as amended or modified from time to time in accordance with the terms
thereof (the “Repurchase Agreement,” the capitalized terms used herein and not
otherwise defined having the meanings given to such terms in said Repurchase
Agreement), by and between INSPIRE HOME LOANS INC., a Delaware corporation, as
Seller, and BRANCH BANKING AND TRUST COMPANY, a North Carolina banking
corporation, as Buyer, we hereby amend {Appendix 2, Item 2.2.2.2 (Approved Loan
Types)}{Schedule EL (Eligible Loans)}{Annex A, B, C, D and/or E} of the
Repurchase Agreement and advise you that, commencing on the {effective date} and
at all times thereafter (unless further amended by a subsequent Eligibility
Change Notice), the {Appendix 2, Item 2.2.2.2 (Approved Loan Types)}{Schedule EL
(Eligible Loans}{Annex A, B, C, D and/or E} attached hereto shall be deemed
applicable to and amend the corresponding {Schedule}{Appendix Item}{Annexes} in
the Repurchase Agreement without any further act or consent from the Seller or
any other Person. This Eligibility Change Notice replaces and supersedes any and
all prior Eligibility Change Notices with respect to the{Schedule}{Appendix
Item}{Annex(es)} amended hereby.

 

Sincerely, BRANCH BANKING AND TRUST COMPANY By:     Name:     Title:    

 

Ex. B-1

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

SCHEDULE CN

FORM OF CHANGE NOTICE

[On Letterhead of the Seller]

[Date]

BRANCH BANKING AND TRUST COMPANY

Mortgage Warehouse Lending Division

102 W. Pineloch Avenue, Suite 18

Orlando, FL 32806

Ladies and Gentlemen:

Pursuant to that certain Master Repurchase Agreement, dated as of April 10,
2017, as amended from time to time (the “Repurchase Agreement,” the capitalized
terms used herein and not otherwise defined having the meanings given to such
terms in said Repurchase Agreement), by and between INSPIRE HOME LOANS INC., a
Delaware corporation, as Seller (the “Seller”), and BRANCH BANKING AND TRUST
COMPANY, a North Carolina banking corporation, as Buyer (the “Buyer”), we hereby
amend the list of Authorized Seller Representatives only as set forth herein and
advise you that, effective as of the date hereof, (1) each of the following
persons is hereby designated as an additional “Authorized Seller Representative”
for purposes of the Repurchase Agreement and, as such, each and all are hereby
authorized and empowered in the name of and on behalf of the Seller, inter alia,
to initiate Purchase Requests under the Repurchase Facility and, in connection
therewith, to execute and deliver to the Buyer such documents substantially in
the forms attached to or otherwise permitted in the Repurchase Agreement, and
the Buyer shall be fully entitled to rely upon the foregoing authorization in so
doing:

Additional Authorized Seller Representative(s)

 

Name   Title/Position    Specimen Signature                                     
                                                                              
                                                                              
                                    

and (2) each of the following persons (if any) is hereby deleted as an
“Authorized Seller Representative” for purposes of the Repurchase Agreement
(list only deletions, if any):

 

 

 

 

This notice is in addition to list of Authorized Seller Representatives and/or
each prior Notice of Change of Authorized Seller Representative(s) delivered by
the Seller to the Buyer and, other than as amended hereby, the list of
Authorized Seller Representatives, as amended from time to time, remains in full
force and effect and are ratified hereby.

DATED this {        } day of {                    , 20        }.

 

SELLER: INSPIRE HOME LOANS INC. By:     Name:     Title:    

 

Schedule CN-1

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

SCHEDULE DQ

DISQUALIFIERS

“Disqualifier” means any of the following events; after the occurrence of any
Disqualifier, unless the Buyer shall have waived it, or declared it cured, in
writing, the Market Value of the affected Purchased Loan shall be deemed to be
zero (and the Buyer shall be deemed to have marked such Purchased Loan to
market):

1. Any event occurs, or is discovered to have occurred, after which the affected
Purchased Loan fails to satisfy any element of the definition of “Eligible Loan”
that is applicable to such Type of Purchased Loan.

2. In respect of any Purchased Loan, for any reason whatsoever any of the
Seller’s special representations concerning Purchased Loans set forth in
Section 16.2 applicable to that type of Purchased Loan shall become untrue, or
shall be discovered to be untrue, in any respect that is material to the value
or collectability of that Purchased Loan, considered either by itself or
together with other Purchased Loans.

3. Any Purchased Loan (other than an Aged Mortgage Loan) shall become In
Default.

4. Any Purchased Loan (other than an Aged Mortgage Loan) for any reason shall
cease to be covered by an Investor Commitment acceptable to the Buyer, and the
Seller shall fail to cause such Purchased Loan to be covered by another Investor
Commitment acceptable to the Buyer on or before ten (10) Banking Days after such
initial coverage is lost.

5. The Wet Mortgage Loan Period shall have elapsed after the Purchase Date upon
which a Wet Mortgage Loan has been sold to the Buyer without all of such Wet
Mortgage Loan’s Required Documents having been received by the Buyer; provided,
that if such Wet Mortgage Loan’s Required Documents were received by the Buyer,
but were found by the Buyer to have been deficient in some manner which, in the
Buyer’s reasonable determination represents a condition correctable by the
Seller within ten (10) days’ time and the Buyer then returns each affected
Required Document to the Seller for such corrective action, then such Purchased
Loan shall not be disqualified by this provision for correction, collection or
other action.

6. Any Purchased Loan shall be assumed by (or otherwise become the liability of)
— or the real property securing it shall become owned by — any corporation,
partnership or any other entity that is not a natural person or a trust for
natural persons unless payment in full of such Purchased Loan is guaranteed by a
natural person. The Buyer may rely on the Seller’s representation and warranty
that no Purchased Loans have been so assumed by (or otherwise become the
liability of) such a Person except as otherwise specified by written notice(s)
to the Buyer.

7. Any Purchased Loan shall be assumed by (or otherwise become the liability of)
— or the real property securing it shall become owned by — an Affiliate of the
Seller or any of the Seller’s or its Affiliates’ directors, managers, members or
officers. The Buyer may rely on the Seller’s representation and warranty that no
Purchased Loans have been so assumed by (or otherwise become the liability of)
such a Person except as otherwise specified by written notice(s) to the Buyer.

8. Any Purchased Loan shipped to an investor or, if applicable, the
Certificating Custodian shall not be paid for or returned to the Buyer on or
before forty-five (45) days after it is shipped.

9. The applicable Repurchase Period shall have elapsed with respect to any
Purchased Loans.

 

Schedule DQ-1

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

SCHEDULE EL

ELIGIBLE LOANS

“Eligible Loan” means and includes each Mortgage Loan as to which each of the
following statements is true and correct:

(1) Such Mortgage Loan is secured by a first priority mortgage, deed of trust or
deed to secure debt, as applicable, on the Property securing such Mortgage Loan;

(2) Unless otherwise approved by the Buyer from time to time, in its sole
discretion and in writing, the improvements on the Property securing such
Mortgage Loan shall consist of any one of the following: (i) a detached,
one-family dwelling, (ii) a detached two-to-four family dwelling, (iii) a
one-family dwelling in a condominium or townhouse project, or (iv) a detached
one-family dwelling or townhouse in a planned unit development, none of which
(x) is a co-operative or a mobile or manufactured home unless, in the case of a
mobile or manufactured home, it is affixed to the real property and is
encumbered by a first priority mortgage (or deed of trust or deed to secure
debt) both on such real property and on such mobile or manufactured home that
has priority over any other Lien on such mobile or manufactured home, whether or
not arising under applicable real property law; (y) does not constitute real
property under applicable state law, or (z) contains any commercial operations
(other than in the nature of an in-home office);

(3) Such Mortgage Loan is free of any material default (other than as otherwise
permitted in the Agreement) of any party thereto (including the Seller);

(4) Except in the case of an Aged Mortgage Loan, no payment under such Mortgage
Loan is more than thirty (30) days past due the payment due date set forth in
the underlying promissory note and mortgage (or deed of trust or deed to secure
debt);

(5) Such Mortgage Loan is in compliance with all applicable Laws and regulations
governing the same, including the federal Consumer Credit Protection Act of
1968, as amended from time to time, and the regulations promulgated thereunder,
the federal Truth-in-Lending Act, as amended from time to time, and the
regulations promulgated thereunder, the Secure and Fair Enforcement for Mortgage
Licensing (SAFE) Act of 2008, as amended from time to time, and the regulations
promulgated thereunder, the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, as amended from time to time, and the regulations
promulgated thereunder, and all applicable usury laws and restrictions; and all
notices, disclosures and other statements or information required by law or
regulation to be given, and any other act required by law or regulation to be
performed, in connection with such Mortgage Loan have been given and performed
as required;

(6) All advance payments and other deposits on such Mortgage Loan have been paid
in cash, and no part of such sums has been loaned, directly or indirectly, by
the Seller to the Customer thereon;

(7) The Property securing such Mortgage Loan is insured against loss or damage
by fire and all other hazards normally included within standard extended
insurance coverage (including flood plain insurance if such Property is located
in a federally designated flood plain) in accordance with the provisions of such
Mortgage Loan with the Seller named as a loss payee thereon;

(8) The Property securing such Mortgage Loan is free and clear of all Liens
except Liens in favor of the Seller and Permitted Encumbrances;

(9) Except in the case of an Aged Mortgage Loan, if the promissory note for such
Mortgage Loan (or any other documentation relating thereto) has been withdrawn
from the possession of the Buyer, on terms and subject to conditions set forth
herein, (i) such note or other documentation has been released to the Seller for
purposes of correcting clerical or other non-substantive documentation problems
pursuant to a trust receipt as permitted herein, and such release has occurred
within the immediately preceding ten (10) days; or (ii) the promissory note and
any related documentation for such Mortgage Loan have been shipped by the Buyer
directly to

 

Schedule EL-1

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

an Approved Investor for purchase or, if applicable, to the Certificating
Custodian for inclusion in a pool of Mortgage Loans supporting an Agency MBS, as
permitted herein, and such shipment has occurred within the immediately
preceding forty-five (45) days;

(10) Except as otherwise waived by the Buyer, in the event the Loan-to-Value
Ratio of such Mortgage Loan exceeds eighty percent (80%), such Mortgage Loan is
either guaranteed by VA or insured by FHA or is covered by a private mortgage
insurance policy issued in favor of the Seller by an insurer approved by Fannie
Mae, Freddie Mac, Ginnie Mae or the Approved Investor issuing the Investor
Commitment for such Mortgage Loan;

(11) Except in the case of an Aged Mortgage Loan, the date of the promissory
note for such Mortgage Loan is no earlier than sixty (60) days (or ninety
(90) days in the case of any Mortgage Loan which is purchased by the Seller from
a third party correspondent) prior to the Purchase Date for any Mortgage Loan
that becomes a Purchased Loan or, if the interest rate applicable to such
Mortgage Loan has converted to a fixed rate, the date of such conversion is no
earlier than sixty (60) days prior to the Purchase Date for such Mortgage Loan
that becomes a Purchased Loan;

(12) If such Mortgage Loan is FHA insured or VA guaranteed, such insurance or
guaranty is in full force and effect (or such Mortgage Loan is eligible for such
insurance or guaranty and said insurance or guaranty has been or will be applied
for within thirty (30) days from the date of funding of such Mortgage Loan),
and/or fully conforms to all underwriting and other requirements of Fannie Mae,
Freddie Mac, Ginnie Mae, FHA or VA;

(13) Except in the case of an Aged Mortgage Loan, such Mortgage Loan is subject
to a valid and binding Investor Commitment to purchase such Mortgage Loan or, if
applicable, an Agency MBS backed by such Mortgage Loan, and the following
requirements are met: (i) such Investor Commitment is fully enforceable in
accordance with its terms; (ii) such Investor Commitment will be assigned to the
Buyer on the Purchase Date in respect of any Mortgage Loan that becomes a
Purchased Loan; (iii) the Seller and the applicable Mortgage Loan are in full
compliance with such Investor Commitment; and (iv) if such Investor Commitment
is not a Best Efforts Commitment, such Mortgage Loan is covered by a Hedging
Arrangement that mitigates interest rate risk;

(14) Except for the existence of a commitment to sell such Mortgage Loan on a
servicing-released basis, such Mortgage Loan is not subject to any servicing
arrangement with any Person other than the Seller nor are any Servicing Rights
relating to such Mortgage Loan subject to any lien, claim, interest or negative
pledge in favor of any Person and such Servicing Rights have not been sold,
transferred, assigned, conveyed, pledged, mortgaged or hypothecated to any
Person, other than as permitted hereunder;

(15) The initial principal amount of such Mortgage Loan does not exceed the
amount set forth in Appendix 2, Item 2.EL.1 (the “Per Loan Limit”), unless
otherwise approved by the Buyer, in its sole discretion, from time to time, in
respect of any Mortgage Loan that becomes a Purchased Loan;

(16) Such Mortgage Loan is originated directly by the Seller and is not
purchased from a third party correspondent, unless otherwise approved by the
Buyer in its sole discretion and, if so approved by the Buyer in respect of a
Mortgage Loan that becomes a Purchased Loan, the Required Documents and, if the
Buyer has so requested, the other Loan Papers for such Mortgage Loan must be
delivered to the Buyer or its designee on or prior to the date of the
Transaction, accompanied by a bailment letter acceptable to the Buyer and
applicable wiring instructions;

(17) If such Mortgage Loan was directly or indirectly acquired by the Seller
from a mortgage broker or a correspondent, such Mortgage Loan was purchased for
fair value and the Seller took possession of such Mortgage Loan in the ordinary
course of its business, without knowledge that such Mortgage Loan was subject to
any security interest;

(18) The Property securing such Mortgage Loan is (i) located in a state in which
the Seller has all necessary licenses to conduct its mortgage banking business;
and (ii) improved by completed improvements;

(19) Except in the case of an Aged Mortgage Loan, no Disqualifier exists as to
such Mortgage Loan;

 

Schedule EL-2

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

(20) Such Mortgage Loan is covered by an ALTA mortgage title insurance policy or
such other form of title insurance as is acceptable to Fannie Mae or Freddie
Mac, issued by and constituting the valid and binding obligation of a title
insurer that is (1) generally acceptable to prudent mortgage lenders who
regularly originate or purchase Mortgage Loans comparable to such Mortgage Loan,
and (2) is qualified to do business in the jurisdiction where the relevant
Mortgaged Premises are located, insuring the Seller, its successors and assigns,
as to the first priority (subject to Permitted Encumbrances) of the Lien of the
Mortgage on the related Mortgaged Premises, in an amount equal to the original
principal amount of such Mortgage Loan. No claims have been made under such
policy and no prior holder of such Mortgage Loan, including the Seller, has
done, by act or omission, anything that would impair the coverage of such
policy. The Seller is the sole named insured of such mortgage title insurance
policy, the assignment to the Buyer of the Seller’s interest in such policy does
not require the consent of or notice to the insurer (or such consent has been
obtained or notice given), and such policy is and will be in full force and
effect and inure to the benefit of the Buyer if, as and when such Mortgage Loan
is sold to the Buyer;

(21) Such Mortgage Loan’s Mortgage contains an enforceable provision for
acceleration of the maturity of the unpaid principal balance thereof in the
event that the Mortgaged Premises are sold or transferred without the prior
written consent of the holder thereof;

(22) Such Mortgage Loan does not contain provisions pursuant to which monthly
payments are paid in whole or in part with funds deposited in any separate
account established by the Seller, the Customer or anyone on behalf of the
Customer, or paid by any source other than the Customer, nor any other similar
provisions currently in effect that effectively constitute a “buydown”
provision;

(23) Such Mortgage Loan is not subject to a bankruptcy plan nor is the Customer
or any guarantor of such Mortgage Loan (or any portion thereof) a debtor in a
bankruptcy or insolvency proceeding;

(24) As to such Mortgage Loan and/or its Loan Papers:

(a) the Seller has not waived any default, breach, violation or event permitting
acceleration except payment delinquencies that have not been outstanding long
enough to cause such Mortgage Loan to be In Default;

(b) the Loan Papers contain customary and enforceable provisions so as to render
the rights and remedies of their holder adequate for the realization of the
benefits of the security intended to be provided by it;

(c) none of its makers or mortgagors is an Affiliate of the Seller or any of its
or its Subsidiaries’ directors or officers;

(d) there is only one original executed Mortgage Note, and, except in the case
of Wet Mortgage Loans, that original has been delivered to the Buyer;

(e) the Mortgage Note and Mortgage for such Mortgage Loan that becomes a
Purchased Loan, including Wet Mortgage Loans, has been duly (i) endorsed by the
last endorsee or assigned to the Seller and (ii) endorsed or assigned by the
Seller in blank (or if requested by the Buyer, to the Buyer)—endorsement in
blank of a Mortgage Assignment is not required when MERS is designated in the
Mortgage as the original mortgagee or the nominee of the original mortgagee, its
successors and assigns—and delivered (or in the case of Wet Mortgage Loans are
in the process of being delivered) to the Buyer;

(f) the Mortgage Assignment for such Mortgage Loan that becomes a Purchased Loan
is or will be in proper and sufficient form for recording in the appropriate
government office in the U.S. jurisdiction where the related Mortgaged Premises
are located (no such Mortgage Assignment is required for any Mortgage that has
been originated in the name of MERS and registered under the MERS® System); and
upon and after delivery to the Buyer of the Mortgage Note evidencing such
Mortgage Loan, the Buyer will have a duly perfected first priority possessory
ownership interest in such Mortgage Loan, and for so long as the Buyer or
another bailee for the Buyer retains possession of such Mortgage Note, the Buyer
will have a duly perfected first priority possessory ownership interest in such
Mortgage Loan;

 

Schedule EL-3

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

(g) all taxes, governmental assessments, insurance premiums, water, sewer and
municipal charges, leasehold payments or ground rents that have previously
become due have been paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains unpaid and which has
been assessed but is not yet due. The Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by any Person other than
the applicable Customer, directly or indirectly, for the payment of any amount
required under the related Loan Papers, except for interest to accrue from the
date of such Mortgage Loan or the date of disbursement of its proceeds
(whichever is greater) to the day that precedes by a month the due date of such
Mortgage Loan’s first installment of principal and interest;

(h) if an escrow of funds has been established for such Mortgage Loan, it is not
prohibited by applicable Law, all escrow deposits and escrow payments have been
collected in full compliance with applicable Law and are in the possession of
the Seller or have been applied to pay their proper and intended purposes, no
escrow deposits or escrow payments or other charges or payments due in respect
of such Mortgage Loan have been capitalized under its Mortgage Note or Mortgage
and no deficiencies exist in connection therewith for which customary
arrangements for payment have not been made;

(i) all interest rate adjustments, if any, in respect of such Mortgage Loan have
been made in strict compliance with applicable Law and the terms of the related
Mortgage Note, and any interest required to be paid pursuant to applicable Law
has been properly paid and credited;

(j) no Customer in respect of such Mortgage Loan has notified the Seller, and
the Seller has no knowledge, of any relief requested by or allowed to such
Customer under the Servicemembers’ Civil Relief Act of 2003;

(k) the Mortgage is a Lien on the Mortgaged Premises and Property described in
it, and the description of the Mortgaged Premises in such Mortgage is legally
adequate and such Mortgage Loan has been fully advanced in its face amount;

(l) no default, and no event that with notice or lapse of time or both would
become a default, has occurred and is continuing in respect of such Mortgage
Loan except as to which the Seller has given written notice to the Buyer with
respect thereto if such Mortgage Loan has become a Purchased Loan (by reporting
Purchased Loans that are delinquent Mortgage Loans);

(m) the Seller’s acquisition, disposition and collection practices with respect
to such Mortgage Loan are and have been in all material respects in accordance
with industry custom and practice, and in all respects legal and proper; and

(n) all Hazard Insurance Policies covering the Mortgaged Premises encumbered by
such Mortgage Loan:

(1) name and will continue to name the Seller or the applicable Servicer as the
insured under a standard mortgagee clause and, in the event such Mortgage Loan
becomes a Purchased Loan, inures to the benefit of the Buyer;

(2) are and will continue to be in full force and effect;

(3) are in the amount of the full insurable value of the Mortgaged Premises on a
replacement cost basis or the unpaid principal amount of such Mortgage Loan,
whichever is less;

(4) are the valid and binding obligation of the insurer;

 

Schedule EL-4

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

(5) have all premiums due thereon paid;

(6) are required by the related Mortgage to be maintained on relevant Mortgaged
Premises at the Customer’s cost and expense, failing which the holder of such
Mortgage is authorized by the express terms of such Mortgage to obtain and
maintain such insurance at such Customer’s cost and expense and to obtain
reimbursement of such cost from such Customer; and

(7) afford and will continue to afford insurance against fire and such other
risks as are usually insured against in the broad form of extended coverage
insurance from time to time available, as well as insurance against flood
hazards if required by the terms of any applicable private mortgage insurance or
by any applicable Requirements of Law.

(25) Such Mortgage Loan or, as applicable, all Loan Papers relating to such
Mortgage Loan:

(a) were originated by a duly licensed mortgage loan originator or mortgage
lender in the ordinary course of its business;

(b) have been made and originated in compliance with all applicable requirements
of the Real Estate Settlement Procedures Act of 1974, the Equal Credit
Opportunity Act of 1974, the federal Truth-In-Lending Act of 1968, the Fair
Credit Billing Act of 1974, the Fair Credit Reporting Act of 1970, the Secure
and Fair Enforcement for Mortgage Licensing (SAFE) Act of 2008, the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010, each as amended from
time to time, and the related statutes and regulations and all applicable
Requirements of Law under usury, truth-in-lending, equal credit opportunity and
all other Laws, and, in respect of such Mortgage Loan if, as and when it becomes
a Purchased Loan, the continued compliance of the Purchased Loan is not affected
by its sale to the Buyer;

(c) are the legal, valid and binding obligations of the Customer(s) who made
them and are and will continue to be in full force and effect and valid and
binding obligations of such Customer(s), enforceable in accordance with their
terms, without and free from any claim, right of rescission, counterclaim,
defense or offset, including any claim or defense of usury, except as such
enforceability may be limited by bankruptcy and other laws affecting the rights
of creditors generally and by principles of equity, excepting rights that, by
applicable Law, cannot be waived, and neither the operation of any of their
respective contract terms nor the exercise of any right thereunder will render
any of them partly or wholly unenforceable or subject to any such claim, right
of rescission, counterclaim, defense or offset, and no such claim, right of
rescission, counterclaim, defense or setoff has been asserted;

(d) have not been modified or amended and none of their requirements has been
waived, except as expressly and completely reflected in the applicable Loan
Papers furnished to the Buyer;

(e) were not originated in, and are not subject to the laws of, any jurisdiction
whose laws (i) make unlawful their sale to the Buyer pursuant to this Agreement,
or (ii) render such Mortgage Loan unenforceable;

(f) are in full force and effect and have not been satisfied or subordinated in
whole or in part or rescinded, and the Mortgaged Premises securing such Mortgage
Loan have not been partially or completely released from the Lien of the
Mortgage;

(g) are each secured by a valid first Lien in favor of the Seller on the real
property securing the amount owed by the Customer(s) under the related Mortgage,
subject only to Permitted Encumbrances, that to the best of the Seller’s
knowledge, has a fair market value equal to or greater than the loan value that
will be attributed or allocated under this Agreement to such Mortgage Loan
secured thereby;

(h) are each executed in full accordance with all requirements of the applicable
Laws of the jurisdiction in which the related Mortgaged Premises are located,
with the Mortgage being (1) duly acknowledged and sealed by such official and in
such manner and form as to be both recordable and

 

Schedule EL-5

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

effective under such Laws to give such constructive notice to all Persons as
shall be necessary to establish and continue the Lien of such Mortgage and
(2) so recorded, and with the Mortgage Note, Mortgage and all related papers
executed with the genuine original signature(s) of the Customer(s) obligated on
such Mortgage Loan, and all parties to such Mortgage Loan had full legal
capacity to execute it;

(i) the Seller has not sold, assigned, transferred, hypothecated or pledged such
Mortgage Loan to any Person (excluding assignments to MERS as nominee for the
Seller, its successors and assigns);

(j) are (except where the applicable Agency guidelines do not require an
Appraisal) the subject of a Current Appraisal of which the Seller has possession
and will make available to the Buyer on request, and the Seller has in its
possession and will make available to the Buyer on request evidence of such
value and how it was determined; and

(k) are not in violation of the Home Ownership and Equity Protection Act of
1994;

(26) As to the Mortgaged Premises related to such Mortgage Loan:

(a) the Mortgaged Premises securing such Mortgage Loan are capable of being
lawfully occupied under applicable Laws, and all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of such Mortgaged Premises and, with respect to the use and occupancy of the
same, including certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate Governmental Authority;

(b) the Mortgaged Premises securing such Mortgage Loan, if located in a special
flood hazard area designated as such by the Secretary of HUD, are and shall
continue to be covered by special flood insurance as required by the National
Flood Insurance Program or its successor program;

(c) based on customary residential mortgage industry practices and, to the
knowledge of the Seller, the Mortgaged Premises securing such Mortgage Loan are
free from any and all toxic and hazardous substances and there exists no
violation of any applicable environmental Law;

(d) to the best of the Seller’s knowledge, no liens or claims have been filed
for work, labor or materials affecting the related Mortgaged Premises which are
undischarged; and

(e) the related Mortgaged Premises are, to the best of the Seller’s knowledge,
free of material damage and in good repair and the Seller has no actual
knowledge that any such Mortgaged Premises have suffered material fire, storm or
other casualty damage that is not covered by a Hazard Insurance Policy.

Notwithstanding anything to the contrary herein, this Schedule EL may be revised
from time to time by the Buyer, in its sole discretion based on, among other
things, prevailing market conditions or changes in the Buyer’s internal
underwriting standards, by delivery to the Seller of a notice thereof.

 

Schedule EL-6

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

SCHEDULE 11

copy of

EXHIBIT A

to UCC-1 Financing Statement

 

Seller:    Inspire Home Loans Inc.       19600 Fairchild Road, Suite 200      
Irvine, CA 92612    Buyer:    Branch Banking and Trust Company       102 W.
Pineloch Avenue, Suite 18       Orlando, FL 32806       Attention: Mortgage
Warehouse Lending Division   

The UCC Financing Statement to which this Exhibit A is attached and forms a
part, covers all of the Seller’s right, title and interest in, to and under each
of the following items of property, whether now owned or hereafter acquired, now
existing or hereafter created and wherever located (capitalized terms are
defined in Annex I to this Exhibit A):

(a) Purchased Loans.

(1) All Purchased Loans;

(2) all Purchased Loans Support;

(3) all rights to deliver Purchased Loans to investors and other purchasers and
all proceeds resulting from the disposition of Purchased Loans pursuant thereto,
including the Seller’s right and entitlement to receive the entire purchase
price paid for Purchased Loans sold;

(4) all Hedging Arrangements relating to or constituting any and all of the
foregoing or relating to the Obligations, including all rights to payment
arising under such Hedging Arrangements;

(5) all Servicing Rights in respect of any of the Purchased Loans and all rights
and benefits (but not the obligations) of Seller in Servicing Agreements or
subservicing agreements pursuant to which Purchased Loans are being serviced or
subserviced, respectively; and

(6) all of the Seller’s rights now or hereafter existing in, to or under any MBS
secured by, created from or representing any interest in any of the Purchased
Loans, whether now owned or hereafter acquired by the Seller, and whether such
MBS are evidenced by book entry or certificate (the Buyer’s ownership interest
and security interest in each MBS created from, based on or backed by Purchased
Loans shall automatically exist in, attach to, cover and affect all of the
Seller’s right, title and interest in that MBS when issued and its proceeds and
the Buyer’s ownership interest and security interest in the Purchased Loans from
which such MBS was so created shall automatically terminate and be released when
such MBS is issued, subject to automatic reinstatement if such issuance is
voided or set aside by any court of competent jurisdiction), all right to the
payment of monies and non-cash distributions on account of any of such MBS and
all new, substituted and additional securities at any time issued with respect
thereto.

(b) Related Accounts, Payment Intangibles, General Intangibles.

(1) All accounts, payment intangibles, general intangibles, instruments
(including promissory notes), documents (including documents of title),
software, chattel paper, letters of credit rights, supporting obligations,
contract rights and proceeds, whether now or hereafter existing (including all
of the Seller’s present and future rights to have and receive interest and other
compensation, whether or not yet accrued, earned, due or payable), under or
arising out of or relating to the Purchased Loans;

(2) all instruments, documents or writings evidencing any such accounts, payment
intangibles, general intangibles or proceeds or evidencing any monetary
obligation under, or security interest in, any of the Purchased Loans, all other
papers delivered to Buyer, and all other rights transferred to Buyer, in respect
of any of the Purchased Loans, including, without limitation, the right to
collect, have and receive all insurance proceeds (including, but not limited to,
casualty insurance, mortgage insurance, pool insurance and title insurance

 

Schedule 11-1

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

proceeds) and condemnation awards or payments in lieu of condemnation which may
be or become payable in respect of the Mortgaged Premises securing or intended
to secured any Purchased Loan, and other personal property of whatever kind
relating to any of the Purchased Loans, in each case whether now existing or
hereafter arising, accruing or acquired;

(3) all security for or claims against others in respect of the Purchased Loans;

(4) all proceeds and rights to proceeds of any sale or other disposition of any
or all of the Purchased Loans; and

(5) the nonexclusive right to use (in common with the Seller and any other
secured party that has a valid and enforceable security interest therein and
that agrees that its security interest is similarly nonexclusive) the Seller’s
operating systems to manage and administer the Purchased Loans and any of the
related data and information described above, or that otherwise relates to the
Purchased Loans, together with the media on which the same are stored to the
extent stored with material information or data that relates to property other
than the Purchased Loans (tapes, discs, cards, drives, flash memory or any other
kind of physical or virtual data or information storage media or systems, and
the Seller’s rights to access the same, whether exclusive or nonexclusive, to
the extent that such access rights may lawfully be transferred or used by the
Seller’s permittees), and any computer programs that are owned by the Seller (or
licensed to the Seller under licenses that may lawfully be transferred or used
by the Seller’s permittees) and that are used or useful to access, organize,
input, read, print or otherwise output and otherwise handle or use such
information and data.

(c) Deposit Accounts. The Investor Funding Account, the Loan Funding Account,
the Administrative Account, the Operating Account and any other deposit accounts
with the Buyer (or any Affiliate thereof), and all sums from time to time on
deposit in each of such accounts.

(d) Custodial Account. The Custodial Account and all MBS and other securities
from time to time held in such account and all sums from time to time on deposit
in such account.

(e) Purchased Loans Records. All Purchased Loans Records.

(f) Other Rights. All rights to have and receive any of the Purchased Loans
described above, all accessions or additions to and substitutions for any of
such Purchased Loans, together with all renewals and replacements of any of such
Purchased Loans, all other rights and interests now owned or hereafter acquired
by the Seller in, under or relating to any of such Purchased Loans or referred
to above and all products and proceeds of any of the foregoing.

(g) Claims and Causes of Actions. All claims and causes of actions in which the
Seller has or may have against any Person, including but not limited to, tort
claims, arising out of or relating to any of the foregoing, and the products and
proceeds thereof.

(h) Proceeds. All products and proceeds of the foregoing.

IT IS THE EXPRESS INTENTION OF SELLER AND BUYER THAT THE TRANSACTIONS UNDER THE
MASTER REPURCHASE AGREEMENT ARE PURCHASES AND SALES. THIS FINANCING STATEMENT IS
INTENDED TO PERFECT (1) ANY OF THE ABOVE-DESCRIBED PROPERTY TO THE EXTENT THAT
ANY OF SUCH PROPERTY CAN BE PERFECTED BY FILING UPON A SALE THEREOF, AND (2) A
FIRST AND PRIOR SECURITY INTEREST IN ANY OF THE ABOVE-DESCRIBED PROPERTY IF,
CONTRARY TO THE PARTIES’ INTENT, ONE OR MORE TRANSACTIONS UNDER THE MASTER
REPURCHASE AGREEMENT ARE RECHARACTERIZED AS LOANS BY ANY COURT OF COMPETENT
JURISDICTION.

This Financing Statement is to be filed in the office of the Secretary of State
of the State of Delaware. A list of all Purchased Loans then subject to this
Financing Statement is available upon reasonable request from Buyer at its
above-stated address.

 

Schedule 11-2

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

ANNEX I

to EXHIBIT A

to UCC-1 Financing Statement

Definitions

“Administrative Account” shall have the meaning set forth in the Master
Repurchase Agreement.

“Affiliate” means and includes, with respect to a specified Person, any other
Person directly or indirectly controlling, controlled by or under common control
with, such Person, whether through the ownership of voting securities, by
contract or otherwise.

“Buyer” means Branch Banking and Trust Company, a North Carolina banking
corporation, and its successors and assigns.

“Custodial Account” shall have the meaning set forth in the Master Repurchase
Agreement.

“Eligible Loans” shall have the meaning set forth in the Master Repurchase
Agreement.

“Facility Papers” shall have the meaning set forth in the Master Repurchase
Agreement.

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

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

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

“Hazard Insurance Policy” shall have the meaning set forth in the Master
Repurchase Agreement.

“Hedging Arrangements” shall have the meaning set forth in the Master Repurchase
Agreement.

“Investor Funding Account” shall have the meaning set forth in the Master
Repurchase Agreement.

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

“Loan Funding Account” shall have the meaning set forth in the Master Repurchase
Agreement.

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

“Margin Call” shall have the meaning set forth in the Master Repurchase
Agreement.

“Master Repurchase Agreement” means the Master Repurchase Agreement dated as of
April 10, 2017, by and between the Seller and Buyer, as supplemented, amended or
restated from time to time.

 

Schedule 11-3

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

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

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

“Mortgage Loan” means any loan evidenced by a Mortgage Note and includes all
right, title and interest of the lender or mortgagee of such Mortgage Loan as a
holder of both the beneficial and legal title to such Mortgage Loan, including
(i) all loan documents, files and records of the lender or mortgagee for such
Mortgage Loan, including the Loan Papers, (ii) the monthly payments, any
prepayments, insurance and other proceeds, (iii) the rights to service such
Mortgage Loan and (iv) all other rights, interests, benefits, security,
proceeds, remedies and claims in favor or for the benefit of the lender or
mortgagee arising out of or in connection with such Mortgage Loan.

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

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

“Obligations” shall have the meaning set forth in the Master Repurchase
Agreement.

“Operating Account” shall have the meaning set forth in the Master Repurchase
Agreement.

“Permitted Encumbrances” shall have the meaning set forth in the Master
Repurchase Agreement.

“Person” means and includes any corporation, natural person, firm, joint
venture, partnership, limited liability company, trust, unincorporated
organization, government or any political subdivision, department, agency or
instrumentality of any government.

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

“Purchased Loan” means a Mortgage Loan sold by the Seller to the Buyer under the
Repurchase Facility. In addition, the term “Purchased Loans” shall also include
all assets and properties described in EXHIBIT A of this UCC Financing
Statement.

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

 

Schedule 11-4

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

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

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

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

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

(iv) all of the Seller’s rights, to the extent assignable, in, to and under any
and all commitments issued by (1) Ginnie Mae, Fannie Mae, Freddie Mac, another
mortgage company or any other investor or the Buyer or a securities issuer to
guarantee, purchase or invest in any of the Purchased Loans or any MBS based on
or backed by any of them or (2) any broker or investor to purchase any MBS,
whether evidenced by book entry or certificate, representing or secured by any
interest in any of the Purchased Loans, together with the proceeds arising from
or pursuant to any and all such commitments;

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

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

(vii) all tax, insurance, maintenance fee and other escrow deposits or payments
made by the Customers under such Purchased Loans (the Buyer acknowledges that
the Seller’s rights in such deposits are limited to the rights of an escrow
agent and such other rights, if any, in and to such deposits as are accorded by
the Purchased Loans and related papers).

“Repurchase Facility” shall have the meaning set forth in the Master Repurchase
Agreement.

“Required Documents” shall have the meaning set forth in the Master Repurchase
Agreement.

“Seller” means Inspire Home Loans Inc., a Delaware corporation, and its
successors and assigns.

“Servicer” means, collectively, with respect to each Purchased Loan, any Person
who owns or holds the rights to service such Purchased Loan (the “Servicing
Rights”), and any Person who as a servicer or subservicer is primarily
responsible for performing the servicing functions for such Purchased Loan,
which is identified in a Real Estate Settlement Procedures Act of 1974, 12
U.S.C. § 2602, as amended, notification letter as the Person to whom the
applicable Customer sends scheduled loan payments.

 

Schedule 11-5

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

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

“Servicing Rights” is defined in the definition of “Servicer”.

“Subsidiary” means, with respect to any Person (herein referred to as the
“parent”), any corporation, association or other business entity of which more
than fifty percent (50%) of the securities or other ownership interests having
ordinary voting power is, or with respect to which rights to control management
(pursuant to any contract or other agreement or otherwise) are, at the time as
of which any determination is being made, owned, controlled or held by the
parent or one or more subsidiaries of the parent.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of Florida; provided, that if by reason of mandatory provisions of law,
the perfection or the effect of perfection or non-perfection of any security
interest granted or deemed granted pursuant to the Master Repurchase Agreement
or the continuation, renewal or enforcement thereof is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of Florida,
the term “UCC” 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.

 

Schedule 11-6

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

ANNEX A

DEFINITION OF CONFORMING MORTGAGE LOAN

“Conforming Mortgage Loan” means a Mortgage Loan as to which each of the
following statements is true and correct:

(i) such Mortgage Loan is an Eligible Loan; and

(ii) such Mortgage Loan (a) fully conforms to all underwriting and other
requirements of Fannie Mae or Freddie Mac, or (b) is a Government Sponsored Loan
(or is eligible for such insurance or guaranty and application therefor has been
made or will be made within 30 days from the date of the closing of such
Mortgage Loan).

 

Annex A-1

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

ANNEX B

DEFINITION OF WET MORTGAGE LOAN

“Wet Mortgage Loan” means a Mortgage Loan:

(i) that has been closed by a title agency or closing attorney, funded and would
qualify without exception as an Eligible Loan except that some or all of its
Required Documents are in transit to, but have not yet been received by, the
Buyer so as to satisfy all requirements to permit the Seller to sell it pursuant
to this Agreement without restriction;

(ii) that is not a third party correspondent loan;

(iii) that the Seller reasonably expects to fully qualify as an Eligible Loan
meeting the criteria of one of the other Approved Loan Types when the original
Required Documents have been received by the Buyer;

(iv) as to which the Seller actually and reasonably expects that such full
qualification can and will be achieved on or before seven (7) Banking Days after
the relevant Purchase Date (and the Seller hereby agrees to take such steps as
are reasonably necessary to ensure it achieves full qualification as an Eligible
Loan); and

(v) for which the Seller has delivered to the Buyer a Purchase Request on or
before the Purchase Date, submission of which to the Buyer shall constitute the
Seller’s certification to the Buyer that a complete document file as to such
Mortgage Loan, including the Required Documents, exists and that such document
file is in the possession of either the title agent or closing attorney that
closed such Mortgage Loan, the Seller or the Seller’s Servicer for such Mortgage
Loan, or that such document file has been shipped to the Buyer.

Each Wet Mortgage Loan that satisfies the foregoing requirements shall be an
Eligible Loan subject to the condition subsequent of physical delivery of its
Mortgage Note, Mortgage and all other Required Documents (and, if requested by
the Buyer, other Loan Papers), together with a revised Loan Schedule to be
attached to the related Purchase Request, to the Buyer on or before seven
(7) Banking Days after the relevant Purchase Date. Each Wet Mortgage Loan sold
by the Seller shall be irrevocably deemed purchased by the Buyer and shall
automatically become a Purchased Loan effective on the date of the related
Purchase Request, and the Seller shall take all steps necessary or appropriate
to cause the sale to the Buyer and delivery to the Buyer of such Wet Mortgage
Loan and its Required Documents to be completed, perfected and continued in all
respects, including causing the original promissory note evidencing such
Purchased Loan to be physically delivered to the Buyer within seven (7) Banking
Days after the relevant Purchase Date, and, if requested by the Buyer, to give
written notice to any title agent, closing attorney or other Person in
possession of the Required Documents for such Wet Mortgage Loan of the Buyer’s
purchase of such Wet Mortgage Loan. Upon the Buyer’s receipt of the Required
Documents relative to a Wet Mortgage Loan accompanied by its Purchase Request
with its attached Loan Schedule revised to recharacterize such Wet Mortgage Loan
as a Dry Mortgage Loan, such Wet Mortgage Loan shall no longer be considered a
Wet Mortgage Loan and shall be recharacterized as a Dry Mortgage Loan of the
applicable Approved Loan Type.

 

Annex B-1

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

ANNEX C

DEFINITION OF AGED MORTGAGE LOAN

“Aged Mortgage Loan” means a Mortgage Loan as to which each of the following
statements is true and correct:

(i) such Mortgage Loan is an Eligible Loan;

(ii) such Mortgage Loan meets the requirements set forth in one of the
following: (a) paragraph (ii) of the definition of Conforming Mortgage Loan, or
(b) paragraphs (ii) and (iv) of the definition of Jumbo Mortgage Loan;

(iii) if the promissory note for such Mortgage Loan (or any other documentation
relating thereto) has been withdrawn from the possession of the Buyer on terms
and subject to the conditions set forth in this Agreement, (i) such note or
other documentation has been released to the Seller pursuant to a trust receipt
as permitted under this Agreement and such release has occurred within the
immediately preceding ten (10) days or (ii) such note or other documentation has
been released to an attorney, trustee or other third party conducting
foreclosure proceedings on behalf of the Seller (for purposes of prosecuting
such foreclosure proceedings) pursuant to a bailee letter as permitted under
this Agreement;

(iv) the Seller has delivered (or caused to be delivered) to the Buyer the
Required Documents and, if requested by the Buyer, any other Loan Papers for
such Mortgage Loan prior to the related Transaction;

(v) the Seller has delivered (or caused to be delivered) to the Buyer, if
requested by the Buyer, a copy of the most recent Appraisal;

(vi) following the transfer of such Mortgage Loan to the Aged Mortgage Loans
Sublimit, the Repurchase Period applicable to Aged Mortgage Loans shall not have
elapsed with respect to such Mortgage Loan; and

(vii) such Mortgage Loan was originally funded in a Transaction under an
Approved Sublimit (other than the Aged Mortgage Loans Sublimit), and either
(a) except for the expiration of the Repurchase Period applicable to such
Mortgage Loan prior to the transfer of such Mortgage Loan to the Aged Mortgage
Loans Sublimit from the applicable other Approved Sublimit, such Mortgage Loan
would continue to be eligible under the Repurchase Facility as an Approved Loan
Type (other than an Aged Mortgage Loan), or (b) such Mortgage Loan has been
rejected or currently is not eligible for purchase by an Approved Investor as an
Approved Loan Type (other than an Aged Mortgage Loan), as a result of an issue
other than fraud.

 

Annex C-1

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

ANNEX D

DEFINITION OF JUMBO MORTGAGE LOAN

“Jumbo Mortgage Loan” means a Mortgage Loan as to which each of the following
statements is true and correct:

(i) such Mortgage Loan is an Eligible Loan;

(ii) such Mortgage Loan is a full documentation loan and either (a) fully
conforms to all Agency underwriting and other requirements for “A” Mortgage
Loans, except loan size; or (b) is approved by the Buyer, in its sole and
absolute discretion, for funding under the Repurchase Facility, and is eligible
for sale to more than one Approved Investor;

(iii) such Mortgage Loan is subject to a Best Efforts Commitment, and prior to
funding any Purchase Request relating to such Mortgage Loan, Buyer shall have
received with respect to such Mortgage Loan a copy of the interest rate lock and
the underwriting approval of the applicable Approved Investor (provided,
however, if Seller has delegated underwriting authority from such Approved
Investor, evidence of such delegated underwriting authority, together with a
copy of the interest rate lock and Seller’s underwriting, will be sufficient);
and

(iv) the Cumulative Loan-to-Value Ratio for such Mortgage Loan does not exceed
100%.

 

Annex D-1

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

ANNEX E

DEFINITION OF BB&T CORRESPONDENT MORTGAGE LOAN

“BB&T Correspondent Mortgage Loan” means a Mortgage Loan as to which each of the
following statements is true and correct:

(i) such Mortgage Loan is an Eligible Loan;

(ii) such Mortgage Loan meets all of the requirements set forth in the
definition of Conforming Mortgage Loan or all of the requirements set forth in
the definition of Jumbo Mortgage Loan; and

(iii) the Approved Investor under the Investor Commitment covering such Mortgage
Loan is the BB&T Correspondent Lending Division or another division or Affiliate
of BB&T (should such Mortgage Loan be recommitted to another investor, such
Mortgage Loan shall no longer be eligible as a BB&T Correspondent Mortgage Loan,
but may be transferred, as applicable, to the Conforming Mortgage Loans Sublimit
if it remains eligible therefor as a Conforming Mortgage Loan or to the Jumbo
Mortgage Loans Sublimit if it remains eligible therefor as a Jumbo Mortgage
Loan).

 

Annex E-1