Exhibit 10.1

EXECUTION VERSION

 

 

 

MASTER REPURCHASE AGREEMENT

Dated as of February 1, 2013

Between:

THE ROYAL BANK OF SCOTLAND PLC, as Buyer,

and

GREEN TREE SERVICING LLC, as Seller

 

 

 

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TABLE OF CONTENTS

 

1.

   APPLICABILITY      1   

2.

   DEFINITIONS AND ACCOUNTING MATTERS      1   

3.

   THE TRANSACTIONS      26   

4.

   PAYMENTs; COMPUTATION      30   

5.

   TAXES; TAX TREATMENT      31   

6.

   MARGIN MAINTENANCE      32   

7.

   INCOME PAYMENTS      33   

8.

   SECURITY INTEREST; BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT      33   

9.

   CONDITIONS PRECEDENT      36   

10.

   RELEASE OF PURCHASED ASSETS      41   

11.

   RELIANCE      42   

12.

   REPRESENTATIONS AND WARRANTIES      42   

13.

   COVENANTS OF SELLER      47   

14.

   REPURCHASE DATE PAYMENTS      56   

15.

   REPURCHASE OF Purchased ASSETS      56   

16.

   RESERVED      57   

17.

   ACCELERATION OF REPURCHASE DATE      57   

18.

   EVENTS OF DEFAULT      57   

19.

   REMEDIES      60   

20.

   DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE      63   

21.

   NOTICES AND OTHER COMMUNICATIONS      63   

22.

   USE OF EMPLOYEE PLAN ASSETS      65   

23.

   INDEMNIFICATION AND EXPENSES      65   

24.

   WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS      66   

25.

   REIMBURSEMENT      66   

26.

   FURTHER ASSURANCES      67   

27.

   TERMINATION      67   

28.

   SEVERABILITY      67   

29.

   BINDING EFFECT; GOVERNING LAW      67   

30.

   AMENDMENTS      67   

31.

   SUCCESSORS AND ASSIGNS      68   

32.

   SURVIVAL      68   

33.

   CAPTIONS      68   

34.

   COUNTERPARTS      68   

35.

   SUBMISSION TO JURISDICTION; WAIVERS      68   

36.

   WAIVER OF JURY TRIAL      69   

37.

   ACKNOWLEDGEMENTS      69   

38.

   HYPOTHECATION OR PLEDGE OF PURCHASED ITEMS      69   

39.

   ASSIGNMENTS; PARTICIPATIONS      69   

 

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40.

   SINGLE AGREEMENT      70   

41.

   INTENT      70   

42.

   CONFIDENTIALITY      71   

43.

   SERVICING      72   

44.

   PERIODIC DUE DILIGENCE REVIEW      73   

45.

   SET-OFF      74   

46.

   ENTIRE AGREEMENT      74   

SCHEDULES

 

SCHEDULE 1   Representations and Warranties re: Assets SCHEDULE 2   Filing
Jurisdictions and Offices SCHEDULE 3   Relevant States SCHEDULE 4   Subsidiaries
SCHEDULE 5   Subservicers SCHEDULE 6   Approved Title Insurance Company

EXHIBITS

 

EXHIBIT A-1    Form of Monthly Certification EXHIBIT A-2    Form of Quarterly
Certification EXHIBIT B    Form of Instruction Letter EXHIBIT C    Form of
Committed Amount Increase Notice EXHIBIT D    Form of Notice of Transaction
Notice EXHIBIT E    Underwriting Guidelines EXHIBIT F    Required Fields for
Servicing Transmission EXHIBIT G    Required Fields for Asset Schedule EXHIBIT H
   Form of Confidentiality Agreement EXHIBIT I    Form of Participation
Certificate EXHIBIT J    Form of Security Release Certification EXHIBIT K   
Form of Trade Assignment EXHIBIT L    Form of Officer’s Certificate

 

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MASTER REPURCHASE AGREEMENT, dated as of February 1, 2013, between Green Tree
Servicing LLC, a Delaware limited liability company as seller (“Seller”) and The
Royal Bank of Scotland plc (“Buyer”, which term shall include any “Principal” as
defined and provided for in Annex I), or as agent pursuant hereto (“Agent”).

 

1. APPLICABILITY

Buyer shall, with respect to the Committed Amount and may, with respect to the
Uncommitted Amount, from time to time, upon the terms and conditions set forth
herein, agree to enter into transactions in which Seller transfers to Buyer
Eligible Loans or 100% beneficial interests in Eligible Loans evidenced by
Eligible Participation Certificates, which shall be exchanged for Eligible
Securities against the transfer of funds by Buyer, with a simultaneous agreement
by Buyer to transfer to Seller Purchased Assets at a date certain, against the
transfer of funds by Seller. Each such transaction shall be referred to herein
as a “Transaction”, and, unless otherwise agreed in writing, shall be governed
by this Agreement. It is hereby understood and agreed that the repurchase
facility provided for in this Agreement with respect to the Uncommitted Amount
is an uncommitted facility.

 

2. DEFINITIONS AND ACCOUNTING MATTERS

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

“Accepted Servicing Practices” shall mean with respect to any Loan, those
accepted and prudent mortgage servicing practices (including collection
procedures) of prudent mortgage lending institutions which service mortgage
loans of the same type as the Loans in the jurisdiction where the related
Mortgaged Property is located, and which are in accordance with the requirements
of the Agency Guidelines, applicable law, if applicable, FHA Regulations and VA
Regulations and the requirements of any private mortgage insurer so that the FHA
Mortgage Insurance, VA guarantee or any other applicable insurance or guarantee
in respect of any Loan is not voided or reduced, as applicable, and in a manner
at least equal in quality to the servicing Seller or Seller’s designee provides
to mortgage loans which they own in their own portfolio.

“Additional Purchased Assets” shall have the meaning specified in Section 6(a)
hereof.

“Adjustable Rate Loan” shall mean a Loan which provides for the adjustment of
the Mortgage Interest Rate payable in respect thereto.

“Adjusted Tangible Net Worth” shall mean, with respect to any Person, as of any
date of determination, the consolidated Net Worth of such Person and its
Subsidiaries, less the consolidated net book value of all assets of such Person
and its Subsidiaries (to the extent reflected as an asset in the balance sheet
of such Person or any Subsidiary at such date) which will be treated as
intangibles under GAAP, including, without limitation, such items as deferred
financing expenses, deferred taxes, net leasehold improvements, good will,
trademarks, trade names, service marks, copyrights, patents, licenses and
unamortized debt discount and expense; provided, that residual securities issued
by such Person or its Subsidiaries shall not be treated as intangibles for
purposes of this definition.

“Adjustment Date” shall mean with respect to each Adjustable Rate Loan, the date
set forth in the related Note on which the Mortgage Interest Rate on the Loan is
adjusted in accordance with the terms of the Note.

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“Affiliate” shall mean, (i) with respect to any Person other than Seller and
Guarantor, any other Person which, directly or indirectly, controls, is
controlled by, or is under common control with, such Person, and which shall
include any Subsidiary of such Person. For purposes of this definition,
“control” (together with the correlative meanings of “controlled by” and “under
common control with”) means possession, directly or indirectly, of the power
(a) to vote 10% or more of the securities (on a fully diluted basis) having
ordinary voting power for the directors or managing general partners (or their
equivalent) of such Person, or (b) to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise, and, (ii) with respect to Seller, the
Guarantor and, with respect to the Guarantor, the Seller; provided that for
purposes of determining the Affiliates of Seller under Section 13(j) hereof,
subclause (i) of this definition shall apply.

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

“Agency Audit” shall mean any Agency, FHA and HUD audits, examinations,
evaluations, monitoring reviews and reports of its origination and servicing
operations (including those prepared on a contract basis for any such Agency).

“Agency Eligible Loan” shall mean a Loan that is originated in Strict Compliance
with the Agency Guidelines and the eligibility requirements specified for the
applicable Agency Program, FHA or VA, as applicable, and is either (i) eligible
for sale to, or securitization by, Fannie Mae, Freddie Mac or Ginnie Mae or
(ii) is an FHA Loan or a VA Loan.

“Agency Guidelines” shall mean, as applicable to the related Purchased Loans,
the Ginnie Mae Guide, the Fannie Mae Guide, Freddie Mac Guide, FHA Regulations
and/or the VA Regulations, as the context may require, in each case as such
guidelines have been or may be amended, supplemented or otherwise modified from
time to time (i) by Ginnie Mae, Fannie Mae, Freddie Mac, FHA or VA, as
applicable, in the ordinary course of business and, with respect to material
amendments, supplements or other modifications, as to which Buyer shall not have
reasonably objected within ten (10) days of receiving notice of such or (ii) by
Ginnie Mae, Fannie Mae, Freddie Mac, FHA or VA, as applicable, at the request of
Seller and as to which (x) Seller has given notice to Buyer of any such material
amendment, supplement or other modification and (y) Buyer shall not have
reasonably objected within ten (10) days of receiving notice of such.

“Agency Program” shall mean the Ginnie Mae Program, the Fannie Mae Program
and/or the Freddie Mac Program, as the context may require.

“Agency Takeout Loan” shall mean a Loan that is an Agency Eligible Loan (other
than an Early Purchase Program Loan) and is subject to a Takeout Commitment of
the kind described in clause (a) of the definition of “Takeout Commitment.”

“Agency WL Repurchase Agreement” shall mean that certain Master Repurchase
Agreement, dated as of December 12, 2012, by and between Seller and Buyer, as
the same may be amended, supplemented or otherwise modified from time to time.

“Agent” shall have the meaning set forth in the preamble to this Agreement.

“Agreement” shall mean this Master Repurchase Agreement (including all exhibits,
schedules and other addenda hereto or thereto), as supplemented by the Pricing
Side Letter, as it may be amended, further supplemented or otherwise modified
from time to time.

 

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“ALTA” shall mean the American Land Title Association.

“AM Funded Wet Loan” shall mean a Wet Loan that is to be purchased by Seller in
a Transaction at or prior to 9:00 a.m. (New York City time) on the requested
Purchase Date.

“Applicable Margin” shall have the meaning assigned thereto in the Pricing Side
Letter.

“Applicable Percentage” shall have the meaning assigned thereto in the Pricing
Side Letter.

“Appraised Value” shall mean, with respect to any Loan, the lesser of (i) the
value set forth on the appraisal (or similar valuation approved by the
applicable Agency) made in connection with the origination of the related Loan
as the value of the related Mortgaged Property, or (ii) the purchase price paid
for the Mortgaged Property, provided, however, that in the case of a Loan the
proceeds of which are not used for the purchase of the Mortgaged Property, such
value shall be based solely on the appraisal made in connection with the
origination of such Loan.

“Approvals” shall mean (i) at all times, with respect to Seller, the approvals
obtained by the applicable Agency, as applicable, in designation of Seller as a
Fannie Mae Seller/Servicer or a Freddie Mac approved Servicer, as applicable, in
good standing, (ii) during any period FHA Loans are sold by Seller to Buyer
pursuant to this Agreement or pursuant to the Agency WL Repurchase Agreement,
with respect to Seller, the approvals obtained by FHA or HUD, as applicable, in
designation of Seller as an FHA-approved mortgagee or a HUD-approved mortgagee
pursuant to Section 203 of the National Housing Act, (iii) during any period VA
Loans are sold by Seller to Buyer pursuant to this Agreement or pursuant to the
Agency WL Repurchase Agreement, with respect to Seller, the approvals obtained
by FHA, HUD or VA, as applicable, in designation of Seller as a VA-approved
lender and (iv) during any period Ginnie Mae Loans are sold by Seller to Buyer
pursuant to this Agreement or pursuant to the Agency WL Repurchase Agreement,
with respect to Seller, the approvals obtained by Ginnie Mae, FHA or HUD, as
applicable, in designation of Seller as a Ginnie Mae approved issuer or a Ginnie
Mae approved servicer, as applicable, in good standing.

“Approved Title Insurance Company” shall mean each title company listed on
Schedule 6 to this Agreement (as such schedule may be amended from time to time
by the Seller and the Buyer) and any title insurance company that has not been
disapproved by Buyer in its reasonable discretion in a written notice to the
Custodian and Seller by Buyer.

“Asset” shall mean a Loan or 100% beneficial interest in a Loan that is a
Related Loan, a Participation Certificate, or Security, as the context may
require.

“Asset Schedule” shall mean the list of Purchased Assets or Assets proposed to
be purchased by Buyer that will be delivered in hard copy or electronic format
to Buyer and shall incorporate the fields identified on Exhibit G hereto, and
any other information required by Buyer and any other additional information to
be provided pursuant to the Custodial Agreement, and which shall also be
separately delivered to Buyer using the Uniform Loan Delivery Dataset format
approved by Fannie Mae and Freddie Mac with respect to Purchased Assets or
Assets that are Agency Eligible Loans, Agency Takeout Loans and Related Loans.

“Assignment of Mortgage” shall mean, with respect to any Mortgage, an assignment
of the Mortgage, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the assignment of the Mortgage to Buyer.

 

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“Attorney Bailee Letter” shall have the meaning assigned to such term in the
Custodial Agreement.

“Bankruptcy Code” shall mean Title 11 of the United States Code, Section 101 et
seq., as amended from time to time

“Best’s” shall mean Best’s Key Rating Guide, as the same shall be amended from
time to time.

“Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a
day on which the New York Stock Exchange, the Federal Reserve Bank of New York,
the Custodian’s offices, banking and savings and loan institutions in the State
of New York, Connecticut, Minnesota or California, the City of New York or the
city or state in which the Custodian’s offices are located are closed, or
(iii) a day on which trading in securities on the New York Stock Exchange or any
other major securities exchange in the United States is not conducted.

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

“Cash Equivalents” shall mean (a) securities with maturities of ninety (90) days
or less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of ninety (90) days or less from
the date of acquisition and overnight bank deposits of any commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than seven (7) days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-1 or the
equivalent thereof by Standard and Poor’s Ratings Group (“S&P”) or P-1 or the
equivalent thereof by Moody’s Investors Service, Inc. (“Moody’s”) and in either
case maturing within ninety (90) days after the day of acquisition,
(e) securities with maturities of ninety (90) days or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s, (f) securities with maturities of ninety (90) days or
less from the date of acquisition backed by standby letters of credit issued by
any commercial bank satisfying the requirements of clause (b) of this definition
or, (g) shares of money market mutual or similar funds which invest exclusively
in assets satisfying the requirements of clauses (a) through (f) of this
definition.

“Change of Control” shall mean, with respect to Seller, the acquisition by any
other Person, or two or more other Persons acting in concert, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of outstanding
shares of voting stock of Seller at any time if after giving effect to such
acquisition (i) such Person or Persons owns twenty percent (20%) or more of such
outstanding voting stock or (ii) Walter Investment Management Corp. does not own
directly or indirectly more than fifty percent (50%) of such outstanding voting
stock.

 

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

“COBRA” shall have the meaning assigned thereto in Section 12(p) hereof.

“Collection Account” shall mean the following account established by Seller in
accordance with Section 13(ii) for the benefit of Buyer.

“Collection Account Control Agreement” shall mean the collection account control
agreement to be entered into by and among Buyer, Seller and Control Bank, in
form and substance acceptable to Buyer to be entered into with respect to the
Collection Account, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

“Commitment Fee” shall have the meaning assigned thereto in the Pricing Side
Letter.

“Committed Amount” shall have the meaning assigned thereto in the Pricing Side
Letter.

“Committed Amount Increase Notice” shall mean a written notice in the form of
Exhibit C hereto pursuant to which Seller requests an increase in the Committed
Amount hereunder to an amount not to exceed the Maximum Aggregate Purchase
Price.

“Confirmation” shall have the meaning assigned thereto in Section 3(a) hereof.

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

“Control Bank” shall mean a depositary bank appointed by Buyer and Seller to act
as control bank under this Agreement.

“Conversion Date” shall mean, with respect to a Purchased Participation
Certificate, the date on which Buyer releases its rights, title and interest in
the Related Loans and the Related Security is registered as a book-entry
security in the name of the Depository.

“Custodial Agreement” shall mean the Custodial and Disbursement Agreement, dated
as of February 1, 2013 among Seller, Buyer, Disbursement Agent and Custodian as
the same may be amended, restated, supplemented or otherwise modified from time
to time.

“Custodian” shall mean Wells Fargo Bank, N.A., or its successors and permitted
assigns, or any successor custodian appointed by Buyer and Seller to act as
custodian under this Agreement.

“Custodian Loan Transmission” shall have the meaning assigned thereto in the
Custodial Agreement.

“Customer Information” shall mean all disclosed data information, however
collected or received, pertaining to or identifiable to customer(s) of Seller or
Mortgagors of Loans, including without limitation, name, address, email address,
passwords, account numbers, personal financial information, personal
preferences; demographic data; marketing data; data about securities
transactions; credit data, or any other identification data. For the avoidance
of doubt, Customer Information shall include all “nonpublic personal
information” as defined under GLBA.

 

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“Default” shall mean an Event of Default or any event, that, with the giving of
notice or the passage of time or both, would become an Event of Default.

“Depository” shall have the meaning set forth in the glossary of the Ginnie Mae
Guide, the Fannie Mae Guide or the Freddie Mac Guide, as applicable.

“Disbursement Account” shall mean the account established by Buyer pursuant to
which funds shall be disbursed to fund any Table Funded Wet Loan.

“Disbursement Agent” shall mean Wells Fargo Bank, N.A., or its successors and
permitted assigns, or such other disbursement agent as may be mutually agreed to
by Buyer and Seller.

“Document Deficient Loan” shall mean any closed Loan for which the Custodian has
not received a complete Mortgage File from Seller.

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

“Dry Loan” shall mean a Loan which is underwritten in accordance with the
Underwriting Guidelines and as to which the related Mortgage File contains all
Required Documents.

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

“Due Diligence Review” shall mean the performance by Buyer of any or all of the
reviews permitted under Section 44 hereof with respect to any or all of the
Loans or Seller or related parties, as desired by Buyer from time to time.

“Early Purchase Program Loan” shall mean a Loan identified as an Early Purchase
Program Loan on the related Asset Schedule that is an Agency Eligible Loan
subject to a Takeout Commitment of the kind described in clause (c) of the
definition of “Takeout Commitment,” and as to which 100% of the beneficial
interests therein are evidenced by a Participation Certificate.

“Effective Date” shall mean the date upon which the conditions precedent set
forth in Section 9(a) have been satisfied.

“Electronic Tracking Agreement” shall mean the electronic tracking agreement, to
be entered into by and among Buyer, Seller, MERSCORP, Inc. and MERS, in form and
substance acceptable to Buyer, as the same may be amended, restated,
supplemented or otherwise modified from time to time; provided that if no Loans
are or will be MERS Loans, all references herein to the Electronic Tracking
Agreement shall be disregarded.

“Electronic Transmission” shall mean the delivery of information in an
electronic format acceptable to the applicable recipient thereof. An Electronic
Transmission shall be considered written notice for all purposes hereof (except
when a request or notice by its terms requires execution).

“Eligible Asset” shall mean an Eligible Loan, an Eligible Participation
Certificate and/or an Eligible Security, as the context may require.

 

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“Eligible Loan” shall mean a First Lien Agency Eligible Loan (including a HARP
Loan) or a Third Party Takeout Loan (i) as to which the representations and
warranties in Section 12(v) and 12(w) and Schedule 1, Part I of the Agreement
are true and correct, (ii) that was originated or acquired by Seller in
accordance with Seller’s or Buyer approved third party’s Underwriting
Guidelines; provided, that such Loan was also originated in accordance with the
Agency Guidelines, (iii) contains all required Loan Documents without Exceptions
unless otherwise waived by Buyer (except if such Loan is a Wet Loan, as may be
permitted hereunder), (iv) that does not cause the applicable sublimits set
forth in the Pricing Side Letter to be exceeded, (v) that does not remain
subject to a Transaction for longer than the applicable “Permitted Days on Line”
set forth in the Pricing Side Letter, (vi) that complies with all applicable
criteria set forth in the Pricing Side Letter, and (vii) that satisfies such
other customary criteria for eligibility determined by Buyer. Except as
otherwise permitted in the Pricing Side Letter, no Loan shall be an Eligible
Loan:

 

  1. that Buyer determines, in its reasonable discretion is not eligible for
sale in the secondary market or for securitization without unreasonable credit
enhancement;

 

  2. as to which the related Mortgage File has been released from the possession
of the Custodian under Section 5(a) of the Custodial Agreement to Seller or its
bailee for a period in excess of fifteen (15) calendar days (or if such
fifteenth day is not a Business Day, the next succeeding Business Day);

 

  3. as to which the related Mortgage File has been released from the possession
of the Custodian (i) under Section 5(b) of the Custodial Agreement under any
Transmittal Letter in excess of the time period stated in such Transmittal
Letter for release, or (ii) under Section 5(c) of the Custodial Agreement under
an Attorney Bailee Letter, from and after the date such Attorney’s Bailee Letter
is terminated or ceases to be in full force and effect;

 

  4. in respect of which (a) the related Mortgaged Property is the subject of a
foreclosure proceeding or (b) the related Note has been extinguished under
relevant state law in connection with a judgment of foreclosure or foreclosure
sale or otherwise;

 

  5. if (a) the related Note or the related Mortgage is not genuine or is not
the legal, valid, binding and enforceable obligation of the maker thereof,
subject to no right of rescission, set-off, counterclaim or defense, or (b) such
Mortgage, is not a valid, subsisting, enforceable and perfected First Lien on
the Mortgaged Property;

 

  6. in respect of which the related Mortgagor is the subject of a bankruptcy
proceeding;

 

  7. if the related Mortgagor has not made its first contractually due payment
on such Loan within thirty (30) days of the related Due Date therefor;

 

  8. if such Loan is thirty (30) or more days past due;

 

  9. if the Purchase Price of such Loan, when added to the aggregate outstanding
Purchase Price of all Purchased Assets that are then subject to Transactions,
exceeds the Maximum Aggregate Purchase Price; or

 

  10. if such Loan is secured by real property improved by manufactured housing

 

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“Eligible Participation Certificate” shall mean a Participation Certificate
(i) that represents a 100% beneficial interest in a pool of Eligible Loans that
are Early Purchase Program Loans (together with all related Servicing Rights),
(ii) that is sufficient for Seller to issue and Ginnie Mae to guarantee, or for
Seller to sell and Fannie Mae or Freddie Mac to issue, the Related Security in
the amount and with the terms described in the related Takeout Commitment, and
(iii) as to which the Takeout Price set forth in the related Takeout Commitment
is for an amount that is not less than the outstanding Repurchase Price for such
Participation Certificate.

“Eligible Security” shall mean a Security that is a Related Security (i) as to
which the representations and warranties in Schedule 1, Part II of the Agreement
are true and correct, (ii) that is issued on the Conversion Date in Strict
Compliance with the applicable Agency Guidelines, (iii) for which a CUSIP has
been issued and provided to Buyer, (iv) that is backed solely by Eligible Loans
that are Early Purchase Program Loans that were subject to Transactions
immediately prior to the issuance of the Security, (v) that is delivered in a
manner sufficient to cause Buyer to have a perfected, first priority security
interest in, and to be the “entitlement holder” (as defined in
Section 8-102(a)(7) of the Uniform Commercial Code of, such Security, (vi) for
which the Conversion Date occurs prior to the related Settlement Date, and
(vii) that is purchased by the Takeout Investor on the related Settlement Date.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

“ERISA Affiliate” shall mean any entity, whether or not incorporated, that is a
member of any group of organizations described in Section 414(b), (c), (m) or
(o) of the Code of which Seller is a member.

“Escrow Letter” shall mean, with respect to any Table Funded Wet Loan that
becomes subject to a Transaction before the end of the applicable Rescission
period, an escrow agreement or letter, which is fully assignable to Buyer,
stating that in the event of a Rescission or if for any other reason such Loan
fails to fund on a given day, all funds which would have been disbursed on
behalf of the Mortgagor shall be returned to account from which such funds
originated not later than two (2) Business Days after the date of Rescission or
other failure of the Loan to fund on a given day.

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

“Event of Default” shall have the meaning provided in Section 18 hereof.

“Exception” shall have the meaning assigned thereto in the Custodial Agreement.

“Exception Report” shall mean the exception report prepared by the Custodian
pursuant to the Custodial Agreement.

“Facility Fee” shall have the meaning assigned thereto in the Pricing Side
Letter.

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

“Fannie Mae Guide” shall mean the Fannie Mae MBS Selling and Servicing Guide, as
such Guide may hereafter from time to time be amended.

 

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“Fannie Mae Loan” shall mean a mortgage loan that is in Strict Compliance on the
related Purchase Date with the eligibility requirements specified for the
applicable Fannie Mae Program described in the Fannie Mae Guide, subject to any
variances and/or waivers received by the Seller from Fannie Mae.

“Fannie Mae Program” shall mean the Fannie Mae Guaranteed Mortgage-Backed
Securities Programs, as described in the Fannie Mae Guide.

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

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

“FHA Mortgage Insurance” shall mean mortgage insurance authorized under Sections
203(b), 213, 221(d)(2), 222, and 235 of the National Housing Act, as amended,
codified in 24 Code of Federal Regulations, and provided by the FHA.

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

“FHA Mortgage Insurance Proceeds” shall mean with respect to each Loan,
Insurance Proceeds with respect to any FHA Mortgage Insurance Contract.

“FHA Regulations” shall mean regulations promulgated by HUD under the Federal
Housing Administration Act, codified in 24 Code of Federal Regulations, and
other HUD issuances relating to FHA Loans, including the related handbooks,
circulars, notices and mortgagee letters.

“First Lien” shall mean with respect to each Mortgaged Property, the lien of the
mortgage, deed of trust or other instrument securing a mortgage note which
creates a first Lien on the Mortgaged Property and is subject to no other prior
Liens on such Mortgaged Property securing financing obtained by the related
Mortgagor and to Permitted Exceptions.

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

“Freddie Mac Guide” shall mean the Freddie Mac Sellers’ and Servicers’ Guide, as
such Guide may hereafter from time to time be amended.

“Freddie Mac Loan” shall mean a mortgage loan that is in Strict Compliance on
the related Purchase Date with the eligibility requirements specified for the
applicable Freddie Mac Program described in the Freddie Mac Guide, subject to
any variances and/or waivers received by the Seller from Freddie Mac.

“Freddie Mac Program” shall mean the Freddie Mac Home Mortgage Guarantor Program
or the Freddie Mac FHA/VA Home Mortgage Guarantor Program, as described in the
Freddie Mac Guide.

“GAAP” shall mean generally accepted accounting principles in effect from time
to time in the United States of America.

 

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“Ginnie Mae” shall mean the Government National Mortgage Association and its
successors in interest, a wholly-owned corporate instrumentality of the
government of the United States of America.

“Ginnie Mae Guide” shall mean the Ginnie Mae Mortgage-Backed Securities Guide I
or II, as such Guide may hereafter from time to time be amended.

“Ginnie Mae Loan” means a mortgage loan that is in Strict Compliance on the
related Purchase Date with the eligibility requirements specified for the
applicable Ginnie Mae Program described in the Ginnie Mae Guide, subject to any
variances and/or waivers received by the Seller from Ginnie Mae.

“Ginnie Mae Program” shall mean the Ginnie Mae Mortgage-Backed Securities
Programs, as described in the Ginnie Mae Guide.

“GLBA” shall mean The Gramm-Leach-Bliley Act (15 U.S.C. Section 6801, et seq.)
and its implementing regulations (e.g., Federal Reserve Board Regulation P).

“Governmental Authority” shall mean with respect to any Person, any nation or
government, any state or other political subdivision, agency or instrumentality
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any court or
arbitrator having jurisdiction over such Person, any of its Subsidiaries or any
of its properties.

“Gross Margin” shall mean with respect to each Adjustable Rate Loan, the fixed
percentage amount set forth in the related Note and the Asset Schedule that is
added to the Index on each Adjustment Date in accordance with the terms of the
related Note to determine the new Mortgage Interest Rate for such Loan.

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

“Guarantor” shall mean Walter Investment Management Corp.

“Guaranty” shall mean that certain Guaranty, dated as of February 1, 2013, made
by Guarantor in favor of Buyer, as the same may be amended, supplemented or
otherwise modified from time to time.

“HARP Loan” shall mean a Fannie Mae Loan or a Freddie Mac Loan that fully
conforms to the Home Affordable Refinance Program (as such program is amended,
supplemented or otherwise modified, from time to time), or is referred to by
Fannie Mae as a “Refi Plus mortgage loan” or “DU Refi Plus mortgage loan”, or by
Freddie Mac as a “Relief Refinance Mortgage,” respectively.

 

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“HARP MH Loan” shall mean a HARP Loan for which the related Mortgaged Property
is on a permanent chassis, attached to a permanent foundation and titled as real
property.

“HUD” shall mean the Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term “HUD,” for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Ginnie Mae.

“Income” shall mean, with respect to any Purchased Asset at any time, any
principal and/or interest thereon, all FHA Mortgage Insurance Proceeds and all
dividends, sale proceeds (including, without limitation, any proceeds from the
securitization of such Purchased Asset or other disposition thereof) and other
collections and distributions thereon (including, without limitation, any
proceeds received in respect of private mortgage insurance), but not including
any commitment fees, origination fees and/or servicing fees accrued in respect
of periods on or after the Purchase Date with respect to such Purchased Asset.

“Indebtedness” shall mean, for any Person: (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within ninety (90) days of the date the respective goods are delivered or the
respective services are rendered; (c) indebtedness of others secured by a Lien
on the Property of such Person, whether or not the respective indebtedness so
secured has been assumed by such Person; (d) obligations (contingent or
otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for account of such
Person; (e) Capital Lease Obligations of such Person; (f) obligations of such
Person under repurchase agreements or like arrangements; (g) indebtedness of
others Guaranteed by such Person; (h) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person;
(i) indebtedness of general partnerships of which such Person is a general
partner; and (j) any other indebtedness of such Person evidenced by a note,
bond, debenture or similar instrument.

“Index” shall mean with respect to each Adjustable Rate Loan, the index
identified on the related Asset Schedule and set forth in the related Note for
the purpose of calculating the interest rate thereon.

“Instruction Letter” shall mean a letter agreement between Seller and each
Subservicer substantially in the form of Exhibit B attached hereto.

“Insurance Proceeds” shall mean with respect to each Loan, proceeds of insurance
policies insuring the Loan or the related Mortgaged Property.

“Insured Closing Letter” shall mean, with respect to any Table Funded Wet Loan
that becomes subject to a Transaction before the end of the applicable
Rescission period, a letter of indemnification from an Approved Title Insurance
Company, in any jurisdiction where insured closing letters are permitted under
applicable law and regulation, addressed to Seller, which is fully assignable to
Buyer, with coverage that is customarily acceptable to Persons engaged in the
origination of mortgage loans identifying the Settlement Agent covered thereby,
which may be in the form of a blanket letter.

 

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“Intercreditor Agreement” shall mean that certain Intercreditor and
Subordination Agreement that will be required to be entered into in connection
with any Subordinated Lender Credit Facility (if any) among the Seller, the
Buyer, and Subordinated Lender, as the same may be amended, supplemented or
otherwise modified from time to time.

“Interest Only Loan” shall mean a Loan which, by its terms, requires the related
Mortgagor to make monthly payments of only accrued interest for a certain period
of time following origination. After such interest-only period, the loan terms
provide that the Mortgagor’s monthly payment will be recalculated to cover both
interest and principal so that such Loan will amortize fully on or prior to its
final payment date.

“Interest Period” shall mean, with respect to any Transaction, the period
commencing on the Purchase Date with respect to such Transaction and ending on
the calendar day prior to the related Repurchase Date or the Termination Date,
as applicable. Notwithstanding the foregoing, no Interest Period may end after
the Termination Date.

“Interest Rate Protection Agreement” shall mean with respect to any or all of
the Purchased Assets, any interest rate swap, cap or collar agreement or any
other applicable hedging arrangements providing for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies entered into by Seller and
reasonably acceptable to Buyer.

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended, including all rules and regulations promulgated thereunder.

“LIBO Base Rate” shall mean with respect to each day on which a Transaction is
outstanding (or if such day is not a Business Day, the next succeeding Business
Day) the rate for eurodollar deposits for a period equal to one-month appearing
on page Reuters Screen LIBOR01 Page or if such rate ceases to appear on page
Reuters Screen LIBOR01 Page, on any other service providing comparable rate
quotations at approximately 11:00 a.m., London time, on the applicable date of
determination, or, with respect to periods of more or less than one-month, such
interpolated rate as determined by Buyer. The LIBO Base Rate shall be calculated
on each Purchase Date and Repurchase Date commencing with the first Purchase
Date.

“LIBO Rate” shall mean with respect to each Interest Period pertaining to a
Transaction, a rate (reset on a monthly basis) per annum determined by Buyer in
its sole discretion in accordance with the following formula (rounded upwards to
the nearest l/100th of one percent), which rate as determined by Buyer shall be
conclusive absent manifest error by Buyer:

 

  LIBO Base Rate

  1.00 – LIBO Reserve Requirements

The LIBO Rate shall be calculated on each Purchase Date and Repurchase Date
commencing with the first Purchase Date; provided that if the LIBO Rate is
unavailable on any such date or there exists any LIBO Reserve Requirements on
any such date, Buyer and Seller shall mutually agree on an alternative index
rate.

“LIBO Reserve Requirements” shall mean for any Interest Period for any
Transaction, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements

 

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applicable to Buyer in effect on such day (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the Board
of Governors of the Federal Reserve System or other Governmental Authority
having jurisdiction with respect thereto), dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of such Board) maintained by a member bank of such
Governmental Authority. As of the Effective Date, the LIBO Reserve Requirements
shall be deemed to be zero.

“Lien” shall mean any mortgage, lien, pledge, charge, security interest or
similar encumbrance.

“Loan” shall mean a First Lien loan secured by a Mortgage on a one to four
family residential property, together with the Servicing Rights thereon, which
the Custodian has been instructed to hold for Buyer pursuant to the Custodial
Agreement, and which Loan includes, without limitation, (i) a Note, the related
Mortgage and all other Loan Documents and (ii) all right, title and interest of
Seller in and to the Mortgaged Property covered by such Mortgage.

“Loan Documents” shall mean, with respect to a Loan, the documents comprising
the Mortgage File for such Loan.

“Loan-to-Value Ratio” or “LTV” shall mean with respect to any Loan, the ratio of
the outstanding principal amount of such Loan at the time of origination to the
lesser of (a) the Appraised Value of the related Mortgaged Property at
origination of such Loan and (b) if the related Mortgaged Property was purchased
within twelve (12) months of the origination of such Loan, the purchase price of
the related Mortgaged Property.

“LTV 125 Loan” shall mean a HARP Loan which has an LTV greater than or equal to
125% and less than 150%.

“LTV 150 Loan” shall mean a HARP Loan which has an LTV greater than or equal to
150%.

“Margin Call” shall have the meaning assigned thereto in Section 6(a) hereof.

“Margin Deficit” shall have the meaning assigned thereto in Section 6(a) hereof.

“Market Value” shall mean the value, on any date of determination, determined by
Buyer in its sole good faith discretion on such date, taking into account
customary factors, including without limitation, market factors where the Assets
may be sold in their entirety to a single third-party purchaser under
circumstances in which Seller is in default under this Agreement. Buyer’s
determination of Market Value shall be conclusive upon the parties, absent
manifest error on the part of Buyer. Buyer shall have the right to mark to
market the Assets on a daily basis which Market Value with respect to one or
more of the Assets may be determined to be zero. Seller acknowledges that
Buyer’s good faith determination of Market Value is for the limited purpose of
determining the value of Purchased Assets which are subject to Transactions
hereunder without the ability to perform customary purchaser’s due diligence and
is not necessarily equivalent to a determination of the fair market value of the
Assets achieved by obtaining competing bids in an orderly market in which Seller
is not in default under a revolving debt facility and the bidders have adequate
opportunity to perform customary loan and servicing due diligence. The Market
Value shall be deemed to be zero with respect to each Asset that is not an
Eligible Asset.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
property, business, operations or financial condition of Seller or any of its
Affiliates, (b) the ability of Seller to perform its obligations under any of
the Program Documents to which it is a party, (c) the validity or enforceability
of

 

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any of the Program Documents, (d) the rights and remedies of Buyer under any of
the Program Documents, (e) the timely repurchase of the Purchased Assets or
payment of other amounts payable in connection therewith or (f) the Purchased
Items.

“Maturity Date” shall have the meaning assigned to such term in the Pricing Side
Letter.

“Maximum Aggregate Purchase Price” shall have the meaning assigned thereto in
the Pricing Side Letter.

“Minimum Leverage Ratio” shall have the meaning assigned to such term in the
Pricing Side Letter.

“Maximum Mortgage Interest Rate” shall mean with respect to each Adjustable Rate
Loan, a rate that is set forth on the related Asset Schedule and in the related
Note and is the maximum interest rate to which the Mortgage Interest Rate on
such Loan may be increased on any Adjustment Date.

“Minimum Adjusted Tangible Net Worth” shall have the meaning assigned to such
term in the Pricing Side Letter.

“Minimum Liquidity Amount” shall have the meaning assigned to such term in the
Pricing Side Letter.

“MERS” shall mean Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.

“MERS Identification Number” shall mean the eighteen digit number permanently
assigned to each MERS Loan.

“MERS Loan” shall mean any Loan as to which the related Mortgage or Assignment
of Mortgage has been recorded in the name of MERS, as agent for the holder from
time to time of the Note, and which is identified as a MERS Loan on the related
Asset Schedule.

“Monthly Payment” shall mean the scheduled monthly payment of principal and
interest on a Loan as adjusted in accordance with changes in the Mortgage
Interest Rate pursuant to the provisions of the Note for an Adjustable Rate
Loan.

“Monthly Repurchase Date” shall mean, with respect to each Purchased Loan, the
tenth (10th) day of each month following the related Purchase Date (or if such
date is not a Business Day, the following Business Day).

“Mortgage” shall mean with respect to a Loan, the mortgage, deed of trust or
other instrument, which creates a First Lien on the fee simple or leasehold
estate in such real property which secures the Note.

“Mortgage File” shall have the meaning assigned thereto in the Custodial
Agreement.

“Mortgage Interest Rate” shall mean the annual rate of interest borne on a Note,
which shall be adjusted from time to time with respect to Adjustable Rate Loans.

 

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“Mortgage Interest Rate Cap” shall mean with respect to an Adjustable Rate Loan,
the limit on each Mortgage Interest Rate adjustment as set forth in the related
Note.

“Mortgaged Property” shall mean the real property (including all improvements,
buildings, fixtures, building equipment and personal property thereon and all
additions, alterations and replacements made at any time with respect to the
foregoing) and all other collateral securing repayment of the debt evidenced by
a Note.

“Mortgagee” shall mean the record holder of a Note secured by a Mortgage.

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

“Multiemployer Plan” shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to be
made by Seller or any ERISA Affiliate or as to which Seller or any ERISA
Affiliate has any actual or potential liability or obligation and that is
covered by Title IV of ERISA.

“MV Margin Amount” shall mean, with respect to any Transaction, as of any date
of determination, the amount obtained by application of the MV Margin Percentage
to the Repurchase Price (reduced by the amount of any accrued and unpaid Price
Differential) for such Transaction as of such date.

“MV Margin Percentage” shall mean the quotient, expressed as a percentage, that
is the result of 1 divided by the Applicable Percentage.

“Negative Amortization” shall mean with respect to each Negative Amortization
Loan, that portion of interest accrued at the Mortgage Interest Rate in any
month which exceeds the Monthly Payment on the related Loan for such month and
which, pursuant to the terms of the Note, is added to the principal balance of
the Loan.

“Negative Amortization Loan” shall mean each Loan that may be subject to
Negative Amortization.

“Net Worth” shall mean, with respect to any Person, the excess of total assets
of such Person, over total liabilities of such Person, determined in accordance
with GAAP.

“No FICO Loan” shall mean an Agency Eligible Loan originated pursuant to a
program for which the related Underlying Guidelines do not require a FICO score
for the related Mortgagor to originate such loan; provided that HARP Loans, HARP
MH Loans, “FHA Streamline Refinance loans” and “VA Streamline Refinance loans”
shall be excluded for purposes of this definition.

“Non-Utilization Fee” shall have the meaning assigned thereto in the Pricing
Side Letter.

“Note” shall mean, with respect to any Loan, the related promissory note
together with all riders thereto and amendments thereof or other evidence of
indebtedness of the related Mortgagor.

“Obligations” shall mean (a) all of Seller’s obligation to pay the Repurchase
Price on the Repurchase Date and other obligations and liabilities of Seller to
Buyer, its Affiliates, the Custodian or any other Person arising under, or in
connection with, the Program Documents or directly related to the

 

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Purchased Assets, whether now existing or hereafter arising; (b) any and all
sums paid by Buyer or on behalf of Buyer pursuant to the Program Documents in
order to preserve any Purchased Asset or its interest therein; (c) in the event
of any proceeding for the collection or enforcement of any of Seller’s
indebtedness, obligations or liabilities referred to in clause (a), the
reasonable expenses of retaking, holding, collecting, preparing for sale,
selling or otherwise disposing of or realizing on any Purchased Assets, or of
any exercise by Buyer or any Affiliate of Buyer of its rights under the Program
Documents, including without limitation, reasonable attorneys’ fees and
disbursements and court costs; and (d) all of Seller’s indemnity obligations to
Buyer pursuant to the Program Documents.

“Par Margin Amount” shall mean, with respect to any Transaction, as of any date
of determination, the amount obtained by application of the Par Margin
Percentage to the Repurchase Price (reduced by the amount of any accrued and
unpaid Price Differential) for such Transaction as of such date.

“Par Margin Percentage” shall mean the quotient, expressed as a percentage, that
is the result of 1 divided by the Applicable Percentage.

“Participants” shall have the meaning assigned thereto in Section 39 hereof.

“Participation Certificate” shall mean, with respect to the applicable Agency
Program, a certificate, in the form of Exhibit I, evidencing the 100% undivided
beneficial ownership interest in the Early Purchase Program Loans that are
either set forth on Fannie Mae Form 2005 (Schedule of Mortgages), Freddie Mac
Form 1034 (Fixed-Rate Custodial Certification Schedule), or HUD 11706 (Schedule
of Pooled Mortgages) and attached to such Participation Certificate, or
identified on a computer tape compatible with the related Selling System as
belonging to the mortgage loan pool described in such Participation Certificate,
as applicable.

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

“Permitted Exceptions” shall mean the following exceptions to lien priority:
(i) the lien of current real property taxes and assessments not yet due and
payable; (ii) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording acceptable to
mortgage lending institutions generally and specifically referred to in the
lender’s title insurance policy delivered to the originator of the Loan and
(A) referred to or otherwise considered in the appraisal (if any) made for the
originator of the Loan or (B) which do not adversely affect the appraised value
of the Mortgaged Property set forth in such appraisal; and (iii) other matters
to which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property.

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

“Plan” shall mean an employee benefit or other plan established or maintained by
either Seller or, in the case of a Plan subject to Title IV of ERISA, any ERISA
Affiliate and that is covered by Title IV of ERISA, other than a Multiemployer
Plan.

 

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“PM Funded Wet Loan” shall mean a Wet Loan that is to be purchased by Seller in
a Transaction at or prior to 4:30 p.m. (New York City time) (but after 9:00 a.m.
(New York City time)) on the requested Purchase Date.

“PMI Policy” or “Primary Insurance Policy” shall mean a policy of primary
mortgage guaranty insurance issued by a Qualified Insurer.

“Post-Default Rate” shall mean, in respect of the Repurchase Price for any
Transaction or any other amount under this Agreement, or any other Program
Document that is not paid when due to Buyer (whether at stated maturity, by
acceleration or mandatory prepayment or otherwise), a rate per annum during the
period from and including the due date to but excluding the date on which such
amount is paid in full equal to four percent (4.00%) per annum, plus (a) the
Pricing Rate otherwise applicable to such Asset or other amount (which amount
shall include the Applicable Margin), or (b) if no Pricing Rate is otherwise
applicable, (i) the LIBO Rate plus (ii) the highest amount specified under the
definition of Applicable Margin.

“Price Differential” shall mean, with respect to each Transaction as of any date
of determination, the aggregate amount obtained by daily application of the
Pricing Rate (or if an Event of Default has occurred that has not been waived by
Buyer in its sole discretion in writing, by daily application of the
Post-Default Rate) for such Transaction to the Purchase Price for such
Transaction on a 360-day-per-year basis for the actual number of days elapsed
during the period commencing on (and including) the Purchase Date and ending on
(but excluding) the date of determination (reduced by any amount of such Price
Differential in respect of such period previously paid by Seller to Buyer with
respect to such Transaction).

“Pricing Rate” shall, as of any date of determination, with respect to Eligible
Assets, be equal to the sum of (x) the one-month LIBO Rate as of such date of
determination plus (y) the Applicable Margin. The Pricing Rate is calculated on
the basis of a 360-day year and the actual number of days elapsed between the
Purchase Date and the Repurchase Date.

“Pricing Side Letter” shall mean the most recently executed pricing side letter,
between Seller and Buyer referencing this Agreement and setting forth the
pricing terms and certain additional terms with respect to this Agreement, as
the same may be amended, supplemented or modified from time to time, and the
terms of which are incorporated herein as if fully set forth.

“Principal” shall have the meaning assigned thereto in Annex I.

“Program Documents” shall mean this Agreement, the Custodial Agreement, any
Servicing Agreement, the Pricing Side Letter, the Guaranty, the Intercreditor
Agreement (if any), any Instruction Letter, any assignment of an Interest Rate
Protection Agreement, the Electronic Tracking Agreement, the Collection Account
Control Agreement, all Trade Assignments and related Takeout Commitments and any
other agreement entered into by Seller, on the one hand, and Buyer and/or any of
its Affiliates or Subsidiaries (or Custodian on its behalf) on the other, in
connection herewith or therewith.

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

“Purchase Date” shall mean, with respect to each Transaction, the date on which
Purchased Assets are sold by Seller to Buyer hereunder.

 

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“Purchase Price” shall mean the price at which Purchased Assets are transferred
by Seller to Buyer in a Transaction, which shall be equal to the product of
(i) the Applicable Percentage and (ii) (x) in the case of Purchased Loans and
Purchased Participation Certificates, the lesser of (A) the outstanding
principal amount of the related Purchased Loans or the Related Loans, as
applicable and (B) the Market Value of the related Purchased Loans or the
Related Loans, as applicable and (y) in the case of Purchased Securities, the
related Takeout Price.

“Purchased Assets” shall mean Purchased Loans (including a 100% beneficial
interest in Loans that are Related Loans and as to which the related
Participation Certificate is a Purchased Participation Certificate), Purchased
Participation Certificates and/or Purchased Securities, as the context may
require. The term “Purchased Assets” with respect to any Transaction at any time
shall also include Additional Purchased Assets delivered pursuant to
Section 6(a) hereof.

“Purchased Items” shall have the meaning assigned thereto in Section 8(a)
hereof.

“Purchased Loans” shall mean any of the following assets sold by Seller to Buyer
in a Transaction on a servicing-released basis: (i) the Loans, together with
(ii) the Servicing Records, all rights of Seller to receive from any third party
or to take delivery of any Servicing Records or other documents which constitute
a part of the Mortgage File or Servicing File, and all rights of Seller to
receive from any third party or to take delivery of any Records or other
documents which constitute a part of the Mortgage File or Servicing File,
(iii) the related Servicing Rights (which were sold to and held by Seller and
subsequently purchased by Buyer on the related Purchase Date), (iv) Seller’s
rights under any Takeout Commitment and Trade Assignments related to such Loans
(including the rights to receive the related Takeout Price as evidenced by such
Trade Assignments), if applicable, (v) all of Seller’s rights under any Escrow
Letters and Insured Closing Letters with respect to the Loans that are Table
Funded Wet Loans, (vi) all Income relating to such Loans, (vii) all FHA Mortgage
Insurance Contracts and VA Loan Guaranty Agreements relating to such Loans,
(viii) such other property, rights, titles or interest as are specified on a
related Transaction Notice, (ix) all Interest Rate Protection Agreements
relating to such Loans (if any) and (x) all documents, instruments, chattel
paper, and general intangibles comprising or related to all of the foregoing.
The term “Purchased Loans” with respect to any Transaction at any time shall
also include Additional Purchased Loans delivered pursuant to Section 6(a)
hereof.

“Purchased Participation Certificate” shall mean a Participation Certificate
evidencing the 100% beneficial interest in Related Loans sold by Seller to Buyer
in a Transaction, together with (i) the Servicing Records, all rights of Seller
to receive from any third party or to take delivery of any Servicing Records or
other documents which constitute a part of the Mortgage File or Servicing File,
and all rights of Seller to receive from any third party or to take delivery of
any Records or other documents which constitute a part of the Mortgage File or
Servicing File, (ii) the related Servicing Rights (which were sold by Seller and
purchased by Buyer on the related Purchase Date), (iii) Seller’s rights under
any Takeout Commitment and Trade Assignments related to the Related Loans
(including the rights to receive the related Takeout Price and the Related
Security as evidenced by such Trade Assignments), if applicable, (iv) all Income
relating to the Related Loans, (v) all FHA Mortgage Insurance Contracts and VA
Loan Guaranty Agreements relating to the Related Loans, (vi) and such other
property, rights, titles or interest as are specified on a related Transaction
Notice, and (vii) all documents, instruments, chattel paper, and general
intangibles and all products and proceeds relating to or constituting any or all
of the foregoing.

“Purchased Security” shall mean a Related Security sold by Seller to Buyer in a
Transaction, together with (i) Seller’s rights under any related Takeout
Commitment and Trade Assignments (including the rights to receive the related
Takeout Price as evidenced by such Trade Assignments), if

 

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applicable, (ii) all related Income, (iii) such other property, rights, titles
or interest as are specified on a related Transaction Notice, and (iv) all
documents, instruments, chattel paper, and general intangibles and all products
and proceeds relating to or constituting any or all of the foregoing.

“Qualified Insurer” shall mean an insurance company duly qualified as such under
the laws of each state in which any Mortgaged Property is located, duly
authorized and licensed in each such state to transact the applicable insurance
business and to write the insurance provided, and approved as an insurer by
Fannie Mae and Freddie Mac and whose claims paying ability is rated in the two
highest rating categories by any of the rating agencies with respect to primary
mortgage insurance and in the two highest rating categories by Best’s with
respect to hazard and flood insurance.

“Qualified Originator” shall mean (a) Seller and (b) any other originator of
Loans previously approved by Buyer; provided, that Buyer shall have the right to
reject an originator (other than Seller) (in its sole discretion) by delivering
written notice to Seller fifteen (15) days prior to ceasing to accept Loans
originated by such person.

“Reacquired Loans” shall have the meaning assigned thereto in Section 16.

“Records” shall mean all instruments, agreements and other books, records, and
reports and data generated by other media for the storage of information
maintained by Seller or any other person or entity with respect to a Purchased
Asset. Records shall include without limitation, the Notes, any Mortgages, the
Mortgage Files, the Servicing File, the Servicing Records and any other
instruments necessary to document or service a Loan that is a Purchased Loan,
including, without limitation, the complete payment and modification history of
each Loan that is a Purchased Loan.

“Related Credit Enhancement” shall have the meaning assigned thereto in
Section 8(a) hereof.

“Related Loan” shall mean a Purchased Loan that is an Early Purchase Program
Loan and underlies a Participation Certificate or the Related Security, as the
context may require.

“Related Security” shall mean the Security backed by the Related Loans that is
issued in exchange for the related Purchased Participation Certificate on the
related Conversion Date.

“Reportable Event” shall mean any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .21, .22, .23, .24, .28, .29, .31 or .32 of PBGC Reg. §
4043 (provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Sections 302 or 303 of ERISA, including, without
limitation, the failure to make on or before its due date a required installment
under Section 430(j) of the Code or Section 303(j) of ERISA, shall be a
Reportable Event regardless of the issuance of any waivers in accordance with
Section 412(c) of the Code).

“Repurchase Date” shall mean, (i) with respect to each Purchased Loan and each
Purchased Participation Certificate, the date occurring on the earliest of
(x) the Termination Date, (y) the Monthly Repurchase Date, or (z) the date
specified by Seller in a Repurchase Notice delivered to Buyer pursuant to
Section 3(g) and (ii) with respect to a Purchased Security, the related
Settlement Date.

“Repurchase Notice” shall have the meaning assigned thereto in Section 3(g)
hereof.

“Repurchase Price” shall mean the price at which Purchased Assets are to be
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including

 

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Transactions terminable upon demand) as the sum of the outstanding Purchase
Price for such Purchased Assets and the Price Differential as of the date of
such determination, plus any accrued and unpaid fees and expenses and indemnity
amounts and any other amounts due and payable as of such date by Seller to Buyer
under this Agreement or any Program Document.

“Required Delivery Item” shall have the meaning assigned thereto in Section 3(a)
hereof.

“Required Delivery Time” shall have the meaning assigned thereto in Section 3(a)
hereof.

“Required Documents” shall mean the documents set forth in Annex 17 of the
Custodial Agreement.

“Required Purchase Time” shall have the meaning assigned thereto in Section 3(c)
hereof.

“Required Recipient” shall have the meaning assigned thereto in Section 3(a)
hereof.

“Requirement of Law” shall mean as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

“Rescission” shall mean the right of a Mortgagor to rescind the related Note and
related documents pursuant to applicable law.

“Responsible Officer” shall mean, as to any Person, the chief executive officer
or, with respect to financial matters, the chief financial officer of such
Person; provided, that in the event any such officer is unavailable at any time
he or she is required to take any action hereunder, Responsible Officer shall
mean any officer authorized to act on such officer’s behalf as demonstrated by a
certificate of corporate resolution.

“Restricted Payments” shall mean with respect to any Person, collectively, all
dividends or other distributions of any nature (cash, securities, assets or
otherwise), and all payments, by virtue of redemption or otherwise, on any class
of equity securities (including, without limitation, warrants, options or rights
therefor) issued by such Person, whether such securities are now or may
hereafter be authorized or outstanding and any distribution in respect of any of
the foregoing, whether directly or indirectly.

“Reuters Screen LIBOR01 Page” shall mean the display page currently so
designated on the Reuters Monitor Money Rates Service (or such other page as may
replace that page on that service for the purpose of displaying comparable rates
or prices).

“Second Lien Loan” shall mean a Loan secured by the lien on the Mortgaged
Property, subject only to one prior lien on such Mortgaged Property securing
financing obtained by the related Mortgagor and to Permitted Exceptions.

“Section 404 Notice” shall mean the notice required pursuant to Section 404 of
the Helping Families Save Their Homes Act of 2009 (P.L. 111-22), which amends 15
U.S.C. Section 1641 et seq., to be delivered by a creditor that is an owner or
an assignee of a mortgage loan to the related Mortgagor within thirty (30) days
after the date on which such mortgage loan is sold or assigned to such creditor.

 

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“Securitization Transaction” shall mean any securitization or other similar
public or private pass-through disposition of any Loan pursuant to which Seller
or any Affiliate thereof is acting as mortgage loan seller or issuer.

“Security” shall mean a fully-modified pass-through mortgage-backed security
that is (i) (a) issued by Seller and fully guaranteed by Ginnie Mae or
(b) issued and fully guaranteed with respect to timely payment of interest and
ultimate payment of principal by Fannie Mae or Freddie Mac, (ii) evidenced by a
book-entry account in a depository institution having book-entry accounts at the
applicable Depository and (iii) backed by a pool of Loans, in substantially the
principal amount and with substantially the other terms as specified with
respect to such Security in the related Takeout Commitment.

“Security Release Certification” shall mean a security release certification in
substantially the form set forth in Exhibit J hereto.

“Seller Financing Facility” any financing, note purchase, loan warehouse,
repurchase or similar facility maintained by Seller (as borrower thereunder)
with any third party, including the Subordinated Lender Credit Facility (if
any), but excluding the financing facility provided to Seller under this
Agreement and the Agency WL Repurchase Agreement.

“Selling System” shall mean the Freddie Mac automated system by which sellers
and servicers of mortgage loans to Freddie Mac transfer mortgage summary and
record data or mortgage accounting and servicing information from their computer
system or service bureau to Freddie Mac, as more fully described in the Freddie
Mac Guide.

“Servicer” shall mean Seller in its capacity as servicer or master servicer of
the Purchased Loans, or such other party as mutually agreed to by Seller and
Buyer.

“Servicing Agreement” shall have the meaning provided in Section 43(c) hereof.

“Servicing File” shall mean with respect to each Loan, the file retained by
Seller (in its capacity as Servicer) consisting of all documents that a prudent
originator and servicer would have, including copies of the Loan Documents, all
documents necessary to document and service the Loans and any and all documents
required to be delivered pursuant to any of the Program Documents.

“Servicing Records” shall have the meaning assigned thereto in Section 43(b)
hereof.

“Servicing Rights” shall mean contractual, possessory or other rights of Seller
or any other Person, whether arising under the Servicing Agreement, the
Custodial Agreement or otherwise, to administer or service a Purchased Loan
(including Related Loans underlying Purchased Participation Certificates) or to
possess related Servicing Records.

“Servicing Transmission” shall mean a computer-readable magnetic or other
electronic format acceptable to the parties containing the information
identified on Exhibit F.

“Settlement Agent” shall mean a title company, escrow company or attorney that
is (i) bonded by an Approved Title Insurance Company and (ii) insured against
errors and omissions in an amount reasonably satisfactory to Buyer in its sole
discretion, to which the proceeds of any Transaction related to a Table Funded
Wet Loan are to be wired prior to the occurrence of such Transaction in
accordance with local law and practice in the jurisdiction where the related
Table Funded Wet Loan is being originated.

 

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“Settlement Date” shall mean, with respect to a Related Security, the date
specified in the related Takeout Commitment on which the sale of such Security
to the Takeout Investor will be settled on a delivery-versus-payment basis.

“SIFMA” shall mean the Securities Industry and Financial Markets Association or
any successor thereto.

“Strict Compliance” shall mean the compliance of Seller and Loans with the
requirements of the Agency Guidelines, as applicable and as amended by any
agreements between Seller and the applicable Agency, sufficient to enable
(i) FHA to issue the related FHA Mortgage Insurance Contracts, (ii) VA to
deliver the related VA Loan Guarantee Agreements, and (iii) Seller to issue and
Ginnie Mae to guarantee or Fannie Mae or Freddie Mac to issue and guarantee a
Security; provided, that until copies of any such agreements between Seller and
the applicable Agency have been provided to Buyer by Seller and agreed to by
Buyer, such agreements shall be deemed, as between Seller and Buyer, not to
amend the requirements of the applicable Agency Guidelines.

“Subordinated Lender” shall mean DT Holdings, LLC.

“Subordinated Lender Credit Facility” shall mean shall mean that certain credit
facility that may be entered into between Seller and Subordinated Lender for
purposes of financing the “haircut” on each Purchased Assets (i.e., the
difference between the outstanding principal balance of a Purchased Loan on the
date of origination and the Purchase Price).

“Subservicer” shall have the meaning provided in Section 43(c) hereof.

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

“Syndicated Credit Facility Credit Agreement” shall mean that certain Credit
Agreement dated as of November 28, 2012 among Walter Investment Management
Corp., Credit Suisse AG and the lenders party thereto, as the same may be
amended, supplemented or otherwise modified from time to time.

“Syndicated Credit Facility” shall mean the syndicated commercial credit
facility provided to Walter Investment Management Corp. under the Syndicated
Credit Facility Credit Agreement, together with all documents, agreements and
instruments entered into in connection therewith (including, without limitation
the Syndicated Credit Facility Credit Agreement and the Syndicated Credit
Facility Security Agreement).

“Syndicated Credit Facility Security Agreement” shall mean that certain Security
Agreement dated as of November 28, 2012 among Walter Investment Management
Corp., certain of its subsidiaries and Credit Suisse AG as collateral agent, as
the same may be amended, supplemented or otherwise modified from time to time.

 

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“Table Funded Wet Loan” shall mean any Loan that is closed in part, either
directly or indirectly, with the Purchase Price paid by Buyer for such Loan and
for which the Custodian has not received a complete Mortgage File from Seller.

“Takeout Commitment” shall mean a fully assignable commitment of Seller to
(a) sell one or more identified Loans to a Takeout Investor that is an Agency,
(b) sell one or more identified Loans to a Takeout Investor other than an
Agency, or (c) (i) swap one or more identified Loans that are Early Purchase
Program Loans with a Takeout Investor that is an Agency for a Security, and
(ii) sell the related Security to a Takeout Investor, and in each case, the
corresponding Takeout Investor’s commitment back to Seller to effectuate any of
the foregoing, as applicable.

“Takeout Investor” shall mean (i) an Agency or (ii) other institution which has
made a Takeout Commitment and has been approved by Buyer.

“Takeout Price” shall mean, with respect to a Purchased Asset, the purchase
price to be paid for such Asset by the Takeout Investor pursuant to the related
Takeout Commitment.

“Termination Date” shall mean the earliest of (i) the Maturity Date, (ii) the
date determined by application of Section 19, as applicable, (iii) any date on
which Buyer shall have determined in good faith that Seller or Guarantor is
unable to meet its commitments with respect to Indebtedness, or (iv) such
earlier date on which this Agreement shall terminate in accordance with the
provisions hereof or by operation of law.

“Third Party Takeout Loan” shall mean a Loan that is subject to a Takeout
Commitment of the kind described in clause (b) of the definitions of “Takeout
Commitment.”

“Trade Assignment” shall mean an assignment to Buyer of a forward trade between
the Takeout Investor and Seller with respect to one or more Assets (provided
that with respect to a Takeout Commitment relating to an Early Purchase Program
Loan, such assignment shall be substantially in the form of Exhibit K hereto),
together with the related trade confirmation from the Takeout Investor to Seller
that has been fully executed, is enforceable and is in full force and effect and
confirms the details of such forward trade.

“Transaction” shall have the meaning assigned thereto in Section 1.

“Transaction Notice” shall mean a written request by Seller delivered to
Buyer to enter into a Transaction hereunder, which may be delivered
electronically in the form attached hereto as Exhibit D, or in the form of an
Asset Schedule, and in any case shall be in a form mutually agreed upon between
Seller and Buyer.

“Trust Receipt” shall have the meaning provided in the Custodial Agreement.

“Uncommitted Amount” shall have the meaning assigned thereto in the Pricing Side
Letter.

“Underwriting Guidelines” shall mean the underwriting guidelines of Seller
attached as Exhibit E hereto in effect as of the date of this Agreement, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with terms of this Agreement, and which have been approved in writing
by Buyer.

 

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“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Purchased Items is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than New York,
“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

“USC” shall mean the United States Code, as amended.

“Utilization Percentage” shall have the meaning assigned thereto in
Section 4(e).

“Utilization Threshold” shall have the meaning assigned thereto in the Pricing
Side Letter.

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

“VA Loan” shall mean a Loan which is subject of a VA Loan Guaranty Agreement as
evidenced by a VA Loan Guaranty Agreement, or a Loan which is a vender loan sold
by the VA.

“VA Loan Guaranty Agreement” shall mean the obligation of the United States to
pay a specific percentage of a Loan (subject to a maximum amount) upon default
of the Mortgagor pursuant to the Servicemen’s Readjustment Act, as amended,
codified in 38 Code of Federal Regulations.

“VA Regulations” shall mean regulations promulgated by the U.S. Department of
Veterans Affairs pursuant to the Servicemen’s Readjustment Act, as amended,
codified in 38 Code of Federal Regulations, and other VA issuances relating to
VA Loans, including related handbooks, circulars and notices.

“Wet Loan” shall mean either a Table Funded Wet Loan or a Document Deficient
Loan, which is underwritten in accordance with the Underwriting Guidelines and
does not contain all the required Loan Documents in the Mortgage File, which in
order to be deemed to an Eligible Loan shall have the following additional
characteristics:

(a) in the case of a Table Funded Wet Loan, the proceeds thereof have been
funded (or, on the Purchase Date supported by a Transaction Notice are being
funded) by wire transfer or cashier’s check, cleared check or draft or other
form of immediately available funds to the Settlement Agent for such Wet Loan;

(b) Seller expects such Wet Loan to close and become a valid lien securing
actual indebtedness by funding to the order of the Mortgagor thereunder;

(c) the proceeds thereof have not been returned to Buyer from the Settlement
Agent for such Wet Loan;

(d) Seller has not learned that such Wet Loan will not be closed and funded to
the order of the Mortgagor;

(e) upon recordation such Loan will constitute a First Lien on the premises
described therein; and

(f) in the case of a Table Funded Wet Loan, Seller shall have obtained an
Insured Closing Letter and an Escrow Letter with respect to such Wet Loan.

 

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(b) Accounting Terms and Determinations. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to Buyer hereunder shall be prepared, in accordance with GAAP.

(c) Interpretation. The following rules of this subsection (c) apply unless the
context requires otherwise. A gender includes all genders. Where a word or
phrase is defined, its other grammatical forms have a corresponding meaning. A
reference to a subsection, Section, Annex or Exhibit is, unless otherwise
specified, a reference to a Section of, or annex or exhibit to, this Agreement.
A reference to a party to this Agreement or another agreement or document
includes the party’s successors and permitted substitutes or assigns. A
reference to an agreement or document (including any Program Document) is to the
agreement or document as amended, modified, novated, supplemented or replaced,
except to the extent prohibited thereby or by any Program Document and in effect
from time to time in accordance with the terms thereof. A reference to
legislation or to a provision of legislation includes a modification or
re-enactment of it, a legislative provision substituted for it and a regulation
or statutory instrument issued under it. A reference to writing includes a
facsimile transmission and any means of reproducing words in a tangible and
permanently visible form. A reference to conduct includes, without limitation,
an omission, statement or undertaking, whether or not in writing. The words
“hereof”, “herein”, “hereunder” and similar words refer to this Agreement as a
whole and not to any particular provision of this Agreement. The term
“including” is not limiting and means “including without limitation”. In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”, the words “to” and “until” each mean
“to but excluding”, and the word “through” means “to and including”.

Except where otherwise provided in this Agreement, any determination, consent,
approval, statement or certificate made or confirmed in writing with notice to
Seller by Buyer or an authorized officer of Buyer provided for in this Agreement
is conclusive and binds the parties in the absence of manifest error. A
reference to an agreement includes a security interest, guarantee, agreement or
legally enforceable arrangement whether or not in writing related to such
agreement.

A reference to a document includes an agreement (as so defined) in writing or a
certificate, notice, instrument or document, or any information recorded in
computer disk form. Where Seller is required to provide any document to Buyer
under the terms of this Agreement, the relevant document shall be provided in
writing or printed form unless Buyer requests otherwise. At the request of
Buyer, the document shall be provided in computer disk form or both printed and
computer disk form.

This Agreement is the result of negotiations among, and has been reviewed by
counsel to, Buyer and Seller, and is the product of all parties. In the
interpretation of this Agreement, no rule of construction shall apply to
disadvantage one party on the ground that such party proposed or was involved in
the preparation of any particular provision of this Agreement or this Agreement
itself. Except where otherwise expressly stated, Buyer may give or withhold, or
give conditionally, approvals and consents and may form opinions and make
determinations at its absolute discretion. Any requirement of good faith,
discretion or judgment by Buyer shall not be construed to require Buyer to
request or await receipt of information or documentation not immediately
available from or with respect to Seller, a servicer of the Purchased Loans, any
other Person or the Purchased Assets themselves.

 

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3. THE TRANSACTIONS

(a) Subject to the terms and conditions of the Program Documents, Buyer shall,
with respect to the Committed Amount and may in its sole discretion, with
respect to the Uncommitted Amount, from time to time in its sole discretion,
enter into Transactions with an aggregate Purchase Price for all Purchased
Assets acquired by Buyer not to exceed the Maximum Aggregate Purchase Price.
Notwithstanding anything contained herein to the contrary, Buyer shall have the
obligation to enter into Transactions up to the Committed Amount and shall have
no obligation to enter into Transactions with respect to the Uncommitted Amount.
Unless otherwise agreed to between Buyer and Seller in writing, all purchases of
Eligible Assets shall be first deemed committed up to the Committed Amount and
then the remainder, if any, shall be deemed uncommitted up to the Uncommitted
Amount. Notwithstanding anything contained herein to the contrary, Buyer shall
have the right, upon written notice to Seller, to terminate any Transactions
with respect to the Uncommitted Amount and require the repurchase of any such
Purchased Assets within two (2) Business Days of such notice (provided that no
such notice shall be required if a Default has occurred and is continuing or any
Event of Default has occurred that has not been waived by Buyer in its sole
discretion in writing). Unless otherwise agreed, Seller shall request that Buyer
enter into a Transaction with respect to any Purchased Loan by delivering to the
indicated required parties (each, a “Required Recipient”) the required delivery
items (each, a “Required Delivery Item”) set forth in the table below by the
corresponding required delivery time (the “Required Delivery Time”):

 

Purchased
Loan Type

  

Required Delivery Items

  

Required Delivery Time

   Required
Recipient    Required
Purchase Time Dry Loans    (i) a Transaction Notice substantially in the form of
Exhibit D hereto (a “Transaction Notice”), appropriately completed, and (ii) an
Asset Schedule    No later than 5:00 p.m. (New York City time) on the Business
Day prior to the requested Purchase Date    Buyer    No later than
5:00 p.m. (New
York City time)
on the requested
Purchase Date    (i) an Asset Schedule and (ii) the Mortgage File for each Loan
proposed to be included in such Transaction (whether or not such Loan is subject
to a Participation Certificate)    No later than 5:00 p.m. (New York City time)
on the Business Day prior to the requested Purchase Date        Custodian   

 

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Purchased
Loan Type

  

Required Delivery Items

  

Required Delivery Time

   Required
Recipient    Required
Purchase Time AM Funded Wet Loans    (i) a Transaction Notice appropriately
completed, and (ii) an Asset Schedule    No later than 5:00 p.m. (New York City
time) on the Business Day prior to the requested Purchase Date    Buyer    No
later than
9:00 a.m. (New
York City time)
on the requested
Purchase Date    (i) an Asset Schedule and (ii) the Mortgage File for each Loan
proposed to be included in such Transaction (whether or not such Loan is subject
to a Participation Certificate)    No later than 5:00 p.m. (New York City time)
on the Business Day prior to the requested Purchase Date    Custodian    PM
Funded Wet Loans    (i) a Transaction Notice appropriately completed, and (ii)
an Asset Schedule    No later than 2:00 p.m. (New York City time) on the
requested Purchase Date    Buyer    No later than
4:00 p.m. (New
York City time)
on the requested
Purchase Date    (i) an Asset Schedule and (ii) the Mortgage File for each Loan
proposed to be included in such Transaction (whether or not such Loan is subject
to a Participation Certificate)    No later than 2:00 p.m. (New York City time)
on the requested Purchase Date    Custodian   

A Transaction Notice issued in connection with one or more Loans shall clearly
indicate those Loans that are intended to be Wet Loans and Dry Loans and include
an Asset Schedule in respect of the Eligible Assets that Seller proposes to
include in the related Transaction. Each Transaction Notice shall specify the
proposed Purchase Date, Purchase Price, Pricing Rate and Repurchase Date. Seller
agrees to immediately report to Custodian and Buyer by facsimile transmission
within one (1) Business Day of discovery that any Wet Loans that were previously
subject to a Transaction do not close for any reason including, but not limited
to, a Rescission. In the event that the parties hereto desire to enter into a
Transaction on terms other than as set forth in this Agreement and the
Transaction Notice, Buyer shall deliver to Seller, in electronic or other
format, a “Confirmation” specifying such terms acceptable to Seller prior to
entering into such Transaction, including, without limitation, the Purchase
Date, the Purchase Price, the Pricing Rate therefor and the Repurchase Date. Any
such Transaction Notice and the related Confirmation, if any, together with this
Agreement, shall constitute conclusive evidence of the terms agreed to between
Buyer and Seller with respect to the Transaction to which the Transaction Notice

 

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and Confirmation, if any, relates. By entering in to a Transaction with Buyer,
Seller consents to the terms set forth in any related Confirmation. In the event
of any conflict between this Agreement and a Confirmation, the terms of the
Confirmation shall control with respect to the related Transaction. It is
acknowledged and agreed that, notwithstanding any other provision of this
Agreement to the contrary, the facility with respect to the Uncommitted Amount
provided under this Agreement is an uncommitted facility and Buyer shall have no
obligation to enter into any Transactions hereunder. Seller may request that
Buyer increase the Committed Amount hereunder to an amount not to exceed the
Maximum Aggregate Purchase Price by providing a Committed Amount Increase Notice
to Buyer, which increase to the Committed Amount shall become effective upon the
execution of such Committed Amount Increase Notice by Buyer.

(b) Pursuant to the Custodial Agreement, the Custodian shall review any Required
Documents delivered prior to 1:00 p.m. (New York City time) on any Business Day
on the same day. Not later than 5:30 p.m. (New York City time) on each Business
Day, the Custodian shall deliver to Buyer, via Electronic Transmission
acceptable to Buyer, the Custodian Loan Transmission and an Exception Report
showing the status of all Loans then held by the Custodian, including but not
limited to the Wet Loans and Dry Loans which are subject to Exceptions, and the
time the related Loan Documents have been released pursuant to Sections 5(a) or
5(b) of the Custodial Agreement. In addition, in accordance with the Custodial
Agreement the Custodian shall deliver to Buyer on each Purchase Date, one or
more Trust Receipts (as defined in the Custodial Agreement) relating to either
Wet Loans or Dry Loans. The original copies of such Trust Receipts shall be
delivered to JPMorgan Chase Bank, N.A. at 4 Chase Metrotech Center, 3rd Floor,
Brooklyn, New York 11245-0001, Attention: Physical Receive Department for the
account of The Royal Bank of Scotland plc, telephone number (718) 242-0260, as
agent for Buyer by overnight delivery using a nationally recognized insured
overnight delivery service.

(c) Upon Seller’s request to enter into a Transaction pursuant to Section 3(a),
Buyer shall, in its sole discretion, assuming all conditions precedent set forth
in this Section 3 and in Sections 9(a) and (b) have been met, and provided no
Default shall have occurred and be continuing, not later than the required time
on the requested Purchase Date set forth in the table above (the “Required
Purchase Time”) purchase the Eligible Assets included in the related Transaction
Notice by transferring, via wire transfer (pursuant to wire transfer
instructions provided by Seller on or prior to such Purchase Date) in
immediately available funds, the Purchase Price. Seller acknowledges and agrees
that the Purchase Price paid in connection with any Purchased Loan that is
purchased in any Transaction includes a mutually negotiated premium allocable to
the portion of such Purchased Loan that constitutes the related Servicing
Rights.

(d) Anything herein to the contrary notwithstanding, if, on or prior to the
determination of any LIBO Base Rate:

(i) Buyer determines, which determination shall be conclusive, that quotations
of interest rates for the relevant deposits referred to in the definition of
“LIBO Base Rate” in Section 2 are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining rates of interest for
Transactions as provided herein; or

(ii) Buyer determines, which determination shall be conclusive, that the
Applicable Margin plus the relevant rate of interest referred to in the
definition of “LIBO Base Rate” in Section 2 upon the basis of which the rate of
interest for Transactions is to be determined is not likely adequately to cover
the cost to Buyer of purchasing and holding Assets hereunder; or

(iii) it becomes unlawful for Buyer to enter into Transactions with a Pricing
Rate based on the LIBO Base Rate;

 

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then Buyer shall give Seller prompt notice thereof and, so long as such
condition remains in effect, Buyer shall be under no obligation to purchase
Assets hereunder, and Seller shall, at its option, either repurchase such Assets
or pay a Pricing Rate at a rate per annum as determined by Buyer taking into
account the increased cost to Buyer of purchasing and holding the Assets.

(e) Seller shall repurchase Purchased Assets from Buyer by 4:00 p.m. (New York
City time) on each related Repurchase Date. Each obligation to repurchase exists
without regard to any prior or intervening liquidation or foreclosure with
respect to any Purchased Asset. Seller is obligated to obtain the Purchased
Assets from Buyer or its designee (including the Custodian) at Seller’s expense
on (or after) the related Repurchase Date.

(f) Provided that the applicable conditions in Sections 9(a) and (b) have been
satisfied, each Purchased Asset shall automatically become subject to a new
Transaction on the related Monthly Repurchase Date (other than a Repurchase Date
occurring on the Termination Date or on any Repurchase Date specified in a
related Repurchase Notice) unless Seller is notified otherwise by Buyer at least
one (1) Business Day prior to such Monthly Repurchase Date. Unless Seller is so
notified, Buyer shall purchase the related Eligible Assets pursuant to the
procedures set forth in Section 3(c); provided that if the Monthly Repurchase
Date so determined is later than the Termination Date, the Repurchase Date for
such Transaction shall automatically reset to the Termination Date, and the
provisions of this sentence as it might relate to a new Transaction shall expire
on such date. For each new Transaction, unless otherwise agreed, (y) the accrued
and unpaid Price Differential shall be settled in cash on each related Monthly
Repurchase Date, and (z) the Pricing Rate shall be as set forth in the Pricing
Side Letter.

(g) If Seller intends to repurchase any Assets on any day which is not a Monthly
Repurchase Date, Seller shall use its best efforts to give two (2) Business Days
prior written notice thereof to Buyer (a “Repurchase Notice”). If such notice is
given, the Repurchase Price specified in such Repurchase Notice shall be due and
payable by 4:00 p.m. (New York City time) on the date specified therein,
together with the Price Differential to such date on the amount prepaid.

(h) [Reserved].

(i) If any Requirement of Law or any change in the interpretation or application
thereof or compliance by Buyer with any request or directive (whether or not
having the force of law) from any central bank or other Governmental Authority
made subsequent to the date hereof:

(i) shall subject Buyer to any tax of any kind whatsoever with respect to this
Agreement or any Assets purchased pursuant to it (excluding net income taxes) or
change the basis of taxation of payments to Buyer in respect thereof;

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

and the result of any of the foregoing is to increase the cost to Buyer, by an
amount which Buyer deems in good faith to be material, of effecting or
maintaining purchases hereunder, or to reduce any amount

 

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receivable hereunder in respect thereof, then, in any such case, Seller shall
promptly pay Buyer such additional amount or amounts as will compensate Buyer
for such increased cost thereafter incurred or reduced amount receivable
thereafter incurred.

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

If Buyer becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify Seller of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to this subsection submitted by Buyer to Seller shall be conclusive in
the absence of manifest error.

(j) With respect to each Purchased Participation Certificate that is subject to
a Transaction hereunder, the Security that is issued on the related Conversion
Date (provided it is an Eligible Security) shall replace the Participation
Certificate as the Purchased Asset, and from and after the Conversion Date, the
Purchased Asset subject to such Transaction shall be the Purchased Security. For
the avoidance of doubt, any Eligible Security that is issued with respect to the
Eligible Loans underlying a Purchased Participation Certificate shall, on the
Conversion Date, replace the Purchased Participation Certificate and
automatically become subject to the Transaction to which the Purchased
Participation Certificate was subject. On or prior to the Conversion Date,
Seller shall deliver to Buyer a duly executed Trade Assignment together with a
copy of the Takeout Commitment with respect to the Related Security.

 

4. PAYMENTS; COMPUTATION

(a) Payments. Except to the extent otherwise provided herein, all payments to be
made by Seller under this Agreement shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to Buyer at the
following account maintained by Buyer at JPMorgan Chase Bank, NY, Account Number
0667-09350, A/C Name: RBSGBM, ABA# 021000021, not later than 4:00 p.m., New York
City time, on the date on which such payment shall become due (each such payment
made after such time on such due date to be deemed to have been made on the next
succeeding Business Day). Seller acknowledges that it has no rights of
withdrawal from the foregoing account.

(b) Computations. The Price Differential shall be computed on the basis of a
360-day year for the actual days elapsed (including the first day but excluding
the last day) occurring in the period for which payable.

(c) Reserved.

(d) Commitment Fee. Seller shall pay to Buyer a commitment fee equal to the
Commitment Fee, such payment to be made in Dollars, in immediately available
funds, without deduction, set off or counterclaim, to Buyer on the Effective
Date. Buyer may, in its sole discretion, net the Commitment Fee

 

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from the proceeds of any Purchase Price paid to Seller. The Commitment Fee is
and shall be deemed to be fully earned and non-refundable as of the Effective
Date. Furthermore, the Commitment Fee will be decreased by the aggregate amount
of any Commitment Fee paid by Seller to Buyer under the Agency WL Repurchase
Agreement prior to the Effective Date. An additional Commitment Fee will be due
and payable to Buyer on a prorated basis in the event of an increase of the
Committed Amount pursuant to the terms of this Agreement for the period
beginning on the effective date of such increase and ending on the Termination
Date, which additional Commitment Fee shall be due and payable on the date of
such increase and non-refundable when paid.

(e) Non-Utilization Fee. On a quarterly basis and on the Termination Date, Buyer
shall determine the average quarterly utilization during the preceding quarter
(or with respect to the Termination Date, during the period from the date
through which the last non-utilization fee calculation has been made to the
Termination Date) by Seller by dividing (a) the sum of the Purchase Prices
outstanding on each day during such period, by (b) the number of days in such
period. If such average amount determined for any period as a percentage of the
Committed Amount (the “Utilization Percentage”) is less than the Utilization
Threshold Seller shall pay to Buyer , the Non-Utilization Fee due for such
related period on the applicable dates specified in the Pricing Side Letter;
provided that Seller shall not be obligated to pay any Non-Utilization Fee to
Buyer for any period with respect to which the Utilization Percentage in such
period is greater than or equal to the Utilization Threshold. All payments shall
be made to Buyer in Dollars, in immediately available funds, without deduction,
setoff or counterclaim. Buyer may, in its sole discretion, net such
Non-Utilization Fee from the proceeds of any Purchase Price paid to Seller. Each
payment of the Non-Utilization Fee is and shall be deemed to be fully earned and
non-refundable when paid.

 

5. TAXES; TAX TREATMENT

(a) All payments made by Seller under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities (including penalties, interest and additions to tax) with respect
thereto imposed by any Governmental Authority, excluding income taxes, branch
profits taxes, franchise taxes or any other tax imposed on the net income by the
United States, a state or a foreign jurisdiction under the laws of which Buyer
is organized or of its applicable lending office, or any political subdivision
thereof (collectively, “Taxes”), all of which shall be paid by Seller for its
own account not later than the date when due. If Seller is required by law or
regulation to deduct or withhold any Taxes from or in respect of any amount
payable hereunder, Buyer shall use commercially reasonable efforts to provide
Seller with notice thereof and Seller shall: (a) make such deduction or
withholding; (b) pay the amount so deducted or withheld to the appropriate
Governmental Authority not later than the date when due; (c) deliver to Buyer,
promptly, original tax receipts and other evidence satisfactory to Buyer of the
payment when due of the full amount of such Taxes; and (d) pay to Buyer such
additional amounts as may be necessary so that such Buyer receives, free and
clear of all Taxes, a net amount equal to the amount it would have received
under this Agreement, as if no such deduction or withholding had been made.

(b) In addition, Seller agrees to pay to the relevant Governmental Authority in
accordance with applicable law any current or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies (including,
without limitation, mortgage recording taxes, transfer taxes and similar fees)
imposed by the United States or any taxing authority thereof or therein that
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement (“Other Taxes”).

 

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(c) Seller agrees to indemnify Buyer for the full amount of Taxes (including
additional amounts with respect thereto) and Other Taxes, and the full amount of
Taxes of any kind imposed by any jurisdiction on amounts payable under this
Section 5, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, provided that Buyer shall have
provided Seller with evidence, reasonably satisfactory to Seller, of payment of
Taxes or Other Taxes, as the case may be.

(d) Any Buyer that is not incorporated under the laws of the United States, any
State thereof, or the District of Columbia (a “Foreign Buyer”) shall provide
Seller with properly completed United States Internal Revenue Service (“IRS”)
Form W-8BEN or W-8ECI or any successor form prescribed by the IRS, certifying
that such Foreign Buyer is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States on or prior to the date upon which each such Foreign Buyer
becomes a Buyer. Each Foreign Buyer will resubmit the appropriate form on the
earliest of (A) the third anniversary of the prior submission or (B) on or
before the expiration of thirty (30) days after there is a “change in
circumstances” with respect to such Foreign Buyer as defined in Treas. Reg.
Section 1.1441(e)(4)(ii)(D). For any period with respect to which a Foreign
Buyer has failed to provide Seller with the appropriate form or other relevant
document pursuant to this Section 5(d) (unless such failure is due to a change
in treaty, law, or regulation occurring subsequent to the date on which a form
originally was required to be provided), such Foreign Buyer shall not be
entitled to any “gross-up” of Taxes or indemnification under Section 5(c) with
respect to Taxes imposed by the United States.

(e) Without prejudice to the survival or any other agreement of Seller
hereunder, the agreements and obligations of Seller contained in this Section 5
shall survive the termination of this Agreement. Nothing contained in this
Section 5 shall require Buyer to make available any of its tax returns or other
information that it deems to be confidential or proprietary.

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

 

6. MARGIN MAINTENANCE

(a) If at any time either (i) the aggregate Market Value of all Purchased Assets
subject to all Transactions is less than the aggregate MV Margin Amount for all
such Transactions, or (ii) the aggregate unpaid principal balance of the
Purchased Assets for all Transactions is less than the aggregate Par Margin
Amount for all such Transactions (either such event, a “Margin Deficit”), then
Buyer may, by notice to Seller, require Seller in such Transactions to transfer
to Buyer cash or, at Buyer’s option (and provided Seller has additional Eligible
Assets), additional Eligible Assets (“Additional Purchased Assets”) within one
(1) Business Day of such notice by Buyer, so that both (x) the cash and
aggregate Market Value of the Purchased Assets, including any such Additional
Purchased Assets, will thereupon equal or exceed such aggregate MV Margin
Amount, and (y) the cash and unpaid principal balance of such Purchased Assets,
including any such Additional Purchased Assets and Purchased Assets, will
therefore equal or exceed such aggregate Par Margin Amount (either requirement,
a “Margin Call”); provided that so long as the aggregate outstanding Purchase
Price is at least $100,000,000, Buyer shall not provide notice of a Margin Call
to Seller until the Margin Deficit equals or exceeds $250,000; provided further
that if Seller transfers cash, Buyer shall deposit such cash into a non-interest
bearing account until the next succeeding Repurchase Date.

(b) Notice required pursuant to Section 6(a) may be given by (i) by any means
provided in Section 21 hereof, (ii) via electronic mail in an excel spreadsheet
format, or (iii) in such other format acceptable to Buyer in its sole
discretion. Any notice given on a Business Day preceding 12:00 p.m. (New York
City time) shall be met, and the related Margin Call satisfied, no later than
5:00 p.m. (New York City time) on the same Business Day. Any notice given on a
Business Day following 12:00 p.m. (New York City time) shall be met, and the
related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on
the following Business Day. The failure of Buyer, on any one or more occasions,
to exercise its rights under this Section 6, shall not change or alter the terms
and conditions to which this Agreement is subject or limit the right of Buyer to
do so at a later date. Seller and Buyer each agree that a failure or delay by
Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights
under this Agreement or otherwise existing by law or in any way create
additional rights for Seller.

 

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7. INCOME PAYMENTS

Where a particular term of a Transaction extends over the date on which Income
is paid in respect of any Purchased Asset subject to that Transaction, such
Income shall be the property of Buyer. Seller shall (i) segregate all Income
collected by or on behalf of Seller on account of the Purchased Assets and shall
hold such Income in trust for the benefit of Buyer and (ii) remit such Income to
the Collection Account for deposit therein no later than two (2) Business Days
after receipt thereof. Withdrawal of any Income on deposit in the Collection
Account shall be in accordance with the provisions of Section 13(ii) hereof.

 

8. SECURITY INTEREST; BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT

(a) Seller and Buyer intend that the Transactions hereunder be sales to Buyer of
the Purchased Assets and not loans from Buyer to Seller secured by the Purchased
Assets. However, in order to preserve Buyer’s rights under this Agreement in the
event that a court or other forum recharacterizes the Transactions hereunder as
other than sales, and as security for Seller’s performance of all of its
Obligations, Seller hereby grants Buyer a fully perfected first priority
security interest in all of Seller’s rights, title and interest in and to the
following property, whether now existing or hereafter acquired:

(i) all Purchased Assets identified on a Transaction Notice delivered by Seller
to Buyer and the Custodian from time to time;

(ii) any other collateral pledged or otherwise relating to such Purchased
Assets, together with all files, material documents, instruments, surveys (if
available), certificates, correspondence, appraisals, computer records, computer
storage media, Asset accounting records and other books and records relating
thereto;

(iii) the Servicing Records, and the related Servicing Rights;

(iv) the Collection Account and all Income on deposit therein;

(v) all mortgage guaranties and insurance (issued by governmental agencies or
otherwise) and any mortgage insurance certificate or other document evidencing
such mortgage guaranties or insurance relating to any Purchased Assets and all
claims and payments thereunder and all rights of Seller to receive from any
third party or to take delivery of any of the foregoing;

 

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(vi) all interests in real property collateralizing any Purchased Assets;

(vii) all other insurance policies and insurance proceeds relating to any
Purchased Assets or the related Mortgaged Property and all rights of Seller to
receive from any third party or to take delivery of any of the foregoing;

(viii) all Interest Rate Protection Agreements relating to any or all of the
foregoing (if any);

(ix) any purchase agreements or other agreements, contracts or take-out
commitments relating to or constituting any or all of the foregoing and all
rights to receive documentation relating thereto;

(x) all “accounts”, “chattel paper”, “commercial tort claims”, “deposit
accounts”, “documents”, “equipment”, “general intangibles”, “goods”,
“instruments”, “inventory”, “investment property”, “letter of credit rights”,
and “securities’ accounts” as each of those terms is defined in the Uniform
Commercial Code related to the Purchased Assets and all cash and Cash
Equivalents and all products and proceeds relating to or constituting any or all
of the foregoing;

(xi) all Takeout Commitments and Trade Assignments related to the Purchased
Assets (including the rights to receive the related Takeout Price and the
Related Security as evidenced by such Trade Assignments);

(xii) all FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements
relating to such Purchased Assets, if applicable; and

(xiii) any and all replacements, substitutions, distributions on or proceeds of
any or all of the foregoing (collectively the “Purchased Items”).

Seller acknowledges and agrees that its rights with respect to the Purchased
Items (including without limitation, any security interest Seller may have in
the Purchased Assets and any other collateral granted by Seller to Buyer
pursuant to any other agreement) are and shall continue to be at all times
junior and subordinate to the rights of Buyer hereunder. Seller further
acknowledges that it has no rights to the Servicing Rights related to the
Purchased Loans and Related Loans underlying the Purchased Participation
Certificates. Without limiting the generality of the foregoing and for the
avoidance of doubt, in the event that Seller is deemed to retain any residual
Servicing Rights, Seller grants, assigns and pledges to Buyer a first priority
security interest in all of its rights, title and interest in and to the
Servicing Rights as indicated hereinabove. In addition, Seller, in its capacity
as Servicer, further grants, assigns and pledges to Buyer a first priority
security interest in and to all Servicing Records and rights to receive
Servicing Records or other documents which constitute a part of the Mortgage
File or Servicing File with respect to each of the Purchased Loans and Related
Loans underlying the Purchased Participation Certificates, and all Income
related to the Purchased Assets received by Seller, in its capacity as Servicer,
and all rights to receive such Income, and all products, proceeds and
distributions relating to or constituting any or all of the foregoing
(collectively, and together with the pledge of Servicing Rights in the
immediately preceding sentence, the “Related Credit Enhancement”). The Related
Credit Enhancement is hereby pledged as further security for Seller’s
Obligations to Buyer hereunder.

At any time and from time to time, upon the written request of Buyer, and at the
sole expense of Seller, Seller will promptly and duly execute and deliver, or
will promptly cause to be executed and

 

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delivered, such further instruments and documents and take such further action
as Buyer may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any jurisdiction with
respect to the Purchased Items and the liens created hereby. Seller also hereby
authorizes Buyer to file any such financing or continuation statement to the
extent permitted by applicable law. A carbon, photographic or other reproduction
of this Agreement shall be sufficient as a financing statement for filing in any
jurisdiction. This Agreement shall constitute a security agreement under
applicable law.

(b) Seller shall not (i) change the location of its chief executive office/chief
place of business from that specified in Section 12(l) hereof, (ii) change its
name, identity or corporate structure (or the equivalent) or change the location
where it maintains its records with respect to the Purchased Items, or
(iii) reincorporate or reorganize under the laws of another jurisdiction unless
it shall have given Buyer at least thirty (30) days prior written notice thereof
and shall have delivered to Buyer all Uniform Commercial Code financing
statements and amendments thereto as Buyer shall request and taken all other
actions deemed reasonably necessary by Buyer to continue its perfected status in
the Purchased Items (to the extent the same may be perfected under the Uniform
Commercial Code) with the same or better priority.

(c) Seller hereby irrevocably constitutes and appoints Buyer and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Seller and in the name of Seller or in its own name, from time to time
in Buyer’s discretion, for the purpose of carrying out the terms of this
Agreement, including without limitation, protecting, preserving and realizing
upon the Purchased Items, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, including without limitation, to
protect, preserve and realize upon the Purchased Items, to file such financing
statement or statements relating to the Purchased Items as Buyer at its option
may deem appropriate, and, without limiting the generality of the foregoing,
Seller hereby gives Buyer the power and right, on behalf of Seller, without
assent by, but with notice to, Seller, if an Event of Default has occurred that
has not been waived by Buyer in its sole discretion in writing, to do the
following:

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

(ii) other than in respect of the Subordinated Lender Credit Facility, to pay or
discharge taxes and Liens levied or placed on or threatened against the
Purchased Items;

(iii) (A) to direct any party liable for any payment under any Purchased Items
to make payment of any and all moneys due or to become due thereunder directly
to Buyer or as Buyer shall direct, including, without limitation, to send
“goodbye” letters on behalf of Seller and any applicable Subservicer and
Section 404 Notices on behalf of Buyer; (B) to ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out of any Purchased
Items; (C) to sign and endorse any invoices, assignments, verifications, notices
and other documents in connection with

 

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any Purchased Items; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Purchased Items or any proceeds thereof and to enforce any other
right in respect of any Purchased Items; (E) to defend any suit, action or
proceeding brought against Seller with respect to any Purchased Items; (F) to
settle, compromise or adjust any suit, action or proceeding described in clause
(E) above and, in connection therewith, to give such discharges or releases as
Buyer may deem appropriate; and (G) generally, to sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any Purchased Items as
fully and completely as though Buyer were the absolute owner thereof for all
purposes, and to do, at Buyer’s option and Seller’s expense, at any time, and
from time to time, all acts and things which Buyer deems necessary to protect,
preserve or realize upon the Purchased Items and Buyer’s Liens thereon and to
effect the intent of this Agreement, all as fully and effectively as Seller
might do.

Seller hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until there are no outstanding Transactions
hereunder and all Purchased Loans have been repurchased by Seller pursuant to
the terms hereof. This power of attorney shall not revoke any prior powers of
attorney granted by Seller.

Seller also authorizes Buyer, if an Event of Default shall have occurred that
has not been waived by Buyer in its sole discretion in writing, from time to
time, to execute, in connection with any sale provided for in Section 19 hereof,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Purchased Items.

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

(e) If Seller fails to perform or comply with any of its agreements contained in
the Program Documents and Buyer may itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the reasonable out-of-pocket
expenses of Buyer incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum equal to the Post-Default
Rate, shall be payable by Seller to Buyer on demand and shall constitute
Obligations.

(f) Buyer’s duty with respect to the custody, safekeeping and physical
preservation of the Purchased Items in its possession, under Section 9-207 of
the Uniform Commercial Code or otherwise, shall be to deal with it in the same
manner as Buyer deals with similar property for its own account. Neither Buyer
nor any of its directors, officers or employees shall be liable for failure to
demand, collect or realize upon all or any part of the Purchased Items or for
any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Purchased Items upon the request of Seller or otherwise.

(g) All authorizations and agencies herein contained with respect to the
Purchased Items are irrevocable and powers coupled with an interest.

 

9. CONDITIONS PRECEDENT

(a) As conditions precedent to the initial Transaction, Buyer shall have
received (or has waived in writing receipt) on or before the date on which such
initial Transaction is consummated the following, in form and substance
satisfactory to Buyer and duly executed by each party thereto (as applicable):

(i) Program Documents. The Program Documents duly executed and delivered by
Seller thereto and being in full force and effect, free of any modification,
breach or waiver not agreed to by Buyer in writing.

 

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(ii) Organizational Documents. An officer’s certificate for each of Seller and
Guarantor, in the form attached hereto as Exhibit L, together with a good
standing certificate and certified copies of their respective charter and
by-laws , in each case dated as of a recent date, but in no event more than ten
(10) days prior to the date of such initial Transaction and of all corporate or
other authority for Seller with respect to the execution, delivery and
performance of the Program Documents and each other document to be delivered by
Seller or Guarantor from time to time in connection herewith (and Buyer may
conclusively rely on such certificate until it receives notice in writing from
Seller to the contrary).

(iii) Incumbency Certificate. An incumbency certificate of the secretary of
Seller and Guarantor certifying the names, true signatures and titles of their
respective representatives duly authorized to request Transactions hereunder and
to execute the Program Documents and the other documents to be delivered
thereunder;

(iv) Legal Opinion. Customary legal opinions of in-house and outside counsel to
Seller and Guarantor, in form and substance satisfactory to Buyer.

(v) Filings, Registrations, Recordings. (i) Any documents (including, without
limitation, financing statements) required to be filed, registered or recorded
in order to create, in favor of Buyer, a perfected, first-priority security
interest in the Purchased Items (to the extent the same may be perfected under
the Uniform Commercial Code), subject to no Liens other than those created
hereunder or the junior Liens created under the Subordinated Lender Credit
Facility, shall have been properly prepared and executed for filing (including
the applicable county(ies) if Buyer determines such filings are necessary in its
reasonable discretion), registration or recording in each office in each
jurisdiction in which such filings, registrations and recordations are required
to perfect such first-priority security interest; and (ii) Uniform Commercial
Code lien searches, dated as of a recent date, in no event more than fourteen
(14) days prior to the date of such initial Transaction, in such jurisdictions
as shall be applicable to Seller and the Purchased Items, the results of which
shall be satisfactory to Buyer.

(vi) Fees and Expenses. Buyer shall have received all fees and expenses required
to be paid by Seller on or prior to the initial Purchase Date, including all
legal fees the amount of which shall be agreed between Buyer and Seller prior to
the date hereof incurred in connection with the drafting, negotiating and
execution of the Program Documents, which fees and expenses may be netted out of
any purchase proceeds paid by Buyer hereunder.

(vii) Financial Statements. Buyer shall have received the financial statements
referenced in Section 12(b).

(viii) Underwriting Guidelines. Buyer shall have received a copy of Seller’s
current Underwriting Guidelines for Loans certified by a Responsible Officer of
Seller.

 

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(ix) Consents, Licenses, Approvals, etc. Buyer shall have received copies
certified by Seller of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by Seller of, and the
validity and enforceability of, the Program Documents, which consents, licenses
and approvals shall be in full force and effect.

(x) Insurance. Buyer shall have received evidence in form and substance
satisfactory to Buyer showing compliance by Seller as of the initial Purchase
Date for the initial Transaction with Section 13(v) hereof.

(xi) Collection Account. Evidence of the establishment of the Collection
Account.

(xii) Credit Facility Documents. Buyer shall have received a true copy
(certified by a Responsible Officer of Seller) of each of the Syndicated Credit
Facility Credit Agreement, the Syndicated Facility Security Agreement, all
amendments, modifications and supplements thereto, and each of the UCC-1 and
UCC-3 financing statements filed in connection therewith.

(xiii) Other Documents. Buyer shall have received such other documents as Buyer
or its counsel may reasonably request.

(xiv) Approvals. Seller shall have provided evidence, satisfactory to Buyer,
that Seller has all Approvals and such Approvals are in good standing.

(b) The obligation of Buyer to enter into each Transaction pursuant to this
Agreement (including the initial Transaction) with respect to the Committed
Amount and the agreement by Buyer (if any) to enter into each Transaction
pursuant to this Agreement (including the initial Transaction) with respect to
the Uncommitted Amount is subject to the satisfaction or waiver of the following
further conditions precedent, both immediately prior to any Transaction and also
after giving effect thereto and to the intended use thereof:

(i) No Default or Event of Default shall have occurred that has not been waived
by Buyer in its sole discretion in writing.

(ii) Both immediately prior to entering into such Transaction and also after
giving effect thereto and to the intended use of the proceeds thereof, the
representations and warranties made by Seller in Section 12 and Schedule 1
hereof, and in each of the other Program Documents, shall be true and complete
on and as of the Purchase Date in all material respects (in the case of the
representations and warranties in Section 12(v), 12(w) and Schedule 1 hereof,
solely with respect to Assets which have not been repurchased by Seller) with
the same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date). At the request of Buyer, Buyer shall
have received an officer’s certificate signed by a Responsible Officer of Seller
certifying as to the truth and accuracy of the above, which certificate shall
specifically include a statement that Seller is in compliance with all
governmental licenses and authorizations and is qualified to do business and in
good standing in all required jurisdictions.

(iii) The then aggregate outstanding Purchase Price for all Purchased Assets,
when added to the Purchase Price for the requested Transaction, shall not exceed
the Maximum Aggregate Purchase Price. If the Transaction is with respect to the
Committed Amount, the aggregate outstanding Purchase Price for all Purchased
Assets then subject to Transactions with

 

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respect to the Committed Amount, when added to the Purchase Price for the
requested Transaction, shall not exceed the Committed Amount as of such date. If
the Transaction is with respect to the Uncommitted Amount, the aggregate
outstanding Purchase Price for all Purchased Assets then subject to Transactions
with respect to the Uncommitted Amount, when added to the Purchase Price for the
requested Transaction, shall not exceed the Uncommitted Amount as of such date.

(iv) Subject to Buyer’s right to perform one or more Due Diligence Reviews
pursuant to Section 44 hereof, Buyer shall have completed its Due Diligence
Review of the Mortgage File for each Loan subject to such Transaction and such
other documents, records, agreements, instruments, Mortgaged Properties or
information relating to such Loans as Buyer in its reasonable discretion deems
appropriate to review and such review shall be satisfactory to Buyer in its
reasonable discretion.

(v) Buyer or its designee (including the Custodian where applicable) shall have
received on or before the day of a Transaction with respect to any Purchased
Loans (unless otherwise specified in this Agreement) the following, in form and
substance satisfactory to Buyer and (if applicable) duly executed:

 

  (A) The Transaction Notice and Asset Schedule with respect to such Purchased
Assets, delivered pursuant to Section 3(a);

 

  (B) The Trust Receipt with respect to such Purchased Assets, with the Asset
Schedule attached;

 

  (C) Such certificates, customary opinions of counsel or other documents as
Buyer may reasonably request, provided that such opinions of counsel shall not
be required routinely in connection with each Transaction but shall only be
required from time to time as deemed necessary by Buyer in its commercially
reasonable judgment; provided further that Seller may provide such opinions of
counsel or other documents to Buyer within five (5) Business Days following such
Purchase Date; and

 

  (D) If any of the Loans that are proposed to be sold are Early Purchase
Program Loans, for each such Loan: (i) a fully completed and executed Eligible
Participation Certificate, (ii) a copy of the fully completed Form HUD 11705
(Schedule of Subscribers), Fannie Mae Form 2014 (Delivery Schedule) or Freddie
Mac Form 381 (Contract Delivery Summary) and Freddie Mac Form 939 (Settlement
and Information Multiple Registration Form), as applicable, designating Buyer as
the party authorized to receive the related Securities, duly executed by Seller,
(iii) a copy of the Form HUD 11706 (Schedule of Pooled Mortgages) and the
reverse side of Form HUD 11706 (Initial Certification), Fannie Mae Form 2005
(Schedule of Mortgages with Magnetic Tape Format Instructions), or Freddie Mac
Form 11 (Mortgage Submission Schedule) and Freddie Mac Form 13SF (Mortgage
Submission Voucher) or Selling System computer tape, as applicable, that has
been delivered to the applicable Agency indicating Custodian’s initial
certification of the Related Loans evidenced by the Participation Certificate
that is proposed to be purchased.

 

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(vi) [Reserved].

(vii) With respect to any Loan that was funded in the name of or acquired by a
Qualified Originator which is an Affiliate of Seller, Buyer may, in its sole
discretion, require Seller to provide evidence sufficient to satisfy Buyer that
such Loan was acquired in a legal sale, including without limitation, an
opinion, in form and substance and from an attorney, in both cases, acceptable
to Buyer in its sole discretion, that such Loan was acquired in a legal sale.

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

i. an event or events resulting in the inability of Buyer to finance its
purchases of assets with traditional counterparties at rates which would have
been reasonable prior to the occurrence of such event or events or a material
adverse change in the financial condition of Buyer which affects (or can
reasonably be expected to affect) materially and adversely the ability of Buyer
to fund its obligations under or otherwise comply with the terms of this
Agreement; or

ii. any other event beyond the control of Buyer which Buyer reasonably
determines may result in Buyer’s inability to perform its obligations under this
Agreement including, without limitation, acts of God, strikes, lockouts, riots,
acts of war or terrorism, epidemics, nationalization, expropriation, currency
restrictions, fire, communication line failures, computer viruses, power
failures, earthquakes, or other disasters of a similar nature to the foregoing;

provided that Buyer shall have provided Seller with notice that such event or
events have occurred and Buyer shall have exercised its right not to enter into
transactions under other similar committed warehouse and repurchase facilities
with sellers similar to Seller and collateral similar to the Purchased Loans,
solely as a result of such event or events.

(ix) If any Loans to be purchased hereunder were acquired by Seller, such Loans
shall conform to Seller’s Underwriting Guidelines or Buyer shall have received
Underwriting Guidelines for such Loans acceptable to Buyer in its sole
discretion.

(x) Buyer shall have received all information requested from Seller relating to
Interest Rate Protection Agreements (if any) pursuant to Section 13(y), and
Buyer shall have determined that such Interest Rate Protection Agreements
adequately protect Seller from interest rate fluctuations.

(xi) If any of the Loans that are proposed to be sold will be serviced by a
Subservicer, Buyer shall have received, no later than 10:00 a.m. three (3) days
prior to the requested Purchase Date, an Instruction Letter, executed by Seller
and such Subservicer, together with a completed Schedule 1 attached thereto and
the related Servicing Agreement, which such Servicing Agreement shall be in form
and substance acceptable to Buyer, or, if an Instruction Letter executed by such
Subservicer shall have been delivered to Buyer in connection with a prior
Transaction, Seller shall instead deliver to such Subservicer and Buyer an
updated Schedule 1.

 

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(xii) Seller shall use its best efforts to not request that Buyer enter into
more than two (2) Transactions in any one (1) Business Day. In no event shall
Buyer be required to enter into (A) more than three (3) Transactions in any one
(1) Business Day (unless otherwise agreed to by Buyer in writing), nor (B) any
Transaction whose Purchase Price would be less than $500,000.

(xiii) Buyer shall have determined that all actions necessary or, in the opinion
of Buyer, desirable to maintain Buyer’s perfected interest in the Purchased
Assets and other Purchased Items have been taken, including, without limitation,
duly filed Uniform Commercial Code financing statements on Form UCC-1 (to the
extent the same may be perfected under the Uniform Commercial Code).

(xiv) Seller shall have paid to Buyer all fees and expenses owed to Buyer in
accordance with this Agreement and any other Program Document.

(xv) Buyer or its designee shall have received any other documents reasonably
requested by Buyer.

(xvi) There is no Margin Deficit at the time immediately prior to entering into
a new Transaction.

(xvii) With respect to each Purchased Asset that is subject to a security
interest (including any precautionary security interest) immediately prior to
the Purchase Date, Buyer shall have received a Security Release Certification
for such Purchased Asset that is duly executed by the related secured party and
Seller. Such secured party shall have filed Uniform Commercial Code termination
statements in respect of any Uniform Commercial Code filings made in respect of
such Loan, and each such release and Uniform Commercial Code termination
statement has been delivered to Buyer prior to each Transaction and to the
Custodian as part of the Mortgage File.

(xviii) No event shall have occurred and/or be continuing which results in a
material adverse change to the Approvals of Seller since the Effective Date, and
such Approvals shall be in good standing.

Each request by Seller hereunder for the purchase of Assets by Buyer shall
constitute a certification by Seller that each of the foregoing conditions
precedent have been or will be satisfied as of the related Purchase Date (both
as of the date of such notice, request or confirmation and as of the date of
such purchase).

 

10. RELEASE OF PURCHASED ASSETS

Upon timely payment in full of the Repurchase Price and all other Obligations
(if any) then owing with respect to a Purchased Asset, unless an Event of
Default shall have occurred that has not been waived by Buyer in its sole
discretion in writing, then (a) Buyer shall be deemed to have terminated any
security interest that Buyer may have in such Purchased Asset and any Purchased
Items solely related to such Purchased Asset and (b) with respect to such
Purchased Asset, Buyer shall direct Custodian to release such Purchased Asset
and any Purchased Items solely related to such Purchased Asset to Seller unless
such release and termination would give rise to or perpetuate a Margin Deficit.
Except as set forth in Section 16, Seller shall use its best efforts to give two
(2) Business Days prior written notice to Buyer if such repurchase shall occur
on any date other than the Repurchase Date in Section 3(e).

 

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If such release and termination gives rise to or perpetuates a Margin Deficit,
Buyer shall notify Seller of the amount thereof and Seller shall thereupon
satisfy the Margin Call in the manner specified in Section 6.

 

11. RELIANCE

With respect to any Transaction, Buyer may conclusively rely upon, and shall
incur no liability to Seller in acting upon, any request or other communication
that Buyer reasonably believes to have been given or made by a person authorized
to enter into a Transaction on Seller’s behalf.

 

12. REPRESENTATIONS AND WARRANTIES

Seller represents and warrants to Buyer that throughout the term of this
Agreement:

(a) Existence. Seller (a) is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, (b) has
all requisite corporate or other power, and has all governmental licenses,
authorizations, consents and approvals, necessary to own its assets and carry on
its business as now being or as proposed to be conducted, except where the lack
of such licenses, authorizations, consents and approvals would not be reasonably
likely to have a Material Adverse Effect, (c) is qualified to do business and is
in good standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify would not be reasonably likely (either individually or in the aggregate)
to have a Material Adverse Effect, and (d) is in compliance in all material
respects with all Requirements of Law.

(b) Financial Condition. Seller has heretofore furnished to Buyer a copy of its
audited consolidated balance sheets and the audited consolidated balance sheets
of its consolidated Subsidiaries, each as at December 31, 2011 with the opinion
thereon of Ernst & Young, LLP, a copy of which has been provided to Buyer.
Seller has also heretofore furnished to Buyer the related consolidated
statements of income and retained earnings and of cash flows for Seller and its
consolidated Subsidiaries for the six-month period ending December 31, 2011,
setting forth in comparative form the figures for the previous year. All such
financial statements are complete and correct in all material respects and
fairly present the consolidated financial condition of Seller and its
Subsidiaries and the consolidated results of their operations for the fiscal
year ended on said date, all in accordance with GAAP applied on a consistent
basis. Since November 8, 2012 there has been no development or event nor any
prospective development or event which has had or should reasonably be expected
to have a Material Adverse Effect.

(c) Litigation. There are no actions, suits, arbitrations, investigations or
proceedings pending or, to its knowledge, threatened against Seller or affecting
any of the property thereof before any Governmental Authority, (i) as to which
individually or in the aggregate there is a reasonable likelihood of an adverse
decision which would be reasonably likely to have a Material Adverse Effect or
(ii) which questions the validity or enforceability of any of the Program
Documents or any action to be taken in connection with the transactions
contemplated thereby and there is a reasonable likelihood of a Material Adverse
Effect or adverse decision.

(d) No Breach. Neither (a) the execution and delivery of the Program Documents,
nor (b) the consummation of the transactions therein contemplated in compliance
with the terms and provisions thereof will conflict with or result in a breach
of the charter or by-laws of Seller, or any applicable law, rule or regulation,
or any order, writ, injunction or decree of any Governmental Authority, or other
material agreement or instrument to which Seller is a party or by which any of
them or any of their

 

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property is bound or to which any of them or their property is subject, or
constitute a default under any such material agreement or instrument, or (except
for the Liens created pursuant to this Agreement) result in the creation or
imposition of any Lien upon any property of Seller pursuant to the terms of any
such agreement or instrument.

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

(f) Approvals. No authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority, or any other Person, are
necessary for the execution, delivery or performance by Seller of the Program
Documents to which it is a party or for the legality, validity or enforceability
thereof, except for filings and recordings in respect of the Liens created
pursuant to this Agreement.

(g) Taxes. Seller has filed all Federal income tax returns and all other
material tax returns that are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any assessment received by any
of them, except for any such taxes, if any, that are being appropriately
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been provided. The charges, accruals and
reserves on the books of Seller in respect of taxes and other governmental
charges are, in the opinion of Seller, adequate. Any taxes, fees and other
governmental charges payable by Seller in connection with a Transaction and the
execution and delivery of the Program Documents have been paid.

(h) Investment Company Act. Seller is not an “investment company”, or a company
“controlled” by an “investment company”, within the meaning of the Investment
Company Act of 1940, as amended. Seller is not subject to any Federal or state
statute or regulation which limits its ability to incur indebtedness.

(i) No Legal Bar. The execution, delivery and performance of this Agreement, the
other Program Documents, the sales hereunder and the use of the proceeds thereof
will not violate any Requirement of Law or Contractual Obligation of Seller and
will not result in, or require, the creation or imposition of any Lien (other
than the Liens created hereunder) on any of its or their respective properties
or revenues pursuant to any such Requirement of Law or Contractual Obligation.

(j) Compliance with Law. No practice, procedure or policy employed or proposed
to be employed by Seller in the conduct of its business violates any law,
regulation, judgment, agreement, regulatory consent, order or decree applicable
to it which, if enforced, would result in either a Material Adverse Effect with
respect to Seller.

(k) No Default. Seller is not in default under or with respect to any of its
Contractual Obligations in any respect which should reasonably be expected to
have a Material Adverse Effect. No Default has occurred and is continuing and no
Event of Default has occurred that has not been waived by Buyer in its sole
discretion in writing.

 

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(l) Chief Executive Office; Chief Operating Office. Seller’s chief executive
office and chief operating office on the Effective Date is located at Green Tree
Servicing LLC, 345 St. Peter Street, Suite 1100, St. Paul, Minnesota 33102.

(m) Location of Books and Records. The location where Seller keeps its books and
records including all computer tapes and records relating to the Purchased Items
is its chief executive office or chief operating office or the offices of the
Custodian.

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

(o) Financial Covenants. Seller’s Adjusted Tangible Net Worth is not less than
the Minimum Adjusted Tangible Net Worth . The ratio of Seller’s Indebtedness
(excluding non-recourse Indebtedness) to Adjusted Tangible Net Worth is not
greater than the Maximum Leverage Ratio. Seller has cash, Cash Equivalents and
unused borrowing capacity on unencumbered assets that could be drawn against
(taking into account required haircuts) under committed warehouse and repurchase
facilities in an amount equal to not less than the Minimum Liquidity Amount .

(p) ERISA. Each Plan which is not a Multiemployer Plan, and, to the knowledge of
Seller, each Multiemployer Plan, is in compliance in all material respects with,
and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other Federal or State law or
any failure to comply with such requirements or administer a Multiemployer Plan
in compliance with the applicable provisions of ERISA, the Code and any other
Federal or State law will not cause a Material Adverse Effect. No event or
condition has occurred and is continuing as to which Seller would be under an
obligation to furnish a report to Buyer under Section 13(a)(v) hereof. The
present value of all accumulated benefit obligations under each Plan subject to
Title IV of ERISA (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of such Plan, and the present value of all accumulated
benefit obligations of all Plans (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such Plans. Seller does not provide any
material medical or health benefits to any of its respective former employees at
no cost to Seller, as an employer, other than as required by the Consolidated
Omnibus Budget Reconciliation Act, as amended, or similar state or local law
(collectively, “COBRA”).

(q) [Reserved].

 

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(r) Filing Jurisdictions; Relevant States. Schedule 2 to this Agreement sets
forth the jurisdiction in which Seller is incorporated. Schedule 3 to this
Agreement sets forth all of the states or other jurisdictions in which Seller
originates Loans in its own name or through brokers on the date of this
Agreement.

(s) True Sales. Any and all interest of a Qualified Originator in, to and under
any Mortgage funded in the name of or acquired by such Qualified Originator or
seller which is an Affiliate of Seller has been sold, transferred, conveyed and
assigned to Seller pursuant to a legal sale and such Qualified Originator
retains no interest in such Loan, and if so requested by Buyer, such sale is
covered by an opinion of counsel to that effect in form and substance acceptable
to Buyer.

(t) No Burdensome Restrictions. No Requirement of Law or Contractual Obligation
of Seller has a Material Adverse Effect.

(u) Subsidiaries. All of the Subsidiaries of Seller are listed on Schedule 4 to
this Agreement, which Schedule 4 to this Agreement is true, complete and
correct.

(v) Origination and Acquisition of Loans. All Purchased Loans and Related Loans
were originated or acquired by Seller, and the origination and collection
practices used by Seller or Qualified Originator, as applicable, with respect to
such Loans have been, in all material respects legal, proper, prudent and
customary in the residential mortgage loan origination and servicing business,
and in accordance with the Underwriting Guidelines and the Agency Guidelines.
With respect to Purchased Loans and Related Loans acquired by Seller, all such
Loans are in conformity with the Underwriting Guidelines. Each Purchased Loan
and Related Loan complies with the representations and warranties listed in
Schedule 1, Part I to this Agreement.

(w) No Adverse Selection. Seller used no selection procedures that identified
any Purchased Loan or Related Loan as being less desirable or valuable than
other comparable Loans owned by Seller.

(x) Seller Solvent; Fraudulent Conveyance. As of the date hereof and immediately
after giving effect to each Transaction, the fair value of the assets of Seller
is greater than the fair value of the liabilities (including, without
limitation, contingent liabilities if and to the extent required to be recorded
as a liability on the financial statements of Seller in accordance with GAAP) of
Seller and Seller is and will be solvent, is and will be able to pay its debts
as they mature and does not and will not have an unreasonably small capital to
engage in the business in which it is engaged and proposes to engage. Seller
does not intend to incur, or believe that it has incurred, debts beyond its
ability to pay such debts as they mature. Seller is not contemplating the
commencement of insolvency, bankruptcy, liquidation or consolidation proceedings
or the appointment of a receiver, liquidator, conservator, trustee or similar
official in respect of Seller or any of its assets. Seller is not transferring
any Assets with any intent to hinder, delay or defraud any of its creditors.

(y) No Broker. Seller has not dealt with any broker, investment banker, agent,
or other person, except for Buyer, who may be entitled to any commission or
compensation in connection with the sale of Purchased Assets pursuant to this
Agreement; provided, that if Seller has dealt with any broker, investment
banker, agent, or other person, except for Buyer, who may be entitled to any
commission or compensation in connection with the sale of Purchased Assets
pursuant to this Agreement, such commission or compensation shall have been paid
in full by Seller.

(z) MERS. Seller is a member of MERS in good standing.

 

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(aa) Insured Closing Letter. As of the date hereof and as of the date of each
delivery of a Table Funded Wet Loan, the Settlement Agent has obtained an
Insured Closing Letter, closing protection letter or similar authorization
letter from a nationally recognized title insurance company that has been
approved by Buyer in writing, copies of which shall be delivered by Seller to
the Custodian prior to the Purchase Date. Among other things, the Insured
Closing Letter covers any losses occurring due to the fraud, dishonesty or
mistakes of the closing agent. The Insured Closing Letter inures to the benefit
of, and the rights thereunder may be enforced by, the loan originator and its
successors and assigns, including Buyer. Upon request by Buyer, all such Insured
Closing Letters or similar letters in possession of Seller shall be made
available for audit by Buyer or its designee.

(bb) Escrow Agreement. As of the date of each delivery of a Purchased Loan that
is a Table Funded Wet Loan, the Settlement Agent has executed an escrow
agreement or letter in form and substance satisfactory to Buyer in its sole
discretion stating that in the event of a Rescission of or if for any reason the
Loan fails to fund on a given day, all funds which would have been disbursed on
behalf of the Mortgagor shall be redeposited in the account from which such
funds originated not later than two (2) Business Days after the date of
Rescission or other failure of the Loan to fund on a given day. Such Escrow
Agreement inures to the benefit of, and the rights thereunder may be enforced
by, the loan originator and its successors and assigns, including Buyer. Upon
request by Buyer, all such Escrow Letters in possession of Seller shall be
delivered to Buyer or made available for audit by Buyer or its designee, as
requested by Buyer.

(cc) Servicing. Seller has adequate financial standing, servicing facilities,
procedures and experienced personnel necessary for the sound servicing of
mortgage loans of the same types as may from time to time constitute Loans and
in accordance with Accepted Servicing Practices.

(dd) Agency Approvals. Seller has all requisite Approvals and is in good
standing with each Agency, with no event having occurred or Seller having any
reason whatsoever to believe or suspect will occur prior to the issuance of the
consummation of any Takeout Commitment with respect to Agency Eligible Loans,
including, without limitation, a change in insurance coverage which would either
make Seller unable to comply with the eligibility requirements for maintaining
all such applicable approvals or require notification to the relevant Agency or
to HUD, FHA or VA, as applicable.

(ee) No Adverse Actions. Seller has not received from any Agency, HUD, FHA or VA
a written notice of extinguishment or a written notice indicating material
breach, default or material non-compliance which Buyer reasonably determines may
entitle such Agency, HUD, FHA or VA to terminate, suspend, sanction or levy
penalties against Seller, or a written notice, in each case, from any Agency,
HUD, FHA or VA indicating any adverse fact or circumstance in respect of Seller
which Buyer reasonably determines may entitle such Agency, HUD, FHA or VA, as
the case may be, to revoke any Approval or otherwise terminate, suspend Seller
as an approved issuer, seller or servicer, as applicable, or with respect to
which such adverse fact or circumstance has caused any Agency, HUD, FHA or VA to
terminate Seller.

 

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13. COVENANTS OF SELLER

Seller covenants and agrees with Buyer that during the term of this Agreement:

(a) Financial Statements and Other Information; Financial Covenants.

Seller shall deliver to Buyer:

(i) As soon as available and in any event within thirty (30) days after the end
of each month that is not the last month of a quarterly fiscal period or fiscal
year of Seller, a certification in the form of Exhibit A-1 attached hereto in
accordance with Section 21 hereof, together with the consolidated balance sheets
of Seller as at the end of such month and the related unaudited consolidated
statements of comprehensive income for Seller for such month and the portion of
the fiscal year through the end of such month, accompanied by a certificate of a
Responsible Officer of Seller, which certificate shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of Seller in accordance with GAAP,
consistently applied, as at the end of, and for, such month (subject to normal
year-end audit adjustments);

(ii) As soon as available and in any event within forty-five (45) days after the
end of each of the first three fiscal quarters of each fiscal year of Seller, a
certification in the form of Exhibit A-2 attached hereto in accordance with
Section 21 hereof, together with the consolidated balance sheets of Seller as at
the end of such period and the related unaudited consolidated statements of
comprehensive income and stockholders’ equity and of cash flows for Seller for
such period and the portion of the fiscal year through the end of such period,
setting forth in each case the figures for the previous year (or in the case of
the balance sheet, as of the end of the previous fiscal year, and in the case of
the statement of stockholders’ equity, no comparative disclosure, accompanied by
a certificate of a Responsible Officer of Seller, which certificate shall state
that said consolidated financial statements fairly present the consolidated
financial condition and results of operations of Seller in accordance with GAAP,
consistently applied, as at the end of, and for, such period (subject to normal
year-end audit adjustments);

(iii) As soon as available and in any event within ninety (90) days after the
end of each fiscal year of Seller, the consolidated balance sheets of Seller as
at the end of such fiscal year and the related consolidated statements of
comprehensive income and stockholders’ equity and of cash flows for Seller for
such year, setting forth in each case in comparative form the figures for the
previous year, accompanied by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall not be
qualified as to scope of audit or going concern and shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of Seller at the end of, and for, such
fiscal year in accordance with GAAP;

(iv) From time to time such other information regarding the financial condition,
operations, or business of Seller as Buyer may reasonably request; and

(v) As soon as reasonably possible, and in any event within fifteen (15) days
after a Responsible Officer knows, or has reason to believe, that any of the
events or conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a senior financial officer of
Seller setting forth details respecting such event or condition and the action,
if any, that Seller or its ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice required to be filed with or given to PBGC
by Seller or an ERISA Affiliate with respect to such event or condition):

a. any Reportable Event or any request for a waiver under Section 412(c) of the
Code for any Plan;

 

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b. the distribution under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan or any action taken by Seller or an ERISA Affiliate to
terminate any Plan;

c. the institution by PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by Seller or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by PBGC with respect to such Multiemployer Plan;

d. the complete or partial withdrawal from a Multiemployer Plan by Seller or any
ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a result of a
purchaser default) or the receipt by Seller or any ERISA Affiliate of notice
from a Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;

e. the institution of a proceeding by a fiduciary of any Multiemployer Plan
against Seller or any ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within thirty (30) days; and

f. the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29)
of the Code, would result in the loss of tax-exempt status of the trust of which
such Plan is a part if Seller or an ERISA Affiliate fails to timely provide
security to such Plan in accordance with the provisions of said Sections.

Seller will furnish to Buyer, at the time it furnishes each set of financial
statements pursuant to paragraphs (i), (ii) or (iii) above, a certificate of a
Responsible Officer of Seller to the effect that, to the best of such
Responsible Officer’s knowledge, Seller during such fiscal period or year has
observed or performed all of its covenants and other agreements, and satisfied
every material condition, contained in this Agreement and the other Program
Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate (and, if any Default has occurred and is
continuing or , describing the same in reasonable detail and describing the
action Seller has taken or proposes to take with respect thereto).

(b) Litigation. Seller will promptly, and in any event within three (3) Business
Days after service of process on any of the following, give to Buyer notice of
all legal or arbitrable proceedings affecting Seller that questions or
challenges the validity or enforceability of any of the Program Documents or as
to which an adverse determination would result in a Material Adverse Effect.

(c) Existence, Etc. Each of Seller will:

(i) preserve and maintain its legal existence and all of its material rights,
privileges, licenses and franchises;

(ii) comply with the requirements of all applicable laws, rules, regulations and
orders of Governmental Authorities (including, without limitation, truth in
lending, real estate settlement procedures and all environmental laws) if
failure to comply with such requirements would be reasonably likely (either
individually or in the aggregate) to have a Material Adverse Effect;

 

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(iii) keep adequate records and books of account, in which complete entries will
be made in accordance with GAAP consistently applied;

(iv) not move its chief executive office or chief operating office from the
addresses referred to in Section 12(l) unless it shall have provided Buyer
thirty (30) days prior written notice of such change;

(v) pay and discharge all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its Property prior to the
date on which penalties attach thereto, except for any such tax, assessment,
charge or levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being maintained; and

(vi) permit representatives of Buyer, during normal business hours upon three
(3) Business Days’ prior written notice at a mutually desirable time or at any
time if an Event of Default has occurred that has not been waived by Buyer in
its sole discretion in writing, to examine, copy and make extracts from its
books and records, to inspect any of its Properties, and to discuss its business
and affairs with its officers, all to the extent reasonably requested by Buyer.

(d) Prohibition of Fundamental Changes. Seller shall not at any time, directly
or indirectly, (i) enter into any transaction of merger or consolidation or
amalgamation (unless Seller is the surviving Person), or liquidate, wind up or
dissolve itself (or suffer any liquidation, winding up or dissolution) or sell
all or substantially all of its assets without Buyer’s prior consent; or
(ii) form or enter into any partnership, joint venture, syndicate or other
combination which would have a Material Adverse Effect with respect to Seller.

(e) Margin Deficit. If at any time there exists a Margin Deficit, Seller shall
cure the same in accordance with Section 6 hereof.

(f) Notices. Seller shall give notice to Buyer promptly in writing of any of the
following:

(i) Upon Seller becoming aware of, and in any event within one (1) Business Day
after the occurrence of any Default, Event of Default, any event of default or
default under any Program Document, the Subordinated Lender Credit Facility (if
any), or other material agreement of Seller or Guarantor or if Buyer or any
Affiliate of Buyer is not a lender under the Syndicated Credit Facility any
event of default or default under the Syndicated Credit Facility (provided that
Seller has received written notice or otherwise has knowledge that Buyer or its
Affiliate is no longer a lender under the Syndicated Credit Facility);

(ii) (x) upon, and in any event within three (3) Business Days after, service of
process on Seller or Guarantor, or any agent thereof for service of process, in
respect of any legal or arbitrable proceedings affecting Seller or Guarantor
that questions or challenges the validity or enforceability of any of the
Program Documents or (y) upon, and in any event within five (5) Business Days
after, service of process on Seller or Guarantor , or any agent thereof for
service of process, in respect of any legal or arbitrable proceedings affecting
Seller or Guarantor in which the amount in controversy exceeds $5,000,000;

 

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(iii) upon Seller becoming aware of any default related to any Purchased Items,
any Material Adverse Effect or any event or change in circumstances which should
reasonably be expected to have a Material Adverse Effect;

(iv) upon Seller becoming aware during the normal course of its business that
the Mortgaged Property in respect of any Purchased Loan or Purchased Loans with
an aggregate unpaid principal balance of at least $1,000,000 has been damaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty, or otherwise damaged so as to materially and adversely affect the
value of such Purchased Loan;

(v) upon the entry of a judgment or decree against Seller or Guarantor in an
amount in excess of $5,000,000;

(vi) any material change in the insurance coverage required of Seller or any
other Person pursuant to any Program Document, with copy of evidence of same
attached;

(vii) any material dispute, licensing issue, litigation, investigation,
proceeding or suspension between Seller or Guarantor, on the one hand, and any
Governmental Authority or any other Person;

(viii) any material change in accounting policies or financial reporting
practices of Seller or Guarantor;

(ix) upon Seller making any payment on account of, or set apart assets for a
sinking or other analogous fund for the purchase, redemption, defeasance,
retirement or other acquisition of, any stock or senior or subordinate debt of
Seller, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of Seller;

(x) if Seller is in breach of Section 13(aa) hereof;

(xi) upon Seller becoming aware of any penalties, sanctions or charges levied,
or threatened to be levied (which in the case of any penalties, sanctions or
charges of a monetary nature, the amount of such penalties, sanctions or charges
is material), against Seller or any change or threatened change in Approval
status, or the commencement of any non-routine Agency Audit, investigation, or
the institution of any action or the threat of institution of any action against
Seller by any Agency, HUD, FHA or VA or any other agency, or any supervisory or
regulatory Government Authority supervising or regulating the origination or
servicing of mortgage loans by, or the issuer or seller status of, Seller;

(xii) with respect to any FHA Loan or VA Loan that is a Purchased Loan, upon
Seller becoming aware of any fact or circumstance which would cause (a) such
Loan to be ineligible for FHA Mortgage Insurance or a VA Loan Guaranty, as
applicable, (b) FHA or VA to deny or reject the related Mortgagor’s application
for FHA Mortgage Insurance or a VA Loan Guaranty, respectively, or (c) FHA or VA
to deny or reject any claim under any FHA Mortgage Insurance Contract or a VA
Loan Guaranty, respectively; and

(xiii) if (x) Seller is in breach of any financial covenant contained in any
Seller Financing Facility (irrespective of whether such breach is or could be
cured or waived thereunder) and (y) any such financial covenant is amended
pursuant to the terms of the related Seller Financing Facility.

 

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Each notice pursuant to this Section 13(f) (other than (vi) above) shall be
accompanied by a statement of a Responsible Officer of Seller, setting forth
details of the occurrence referred to therein and stating what action Seller has
taken or proposes to take with respect thereto.

(g) Servicing. Except as provided in Section 43, Seller shall not permit any
Person other than Seller to service Loans without the prior written consent of
Buyer, which consent shall not be unreasonably withheld.

(h) Underwriting Guidelines. Seller shall not permit any material modifications
to be made to the Underwriting Guidelines that will impact either Buyer or the
Purchased Loans without the prior consent of Buyer (such consent not to be
unreasonably withheld). Seller agrees to deliver to Buyer copies of the
Underwriting Guidelines in the event that any changes are made to the
Underwriting Guidelines following the Effective Date, that could reasonably be
expected to affect any of the Purchased Loans or Loans.

(i) [Reserved].

(j) Transactions with Affiliates. Seller will not enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service or the making of any payment, with any Affiliate
unless such transaction is (x) in the ordinary course of Seller’s business and
(y) upon fair and reasonable terms no less favorable to Seller than it would
obtain in a comparable arm’s length transaction with a Person which is not an
Affiliate.

(k) Defense of Title. Seller warrants and will defend the right, title and
interest of Buyer in and to all Purchased Items against all adverse claims and
demands of all Persons whomsoever.

(l) Preservation of Purchased Items. Seller shall do all things necessary to
preserve the Purchased Items so that such Purchased Items remain subject to a
first priority perfected security interest hereunder (to the extent the same may
be perfected under the Uniform Commercial Code). Without limiting the foregoing,
Seller will comply with all applicable laws, rules and regulations of any
Governmental Authority applicable to Seller or relating to the Purchased Items
and cause the Purchased Items to comply with all applicable laws, rules and
regulations of any such Governmental Authority. Seller will not allow any
default to occur for which Seller is responsible under any Purchased Items or
any Program Documents and Seller shall fully perform or cause to be performed
when due all of its obligations under any Purchased Items or the Program
Documents.

(m) No Assignment. Seller shall not sell, assign, transfer or otherwise dispose
of, or grant any option with respect to, or pledge, hypothecate or grant a
security interest in or lien on or otherwise encumber (except pursuant to the
Program Documents or any Subordinated Lender Credit Facility (solely in
accordance with the terms of the Intercreditor Agreement, if any)), any of the
Purchased Assets or any interest therein. Notwithstanding the foregoing, in the
event that Seller enters into a Subordinated Lender Credit Facility with
Subordinated Lender, Seller may grant a junior Lien on the Purchased Assets to
Subordinated Lender under the Subordinated Lender Credit Facility so long as
Seller, Buyer and Subordinated Lender enter into an Intercreditor Agreement upon
mutually agreed-upon terms; provided

 

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that such Lien shall be and shall remain fully subordinated in all respects to
the rights of Buyer to the Purchased Assets as provided in the Program Documents
and Subordinated Lender’s rights to the Purchased Assets under the Subordinated
Lender Credit Facility shall be and shall remain subject in all respects to the
terms and provisions of the Intercreditor Agreement, if any. This Section 13(m)
shall not prevent any contribution, assignment, transfer or conveyance of
Purchased Assets in accordance with the Program Documents.

(n) Limitation on Sale of Assets. Seller shall not convey, sell, lease, assign,
transfer or otherwise dispose of (collectively, “Transfer”), all or
substantially all of its Property, business or assets (including, without
limitation, receivables and leasehold interests) whether now owned or hereafter
acquired to any Person.

(o) No Amendment of Credit Agreements. Without Buyer’s prior written consent,
none of Seller or those acting on Seller’s behalf shall amend, waive, modify or
supplement any of the terms or provisions of the Subordinated Lender Credit
Facility or the Syndicated Credit Facility if the substance of such amendment,
modification, waiver or supplement could adversely affect Buyer, the facility
provided by Buyer to Seller hereunder or under the Agency WL Repurchase
Agreement, or any of Buyer’s rights hereunder or thereunder.

(p) Takeout Payments. With respect to each Purchased Asset that is an Agency
Takeout Loan, an Early Purchase Program Loan, a Third Party Takeout Loan, or a
Security, Seller shall ensure that the related Takeout Price and all other
payments under the related Takeout Commitment shall be paid directly to Buyer in
accordance with the wire instructions designated by Buyer; provided, that in the
event that such Takeout Price exceeds an amount equal (i) the Repurchase Price
for such Purchased Asset, plus (ii) all Obligations then due and owing by Seller
to Buyer under the Agreement, then Buyer shall immediately remit such excess
amount to Seller; provided, further, that Buyer may, in its sole discretion, net
such excess amount from any other Obligations then due and owing by Seller to
Buyer under this Agreement. With respect to each Purchased Asset that is an
Agency Takeout Loan, (1) with respect to the wire transfer instructions as set
forth in Freddie Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse
Delivery) such wire transfer instructions are identical to Buyer’s designated
wire instructions or Buyer has approved such wire transfer instructions in
writing in its sole discretion, or (2) the Payee Number set forth on Fannie Mae
Form 1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Asset
Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Asset Schedule), as
applicable, is identical to the Payee Number that has been identified by Buyer
in writing as Buyer’s Payee Number or Buyer has approved the related Payee
Number in writing in its sole discretion. With respect each Purchased Asset that
is an Early Purchase Program Loan, the applicable Agency documents list Buyer as
the sole subscriber of the Related Security.

(q) Trade Assignments.

(i) With respect to Early Purchase Program Loans subject to any Transaction,
Seller shall deliver to Buyer no later than the Conversion Date, a duly executed
Trade Assignment together with a copy of the Takeout Commitment with respect to
the Related Security.

(ii) With respect to Agency Takeout Loans and Third Party Takeout Loans subject
to any Transaction, Seller shall deliver to Buyer as soon as possible but no
more than one (1) Business Day following the date on which Seller enters into a
Takeout Commitment for such Loans, a duly executed Trade Assignment together
with a copy of the Takeout Commitment with respect to such Loans.

 

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(r) Agency Audit and Approval Maintenance. Seller shall (i) at all times
maintain copies of relevant portions of all Agency Audits in which there are
material adverse findings, including without limitation written notices of
defaults, written notices of termination of approved status, written notices of
imposition of supervisory agreements or interim servicing agreements, and
written notices of probation, suspension, or non-renewal, (ii) unless prohibited
by the applicable Governmental Authority provide Buyer with copies of such
Agency Audits promptly upon Buyer’s request, and (iii) take all actions
necessary to maintain its respective Approvals.

(s) [Reserved].

(t) Servicing Transmission. Seller shall provide to Buyer on a monthly basis no
later than 11:00 a.m. New York City time two (2) Business Days prior to each
Repurchase Date (or such other day mutually agreed to by Buyer and Seller)
(i) the Servicing Transmission, on a loan-by-loan basis and in the aggregate,
with respect to the Loans serviced hereunder by Seller which were funded prior
to the first day of the current month, summarizing Seller’s delinquency and loss
experience with respect to Loans serviced by Seller (including, in the case of
the Loans, the following categories: current, 30-59, 60-89, 90-119, 120-180 and
180+), (ii) the CUSIP numbers in respect of any Purchased Securities subject to
Transactions during the preceding calendar month and (iii) any other information
reasonably requested by Buyer with respect to the Loans.

(u) No Amendment or Compromise. Without Buyer’s prior written consent, none of
Seller or those acting on Seller’s behalf shall amend or modify, or waive any
term or condition of, or settle or compromise any claim in respect of, any item
of the Purchased Assets, any related rights or any of the Program Documents,
provided that Seller may amend or modify an Asset if such amendment or
modification does not affect the amount or timing of any payment of principal or
interest, extend its scheduled maturity date, modify its interest rate, or
constitute a cancellation or discharge of its outstanding principal balance and
does not materially and adversely affect the security afforded by the real
property, furnishings, fixtures, or equipment securing the Asset.

(v) Maintenance of Property; Insurance. Seller shall keep all property useful
and necessary in its business in good working order and condition. Seller shall
maintain errors and omissions insurance and/or mortgage impairment insurance and
blanket bond coverage in such amounts as are in effect on the Effective Date (as
disclosed to Buyer in writing) and shall not reduce such coverage without the
written consent of Buyer, and shall also maintain such other insurance with
financially sound and reputable insurance companies, and with respect to
property and risks of a character usually maintained by entities engaged in the
same or similar business similarly situated, against loss, damage and liability
of the kinds and in the amounts customarily maintained by such entities.

(w) Further Identification of Purchased Items. Seller will furnish to Buyer from
time to time statements and schedules further identifying and describing the
Purchased Items and such other reports in connection with the Purchased Items as
Buyer may reasonably request, all in reasonable detail.

(x) Asset Determined to be Defective. Upon discovery by Seller of any breach of
any representation or warranty listed on Schedule 1 hereto applicable to any
Asset, Seller shall promptly give notice of such discovery to Buyer.

(y) Interest Rate Protection Agreements. Upon Buyer’s request, Seller shall
deliver to Buyer any and all information relating to Interest Rate Protection
Agreements (if any).

 

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(z) Certificate of a Responsible Officer of Seller. At the time that Seller
delivers financial statements to Buyer in accordance with Section 13(a) hereof,
Seller shall forward to Buyer a certificate of a Responsible Officer of Seller
which demonstrates that Seller is in compliance with the covenants set forth in
Sections 13(p) and (aa) above.

(aa) [Reserved].

(bb) Alternative Purchase of Collateral. Seller shall not cause any Eligible
Asset which is at any time purchased hereunder to be subsequently purchased or
used as collateral pursuant to any Seller Financing Facility without the express
written consent of Buyer, unless such Asset is no longer an Eligible Asset or
such Asset was subject to a Transaction hereunder with respect to the
Uncommitted Amount and Buyer required Seller to repurchase such Asset pursuant
to Section 3(a) and/or Section 17 hereof.

(cc) Maintenance of Papers, Records and Files. Seller shall acquire, and Seller
shall build, maintain and have available, a complete file in accordance with
lending industry custom and practice for each Purchased Asset. Seller will
maintain all such Records not in the possession of Custodian in good and
complete condition in accordance with industry practices and preserve them
against loss or destruction.

(i) Seller shall collect and maintain or cause to be collected and maintained
all Records relating to the Purchased Assets in accordance with industry custom
and practice, including those maintained pursuant to the preceding subsection,
and all such Records shall be in Custodian’s possession unless Buyer otherwise
approves. Upon request Seller shall deliver to Buyer or its designee updates of
such Servicing Records. Seller will not cause or authorize any such papers,
records or files that are an original or an only copy to leave Custodian’s
possession, except for individual items removed in connection with servicing a
specific Loan, in which event Seller will obtain or cause to be obtained a
receipt from the Custodian for any such paper, record or file.

(ii) For so long as Buyer has an interest in or lien on any Purchased Asset,
Seller will hold or cause to be held all related Records in trust for Buyer.
Seller shall notify, or cause to be notified, every other party holding any such
Records of the interests and liens granted hereby.

(iii) Upon reasonable advance notice from Custodian or Buyer, Seller shall
(x) make any and all such Records available to Custodian or Buyer to examine any
such Records, either by its own officers or employees, or by agents or
contractors, or both, and make copies of all or any portion thereof, (y) permit
Buyer or its authorized agents to discuss the affairs, finances and accounts of
Seller with its respective chief operating officer and chief financial officer
and to discuss the affairs, finances and accounts of Seller with its independent
certified public accountants; provided, however, Seller shall be permitted to
participate in such discussions with its independent certified public
accountants (provided that Seller’s participation in such discussions shall not
be a requirement for Buyer to engage in such discussions with Seller’s
independent certified public accountants).

(dd) Maintenance of Licenses. Seller shall (i) maintain all licenses, permits or
other approvals necessary for Seller to conduct its business and to perform its
obligations under the Program Documents, (ii) remain in good standing under the
laws of each state in which it conducts business or any Mortgaged Property is
located, and (iii) conduct its business strictly in accordance with applicable
law.

 

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(ee) Taxes, Etc. Seller shall pay and discharge or cause to be paid and
discharged, when due, all taxes, assessments and governmental charges or levies
imposed upon Seller or upon its income and profits or upon any of its property,
real, personal or mixed (including without limitation, the Purchased Assets) or
upon any part thereof, as well as any other lawful claims which, if unpaid,
might become a Lien upon such properties or any part thereof, except for any
such taxes, assessments and governmental charges, levies or claims as are
appropriately contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves are provided. Seller shall
file on a timely basis all federal, and material state and local tax and
information returns, reports and any other information statements or schedules
required to be filed by or in respect of it.

(ff) Use of Custodian. Without the prior written consent of Buyer, Seller shall
use no third party custodian as document custodian other than the Custodian with
respect to the Purchased Assets.

(gg) Change of Fiscal Year. Seller will not at any time, directly or indirectly,
except upon ninety (90) days’ prior written notice to Buyer, change the date on
which Seller’s fiscal year begins from Seller’s current fiscal year beginning
date.

(hh) Delivery of Servicing Rights and Servicing Records. With respect to the
Servicing Rights of each Purchased Loan, Seller shall (or shall cause the
related Subservicer to deliver) deliver such Servicing Rights to Buyer on the
related Purchase Date. Seller shall deliver (or cause the related Subservicer to
deliver) the Servicing Records and the physical and contractual servicing of
each Purchased Loan, to Buyer or its designee upon the termination of Seller or
Subservicer as the servicer or subservicer, respectively, pursuant to
Section 43(d). In addition, with respect to the Servicing Records for each
Purchased Loan and the physical and contractual servicing of each Purchased
Loan, Seller shall deliver (or cause the related Subservicer to deliver) such
Servicing Records and, to the extent applicable, the servicing to Buyer or its
designee within thirty (30) days of the earlier of (i) the termination of Seller
or Subservicer as the servicer or subservicer, respectively, of the Purchased
Loans and (ii) the related Purchase Date for each such Purchased Loan (the
“Servicing Delivery Requirement”). Notwithstanding the foregoing, such Servicing
Delivery Requirement will be deemed restated for each such Purchased Loan on
each Repurchase Date that is subject to a new Transaction (and the immediately
preceding delivery requirement will be deemed to be rescinded), and a new 30-day
Servicing Delivery Requirement will be deemed to commence for such Purchased
Loans as of such Repurchase Date in the absence of directions to the contrary
from Buyer. Further, the Servicing Delivery Requirement will no longer apply to
any Purchased Loan that is repurchased in full by Seller in accordance with the
provisions of this Agreement and is no longer subject to a Transaction. Seller’s
transfer of the Servicing Rights, Servicing Records and the physical and
contractual servicing under this Section shall be in accordance with customary
standards in the industry and such transfer shall include the transfer of the
gross amount of all escrows held for the related mortgagors (without reduction
for unreimbursed advances or “negative escrows”). For the avoidance of doubt,
all right, title and interest in and to the Servicing Rights and Servicing
Records with respect to a Purchased Loan shall be assigned by Buyer to Seller
immediately upon the repurchase of such Purchased Loan in accordance with the
terms hereof.

(ii) Establishment of Collection Account. Prior to the initial Purchase Date,
Seller shall establish the Collection Account for the benefit of Buyer. Seller
shall deposit or credit to the Collection Account all such Income within two
(2) Business Days of receipt in accordance with Section 7 hereof. On each
Repurchase Date, Seller shall have the right to withdraw all amounts on deposit
therein; provided that upon the occurrence of an Event of Default that has not
been waived by Buyer in its sole discretion in writing, Seller shall have no
right to withdraw any such amounts without Buyer’s prior written consent. Seller
shall follow the instructions of Buyer with respect to the Purchased Assets and
deliver to Buyer any

 

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information with respect to the Purchased Assets reasonably requested by Buyer.
Seller shall deposit or credit to the Collection Account all items to be
deposited or credited thereto irrespective of any right of setoff or
counterclaim arising in favor of it (or any third party claiming through it)
under any other agreement or arrangement.

(jj) MERS. Seller will comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the MERS Loans for as
long as such Purchased Loans are registered with MERS.

(kk) Wet Loans. With respect to each Wet Loan, Seller shall deliver to the
Custodian all Required Documents within seven (7) Business Days of the related
Purchase Date for such Wet Loan.

(ll) Reserved.

(mm) Financial Covenants.

(i) Maintenance of Liquidity. Seller shall at all times maintain cash, Cash
Equivalents and unused borrowing capacity on unencumbered assets that could be
drawn against (taking into account required haircuts) under uncommitted
warehouse and repurchase facilities in an aggregate amount equal to not less
than the Minimum Liquidity Amount .

(ii) Maintenance of Adjusted Tangible Net Worth. Seller shall not permit its
Adjusted Tangible Net Worth to be less than the Minimum Adjusted Tangible Net
Worth at any time.

(iii) Maintenance of Leverage. Seller shall not permit the ratio of its
Indebtedness (excluding non-recourse Indebtedness) to Adjusted Tangible Net
Worth to be greater than the Maximum Leverage Ratio at any time.

 

14. REPURCHASE DATE PAYMENTS

On each Repurchase Date for any Transaction or individual Purchased Asset (other
than a Repurchase Date on which the related Purchased Assets automatically
become subject to a new Transaction in accordance with Section 3(f) hereof),
Seller shall remit or shall cause to be remitted to Buyer the Repurchase Price
together with any other Obligations then due and payable, and thereafter and
following the exercise of any of Buyer’s rights of setoff hereunder, all excess
proceeds received by Buyer at any time thereafter with respect to such
Transaction or individual Purchased Asset over such amount shall be remitted by
Buyer to Seller.

 

15. REPURCHASE OF PURCHASED ASSETS

Upon discovery by Seller of a breach of any of the representations and
warranties set forth on Schedule 1 to this Agreement with respect to any
Purchased Asset, or if a Purchased Asset at any time ceases to be an Eligible
Asset, Seller shall give prompt written notice thereof to Buyer. It is
understood and agreed that the representations and warranties set forth in
Schedule 1 to this Agreement with respect to the Purchased Assets shall survive
delivery of the respective Mortgage Files to the Custodian and shall inure to
the benefit of Buyer. The fact that Buyer has conducted or has failed to conduct
any partial or complete due diligence investigation in connection with its
purchase of any Purchased Asset shall not affect Buyer’s right to demand
repurchase as provided under this Agreement. Seller shall, within two
(2) Business Days of the earlier of Seller’s discovery or Seller receiving
notice with respect to any Purchased

 

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Asset of (i) any breach of a representation or warranty contained in Schedule 1
to this Agreement with respect to such Purchased Asset, (ii) the failure of such
Purchased Asset to be an Eligible Asset or (iii) any failure to deliver any of
the items required to be delivered as part of the Mortgage File within the time
period required for delivery pursuant to the Custodial Agreement, promptly cure
such breach or delivery failure in all material respects. If within two
(2) Business Days after the earlier of Seller’s discovery of such breach or
delivery failure or Seller receiving notice thereof that such breach,
ineligibility or delivery failure has not been remedied by Seller, Seller shall
promptly upon receipt of written instructions from Buyer, repurchase such
Purchased Asset at a purchase price equal to the Repurchase Price with respect
to such Purchased Asset by wire transfer to the account designated by Buyer.

 

16. RESERVED

 

17. ACCELERATION OF REPURCHASE DATE

Buyer may, at any time, with respect to the Uncommitted Amount only, terminate
this Agreement by providing written notice to Seller; provided that no such
notice shall be required if a Default has occurred and is continuing or any
Event of Default has occurred that has not been waived by Buyer in its sole
discretion in writing. Within two (2) Business Days of receipt of such notice
(if required), Seller agrees to repurchase all Purchased Assets which were
financed from the Uncommitted Amount at the Repurchase Price and to satisfy all
of its Obligations with respect to such Purchased Assets hereunder

 

18. EVENTS OF DEFAULT

Each of the following events shall constitute an Event of Default (an “Event of
Default”) hereunder:

(a) Seller fails to transfer the Purchased Assets to Buyer on the applicable
Purchase Date (provided Buyer has tendered the related Purchase Price);

(b) Seller either fails to repurchase the Purchased Assets on the applicable
Repurchase Date or fails to perform its obligations under Section 6;

(c) Seller shall default in the payment of any other amount payable by it
hereunder or under any other Program Document after notification by Buyer to
Seller in writing of such default, and such default shall have continued
unremedied for three (3) Business Days after delivery of such written notice in
accordance with Section 21 hereof;

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

(e) Seller shall fail to comply with the requirements of Section 13(c)(i),
Section 13(d), Section 13(f)(i), (iii) or (xiii), Sections 13(g) through 13(o),
Section 13(s), Section 13(u), Section 13(v), Section 13(bb), Section 13(ff),
Section 13(gg) or Section 13(mm) hereof; or Seller shall otherwise fail to
observe or perform any other agreement contained in this Agreement or any other
Program Document and

 

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such failure to observe or perform shall continue unremedied for a period of
five (5) Business Days following the earlier of knowledge by Seller or
notification by Buyer to Seller in writing in accordance with Section 21 hereof;

(f) any final, judgment or judgments or order or orders for the payment of money
in excess of $5,000,000 in the aggregate (to the extent that it is, in the
reasonable determination of Buyer, uninsured and provided that any insurance or
other credit posted in connection with an appeal shall not be deemed insurance
for these purposes) shall be rendered against Seller, Guarantor or any of
Seller’s or Guarantor’s Affiliates by one or more courts, administrative
tribunals or other bodies having jurisdiction over them and the same shall not
be discharged (or provisions shall not be made for such discharge), satisfied,
or bonded, or a stay of execution thereof shall not be procured, within sixty
(60) days from the date of entry thereof and Seller, Guarantor or any of
Seller’s or Guarantor’s Affiliates, as applicable, shall not, within said period
of sixty (60) days, appeal therefrom and cause the execution thereof to be
stayed during such appeal;

(g) Seller shall admit in writing its inability to, or intention not to, perform
any of Seller’s Obligations;

(h) Seller, Guarantor or any of Seller’s or Guarantor’s Affiliates files a
voluntary petition in bankruptcy, seeks relief under any provision of any
bankruptcy, reorganization, moratorium, delinquency, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction whether
now or subsequently in effect; or consents to the filing of any petition against
it under any such law; or consents to the appointment of or taking possession by
a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar
official for Seller, Guarantor or any of Seller’s or Guarantor’s Affiliates, or
of all or any part of Seller’s, Guarantors, Seller’s Affiliates’ or Guarantor’s
Affiliates’ Property; or makes an assignment for the benefit of Seller,
Guarantor or any of Seller’s Affiliates’ or Guarantor’s Affiliates’ creditors;

(i) A custodian, receiver, conservator, liquidator, trustee, sequestrator or
similar official for Seller, Guarantor or any of Seller’s or Guarantor’s
Affiliates, or of any of Seller’s, Guarantor’s or their respective Property (as
a debtor or creditor protection procedure), is appointed or takes possession of
such Property; or Seller, Guarantor or any of Seller’s or Guarantor’s Affiliates
generally fails to pay Seller’s, Guarantor’s, Guarantor’s Affiliates’ or
Seller’s Affiliates’ debts as they become due; or Seller, Guarantor or any of
Seller’s or Guarantor’s Affiliates is adjudicated bankrupt or insolvent; or an
order for relief is entered under the Bankruptcy Code, or any successor or
similar applicable statute, or any administrative insolvency scheme, against
Seller, Guarantor or any of Seller’s or Guarantor’s Affiliates; or any of
Seller’s, Guarantor’s, Guarantor’s Affiliates’ or Seller’s Affiliates’ Property
is sequestered by court or administrative order; or a petition is filed against
Seller, Guarantor or any of Seller’s or Guarantor’s Affiliates under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, moratorium, delinquency or liquidation law of any jurisdiction,
whether now or subsequently in effect;

(j) Any Governmental Authority or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the Property of Seller, Guarantor or any of Seller’s or
Guarantor’s Affiliates, or shall have taken any action to displace the
management of Seller, Guarantor or any of Seller’s or Guarantor’s Affiliates or
to curtail its authority in the conduct of the business of any Seller, Guarantor
or any of Seller’s or Guarantor’s Affiliates, or takes any action in the nature
of enforcement to remove, limit or restrict the approval of Seller, Guarantor or
any of Seller’s or Guarantor’s Affiliates as an issuer, buyer or a
seller/servicer of Loans or securities backed thereby, and such action provided
for in this subsection (j) shall not have been discontinued or stayed within
thirty (30) days;

 

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(k) An event of default by or on the part of Seller shall have occurred and
shall be continuing under any Program Document (other than this Agreement)
beyond any applicable grace period, or shall for whatever reason (including an
event of default thereunder) be terminated without the consent of the parties
thereto; an event of default by or on the part of Guarantor shall have occurred
and shall be continuing under the Guaranty beyond any applicable grace period,
or the Guaranty shall for whatever reason (including an event of default
thereunder) be terminated without Buyer’s consent; or any of Seller’s material
obligations (including Seller’s Obligations hereunder) shall cease to be in full
force and effect, or the enforceability thereof shall be contested by Seller;

(l) Any Material Adverse Effect shall have occurred, as determined by Buyer in
its sole discretion;

(m) (i) Any Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) a
determination that a Plan is “at risk” (within the meaning of Section 302 of
ERISA) or any Lien in favor of the PBGC or a Plan shall arise on the assets of
Buyer or any ERISA Affiliate, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Plan, which Reportable
Event or commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of Buyer, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Plan shall terminate for purposes of
Title IV of ERISA, (v) any Seller or any ERISA Affiliate shall, or in the
reasonable opinion of Buyer is likely to, incur any liability in connection with
a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan,
(vi) any Seller or any ERISA Affiliate shall file an application for a minimum
funding waiver under Section 302 of ERISA or Section 412 of the Code with
respect to any Plans, (vii) any obligation for post-retirement medical costs
(other than as required by COBRA) exists or (viii) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses
(i) through (viii) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a Material
Adverse Effect;

(n) A Change of Control of Seller shall have occurred without the prior consent
of Buyer;

(o) Seller shall grant, or suffer to exist, any Lien on any Purchased Items
except the Liens contemplated hereby or by the Subordinated Lender Credit
Facility (but solely in accordance with the Intercreditor Agreement, if any);or
the Liens contemplated hereby shall cease to be first priority perfected Liens
on the Purchased Items in favor of Buyer or shall be Liens in favor of any
Person other than Buyer, or this Agreement shall for any reason cease to create
a valid, first priority security interest or ownership interest upon transfer in
any of the Purchased Assets or Purchased Items purported to be covered hereby;

(p) Buyer shall reasonably request, specifying the reasons for such request,
reasonable information, and/or written responses to such requests, regarding the
financial well-being of Seller and such reasonable information and/or responses
shall not have been provided within three (3) Business Days of such request
(unless Seller is prohibited by applicable law from complying with such
request);

(q) Seller or any Affiliate of Seller shall default under, or fail to perform as
required under, or shall otherwise breach the terms of any instrument, agreement
or contract between Seller or such other entity, on the one hand, and Buyer or
any of Buyer’s Affiliates on the other (including without limitation

 

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under any “Program Document” as such term is defined in the Agency WL Repurchase
Agreement); or Seller or any Affiliate of Seller shall default under, or fail to
perform as requested under, the terms of any repurchase agreement, loan and
security agreement or similar credit facility or material agreement for borrowed
funds entered into by Seller or such other entity and any third party, which
default or failure is the result of a failure by Seller or such Affiliate to
make payments when due under such agreement or facility and which entitles any
party to require acceleration or prepayment of any indebtedness thereunder after
the expiration of any applicable cure or grace periods;

(r) Seller shall admit in writing its inability to, or intention not to, perform
any of its material obligations, (ii) Buyer shall have determined in good faith
that Seller is unable to meet its commitments; or (iii) Seller’s audited annual
financial statements or the notes thereto or other opinions or conclusions
stated therein shall be qualified or limited by reference to the status of
Seller, as a “going concern” or a reference of similar import or shall indicate
that Seller has a negative net worth or is insolvent;

(s) Seller ceases to be a member of MERS (or any successor thereto) in good
standing for any reason (unless MERS and any such successor is no longer in
existence or the MERS System is no longer commonly accepted by similarly
situated warehouse facility parties) and Seller fails to cause MERS to deliver
to Buyer all of the Assignments of Mortgage, in blank, in recordable form but
unrecorded for each MERS Loan within five (5) Business Days; or

(t) Seller shall fail to either (i) service the Purchased Loans in accordance
with Accepted Servicing Practices; or (ii) maintain all requisite Approvals; or
any Agency, FHA or VA shall refuse to accept the transfer or delivery of Loans
similar to the Purchased Loans from Seller.

 

19. REMEDIES

Upon the occurrence of an Event of Default, Buyer, at its option (which option
shall be deemed to have been exercised immediately upon the occurrence of an
Event of Default pursuant to Section 18(g), (h), (i) or (j) hereof), shall have
the right to exercise any or all of the following rights and remedies:

(a)(i) The Repurchase Date for each Transaction hereunder shall, if it has not
already occurred, be deemed immediately to occur (provided that, in the event
that the Purchase Date for any Transaction has not yet occurred as of the date
of such exercise or deemed exercise, such Transaction shall be deemed
immediately canceled). Seller’s obligations hereunder to repurchase all
Purchased Assets at the Repurchase Price therefor on the Repurchase Date
(determined in accordance with the preceding sentence) in such Transactions
shall thereupon become immediately due and payable; all Income then on deposit
in the Collection Account, and all Income paid after such exercise or deemed
exercise shall be remitted to and retained by Buyer and applied to the aggregate
Repurchase Price and any other amounts owing by Seller hereunder; Seller shall
immediately deliver to Buyer or its designee any and all original papers,
Servicing Records and files relating to the Purchased Assets subject to such
Transaction then in Seller’s possession and/or control; and all right, title and
interest in and entitlement to such Purchased Assets and Servicing Rights
thereon shall be deemed transferred to Buyer or its designee; provided, however,
in the event that Seller repurchases any Purchased Asset pursuant to this
Section 19(a)(i), Buyer shall cooperate with Seller in delivering any and all
original papers, records and files relating to such Purchased Asset then in its
possession and/or control.

(ii) Buyer shall have the right to (A) sell, on or following the Business Day
following the date on which the Repurchase Price became due and payable pursuant
to Section 19(a)(i)

 

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without notice or demand of any kind, at a public or private sale and at such
price or prices as Buyer may deem to be commercially reasonable for cash or for
future delivery without assumption of any credit risk, any or all or portions of
the Purchased Assets on a servicing released basis. Buyer may purchase any or
all of the Purchased Assets at any public or private sale. Seller shall remain
liable to Buyer for any amounts that remain owing to Buyer following a sale
and/or credit under the preceding sentence. The proceeds of any disposition of
Purchased Assets shall be applied first to the reasonable costs and expenses
incurred by Buyer in connection with or as a result of an Event of Default;
second to the aggregate Repurchase Prices; and third to all other Obligations.

(iii) Buyer shall have the right to terminate this Agreement and declare all
obligations of Seller to be immediately due and payable, by a notice in
accordance with Section 21 hereof provided no such notice shall be required for
an Event of Default pursuant to Section 18(g),(h),(i) or (j) hereof.

(iv) The parties recognize that it may not be possible to purchase or sell all
of the Purchased Assets on a particular Business Day, or in a transaction with
the same purchaser, or in the same manner because the market for such Purchased
Assets may not be liquid. In view of the nature of the Purchased Assets, the
parties agree that liquidation of a Transaction or the underlying Purchased
Assets does not require a public purchase or sale and that a good faith private
purchase or sale shall be deemed to have been made in a commercially reasonable
manner. Accordingly, Buyer may elect the time and manner of liquidating any
Purchased Asset and nothing contained herein shall obligate Buyer to liquidate
any Purchased Asset on the occurrence of an Event of Default or to liquidate all
Purchased Assets in the same manner or on the same Business Day or constitute a
waiver of any right or remedy of Buyer. Notwithstanding the foregoing, the
parties to this Agreement agree that the Transactions have been entered into in
consideration of and in reliance upon the fact that all Transactions hereunder
constitute a single business and contractual obligation and that each
Transaction has been entered into in consideration of the other Transactions.

(vi) To the extent permitted by applicable law, Seller waives all claims,
damages and demands it may acquire against Buyer arising out of the exercise by
Buyer of any of its rights hereunder, other than those claims, damages and
demands arising from the gross negligence or willful misconduct of Buyer. If any
notice of a proposed sale or other disposition of Purchased Items shall be
required by law, such notice shall be deemed reasonable and proper if given at
least two (2) Business Days before such sale or other disposition.

(b) Seller hereby acknowledges, admits and agrees that Seller’s obligations
under this Agreement are recourse obligations of Seller to which Seller pledges
its full faith and credit. In addition to its rights hereunder, Buyer shall have
the right to proceed against any of Seller’s assets which may be in the
possession of Buyer, any of Buyer’s Affiliates or their respective designees
(including the Custodian in its capacity as custodian for Buyer), including the
right to liquidate such assets and to setoff the proceeds against monies owed by
Seller to Buyer pursuant to this Agreement. Buyer may set off cash, the proceeds
of the liquidation of the Purchased Assets and Additional Purchased Assets, any
other Purchased Items and their proceeds and all other sums or obligations owed
by Buyer to Seller against all of Seller’s obligations to Buyer, whether under
this Agreement, under a Transaction, or under any other agreement between the
parties, or otherwise, whether or not such obligations are then due, without
prejudice to Buyer’s right to recover any deficiency.

 

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(c) Buyer shall have the right to obtain physical possession of the Servicing
Records and all other files of Seller relating to the Purchased Assets and all
documents relating to the Purchased Assets which are then or may thereafter come
into the possession of Seller or any third party acting for Seller and Seller
shall deliver to Buyer such assignments as Buyer shall request.

(d) Buyer shall have the right to direct all Persons servicing the Purchased
Assets consisting of Purchased Loans and Related Loans to take such action with
respect thereto as Buyer determines appropriate.

(e) Buyer shall, without regard to the adequacy of the security for the
Obligations, be entitled to the appointment of a receiver by any court having
jurisdiction, without notice, to take possession of and protect, collect,
manage, liquidate, and sell the Purchased Assets and any other Purchased Items
or any portion thereof, collect the payments due with respect to the Purchased
Assets and any other Purchased Items or any portion thereof, and do anything
that Buyer is authorized hereunder or by law to do. Seller shall pay all costs
and expenses incurred by Buyer in connection with the appointment and activities
of such receiver.

(f) Buyer may, at its option, enter into one or more Interest Rate Protection
Agreements covering all or a portion of the Purchased Assets, and Seller shall
be responsible for all damages, judgments, costs and expenses of any kind which
may be imposed on, incurred by or asserted against Buyer relating to or arising
out of such Interest Rate Protection Agreements; including without limitation
any losses resulting from such Interest Rate Protection Agreements.

(g) In addition to all the rights and remedies specifically provided herein,
Buyer shall have all other rights and remedies provided by applicable federal,
state, foreign, and local laws, whether existing at law, in equity or by
statute, including, without limitation, all rights and remedies available to a
purchaser or a secured party, as applicable, under the Uniform Commercial Code.

Except as otherwise expressly provided in this Agreement, Buyer shall have the
right to exercise any of its rights and/or remedies without presentment, demand,
protest or further notice of any kind other than as expressly set forth herein,
all of which are hereby expressly waived by Seller.

Buyer may enforce its rights and remedies hereunder without prior judicial
process or hearing, and Seller hereby expressly waives, to the extent permitted
by law, any right Seller might otherwise have to require Buyer to enforce its
rights by judicial process. Seller also waives, to the extent permitted by law,
any defense Seller might otherwise have to the Obligations, arising from use of
nonjudicial process, enforcement and sale of all or any portion of the Purchased
Assets and any other Purchased Items or from any other election of remedies.
Seller recognizes that nonjudicial remedies are consistent with the usages of
the trade, are responsive to commercial necessity and are the result of a
bargain at arm’s length.

Seller shall cause all sums received by it with respect to the Purchased Assets
to be deposited with such Person as Buyer may direct after receipt thereof.
Seller shall be liable to Buyer for the amount of all expenses (plus interest
thereon at a rate equal to the Post-Default Rate), including, without
limitation, all costs and expenses incurred within thirty (30) days of the Event
of Default in connection with hedging or covering transactions related to the
Purchased Assets, conduit advances and payments for mortgage insurance.

 

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In the event that Seller requests a waiver from Buyer following the occurrence
of an Event of Default pursuant to the terms of this Agreement, Buyer shall use
commercially reasonable efforts to promptly respond to such waiver request.

 

20. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE

No failure on the part of Buyer to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise by Buyer of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All rights and remedies of Buyer provided for herein are
cumulative and in addition to any and all other rights and remedies provided by
law, the Program Documents and the other instruments and agreements contemplated
hereby and thereby, and are not conditional or contingent on any attempt by
Buyer to exercise any of its rights under any other related document. Buyer may
exercise at any time after the occurrence of an Event of Default that has not
been waived by Buyer in its sole discretion in writing one or more remedies, as
they so desire, and may thereafter at any time and from time to time exercise
any other remedy or remedies.

 

21. NOTICES AND OTHER COMMUNICATIONS

Except as otherwise expressly permitted by this Agreement, all notices, requests
and other communications provided for herein and under the Custodial Agreement
(including, without limitation, any modifications of, or waivers, requests or
consents under, this Agreement) shall be given or made in writing (including,
without limitation, by electronic mail, telex or telecopy) delivered to the
intended recipient at the address of such Person set forth in this Section 21
below; or, as to any party, at such other address as shall be designated by such
party in a written notice to each other party. Except as otherwise provided in
this Agreement and except for notices given by Seller under Section 3(a) (which
shall be effective only on receipt), all such communications shall be deemed to
have been duly given when transmitted by telex, telecopier or electronic mail or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.

If to Buyer (in each case with an e-mail copy):

 

(legal notices)    The Royal Bank of Scotland plc    600 Washington Boulevard   
Stamford, Connecticut 06901    Attention: James Esposito, Esq.    Telephone:
(203) 897-6072    Facsimile: (203) 873-4072    Email: James.Esposito@rbs.com

with copies to:

   The Royal Bank of Scotland plc    600 Washington Boulevard    Stamford,
Connecticut 06901    Attention: James Raezer    Telephone: (203) 897-6030   
Facsimile: (203) 873-4030    Email: James.Raezer@rbs.com

 

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and

      The Royal Bank of Scotland plc    Suite 222 Metlox Center    451 Manhattan
Beach Boulevard    Manhattan Beach, California 90266    Attention: Regina Abayev
   Telephone: (310) 750-2075    Facsimile: (203) 873-5072    Email:
Regina.Abayev@rbs.com (operational notices)    The Royal Bank of Scotland plc   
600 Washington Boulevard    Stamford, Connecticut 06901    Attention: David
Katze    Telephone: (203) 897-7926    Facsimile: (203) 873-4675    Email:
David.Katze@rbs.com (credit notifications and financial statements pursuant to
Section 13(a))    The Royal Bank of Scotland plc    600 Washington Boulevard   
Stamford, Connecticut 06901    Attention: David Falkoff    Telephone: (203)
897-5767    Email: David.Falkoff@rbs.com

with a copy to:

   Regina Abayev (at address above)

and

      The Royal Bank of Scotland plc    600 Washington Boulevard    Stamford,
Connecticut 06901    Attention: Ann Marie Petrovcik    Email:
AnnMarie.Petrovcik@rbs.com

If to Seller:

 

  Green Tree Servicing LLC   345 St. Peter Street   1100 Landmark Towers   St.
Paul, Minnesota 85102   Attention: Cheryl Collins   Telephone: (651) 293-3410  
Facsimile: (651) 293-5746

 

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with a copy to:     Green Tree Servicing LLC   345 St. Peter Street   1100
Landmark Towers   St. Paul, Minnesota 85102   Attention: General Counsel  
Telephone: (651) 293-3472   Facsimile: (651) 265-5337

 

22. USE OF EMPLOYEE PLAN ASSETS

No assets of an employee benefit plan subject to any provision of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) shall be used by
either party hereto in a Transaction.

 

23. INDEMNIFICATION AND EXPENSES.

(a) Seller agrees to hold Buyer, and its Affiliates and their officers,
directors, employees, agents and advisors (each an “Indemnified Party”) harmless
from and indemnify any Indemnified Party against all liabilities, losses,
damages, judgments, costs and expenses of any kind which may be imposed on,
incurred by or asserted against such Indemnified Party solely relating to claims
of third parties, including without limitation Governmental Authorities
(collectively, the “Costs”) relating to or arising out of this Agreement, any
other Program Document or any transaction contemplated hereby or thereby, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, any other Program Document or any transaction
contemplated hereby or thereby, that, in each case, results from anything other
than any Indemnified Party’s gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Seller agrees to hold any Indemnified
Party harmless from and indemnify such Indemnified Party against all Costs with
respect to all Assets relating to or arising out of any violation or alleged
violation of any environmental law, rule or regulation or any consumer credit
laws, including without limitation laws with respect to unfair or deceptive
lending practices and predatory lending practices, the Truth in Lending Act
and/or the Real Estate Settlement Procedures Act, that, in each case, results
from anything other than such Indemnified Party’s gross negligence or willful
misconduct. In any suit, proceeding or action brought by an Indemnified Party in
connection with any Asset for any sum owing thereunder, or to enforce any
provisions of any Asset, Seller will save, indemnify and hold such Indemnified
Party harmless from and against all expense, loss or damage suffered by reason
of any defense, set-off, counterclaim, recoupment or reduction of liability
whatsoever of the account debtor or obligor thereunder, arising out of a breach
by Seller of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such account
debtor or obligor or its successors from Seller. Seller also agrees to reimburse
an Indemnified Party as and when billed by such Indemnified Party for all such
Indemnified Party’s reasonable out-of-pocket costs and expenses incurred in
connection with the enforcement or the preservation of such Indemnified Party’s
rights under this Agreement, any other Program Document or any transaction
contemplated hereby or thereby, including without limitation the reasonable fees
and disbursements of its counsel. Seller hereby acknowledges that, the
obligations of Seller under this Agreement are recourse obligations of Seller.

(b) Seller agrees to pay as and when billed by Buyer all of the reasonable
out-of pocket costs and expenses incurred by Buyer in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement, any other Program Document or any

 

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other documents prepared in connection herewith or therewith. Seller agrees to
pay as and when billed by Buyer all of the out-of-pocket costs and expenses
incurred in connection with the consummation and administration of the
transactions contemplated hereby and thereby including, without limitation,
(i) all the reasonable fees, disbursements and expenses of external counsel to
Buyer and (ii) all the due diligence, inspection, testing and review costs and
expenses incurred by Buyer with respect to Purchased Items under this Agreement,
including, but not limited to, those costs and expenses incurred by Buyer
pursuant to Sections 23, 39 and 44 hereof; provided that Buyer shall notify
Seller of any ongoing Loan level due diligence expenses in excess of $50,000.
Each of Buyer and Seller agrees not to assert any claim against the other party
or any of their respective Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the Program Documents, the actual or proposed use of the proceeds of
the Transactions, this Agreement or any of the transactions contemplated hereby
or thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY
APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT NEGLIGENCE OR WILLFUL
MISCONDUCT) OF SUCH PARTIES.

(c) If Seller fails to pay when due any costs, expenses or other amounts payable
by it under this Agreement, including, without limitation, reasonable fees and
expenses of external counsel and indemnities, such amount may be paid on behalf
of Seller by Buyer (including without limitation by Buyer netting such amount
from the proceeds of any Purchase Price paid by Buyer to Seller hereunder), in
its sole discretion and Seller shall remain liable for any such payments by
Buyer. No such payment by Buyer shall be deemed a waiver of any of Buyer’s
rights under the Program Documents.

(d) Without prejudice to the survival of any other agreement of Seller
hereunder, the covenants and obligations of Seller contained in this Section 23
shall survive the termination of this Agreement, the payment in full of the
Repurchase Price and all other amounts payable hereunder and delivery of the
Purchased Assets by Buyer against full payment therefor.

 

24. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS

Seller hereby expressly waives, to the fullest extent permitted by law, every
statute of limitation on a deficiency judgment, any reduction in the proceeds of
any Purchased Items as a result of restrictions upon Buyer or Custodian
contained in the Program Documents or any other instrument delivered in
connection therewith, and any right that it may have to direct the order in
which any of the Purchased Items shall be disposed of in the event of any
disposition pursuant hereto.

 

25. REIMBURSEMENT

All out-of-pocket sums reasonably expended by Buyer in connection with the
exercise of any right or remedy provided for herein shall be and remain Seller’s
obligation (unless and to the extent that Seller is the prevailing party in any
dispute, claim or action relating thereto). Seller agrees to pay, with interest
at the Post-Default Rate to the extent that an Event of Default has occurred,
the reasonable out-of-pocket expenses and reasonable attorneys’ fees incurred by
Buyer and/or Custodian in connection with the preparation, negotiation,
enforcement (including any waivers), administration and amendment of the Program
Documents (regardless of whether a Transaction is entered into hereunder), the
taking of any action, including legal action, required or permitted to be taken
by Buyer (without duplication to Buyer) and/or Custodian pursuant thereto, any
“due diligence” or loan agent reviews conducted by Buyer or on its behalf or by
refinancing or restructuring in the nature of a “workout.”

 

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26. FURTHER ASSURANCES

Seller agrees to do such further acts and things and to execute and deliver to
Buyer such additional assignments, acknowledgments, agreements, powers and
instruments as are reasonably required by Buyer to carry into effect the intent
and purposes of this Agreement and the other Program Documents, to perfect the
interests of Buyer in the Purchased Items (to the extent the same may be
perfected under the Uniform Commercial Code) or to better assure and confirm
unto Buyer its rights, powers and remedies hereunder and thereunder.

 

27. TERMINATION

This Agreement shall remain in effect until the Termination Date. In addition,
Seller may terminate this Agreement at any time after the Subordinated Lender
and Buyer enter into a master repurchase agreement (if any) without the payment
of any penalty or termination fee (other than any accrued and unpaid
Non-Utilization Fee); provided that the terms and conditions of such master
repurchase agreement are mutually agreed to between Buyer and Subordinated
Lender. Seller and Buyer shall cooperate in good faith to establish mutually
agreed upon terms with respect to any such termination, including without
limitation whether any breakage costs and expenses incurred by Buyer in
connection with such termination will be reimbursed by Seller. If Seller
exercises such right of termination, Buyer shall promptly reimburse Seller for
the pro-rated amount of the Commitment Fee based on the number of days remaining
from the date such of such termination until the Maturity Date. However, no such
termination under this Section 27 shall affect Seller’s outstanding obligations
to Buyer at the time of such termination. Seller’s obligations under
Section 3(h), (i), Section 5, Section 12 and Section 23 and any other
reimbursement or indemnity obligation of Seller to Buyer pursuant to this
Agreement or any other Program Documents shall survive the termination hereof.

 

28. SEVERABILITY

If any provision of any Program Document is declared invalid by any court of
competent jurisdiction, such invalidity shall not affect any other provision of
the Program Documents, and each Program Document shall be enforced to the
fullest extent permitted by law.

 

29. BINDING EFFECT; GOVERNING LAW

This Agreement shall be binding and inure to the benefit of the parties hereto
and their respective successors and assigns, except that Seller may not assign
or transfer any of its respective rights or obligations under this Agreement or
any other Program Document without the prior written consent of Buyer. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF (EXCEPT FOR SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
WHICH SHALL GOVERN).

 

30. AMENDMENTS

Except as otherwise expressly provided in this Agreement, any provision of this
Agreement may be modified or supplemented only by an instrument in writing
signed by Seller and Buyer and any provision of this Agreement may be waived by
Buyer.

 

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31. SUCCESSORS AND ASSIGNS

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.

 

32. SURVIVAL

The obligations of Seller under Sections 3(h), 3(i), 5, 23 and 25 hereof and any
other reimbursement or indemnity obligation of Seller to Buyer pursuant to this
Agreement or any other Program Document shall survive the repurchase of the
Assets hereunder and the termination of this Agreement. In addition, each
representation and warranty made, or deemed to be made by a request for a
purchase, herein or pursuant hereto shall survive the making of such
representation and warranty, and Buyer shall not be deemed to have waived, by
reason of purchasing any Asset, any Default that may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that Buyer may have had notice or knowledge or reason to believe
that such representation or warranty was false or misleading at the time such
purchase was made.

 

33. CAPTIONS

The table of contents and captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.

 

34. COUNTERPARTS

This Agreement may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument. The
parties agree that this Agreement, any documents to be delivered pursuant to
this Agreement and any notices hereunder may be transmitted between them by
email and/or facsimile. The parties intend that faxed signatures and
electronically imaged signatures such as .pdf files shall constitute original
signatures and are binding on all parties.

 

35. SUBMISSION TO JURISDICTION; WAIVERS

EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:

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

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

 

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(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
IN SECTION 21 OR AT SUCH OTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED;
AND

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

 

36. WAIVER OF JURY TRIAL

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

 

37. ACKNOWLEDGEMENTS

Seller hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Program Documents to which it is a party;

(b) Buyer has no fiduciary relationship to Seller; and

(c) no joint venture exists among or between Buyer and Seller.

 

38. HYPOTHECATION OR PLEDGE OF PURCHASED ITEMS.

Buyer shall have free and unrestricted use of all Purchased Assets and other
Purchased Items and nothing in this Agreement or in the Subordinated Lender
Credit Facility shall preclude Buyer from engaging in repurchase transactions
with the Purchased Asset and other Purchased Items or otherwise pledging,
repledging, transferring, hypothecating, or rehypothecating the Purchased Assets
and other Purchased Items, in all cases subject to Buyer’s obligation to
reconvey the Purchased Assets (and not substitutes therefor) on the Repurchase
Date to Seller. Nothing contained in this Agreement shall obligate Buyer to
segregate any Purchased Assets or other Purchased Items delivered to Buyer by
Seller.

 

39. ASSIGNMENTS; PARTICIPATIONS.

(a) Seller may assign any of its rights or obligations hereunder only with the
prior written consent of Buyer. Buyer may assign or transfer to any bank or
other financial institution that makes or invests in repurchase agreements or
loans or any Affiliate of Buyer all or any of its rights and obligations under
this Agreement and the other Program Documents.

(b) Buyer may, in accordance with applicable law, at any time sell to one or
more entities (“Participants”) participating interests in this Agreement, its
agreement to purchase Assets, or any other interest of Buyer hereunder and under
the other Program Documents. In the event of any such sale by Buyer of
participating interests to a Participant, Buyer’s obligations under this
Agreement to Seller shall

 

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remain unchanged, Buyer shall remain solely responsible for the performance
thereof and Seller shall continue to deal solely and directly with Buyer in
connection with Buyer’s rights and obligations under this Agreement and the
other Program Documents. Seller agrees that if amounts outstanding under this
Agreement are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Buyer under
this Agreement; provided, that such Participant shall only be entitled to such
right of set-off if it shall have agreed in the agreement pursuant to which it
shall have acquired its participating interest to share with Buyer the proceeds
thereof. Buyer also agrees that each Participant shall be entitled to the
benefits of Sections 3(i) and 23 with respect to its participation in the Assets
and Purchased Items outstanding from time to time; provided, that Buyer and all
Participants shall be entitled to receive no greater amount in the aggregate
pursuant to such Sections than Buyer would have been entitled to receive had no
such transfer occurred.

(c) Buyer may furnish any information concerning Seller or any of its
Subsidiaries in the possession of Buyer from time to time to assignees and
Participants (including prospective assignees and Participants) only after
notifying Seller in writing and securing signed confidentiality statements (a
form of which is attached hereto as Exhibit H) and only for the sole purpose of
evaluating assignments or participations and for no other purpose.

(d) Seller agrees to cooperate with Buyer in connection with any such assignment
and/or participation, to execute and deliver replacement notes, and to enter
into such restatements of, and amendments, supplements and other modifications
to, this Agreement and the other Program Documents in order to give effect to
such assignment and/or participation. Seller further agrees to furnish to any
Participant identified by Buyer to Seller copies of all reports and certificates
to be delivered by Seller to Buyer hereunder, as and when delivered to Buyer.

 

40. SINGLE AGREEMENT

Seller and Buyer acknowledge that, and have entered hereinto and will enter into
each Transaction hereunder in consideration of and in reliance upon the fact
that, all Transactions hereunder constitute a single business and contractual
relationship and have been made in consideration of each other. Accordingly,
Seller and Buyer each agree (i) to perform all of its obligations in respect of
each Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, and (ii) that payments, deliveries and other transfers made by any of
them in respect of any Transaction shall be deemed to have been made in
consideration of payments, deliveries and other transfers in respect of any
other Transaction hereunder, and the obligations to make any such payments,
deliveries and other transfers may be applied against each other and netted.

 

41. INTENT

(a) Seller and Buyer recognize that each Transaction is a “repurchase agreement”
as that term is defined in Section 101(47)(A)(i) of Title 11 of the USC, a
“securities contract” as that term is defined in Section 741(7)(A)(i) of Title
11 of the USC, and a “master netting agreement” as that term is defined in
Section 101(38A)(A) of Title 11 of the USC, and that the pledge of the Related
Credit Enhancement in Section 8(a) hereof is intended to constitute “a security
agreement or other arrangement or other credit enhancement” that is “related to”
the Agreement and Transactions hereunder within the meaning of Sections
101(38A)(A), 101(47)(a)(v) and 741(7)(A)(x) of Title 11 of the USC.

 

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(b) It is understood that Buyer’s right to liquidate the Purchased Items
delivered to it in connection with the Transactions hereunder or to accelerate
or terminate this Agreement or otherwise exercise any other remedies pursuant to
Section 19 hereof is a contractual right to liquidate, accelerate or terminate
such Transaction as described in Sections 555, 559 and 561 of Title 11 of the
USC.

(c) The parties further agree that if a party hereto is an “insured depository
institution” as such term is defined in the Federal Deposit Insurance Act, as
amended (“FDIA”), then each Transaction hereunder is a “qualified financial
contract” as that term is defined in the FDIA, and any rules, orders or policy
statement thereunder.

(d) It is understood that this Agreement constitutes a “netting contract” as
defined in and subject to Subtitle A of Title IV of the Federal Deposit
Insurance Corporation Improvement Act of 1991, 12 U.S.C. Sections 4401-4407
(“FDICIA Tit. IV.A”) 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 Tit. IV.A.

 

42. CONFIDENTIALITY

The Program Documents and their respective terms, provisions, supplements and
amendments, and transactions and notices thereunder, are proprietary to Buyer
and shall be held by Seller in strict confidence and shall not be disclosed to
any third party without the consent of Buyer except for (i) disclosure to
Seller’s direct and indirect parent companies, directors, attorneys, agents or
accountants, provided that such attorneys or accountants likewise agree to be
bound by this covenant of confidentiality, or are otherwise subject to
confidentiality restrictions or (ii) upon prior written notice to Buyer,
disclosure required by law, rule, regulation or order of a court or other
regulatory body or (iii) upon prior written notice to Buyer, disclosure to any
approved hedge counterparty to the extent necessary to obtain any Interest Rate
Protection Agreement hereunder or (iv) any disclosures or filing required under
Securities and Exchange Commission (“SEC”) or state securities’ laws; provided
that in the case of (ii), (iii) and (iv), Seller shall take reasonable actions
to provide Buyer with prior written notice; provided further that in the case of
(iv), Seller shall not file any of the Program Documents other than the
Agreement with the SEC or any state securities office unless Seller shall have
provided at least thirty (30) days (or such lesser time as may be demanded by
the SEC or state securities office) prior written notice of such filing to
Buyer; provided further that Seller shall file a request with the SEC and each
applicable state securities office to keep the Pricing Side Letter confidential.
In the event that the SEC or applicable state securities office rejects such
confidentiality request with respect to the Pricing Side Letter, Seller may file
the Pricing Side Letter with the SEC and any applicable state securities office,
as applicable; provided that Seller shall redact such pricing terms mutually
agreed to between Buyer and Seller. Notwithstanding anything herein to the
contrary, each party (and each employee, representative, or other agent of each
party) may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating to
such tax treatment and tax structure. For this purpose, tax treatment and tax
structure shall not include (i) the identity of any existing or future party (or
any Affiliate of such party) to this Agreement or (ii) any specific pricing
information or other commercial terms, including the amount of any fees,
expenses, rates or payments arising in connection with the transactions
contemplated by this Agreement. Buyer acknowledges that this Agreement may be
filed with the Securities and Exchange Commission; provided that, Seller shall
redact any pricing and other confidential provisions, including, without
limitation, the amount of any Price Differential and Purchase Price from such
filed Agreement. Each of Seller and Buyer covenant and agree that they shall
safeguard and protect all Customer Information in a manner consistent with the
GLBA and not make any unauthorized disclosure of or use any Customer Information
other than to carry out the purposes for which such information is received, and
each of Seller and Buyer shall comply in all respects with all applicable
requirements of the GLBA.

 

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43. SERVICING

(a) Subject to Section 43(d) below, Seller covenants to maintain or cause the
servicing of the Purchased Loans to be maintained in conformity with Accepted
Servicing Practices and pursuant to the related underlying Servicing Agreement.
In the event that the preceding language is interpreted as constituting one or
more servicing contracts, each such servicing contract shall terminate
automatically upon the earliest of (i) the termination thereof by Buyer pursuant
to subsection (d) below, (ii) thirty (30) days after the last Purchase Date of
such Purchased Loan, (iii) a Default or an Event of Default, (iv) the date on
which all the Obligations have been paid in full, (v) the transfer of servicing
to any entity approved by Buyer and the assumption thereof by such entity or
(vi) upon written notice from Buyer to Seller which may be provided by Buyer at
any time in its sole discretion.

(b) During the period Seller is servicing the Purchased Loans, (i) Seller agrees
that Buyer is the owner of all Servicing Records, including but not limited to
any and all servicing agreements, files, documents, records, data bases,
computer tapes, copies of computer tapes, proof of insurance coverage, insurance
policies, appraisals, other closing documentation, payment history records, and
any other records relating to or evidencing the servicing of such Loans (the
“Servicing Records”), and (ii) Seller grants Buyer a security interest in all
servicing fees and rights relating to the Purchased Loans and all Servicing
Records to secure the obligation of Seller or its designee to service in
conformity with this Section 43 and any other obligation of Seller to Buyer. At
all times during the term of this Agreement, Seller covenants to hold such
Servicing Records in trust for Buyer and to safeguard, or cause each Subservicer
to safeguard, such Servicing Records and to deliver them, or cause any such
Subservicer to deliver them to the extent permitted under the related Servicing
Agreement promptly to Buyer or its designee (including the Custodian) at Buyer’s
request or otherwise as required by operation of Section 13(hh) hereof. It is
understood and agreed by the parties that prior to an Event of Default, Seller,
as servicer shall retain the servicing fees with respect to the Purchased Loans.

(c) If any Loan that is proposed to be sold on a Purchase Date is serviced by a
servicer other than Seller (such third party servicer, the “Subservicer”), or if
the servicing of any Purchased Loan is to be transferred to a Subservicer,
Seller shall provide a copy of the related servicing agreement with an
Instruction Letter executed by such Subservicer (collectively, the “Servicing
Agreement”) to Buyer at least three (3) Business Days prior to such Purchase
Date or transfer date, as applicable, which Servicing Agreement shall be in form
and substance acceptable to Buyer. In addition, Seller shall have obtained the
prior written consent of Buyer for such Subservicer to subservice the Loans,
which consent may be withheld in Buyer’s sole discretion. All Subservicers shall
be listed on Schedule 5 attached hereto. Initially, Seller shall not use a
Subservicer.

(d) Buyer shall have the right, exercisable at any time in its sole discretion,
upon written notice, to terminate any of Seller or Subservicer as servicer or
subservicer, respectively of any of the Purchased Loans and any related
Servicing Agreement (to the extent permitted therein). Any Servicing Agreement
shall be terminable at will by Buyer and shall be terminable under each of the
conditions set forth in Section 13(hh) hereof. Upon any such termination, Seller
shall transfer or shall cause the Subservicer to transfer such servicing with
respect to such Purchased Loans to Buyer or its designee, at no cost or expense
to Buyer. Seller agrees to cooperate with Buyer in connection with the transfer
of servicing.

 

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(e) After the Purchase Date, until the Repurchase Date, Seller will have no
right to modify or alter the terms of the Loan or consent to the modification or
alteration of the terms of any Loan, and Seller will have no obligation or right
to repossess any Loan or substitute another Loan, except as provided in any
Custodial Agreement.

(f) Seller shall permit Buyer to inspect upon reasonable prior written notice at
a mutually convenient time, Seller’s or its Affiliate’s servicing facilities, as
the case may be, for the purpose of satisfying Buyer that Seller or its
Affiliate, as the case may be, has the ability to service the Loans as provided
in this Agreement. In addition, with respect to any Subservicer which is not an
Affiliate of Seller, Seller shall use its best efforts to enable Buyer to
inspect the servicing facilities of such Subservicer.

 

44. PERIODIC DUE DILIGENCE REVIEW

Seller acknowledges that Buyer has the right to perform continuing due diligence
reviews with respect to the Loans, for purposes of verifying compliance with the
representations, warranties, covenants and specifications made hereunder or
under any other Program Document, or otherwise, and Seller agrees that upon
reasonable (but no less than one (1) Business Day’s) prior notice to Seller
(provided that upon the occurrence of a Default or an Event of Default, no such
prior notice shall be required), Buyer or its authorized representatives will be
permitted during normal business hours to examine, inspect, make copies of, and
make extracts of, the Mortgage Files, the Servicing Records and any and all
documents, records, agreements, instruments or information relating to such
Loans in the possession, or under the control, of Seller and/or the Custodian.
Seller also shall make available to Buyer a knowledgeable financial or
accounting officer for the purpose of answering questions respecting the
Mortgage Files and the Loans. Without limiting the generality of the foregoing,
Seller acknowledges that Buyer shall purchase Loans from Seller based solely
upon the information provided by Seller to Buyer in the Asset Schedule and the
representations, warranties and covenants contained herein, and that Buyer, at
its option, has the right, at any time to conduct a partial or complete due
diligence review on some or all of the Purchased Loans, including, without
limitation, ordering new credit reports, new appraisals on the related Mortgaged
Properties and otherwise re-generating the information used to originate such
Loan. Buyer may underwrite such Loans itself or engage a third party underwriter
to perform such underwriting. Seller agrees to cooperate with Buyer and any
third party underwriter in connection with such underwriting, including, but not
limited to, providing Buyer and any third party underwriter with access to any
and all documents, records, agreements, instruments or information relating to
such Loans in the possession, or under the control, of Seller. In addition,
Buyer has the right to perform continuing Due Diligence Reviews of Seller and
its Affiliates (other than the Guarantor), directors, and their respective
Subsidiaries and the officers, employees and significant shareholders thereof,
and of the Mortgage Files, the Servicing Records and any and all documents,
records, agreements, instruments or information relating to the Assets in the
possession, or under the control, of Seller and/or the Custodian. Following
Buyer’s initial due diligence review of the Seller, (i) Buyer shall conduct an
additional review on a representative sample of Mortgage Files ninety (90) days
following the Effective Date and (ii) if the results of such additional review
are not acceptable to Buyer in its sole discretion, Buyer shall have the right
to reduce the Committed Amount to zero, increase the Uncommitted Amount by the
amount of such reduction and deem any outstanding Transaction with respect to
the Committed Amount to be a Transaction with respect to the Uncommitted Amount
provided that if Buyer exercises such right, Buyer shall promptly reimburse
Seller for the pro-rated amount of the Commitment Fee based on the number of
days remaining from the date such action is taken until January 31, 2014. Seller
and Buyer further agree that all out-of-pocket costs and expenses incurred by
Buyer in connection with Buyer’s activities pursuant to this Section 44 shall be
paid by Seller; provided that Buyer shall notify Seller of any ongoing Loan
level due diligence expenses in excess of $50,000.

 

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45. SET-OFF

In addition to any rights and remedies of Buyer provided by this Agreement and
by law, Buyer shall have the right, without prior notice to Seller, any such
notice being expressly waived by Seller to the extent permitted by applicable
law, upon any amount becoming due and payable by Seller hereunder (whether at
the stated maturity, by acceleration or otherwise) to set-off and appropriate
and apply against such amount any and all Property and deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by Buyer or any Affiliate thereof to or for the credit or the account of
Seller. Buyer may set-off cash, the proceeds of the liquidation of any Purchased
Items and all other sums or obligations owed by Buyer or its Affiliates to
Seller against all of Seller’s obligations to Buyer or its Affiliates, whether
under this Agreement or under any other agreement between the parties or between
Seller and any Affiliate of Buyer, or otherwise (including without limitation
under the Agency WL Repurchase Agreement), whether or not such obligations are
then due, without prejudice to Buyer’s or its Affiliate’s right to recover any
deficiency. Buyer agrees promptly to notify Seller after any such set-off and
application made by Buyer; provided that the failure to give such notice shall
not affect the validity of such set-off and application.

 

46. ENTIRE AGREEMENT

This Agreement and the other Program Documents embody the entire agreement and
understanding of the parties hereto and thereto and supersede any and all prior
agreements, arrangements and understandings relating to the matters provided for
herein and therein. No alteration, waiver, amendments, or change or supplement
hereto shall be binding or effective unless the same is set forth in writing by
a duly authorized representative of each party hereto.

[SIGNATURE PAGE FOLLOWS]

 

74

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

GREEN TREE SERVICING LLC, a Delaware limited liability company as Seller By:  

 

Name:  

 

Title:  

 

THE ROYAL BANK OF SCOTLAND PLC, as Buyer and Agent, as applicable By:   RBS
Securities Inc., its agent By:  

 

Name:  

 

Title:  

 

[Signature Page to Master Repurchase Agreement]

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ANNEX I

BUYER ACTING AS AGENT

This Annex I forms a part of the Master Repurchase Agreement dated as of
February 1, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Agreement”) between Green Tree Servicing LLC, and The Royal
Bank of Scotland plc. This Annex I sets forth the terms and conditions governing
all transactions in which Buyer selling assets or buying assets, as the case may
be (“Agent”), in a Transaction is acting as agent for one or more third parties
(each, a “Principal”). Capitalized terms used but not defined in this Annex I
shall have the meanings ascribed to them in the Agreement.

 

1. Additional Representations. Agent hereby makes the following representations,
which shall continue during the term of any Transaction: Principal has duly
authorized Agent to execute and deliver the Agreement and the other Program
Documents on its behalf, has the power to so authorize Agent and to enter into
the Transactions contemplated by the Agreement and the other Program Documents
and to perform the obligations of Buyer under such Transactions, and has taken
all necessary action to authorize such execution and delivery by Agent and such
performance by it.

 

2. Identification of Principals. Agent agrees (a) to provide the other party,
prior to the date on which the parties agree to enter into any Transaction under
the Agreement, with a written list of Principals for which it intends to act as
Agent (which list may be amended in writing from time to time with the consent
of the other party) and (b) to provide the other party, before the close of
business on the next business day after orally agreeing to enter into a
Transaction, with notice of the specific Principal or Principals for whom it is
acting in connection with such Transaction. If (i) Agent fails to identify such
Principal or Principals prior to the close of business on such next business day
or (ii) the other party shall determine in its sole discretion any Principal or
Principals identified by Agent are not acceptable to it, the other party may
reject and rescind any Transaction with such Principal or Principals, return to
Agent any Purchased Assets or portion of the Purchase Price, as the case may be,
previously transferred to the other party and refuse any further performance
under such Transaction, and Agent shall immediately return to the other party
any portion of the Purchase Price or Purchased Assets, as the case may be,
previously transferred to Agent in connection with such Transaction; provided,
however, that (A) the other party shall promptly (and in any event within one
(1) Business Day) notify Agent of its determination to reject and rescind such
Transaction and (B) to the extent that any performance was rendered by any party
under any Transaction rejected by the other party, such party shall remain
entitled to any Price Differential or other amounts that would have been payable
to it with respect to such performance if such Transaction had not been
rejected. The other party acknowledges that Agent shall not have any obligation
to provide it with confidential information regarding the financial status of
its Principals; Agent agrees, however, that it will assist the other party in
obtaining from Agent’s Principals such Information regarding the financial
status of such Principals as the other party may reasonably request.

 

3.

Limitation of Agent’s Liability. The parties expressly acknowledge that if the
representations of Agent under the Agreement, including this Annex I, are true
and correct in all material respects during the term of any Transaction and
Agent otherwise complies with the provisions of this Annex I, then (a) Agent’s
obligations under the Agreement shall not include a guarantee of performance by
its Principal or Principals; provided that Agent shall remain liable for

 

Annex 1-1

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  performance pursuant to Section 10 of the Agreement, and (b) the other party’s
remedies shall not include a right of setoff in respect of rights or
obligations, if any, of Agent arising in other transactions in which Agent is
acting as principal.

 

4. Multiple Principals.

(a) In the event that Agent proposes to act for more than one Principal
hereunder, Agent and the other party shall elect whether (i) to treat
Transactions under the Agreement as transactions entered into on behalf of
separate Principals or (ii) to aggregate such Transactions as if they were
transactions by a single Principal. Failure to make such an election in writing
shall be deemed an election to treat Transactions under the Agreement as
transactions on behalf of a single Principal.

(b) In the event that Agent and the other party elect (or are deemed to elect)
to treat Transactions under the Agreement as transactions on behalf of separate
Principals, the parties agree that (i) Agent will provide the other party,
together with the notice described in Section 2(b) of this Annex I, notice
specifying the portion of each Transaction allocable to the account of each of
the Principals for which it is acting (to the extent that any such Transaction
is allocable to the account of more than one Principal); (ii) the portion of any
individual Transaction allocable to each Principal shall be deemed a separate
Transaction under the Agreement; (iii) the margin maintenance obligations of
Seller under Section 6(a) of the Agreement shall be determined on a
Transaction-by-Transaction basis (unless the parties agree to determine such
obligations on a Principal-by-Principal basis); and (iv) Buyer’s remedies under
the Agreement upon the occurrence of an Event of Default shall be determined as
if Agent had entered into a separate Agreement with the other party on behalf of
each of its Principals.

(c) In the event that Agent and the other party elect to treat Transactions
under the Agreement as if they were transactions by a single Principal, the
parties agree that (i) Agent’s notice under Section 2(b) of this Annex I need
only identify the names of its Principals but not the portion of each
Transaction allocable to each Principal’s account; (ii) the margin maintenance
obligations of Seller under Section 6(a) of the Agreement shall, subject to any
greater requirement imposed by applicable law, be determined on an aggregate
basis for all Transactions entered into by Agent on behalf of any Principal; and
(iii) Buyer’s remedies upon the occurrence of an Event of Default shall be
determined as if all Principals were a single Buyer.

(d) Notwithstanding any other provision of the Agreement (including, without
limitation, this Annex I), the parties agree that any Transactions by Agent on
behalf of an employee benefit plan under ERISA shall be treated as Transactions
on behalf of separate Principals in accordance with Section 4(b) of this Annex I
(and all margin maintenance obligations of the parties shall be determined on a
Transaction-by-Transaction basis).

 

5.

Interpretation of Terms. All references to “Buyer” in the Agreement shall,
subject to the provisions of this Annex I (including, among other provisions,
the limitations on Agent’s liability in Section 3 of this Annex 1), be construed
to reflect that (i) each Principal shall have, in connection with any
Transaction or Transactions entered into by Agent on its behalf, the rights,
responsibilities, privileges and obligations of a “Buyer”, directly entering
into such Transaction or Transactions with the other party under the Agreement,
and (ii) Agent’s Principal or Principals

 

Annex 1-2

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  have designated Agent as their sole agent for performance of Buyer’s
obligations to Seller and for receipt of performance by Seller of its
obligations to Buyer in connection with any Transaction or Transactions under
the Agreement (including, among other things, as Agent for each Principal in
connection with transfers of Assets, securities, cash or other property and as
agent for giving and receiving all notices under the Agreement). Both Agent and
its Principal or Principals shall be deemed “parties” to the Agreement and all
references to a “party” or “either party” in the Agreement shall be deemed
revised accordingly.

 

Annex 1-3

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Schedule 1

REPRESENTATIONS AND WARRANTIES RE: ASSETS

As to each Asset that is subject to a Transaction hereunder, Seller shall be
deemed to make the following representations and warranties to Buyer as of the
Purchase Date and as of each date such Asset is subject to a Transaction:

 

  I. Representations and Warranties with respect to Loans

(a) Loans as Described. The information set forth in the Asset Schedule with
respect to the Loan is complete, true and correct in all material respects.

(b) Payments Current. The first Monthly Payment shall have been made prior to
the second scheduled Monthly Payment becoming due.

(c) No Outstanding Charges. There are no defaults in complying with the terms of
the Mortgage securing the Loan, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or an escrow
of funds has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and payable.
Neither Seller nor the Qualified Originator from which Seller acquired the Loan
has advanced funds, or induced, solicited or knowingly received any advance of
funds by a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required under the Loan, except for interest accruing from
the date of the Note or date of disbursement of the proceeds of the Loan,
whichever is more recent, to the day which precedes by one month the Due Date of
the first installment of principal and interest thereunder.

(d) Original Terms Unmodified. The terms of the Note and Mortgage have not been
impaired, waived, altered or modified in any respect, from the date of
origination; except by a written instrument which has been recorded, if
necessary to protect the interests of Buyer, and which an original or certified
copy has been delivered to the Custodian and the terms of which are reflected in
the Asset Schedule. The substance of any such waiver, alteration or modification
has been approved by the title insurer, to the extent required by the title
insurance policy, and its terms are reflected on the Asset Schedule. No
Mortgagor in respect of the Loan has been released, in whole or in part, except
in connection with an assumption agreement approved by the title insurer, to the
extent required by such policy, and which assumption agreement (or certified
copy of such assumption agreement) is part of the Mortgage File delivered to the
Custodian and the terms of which are reflected in the Asset Schedule.

(e) No Defenses. The Loan is not subject to any right of Rescission, setoff,
counterclaim or defense, including without limitation the defense of usury, nor
will the operation of any of the terms of the Note or the Mortgage, or the
exercise of any right thereunder, render either the Note or the Mortgage
unenforceable, in whole or in part and no such right of Rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
in respect of the Loan was a debtor in any state or Federal bankruptcy or
insolvency proceeding at the time the Loan was originated.

(f) Hazard Insurance. The Mortgaged Property is insured by a fire and extended
perils insurance policy, issued by a Qualified Insurer, and such other hazards
as are customary in the area where the Mortgaged Property is located, and to the
extent required by Seller as of the date of origination consistent with the
Underwriting Guidelines and Agency Guidelines, against earthquake and other
risks insured

 

Schedule 1-1

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against by Persons operating like properties in the locality of the Mortgaged
Property, in an amount not less than the greatest of (i) 100% of the replacement
cost of all improvements to the Mortgaged Property, (ii) the outstanding
principal balance of the Loan, (iii) the amount necessary to avoid the operation
of any co-insurance provisions with respect to the Mortgaged Property, and
consistent with the amount that would have been required as of the date of
origination in accordance with the Underwriting Guidelines or (iv) the amount
necessary to fully compensate for any damage or loss to the improvements that
are a part of such property on a replacement cost basis. If any portion of the
Mortgaged Property is in an area identified by any federal Governmental
Authority as having special flood hazards, and flood insurance is available, a
flood insurance policy meeting the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (1) the outstanding
principal balance of the Loan, (2) the full insurable value of the Mortgaged
Property, and (3) the maximum amount of insurance available under the Flood
Disaster Protection Act of 1973, as amended. All such insurance policies
(collectively, the “Hazard Insurance Policy”) contain a standard mortgagee
clause naming Seller or the Subservicer, its successors and assigns (including
without limitation, subsequent owners of the Loan), as mortgagee, and may not be
reduced, terminated or canceled without thirty (30) days’ prior written notice
to the mortgagee. No such notice has been received by Seller. All premiums due
and owing on such insurance policy have been paid. The related Mortgage
obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s
failure to do so, authorizes the mortgagee to maintain such insurance at the
Mortgagor’s cost and expense and to seek reimbursement therefor from such
Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a “master” or “blanket” Hazard Insurance Policy
covering a condominium, or any Hazard Insurance Policy covering the common
facilities of a planned unit development. The Hazard Insurance Policy is the
valid and binding obligation of the insurer and is in full force and effect.
Seller has not engaged in, and has no knowledge of the Mortgagor’s having
engaged in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity and
binding effect of either including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
Person, and no such unlawful items have been received, retained or realized by
Seller.

(g) Compliance with Applicable Laws. Any and all requirements of any federal,
state or local law including, without limitation, usury, truth-in-lending, all
applicable predatory and abusive lending, real estate settlement procedures,
consumer credit protection, equal credit opportunity or disclosure laws
applicable to the origination and servicing of such Loan have been complied
with, the consummation of the transactions contemplated hereby will not involve
the violation of any such laws or regulations, and Seller shall maintain or
shall cause its agent to maintain in its possession, available for the
inspection of Buyer, and shall deliver to Buyer, upon two (2) Business Days’
request, evidence of compliance with all such requirements.

(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole-or in part, nor has
any instrument been executed that would effect any such release, cancellation,
subordination or Rescission other than in the case of a release of a portion of
the land comprising a Mortgaged Property or a release of a blanket Mortgage
which release will not cause the Loan to fail to satisfy the Underwriting
Guidelines. Seller has not waived the performance by the Mortgagor of any
action, if the Mortgagor’s failure to perform such action would cause the Loan
to be in default, nor has Seller waived any default resulting from any action or
inaction by the Mortgagor.

 

Schedule 1-2

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(i) Location and Type of Mortgaged Property. The Mortgaged Property is located
in the state identified in the Asset Schedule and consists of a single parcel of
real property with a detached or attached single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium unit in
a condominium project, or an individual unit in a planned unit development or a
de minimis planned unit development, provided, however, that any condominium
unit or planned unit development shall conform with the applicable Agency
requirements regarding such dwellings, that no residence or dwelling is a mobile
home. No portion of the Mortgaged Property is used for commercial purposes. The
Mortgaged Property is not the subject of a foreclosure proceeding and the
related Mortgagor is not the subject of a bankruptcy proceeding.

(j) Valid Lien. The Mortgage is a valid, subsisting, enforceable and perfected
First Lien and first priority security interest with respect to each Loan on the
real property included in the Mortgaged Property, including all buildings on the
Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to:

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

(2) covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording acceptable to prudent
mortgage lending institutions generally and specifically referred to in the
lender’s title insurance policy delivered to the originator of the Loan and
(a) referred to or otherwise considered in the appraisal made for the originator
of the Loan or (b) which do not adversely affect the Appraised Value of the
related Mortgaged Property set forth in such appraisal; and

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

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Loan establishes and creates a valid,
subsisting and enforceable First Lien and first priority security interest with
respect to each Loan on the property described therein and Seller has full right
to pledge and assign the same to Buyer. The Mortgaged Property was not, as of
the date of origination of the Loan, subject to a mortgage, deed of trust, deed
to secure debt or other security instrument creating a lien subordinate to the
lien of the Mortgage.

(k) Validity of Mortgage Documents. The Note and the Mortgage and any other
agreement executed and delivered by a Mortgagor or guarantor, if applicable, in
connection with a Loan are genuine and in full force and effect, and each is the
legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms, subject to no right of Rescission, set-off,
counterclaim or defense. All parties to the Note, the Mortgage and any other
such related agreement had legal capacity to enter into the Loan and to execute
and deliver the Note, the Mortgage and any such agreement, and the Note, the
Mortgage and any other such related agreement have been duly and properly
executed by such related parties. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Loan has taken place on the
part of any Person, including, without limitation, the Mortgagor, any appraiser,
any builder or developer, or any other party involved in the origination of the
Loan. Seller has reviewed all of the documents constituting the Servicing File
and has made such inquiries as it deems necessary to make and confirm the
accuracy of the representations set forth herein. The related Note has not been
extinguished under relevant state law in connection with a judgment of
foreclosure or foreclosure sale or otherwise.

 

Schedule 1-3

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

(m) Ownership. Seller is the sole owner and holder of the Loan. All Loans
acquired by Seller from third parties (including affiliates) were acquired in a
true and legal sale pursuant to which such third party sold, transferred,
conveyed and assigned to Seller all of its right, title and interest in, to and
under such Loan and retained no interest in such Loan. In connection with such
sale, such third party received reasonably equivalent value and fair
consideration and, in accordance with GAAP and for federal income tax purposes,
reported the sale of such Loan to Seller as a sale of its interests in such
Loan. Other than in respect of the Subordinated Lender Credit Facility, the Loan
is not assigned or pledged, and Seller has good, indefeasible and marketable
title thereto, and has full right to transfer, pledge and assign the Loan to
Buyer free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest (other than the security interest
created by the Subordinated Lender Credit Facility, if any which is subordinated
pursuant to the terms of the Intercreditor Agreement, if any), and has full
right and authority subject to no interest or participation of, or agreement
with, any other party, to assign, transfer and pledge each Loan pursuant to this
Agreement and following the pledge of each Loan, Buyer will hold such Loan free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest except any such security interest created
pursuant to the terms of this Agreement and the Subordinated Lender Credit
Facility.

(n) Doing Business. All parties which have had any interest in the Loan, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (i) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (ii) either (A) organized under the laws of
such state, (B) qualified to do business in such state, (C) a federal savings
and loan association, a savings bank or a national bank having a principal
office in such state, (D) not doing business in such state or (e) not otherwise
required to be qualified to do business in such state.

(o) LTV. As of the date of origination of the Loan, the LTV is as identified on
the Asset Schedule.

(p) Title Insurance. The Loan is covered by either (i) an attorney’s opinion of
title and abstract of title, the form and substance of which is acceptable to
prudent mortgage lending institutions making mortgage loans in the area wherein
the Mortgaged Property is located or (ii) an ALTA lender’s title insurance
policy or other generally acceptable form of policy or insurance acceptable to
Fannie Mae or Freddie Mac and each such title insurance policy is issued by a
title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
Seller, its successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Loan, subject only to the
exceptions contained in clauses (1), (2) and (3) of paragraph (j) of this Part I
of Schedule 1, and in the case of Adjustable Rate Loans, against any loss by
reason of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required

 

Schedule 1-4

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mortgage title insurance. Additionally, such lender’s title insurance policy
affirmatively insures ingress and egress and against encroachments by or upon
the Mortgaged Property or any interest therein. The title policy does not
contain any special exceptions (other than the standard exclusions) for zoning
and uses and has been marked to delete the standard survey exception or to
replace the standard survey exception with a specific survey reading. Seller,
its successors and assigns, are the sole insureds of such lender’s title
insurance policy, and such lender’s title insurance policy is valid and remains
in full force and effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been made
under such lender’s title insurance policy, and no prior holder or servicer of
the related Mortgage, including Seller, has done, by act or omission, anything
which would impair the coverage of such lender’s title insurance policy,
including, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other Person, and no such unlawful
items have been received, retained or realized by Seller.

(q) No Defaults. There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Note and no event has occurred which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration,
and neither Seller nor its predecessors have waived any default, breach,
violation or event of acceleration.

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

(s) Location of Improvements; No Encroachments. All improvements which were
considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning and building law, ordinance or
regulation.

(t) Origination; Payment Terms. The Loan was originated by or in conjunction
with a mortgagee approved by the Secretary of HUD pursuant to Sections 203 and
211 of the National Housing Act, a savings and loan association, a savings bank,
a commercial bank, credit union, insurance company or similar banking
institution which is supervised and examined by a federal or state authority.
Monthly Payments on the Loan commenced no more than sixty (60) days after funds
were disbursed in connection with the Loan. The Mortgage Interest Rate is
adjusted, with respect to Adjustable Rate Loans, on each Interest Rate
Adjustment Date to equal the Index plus the Gross Margin (rounded up or down to
the nearest .125%), subject to the Mortgage Interest Rate Cap. With respect to
each Loan, the Note is payable on the first day of each month in equal monthly
installments of principal and interest, which installments of interest, with
respect to an Adjustable Rate Mortgage Loan, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Adjustment Date, with interest
calculated and payable in arrears, sufficient to amortize the Loan fully by the
stated maturity date, over an original term of not more than thirty (30) years
from commencement of amortization. No Loan is a Negative Amortization Loan. No
Loan is an Interest Only Loan (unless otherwise mutually agreed to by Buyer and
Seller).

(u) Customary Provisions. The Note has a stated maturity. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (i)

 

Schedule 1-5

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in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Loan
and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Loan will be able to deliver good and
merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee’s sale or the right to foreclose the
Mortgage.

(v) Conformance with Underwriting Guidelines and Agency Standards. The Loan was
underwritten in accordance with the applicable Underwriting Guidelines and
Agency Guidelines, subject to variances and waivers received by the Seller from
the applicable Agency. The Note and Mortgage are on forms similar to those used
by Freddie Mac or Fannie Mae and Seller has not made any representations to a
Mortgagor that are inconsistent with the mortgage instruments used.

(w) Occupancy of the Mortgaged Property. As of the Purchase Date the Mortgaged
Property is either vacant or lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. Seller has not received written notification from
any governmental authority that the Mortgaged Property is in material
non-compliance with such laws or regulations, is being used, operated or
occupied unlawfully or has failed to have or obtain such inspection, licenses or
certificates, as the case may be. Seller has not received notice of any
violation or failure to conform with any such law, ordinance, regulation,
standard, license or certificate. Except as otherwise set forth in the Asset
Schedule, the Mortgagor represented at the time of origination of the Loan that
the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary
residence.

(x) No Additional Collateral. The Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to in
clause (j) above.

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

(z) Delivery of Mortgage Documents. With respect to each Loan, each document
required to be delivered under the Custodial Agreement for such Loan has been
delivered to the Custodian. Seller or its agent is in possession of a complete,
true and materially accurate Mortgage File in compliance with the Custodial
Agreement, except for such documents the originals of which have been delivered
to the Custodian.

(aa) Transfer of Loans. The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located.

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

 

Schedule 1-6

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

(cc) No Buydown Provisions; No Graduated Payments or Contingent Interests. The
Loan does not contain provisions pursuant to which Monthly Payments are paid or
partially paid with funds deposited in any separate account established by
Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor nor does it contain any other similar provisions
which may constitute a “buydown” provision. The Loan is not a graduated payment
mortgage loan and the Loan does not have a shared appreciation or other
contingent interest feature.

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

(ee) Mortgaged Property Undamaged. The Mortgaged Property is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other casualty
so as to affect adversely the value of the Mortgaged Property as security for
the Loan or the use for which the premises were intended and each Mortgaged
Property is in good repair. There have not been any condemnation proceedings
with respect to the Mortgaged Property and Seller has no knowledge of any such
proceedings.

(ff) Collection Practices; Escrow Deposits: Interest Rate Adjustments. The
origination and collection practices used by the originator, each servicer of
the Loan and Seller with respect to the Loan have been in all material respects
in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, Seller and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. All Escrow Payments have been collected in full compliance with state and
federal law. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due Seller have been capitalized
under the Mortgage or the Note. All Mortgage Interest Rate adjustments have been
made in strict compliance with state and federal law and the terms of the
related Note. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited.

(gg) Conversion to Fixed Interest Rate. With respect to Adjustable Rate Loans,
the Loan is not convertible to a fixed interest rate Loan.

(hh) Other Insurance Policies. No action, inaction or event has occurred and no
state of facts exists or has existed that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable special
Hazard Insurance Policy, PMI Policy or bankruptcy bond, irrespective of the
cause of such failure of coverage. In connection with the placement of any such
insurance, no commission, fee, or other compensation has been or will be
received by Seller or by any officer, director, or employee of Seller or any
designee of Seller or any corporation in which Seller or any officer, director,
or employee had a financial interest at the time of placement of such insurance.

 

Schedule 1-7

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

(ii) Servicmembers’ Civil Relief Act. The Mortgagor has not notified Seller, and
Seller has no knowledge, of any relief requested or allowed to the Mortgagor
under the Servicemembers’ Civil Relief Act.

(jj) Appraisal. Unless not required by Agency Guidelines, the Mortgage File
contains an appraisal of the related Mortgaged Property signed prior to the
approval of the Loan application by a qualified appraiser, duly appointed by
Seller or the Qualified Originator, who had no interest, direct or indirect in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Loan, and the
appraisal and appraiser both satisfy the requirements of Fannie Mae or Freddie
Mac and Title XI of the Federal Institutions Reform, Recovery, and Enforcement
Act of 1989 as amended and the regulations promulgated thereunder, all as in
effect on the date the Loan was originated.

(kk) Disclosure Materials. The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by applicable
law with respect to the making of adjustable rate mortgage loans and Seller
maintains such statement in the Mortgage File.

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

(mm) No Defense to Insurance Coverage. No action has been taken or failed to be
taken, no event has occurred and no state of facts exists or has existed on or
prior to the Purchase Date (whether or not known to Seller on or prior to such
date) which has resulted or will result in an exclusion from, denial of, or
defense to coverage under any private mortgage insurance (including, without
limitation, any exclusions, denials or defenses which would limit or reduce the
availability of the timely payment of the full amount of the loss otherwise due
thereunder to the insured) whether arising out of actions, representations,
errors, omissions, negligence, or fraud of Seller, the related Mortgagor or any
party involved in the application for such coverage, including the appraisal,
plans and specifications and other exhibits or documents submitted therewith to
the insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason of such
insurer’s breach of such insurance policy or such insurer’s financial inability
to pay.

(nn) Capitalization of Interest. The Note does not by its terms provide for the
capitalization or forbearance of interest.

(oo) No Equity Participation. No document relating to the Loan provides for any
contingent or additional interest in the form of participation in the cash flow
of the Mortgaged Property or a sharing in the appreciation of the value of the
Mortgaged Property. The indebtedness evidenced by the Note is not convertible to
an ownership interest in the Mortgaged Property or the Mortgagor and Seller has
not financed nor does it own directly or indirectly, any equity of any form in
the Mortgaged Property or the Mortgagor.

(pp) Withdrawn Loans. If the Loan has been released to Seller pursuant to a
Request for Release as permitted under Section 5 of the Custodial Agreement,
then the promissory note relating to the Loan was returned to the Custodian
within fifteen (15) days (or if such fifteenth (15th) day was not a Business
Day, the next succeeding Business Day).

 

Schedule 1-8

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

(qq) No Exception. Other than as noted by the Custodian on the Exception Report;
no Exception exists (as defined in the Custodial Agreement) with respect to the
Loan which would materially adversely affect the Loan or Buyer’s security
interest, granted by Seller, in the Loan as determined by Buyer in its sole
discretion.

(rr) Qualified Originator. The Loan has been originated by, and, if applicable,
purchased by Seller from, a Qualified Originator.

(ss) Mortgage Submitted for Recordation. The Mortgage (other than for a MERS
Loan) has been submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is located.

(tt) First Lien. No Loan is a Second Lien Loan.

(uu) Acceptable Investment. No specific circumstances or conditions exist with
respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor’s credit standing that should reasonably be expected to (i) cause
private institutional investors which invest in Loans similar to the Loan to
regard the Loan as an unacceptable investment, (ii) cause the Loan to be more
likely to become past due in comparison to similar Loans, or (iii) adversely
affect the value or marketability of the Loan in comparison to similar Loans.

(vv) Environmental Matters. The Mortgaged Property is free from any and all
toxic or hazardous substances and there exists no violation of any local, state
or federal environmental law, rule or regulation.

(ww) Ground Leases. With respect to each ground lease to which the Mortgaged
Property is subject (a “Ground Lease”): (i) the Mortgagor is the owner of a
valid and subsisting interest as tenant under the Ground Lease; (ii) the Ground
Lease is in full force and effect, unmodified and not supplemented by any
writing or otherwise; (iii) all rent, additional rent and other charges reserved
therein have been paid to the extent they are payable to the date hereof;
(iv) the Mortgagor enjoys the quiet and peaceful possession of the estate
demised thereby, subject to any sublease; (v) the Mortgagor is not in default
under any of the terms thereof and there are no circumstances which, with the
passage of time or the giving of notice or both, would constitute an event of
default thereunder; (vi) the lessor under the Ground Lease is not in default
under any of the terms or provisions thereof on the part of the lessor to be
observed or performed; (vii) the lessor under the Ground Lease has satisfied all
of its repair or construction obligations, if any, to date pursuant to the terms
of the Ground Lease; (viii) the remaining term of the Ground Lease extends not
less than ten (10) years following the maturity date of such Loan; and (ix) the
execution, delivery and performance of the Mortgage do not require the consent
(other than those consents which have been obtained and are in full force and
effect) under, and will not contravene any provision of or cause a default
under, the Ground Lease.

(xx) Value of Mortgaged Property. Seller has no knowledge of any circumstances
existing that should reasonably be expected to adversely affect the value or the
marketability of the Mortgaged Property or the Loan or to cause the Loan to
prepay during any period materially faster or slower than the Loans originated
by Seller generally.

(yy) HOEPA. No Loan is (a) subject to the provisions of the Homeownership and
Equity Protection Act of 1994 as amended (“HOEPA”), (b) a “high cost” mortgage
loan, “covered” mortgage loan, “high risk home” mortgage loan, or “predatory”
mortgage loan or any other comparable term, no matter how

 

Schedule 1-9

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

defined under any federal, state or local law, (c) subject to any comparable
federal, state or local statutes or regulations, or any other statute or
regulation providing for heightened regulatory scrutiny or assignee liability to
holders of such mortgage loans, or (d) a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the current Standard & Poor’s LEVELS®
Glossary Revised, Appendix E).

(zz) No Predatory Lending. No predatory, abusive or deceptive lending practices,
including but not limited to, the extension of credit to a mortgagor without
regard for the mortgagor’s ability to repay the Loan and the extension of credit
to a mortgagor which has no tangible net benefit to the mortgagor, were employed
in connection with the origination of the Loan.

(aaa) Georgia Mortgage Loans. No Loan which is secured by a Mortgaged Property
which is located in the state of Georgia was originated prior to March 7, 2004.

(bbb) MERS Loans. With respect to each MERS Loan, a Mortgage Identification
Number has been assigned by MERS and such Mortgage Identification Number is
accurately provided on the Asset Schedule. The related Assignment of Mortgage to
MERS has been duly and properly recorded if applicable. With respect to each
MERS Loan, Seller has not received any notice of liens or legal actions with
respect to such Loan and no such notices have been electronically posted by
MERS.

(ccc) Compliance with Agency Guidelines. Each Agency Eligible Loan was
originated in Strict Compliance with the Agency Guidelines, subject to variances
and waivers received by the Seller from the applicable Agency.

(ddd) Takeout Commitment. Each Loan that is subject to a Takeout Commitment,
(i) does not exceed the availability under such Takeout Commitment (taking into
consideration mortgage loans or securities, as applicable, which have been
purchased by the respective Takeout Investor under the Takeout Commitment),
(ii) conforms to the requirements and the specifications set forth in such
Takeout Commitment and the related regulations, rules, requirements and/or
handbooks of the applicable Takeout Investor, and (iii) is eligible for sale to
and insurance or guaranty by, respectively the applicable Takeout Investor and
applicable insurer. Each such Takeout Commitment is enforceable, in full force
and effect and is validly and effectively assigned to Buyer pursuant to a Trade
Assignment. Each such Trade Assignment is enforceable and in full force and
effect. Each Takeout Commitment and Trade Assignment is a legal, valid and
binding obligation of Seller enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

(eee) FHA Mortgage Insurance; VA Loan Guaranty. With respect each FHA Loan or VA
Loan, (i) the FHA Mortgage Insurance Contract is in full force and effect and
there exists no impairment to full recovery without indemnity to HUD under FHA
Mortgage Insurance, or the VA Loan Guaranty Agreement is in full force and
effect to the maximum extent stated therein, as applicable, (ii) all necessary
steps have been taken to keep such guaranty or insurance valid, binding and
enforceable and each of such is the binding, valid and enforceable obligation of
the FHA and the VA, respectively, to the full extent thereof, without surcharge,
set-off or defense, (iii) such Loan is insured, or eligible to be insured,
pursuant to the National Housing Act or is guaranteed, or eligible to be
guaranteed, under the provisions of Chapter 37 of Title 38 of the United States
Code, as applicable, (iv) with respect to each FHA insurance certificate or VA
guaranty certificate, Seller has complied with applicable provisions of the
insurance for guaranty contract and federal statutes and regulations, all
premiums or other charges due in connection with such insurance or guarantee
have been paid, there has been no act or omission which would or may invalidate

 

Schedule 1-10

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

any such insurance or guaranty, and the insurance or guaranty is, or when
issued, will be, in full force and effect with respect to such Loan, (v) Seller
has no knowledge of any defenses, counterclaims, or rights of setoff affecting
such Loan or affecting the validity or enforceability of any private mortgage
insurance or FHA Mortgage Insurance or VA Loan Guaranty with respect to such
Loan, and (vi) Seller has no knowledge of any circumstance which would cause
such Loan to be ineligible for FHA Mortgage Insurance or a VA Loan Guaranty, as
applicable, or cause FHA or VA to deny or reject the related Mortgagor’s
application for FHA Mortgage Insurance or a VA Loan Guaranty, respectively.

(fff) HARP Mortgage Loan. Each HARP Mortgage Loan was originated in Strict
Compliance with and remains in compliance with the Agency Guidelines, subject to
variances and waivers received by the Seller from the applicable Agency, and the
guidance issued by the Federal Housing Finance Authority, Fannie Mae and Freddie
Mac for origination of mortgage loans under the Home Affordable Refinance
Program (as such program is amended, supplemented or otherwise modified, from
time to time).

(ggg) Early Purchase Program Loans. With respect to each Early Purchase Program
Loan, (i) the Loan is an Agency Eligible Loan, (ii) such Loan is pooled with
other Early Purchase Program Loans that satisfy the “Good Delivery Guidelines”
promulgated by SIFMA, (iii) the Related Security is subject to a Takeout
Commitment, (iv) the applicable Agency documents list Buyer as sole subscriber
with respect to the Related Security, and (v) to the extent applicable, such
Loan is being serviced by a Subservicer having all Approvals necessary to make
such Loan eligible to back such Related Security.

Part II. Representations and Warranties with respect to Securities

(a) Compliance with Applicable Laws. Each Security has been validly issued, and
is fully paid and non assessable, and has been issued in compliance with all
applicable laws, including without limitation, the applicable Agency Guidelines.

(b) No Encumbrances. There are (i) no outstanding rights, options, warrants or
agreements (other than as created by Buyer) for a purchase, sale or issuance, in
connection with any Security, (ii) no agreements on the part of Seller to issue,
sell or distribute the Securities, and (iii) no obligations on the part of
Seller (contingent or otherwise) to purchase, redeem or otherwise acquire any
securities or any interest therein or to pay any dividend or make any
distribution in respect of the Securities.

(c) Unencumbered Assets. The Securities are unencumbered (other than Liens
created in favor of Buyer pursuant to this Agreement and Liens created by or
through Buyer).

(d) Proper Form. The Securities are in uncertificated form and held through the
facilities of the applicable Depository.

(e) Takeout Commitments. The Security is subject to a valid, binding and
subsisting Takeout Commitment enforceable in accordance with its terms.

 

Schedule 1-11

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

Schedule 2

Filing Jurisdictions and Offices

Delaware

 

Schedule 2-1

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

Schedule 3

Relevant States

All 50 States other than Hawaii, New Jersey, New York, Pennsylvania and Utah

 

Schedule 3-1

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

Schedule 4

Subsidiaries

Green Tree Advance Receivables, LLC

 

Schedule 4-1

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

Schedule 5

Subservicers

None

 

Schedule 5-1

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

Schedule 6

Approved Title Insurance Company

[see attached excel spreadsheet]

 

Schedule 5-1

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

EXHIBIT A-1

MONTHLY CERTIFICATION

I,                     ,                      of Green Tree Servicing LLC
(“Seller”), do hereby certify that

 

  (i) Seller is in compliance with all provisions and terms of the Master
Repurchase Agreement, dated as of February 1, 2013, by and between The Royal
Bank of Scotland plc and Seller (as amended, restated, supplemented or otherwise
modified from time to time, the “Agreement”);

 

  (ii) no Default or Event of Default has occurred thereunder;

 

  (iii) there have not been any modifications to the Underwriting Guidelines
that have not been approved by Buyer;

 

  (iv) all additional modifications to the Underwriting Guidelines since the
date of the most recent disclosure to Buyer of any modification to the
Underwriting Guidelines are set forth herewith; and

 

  (v) Seller’s Adjusted Tangible Net Worth is not less than $200,000,000. The
ratio of Seller’s Indebtedness (excluding non-recourse Indebtedness) to Adjusted
Tangible Net Worth is not greater than 12:1. Seller has cash, Cash Equivalents
and unused borrowing capacity on unencumbered assets that could be drawn against
(taking into account required haircuts) under committed warehouse and repurchase
facilities in an amount equal to not less than $25,000,000.

Capitalized terms used but not defined herein shall have the meanings assigned
thereto in the Agreement.

IN WITNESS WHEREOF, I have signed this certificate.

Date:             , 201  

 

Green Tree Servicing LLC By:  

 

Name:   Title:  

 

A-1-1

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

EXHIBIT A-2

QUARTERLY CERTIFICATION

I,                    ,                      of Green Tree Servicing LLC
(“Seller”), in accordance with that certain Master Repurchase Agreement (as
amended, restated, supplemented or otherwise modified from time to time,
“Agreement”), dated as of February 1, 2013, between The Royal Bank of Scotland
plc and Seller, do hereby certify that:

(i) Seller is in compliance with all provisions and terms of the Agreement and
all other Program Documents;

(ii) no Default or Event of Default has occurred under the Agreement;

Capitalized terms used but not defined herein shall have the meanings assigned
thereto in the Agreement.

IN WITNESS WHEREOF, I have signed this certificate.

Date:             , 201  

 

Green Tree Servicing LLC By:  

 

Name:   Title:  

 

A-2-1

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

EXHIBIT B

[FORM OF INSTRUCTION LETTER]

            , 201  

                                     , as Subservicer/Additional Collateral
Servicer

 

 

 

 

Attention:                                         

 

  Re: Master Repurchase Agreement, dated as of February 1, 2013, by and among
The Royal Bank of Scotland plc, (“Buyer”) and Green Tree Servicing LLC,
(“Seller”)

Ladies and Gentlemen:

As [sub]servicer of those assets described on Schedule 1 hereto, which may be
amended or updated from time to time (the “Eligible Assets”) pursuant to that
Servicing Agreement, between You and the undersigned Seller, as amended or
modified, attached hereto as Exhibit A (the “Servicing Agreement”), you are
hereby notified that [(i)] the undersigned Seller has sold to Buyer such
Eligible Assets pursuant to that certain Master Repurchase Agreement, dated as
February 1, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Agreement”), between Buyer and Seller and (ii) each of the
Eligible Assets is subject to a security interest in favor of Buyer.

You agree to service the Eligible Assets in accordance with the terms of the
Servicing Agreement for the benefit of Buyer and, except as otherwise provided
herein, Buyer shall have all of the rights, but none of the duties or
obligations of Seller under the Servicing Agreement including, without
limitation, payment of any indemnification or reimbursement or payment of any
servicing fees or any other fees. No subservicing relationship shall be hereby
created between You and Buyer.

Upon your receipt of written notification by Buyer that a Default has occurred
under the Agreement (the “Default Notice”), you, as [Subservicer] [Additional
Collateral Servicer], hereby agree to remit all payments or distributions made
with respect to such Eligible Assets, net of the servicing fees payable to you
with respect thereto, immediately in accordance with Buyer’s wiring instructions
provided below, or in accordance with other instructions that may be delivered
to you by Buyer:

 

JPMorgan Chase Bank Account No.:    0667-09350    For the A/C of The Royal Bank
of Scotland plc ABA No.:    021000021 Reference:    ABO

You agree that, following your receipt of such Default Notice, under no
circumstances will you remit any such payments or distributions in accordance
with any instructions delivered to you by the undersigned Seller, except if
Buyer instructs you in writing otherwise.

You further agree that, upon receipt written notification by Buyer that an Event
of Default has occurred under the Agreement, Buyer shall assume all of the
rights and obligations of Seller under the Servicing Agreement, except as
otherwise provided herein. Subject to the terms of the Servicing Agreement, You
shall (x) follow the instructions of Buyer with respect to the Eligible Assets
and deliver

 

B-1

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

to a Buyer any information with respect to the Eligible Assets reasonably
requested by such Buyer, and (y) treat this letter agreement as a separate and
distinct servicing agreement between You and Buyer (incorporating the terms of
the Servicing Agreement by reference), subject to no setoff or counterclaims
arising in Your favor (or the favor of any third party claiming through You)
under any other agreement or arrangement between You and any Seller or
otherwise. Notwithstanding anything to the contrary herein or in the Servicing
Agreement, in no event shall Buyer be liable for any fees, indemnities, costs,
reimbursements or expenses incurred by You prior to such Event of Default or
otherwise owed to You in respect of the period of time prior to such Event of
Default.

Notwithstanding anything to the contrary herein or in the Servicing Agreement,
with respect to those Eligible Assets marked as “Servicing Released” on Schedule
1 (the “Servicing Released Assets”), You are hereby instructed to service such
Servicing Released Assets for a term of thirty (30) days (each, a “Servicing
Term”) commencing as of the date such Servicing Released Assets become subject
to a purchase transaction under the Agreement, which Servicing Term shall be
deemed to be renewed at the end of each 30-day period subject to the following
sentence. The Servicing Term shall terminate upon the occurrence of any of the
following events: (i) if the related purchase transaction is not renewed at the
end of such Servicing Term and such Servicing Released Asset is not repurchased
by Seller, or (ii) You shall have received a written termination notice from
Buyer at any time with respect to some or all of the Servicing Released Assets
being serviced by You (each, a “Servicing Termination”). In the event of a
Servicing Termination, You hereby agree to (i) deliver all servicing and
“records” relating to such Servicing Released Assets to the designee of Buyer at
the end of each such Servicing Term and (ii) cooperate in all respects with the
transfer of servicing to Buyer or its designee. The transfer of servicing and
such records by You shall be in accordance with customary standards in the
industry and the terms of the Servicing Agreement, and such transfer shall
include the transfer of the gross amount of all escrows held for the related
mortgagors (without reduction for unreimbursed advances or “negative escrows”).

Further, You hereby constitute and appoint Buyer and any officer or agent
thereof, with full power of substitution, as Your true and lawful
attorney-in-fact with full irrevocable power and authority in Your place and
stead and in Your name or in Buyer’s own name, following any Servicer
Termination with respect solely to the Servicing Released Assets that are
subject to such Servicer Termination, to direct any party liable for any payment
under any such Servicing Released Assets to make payment of any and all moneys
due or to become due thereunder directly to Buyer or as Buyer shall direct
including, without limitation, the right to send “goodbye” and “hello” letters
on Your behalf. You hereby ratify all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.

For the purpose of the foregoing, the term “records” shall be deemed to include
but not be limited to any and all servicing agreements, files, documents,
records, data bases, computer tapes, copies of computer tapes, proof of
insurance coverage, insurance policies, appraisals, other closing documentation,
payment history records, and any other records relating to or evidencing the
servicing of such Servicing Released Assets.

[NO FURTHER TEXT ON THIS PAGE]

 

B-2

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

Please acknowledge receipt of this instruction letter by signing in the
signature block below and forwarding an executed copy to Buyer promptly upon
receipt. Any notices to Buyer should be delivered to the following address: 600
Washington Blvd., Stamford, Connecticut 06901, Attention: James Esposito,
Telephone: (203) 897-6072, Facsimile: (203) 873-4072.

 

Very truly yours, GREEN TREE SERVICING LLC By:  

 

Name:   Title:  

 

Acknowledged and Agreed as of this      day of             , 201  :
[SUBSERVICER] [ADDITIONAL COLLATERAL SERVICER] By:  

 

Name:   Title:  

 

B-3

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

Schedule 1 to Instruction Letter

List of Servicing Released Assets

 

B-4

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

Exhibit A to Instruction Letter

Servicing Agreement

 

B-5

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

EXHIBIT C

FORM OF COMMITTED AMOUNT INCREASE NOTICE

[insert date]

The Royal Bank of Scotland plc

600 Washington Blvd.

Stamford Connecticut 06901

Attention:                                 

Ladies/Gentlemen:

Reference is made to the Master Repurchase Agreement, dated as of February 1,
2013 (as amended, restated, supplemented or otherwise modified from time to
time, the “Repurchase Agreement”; capitalized terms used but not otherwise
defined herein shall have the meaning given them in the Repurchase Agreement),
between Green Tree Servicing LLC (the “Seller”) and The Royal Bank of Scotland
plc (the “Buyer”).

In accordance with Section 3(a) of the Repurchase Agreement, the undersigned
Seller hereby requests that you, Buyer, agree to increase the Committed Amount
under the Repurchase Agreement.

 

Current Committed Amount:

   $                   

 

 

 

Amount of Increase to Committed Amount

   $        

 

 

 

Proposed Total Committed Amount

   $        

 

 

 

Current Uncommitted Amount

   $        

 

 

 

Amount of Decrease to Uncommitted Amount

   $        

 

 

 

Proposed Total Uncommitted Amount

   $        

 

 

 

Maximum Aggregate Purchase Price

   $        

 

 

 

Seller hereby certifies, as of such Purchase Date, that:

1. no Default has occurred and is continuing on the date hereof and no Event of
Default has occurred that has not been waived by Buyer in its sole discretion in
writing on the date hereof , and in each case nor will occur after giving effect
to such increase and/or decrease;

2. each of the representations and warranties made by Seller in or pursuant to
the Program Documents is true and correct in all material respects on and as of
such date.

 

C-1

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

Very truly yours, GREEN TREE SERVICING LLC By:  

 

Name:   Title:  

 

Acknowledged and Agreed to: THE ROYAL BANK OF SCOTLAND PLC BY: RBS Securities,
Inc., its agent By:  

 

Name:   Title:   Date:  

 

C-2

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

EXHIBIT D

FORM OF TRANSACTION NOTICE

[insert date]

The Royal Bank of Scotland plc

600 Washington Blvd.

Stamford Connecticut 06901

Attention:                                 

Transaction Notice No.:                                

Ladies/Gentlemen:

Reference is made to the Master Repurchase Agreement, dated as of February 1,
2013 (as amended, restated, supplemented or otherwise modified from time to
time, the “Repurchase Agreement”; capitalized terms used but not otherwise
defined herein shall have the meaning given them in the Repurchase Agreement),
between Green Tree Servicing LLC (the “Seller”) and The Royal Bank of Scotland
plc (the “Buyer”).

In accordance with Section 3(a) of the Repurchase Agreement, the undersigned
Seller hereby requests that you, Buyer, agree to enter into a Transaction with
us in connection with our delivery of Loans (or 100% beneficial interests
therein) on             [insert requested Purchase Date, which in the case of
Dry Loans must be at least two (2) Business Days following the date of the
request] (the “Purchase Date”), in connection with which we shall sell to you
the Loans (or 100% beneficial interests therein) set forth on the Asset Schedule
attached hereto. The Purchase Price shall be             [insert applicable
Purchase Price pursuant to the terms of the Pricing Side Letter], the Pricing
Rate shall be             [insert applicable Pricing Rate pursuant to the terms
of the Pricing Side Letter], and Seller agrees to repurchase such Loans (or 100%
beneficial interests therein) on [the Repurchase Date][            (insert
requested Repurchase Date)] at the Repurchase Price.

Seller hereby certifies, as of such Purchase Date, that:

1. no Default has occurred and is continuing on the date hereof and no Event of
Default has occurred that has not been waived by Buyer in its sole discretion in
writing on the date hereof , and in each case nor will occur after giving effect
to such Transaction as a result of such Transaction;

2. each of the representations and warranties made by Seller in or pursuant to
the Program Documents is true and correct in all material respects on and as of
such date (in the case of the representations and warranties in respect of
Assets, solely with respect to Assets being purchased on the Purchase Date) as
if made on and as of the date hereof (or, if any such representation or warranty
is expressly stated to have been made as of a specific date, as of such specific
date);

3. Seller is in compliance with all governmental licenses and authorizations and
is qualified to do business and is in good standing in all required
jurisdictions; and

4. Seller has satisfied all conditions precedent in Sections 9(a) and (b) of the
Repurchase Agreement and all other requirements of the Program Documents.

 

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The undersigned duly authorized officer of Seller further represents and
warrants that (1) the documents constituting the Mortgage File (as defined in
the Custodial Agreement) with respect to the Assets that are the subject of the
Transaction requested herein and more specifically identified on the mortgage
loan schedule or computer readable magnetic transmission delivered to both Buyer
and the Custodian in connection herewith (the “Receipted Assets”) [with respect
to Dry Loans: have been or are hereby submitted] [with respect to Wet Loans:
shall be delivered, within seven (7) calendar days of the date of the execution
of this Transaction Notice] to Custodian and such Required Documents are to be
held by the Custodian for Buyer, (2) all other documents related to such
Receipted Assets (including, but not limited to, mortgages, insurance policies,
loan applications and appraisals) have been or will be created and held by
Seller in trust for Buyer, (3) all documents related to such Receipted Assets
withdrawn from Custodian shall be held in trust by Seller for Buyer, and
(4) upon Buyer’s wiring of the Purchase Price pursuant to Section 3(c) of the
Repurchase Agreement, Buyer will have agreed to the terms of the Transaction as
set forth herein and purchased the Receipted Loans from Seller.

Seller hereby represents and warrants that (x) the Receipted Assets have an
unpaid principal balance as of the date hereof of $            and (y) the
number of Receipted Assets is             .

 

Very truly yours, GREEN TREE SERVICING LLC By:  

 

Name:   Title:  

 

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Schedule 1

to Loan Transaction Notice

[ELIGIBLE LOANS PROPOSED TO BE SOLD TO BUYER ON PURCHASE DATE]

[Attach Asset Schedule]

 

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EXHIBIT E

UNDERWRITING GUIDELINES

[Underwriting guidelines to be attached]

 

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EXHIBIT F

REQUIRED FIELDS FOR SERVICING TRANSMISSION

[See attached spreadsheet]

 

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EXHIBIT G

REQUIRED FIELDS FOR ASSET SCHEDULE

[See attached spreadsheet]

 

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EXHIBIT H

FORM OF CONFIDENTIALITY AGREEMENT

CONFIDENTIALITY AGREEMENT, dated as of [            ], 201[    ] (as amended,
restated, supplemented or otherwise modified from time to time, this
“Confidentiality Agreement”), between The Royal Bank of Scotland plc and
[            ].

In connection with your consideration of a possible or actual acquisition of a
participating interest (the “Transaction”) in an advance, note or commitment of
The Royal Bank of Scotland plc (“Buyer”) pursuant to a Master Repurchase
Agreement between Buyer and Green Tree Servicing LLC (“Seller”) dated
February 1, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Repurchase Agreement”), you have requested the right to
review certain non-public information regarding Seller that is in the possession
of Buyer. In consideration of, and as a condition to, furnishing you with such
information and any other information (whether communicated in writing or
communicated orally) delivered to you by Buyer or its affiliates, directors,
officers, employees, advisors, agents or “controlling persons” (within the
meaning of the Securities Exchange Act of 1934, as amended (the “1934 Act”))
(such affiliates and other persons being herein referred to collectively as
Buyer “Representatives”) in connection with the consideration of a Transaction
(such information being herein referred to as “Evaluation Material”), Buyer
hereby requests your agreement as follows:

1. The Evaluation Material will be used solely for the purpose of evaluating a
possible Transaction with Buyer involving you or your affiliates, and unless and
until you have completed such Transaction pursuant to a definitive agreement
between you or any such affiliate and Buyer, such Evaluation Material will be
kept strictly confidential by you and your affiliates, directors, officers,
employees, advisors, agents or controlling persons (such affiliates and other
persons being herein referred to collectively as “your Representatives”), except
that the Evaluation Material or portions thereof may be disclosed to those of
your Representatives who need to know such information for the purpose of
evaluating a possible Transaction with Buyer (it being understood that prior to
such disclosure your Representatives will be informed of the confidential nature
of the Evaluation Material and shall agree to be bound by this Confidentiality
Agreement). You agree to be responsible for any breach of this Confidentiality
Agreement by your Representatives.

2. The term “Evaluation Material” does not include any information which (i) at
the time of disclosure or thereafter is generally known by the public (other
than as a result of its disclosure by you or your Representatives) or (ii) was
or becomes available to you on a nonconfidential basis from a person not
otherwise bound by a confidential agreement with Buyer or its Representatives or
is not otherwise prohibited from transmitting the information to you. As used in
this Confidentiality Agreement, the term “person” shall be broadly interpreted
to include, without limitation, any corporation, company, joint venture,
partnership or individual.

3. In the event that you receive a request to disclose all or any part of the
information contained in the Evaluation Material under the terms of a valid and
effective subpoena or order issued by a court of competent jurisdiction, you
agree to (i) immediately notify Buyer and Seller of the existence, terms and
circumstances surrounding such a request, (ii)

 

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consult with Seller on the advisability of taking legally available steps to
resist or narrow such request, and (iii) if disclosure of such information is
required, exercise your best efforts to obtain an order or other reliable
assurance that confidential treatment will be accorded to such information.

4. Unless otherwise required by law in the opinion of your counsel, neither you
nor your Representative will, without our prior written consent, disclose to any
person the fact that the Evaluation Material has been made available to you.

5. You agree not to initiate or maintain contact (except for those contacts made
in the ordinary course of business) with any officer, director or employee of
Seller regarding the business, operations, prospects or finances of Seller or
the employment of such officer, director or employee, except with the express
written permission of Seller.

6. You understand and acknowledge that Seller is not making any representation
or warranty, express or implied, as to the accuracy or completeness of the
Evaluation Material or any other information provided to you by Buyer. None of
Seller, its respective affiliates or Representatives, nor any of its respective
officers, directors, employees, agents or controlling persons (within the
meaning of the 1934 Act) shall have any liability to you or any other person
(including, without limitation, any of your Representatives) resulting from your
use of the Evaluation Material.

7. You agree that neither Buyer nor Seller has granted you any license,
copyright, or similar right with respect to any of the Evaluation Material or
any other information provided to you by Buyer.

8. If you determine that you do not wish to proceed with the Transaction, you
will promptly deliver to Buyer all of the Evaluation Material, including all
copies and reproductions thereof in your possession or in the possession of any
of your Representatives.

9. Without prejudice to the rights and remedies otherwise available to Seller,
Seller shall be entitled to equitable relief by way of injunction if you or any
of your Representatives breach or threaten to breach any of the provisions of
this Confidentiality Agreement. You agree to waive, and to cause your
Representatives to waive, any requirement for the securing or posting of any
bond in connection with such remedy.

10. The validity and interpretation of this Confidentiality Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York applicable to agreements made and to be fully performed
therein (excluding the conflicts of law rules). You submit to the jurisdiction
of any court of the State of New York or the United States District Court for
the Southern District of the State of New York for the purpose of any suit,
action, or other proceeding arising out of this Confidentiality Agreement.

11. The benefits of this Confidentiality Agreement shall inure to the respective
successors and assigns of the parties hereto, and the obligations and
liabilities assumed in this Confidentiality Agreement by the parties hereto
shall be binding upon the respective successors and assigns.

12. If it is found in a final judgment by a court of competent jurisdiction (not
subject to further appeal) that any term or provision hereof is invalid or
unenforceable, (i) the remaining

 

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terms and provisions hereof shall be unimpaired and shall remain in full force
and effect and (ii) the invalid or unenforceable provision or term shall be
replaced by a term or provision that is valid and enforceable and that comes
closest to expressing the intention of such invalid or unenforceable term or
provision.

13. This Confidentiality Agreement embodies the entire agreement and
understanding of the parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to the matters provided for herein. No
alteration, waiver, amendments, or change or supplement hereto shall be binding
or effective unless the same is set forth in writing by a duly authorized
representative of each party and may be modified or waived only by a separate
letter executed by Seller and you expressly so modifying or waiving such
Agreement.

14. For the convenience of the parties, any number of counterparts of this
Confidentiality Agreement may be executed by the parties hereto. Each such
counterpart shall be, and shall be deemed to be, an original instrument, but all
such counterparts taken together shall constitute one and the same Agreement.
The parties agree that this Confidentiality Agreement and any notices hereunder
may be transmitted between them by email and/or by facsimile. The parties intend
that faxed signatures and electronically imaged signatures such as .pdf files
shall constitute original signatures and are binding on all parties. The
original documents shall be promptly delivered, if requested.

15. Capitalized terms used but not otherwise defined herein shall have the
meaning given them in the Repurchase Agreement.

 

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Kindly execute and return one copy of this letter which will constitute our
Agreement with respect to the subject matter of this letter.

 

THE ROYAL BANK OF SCOTLAND PLC By: RBS Securities Inc., its agent By:  

 

  Name     Title:  

 

Confirmed and agreed to this      day of             , 201  . By:  

 

Name   Title:  

 

H-4

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EXHIBIT I

FORM OF PARTICIPATION CERTIFICATE

POOL NO. (or Freddie Mac CONTRACT NO.):

This Participation Certificate evidences a one hundred percent (100%) undivided
beneficial ownership interest in (including the right to receive the payments of
principal of and interest on) the Loans (the “Participation”) identified:

(Check Box)

 

  (a) Form HUD 11706 (Schedule of Pooled Mortgages);

 

  (b) Fannie Mae Form 2005 (Schedule of Mortgages); or

 

  (c) Freddie Mac Form 1034 (Fixed-Rate Custodial Certification Schedule) or
Selling System computer tape.

The Participation has been sold to The Royal Bank of Scotland plc (“Buyer”)
pursuant to the terms of that certain Master Repurchase Agreement, dated
February 1, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Agreement”) between Green Tree Servicing LLC, as Seller, and
Buyer. Capitalized terms used but not defined herein shall have the meanings set
forth in the Agreement, the terms of which are hereby incorporated by reference
and made a part of this Participation Certificate.

Upon delivery of the Related Security to Buyer or its assignee, Buyer’s
beneficial ownership interest in the Loans evidenced in this Participation
Certificate shall terminate in exchange for such Security, and this
Participation Certificate shall be void and of no further effect.

This Participation Certificate may be amended only by a written agreement
between Seller and Buyer.

 

GREEN TREE SERVICING LLC By:  

 

Its:   Date:  

 

J-1

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EXHIBIT J

FORM OF SECURITY RELEASE CERTIFICATION

[insert date]

The Royal Bank of Scotland plc

600 Washington Blvd.

Stamford, Connecticut 06901

Attention:                                 

 

  Re: Security Release Certification

Effective as of             [DATE]            [            ] hereby relinquishes
any and all right, title and interest it may have in and to the Loans described
in Exhibit A attached hereto upon purchase thereof by The Royal Bank of Scotland
plc (“Buyer”) from Seller named below pursuant to that certain Master Repurchase
Agreement, dated as of February 1, 2013 (as amended, restated, supplemented or
otherwise modified from time to time, the “Repurchase Agreement”) as of the date
and time of receipt by [            ] of $            for such Loans (the “Date
and Time of Sale”) and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Loans have been delivered and
released to Seller named below or its designees as of the Date and Time of Sale.
Capitalized terms used but not defined herein shall have the meanings assigned
thereto in the Repurchase Agreement.

Name and Address of Lender:

[Custodian]

[            ]

For Credit Account No. [            ]

Attention: [            ]

Phone: [            ]

Further Credit – [            ]

 

[NAME OF WAREHOUSE LENDER] By:  

 

Name:   Title:  

Seller named below hereby certifies to Buyer that, as of the Date and Time of
Sale of the above mentioned Loans to Buyer, the security interests in the Loans
released by the above named corporation comprise all security interests relating
to or affecting any and all such Loans. Seller warrants that, as of such time,
there are and will be no other security interests affecting any or all of such
Loans.

 

J-1

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GREEN TREE SERVICING LLC By:  

 

Name:   Title:  

 

J-2

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EXHIBIT TO SECURITY RELEASE CERTIFICATION

[List of Loans]

 

J-3

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EXHIBIT K

FORM OF TRADE ASSIGNMENT

                     (“Takeout Investor”)

(Address)

Attention:

Fax No.:

Dear Sirs:

Attached hereto is a correct and complete copy of your confirmation of
commitment (the “Commitment”), trade-dated             ,             , to
purchase

[FOR MORTGAGE LOANS] [residential mortgage loans, on a servicing released basis,
having an unpaid principal balance of $            as of [            ] (the
“Mortgage Loans”)] at a purchase price of $            from             on
[insert closing date]

[FOR SECURITIES]. [$            of     %             year,

(Check Box)

 

  (a) Ginnie Mae;

 

  (b) Fannie Mae; or

 

  (c) Freddie Mac

mortgage-backed pass-through securities (“Securities”) at a purchase price of
$            from             on [insert Settlement Date].

Our intention is to assign $            of this Commitment’s full amount. This
is to confirm that (i) the form of this assignment conforms to the SIFMA
guidelines, (ii) the Commitment is in full force and effect, (iii) the
Commitment has been assigned to The Royal Bank of Scotland plc (“RBS”) as
security for the Obligations of Green Tree Servicing LLC (“Seller”) under the
Master Repurchase Agreement, dated as of February 1, 2013, (as amended,
restated, supplemented or otherwise modified from time to time, the “Agreement”)
by and between RBS as Buyer and Seller, whose acceptance of such assignment is
indicated below, [and] (iv) upon delivery of this trade assignment to you by RBS
you will accept Seller’s direction set forth herein to pay RBS for such
[Mortgage Loans/Securities], [(v) you will accept delivery of such Mortgage
Loans/Securities directly from RBS, (vi) RBS is obligated to make delivery of
such Mortgage Loans/Securities to you in accordance with the attached Commitment
and (vii) you have released Seller from its obligation to deliver the Mortgage
Loans/Securities to you under the Commitment.] Payment will be made “delivery
versus payment (DVP)” to RBS in immediately available funds. Capitalized terms
used but not defined herein shall have the meanings set forth in the Agreement,
the terms of which are hereby incorporated by reference and made a part of this
trade assignment.

 

K-1

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If you have any questions, please call             at (            )
            -            immediately or contact him by fax at (            )
            -            .

 

Very truly yours, Green Tree Servicing LLC By:  

 

Title:   Date:  

 

Agreed to: The Royal Bank of Scotland plc By: RBS Securities Inc., its agent By:
 

 

Title:  

 

Date:  

 

Notice of delivery and confirmation of receipt are the obligations of RBS.
Prompt notification of incorrect information or rejection of the trade
assignment should be made to [            ].

 

K-2

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EXHIBIT L

FORM OF OFFICER’S CERTIFICATE

GREEN TREE SERVICING LLC

I,             , hereby certify that I am the duly elected Secretary of Green
Tree Servicing LLC a             (the “Company”), and further certify, on behalf
of the Company as follows:

1. Attached hereto as Attachment I is a true and correct copy of the articles of
formation of the Company as are in full force and effect on the date hereof.
Attached hereto as Attachment II is a true and correct copy of the operating
agreement of the Company as is in full force and effect on the date hereof.
Attached hereto as Attachment III is a Certificate of Good Standing of the
Company, issued by the Secretary of the State of             dated [Date]. No
event has occurred since the date of such good standing certificate which has
affected the good standing of the Company under the laws of the state of
[            ].

2. Each person who, as an officer or attorney-in-fact of the Company, signed
(a) the Master Repurchase Agreement (as amended, the “Repurchase Agreement”),
dated as of February 1, 2013 by and between the Company and The Royal Bank of
Scotland plc (the “Buyer”); (b) the Custodial Agreement and Disbursement
Agreement (the “Custodial Agreement”), dated as of February 1, 2013, by and
among the Company, the Buyer and Wells Fargo Bank, N.A., as disbursement agent
and custodian (c) the Pricing Letter (the “Pricing Letter”) dated February 1,
2013 executed by the Company and the Buyer; and (d) any other document delivered
prior hereto or on the date hereof in connection with the transactions
contemplated in the Repurchase Agreement was, at the respective times of such
signing and delivery, and is as of the date hereof, duly elected or appointed,
qualified and acting as such officer or attorney-in-fact, and the signatures of
such persons appearing on such documents are their genuine signatures.

3. Attached hereto as Attachment IV is a true and correct copy of the
resolutions duly adopted by the [board of directors] of the Company as of
[            ], 2013 (the “Resolutions”) with respect to the authorization and
approval of the transactions contemplated in the Repurchase Agreement; said
Resolutions have not been amended, modified, annulled or revoked and are in full
force and effect on the date hereof.

4. All of the representations and warranties of the Company contained in
Section 12 of the Repurchase Agreement were true and correct in all material
respects as of the date of the Repurchase Agreement and are true and correct in
all material respects as of the date hereof.

5. The Company has performed all of its duties and has satisfied all of the
material conditions on its part to be performed or satisfied pursuant to
Section 9 of the Repurchase Agreement.

6. There are no actions, suits or proceedings pending or, to my knowledge
threatened, against or affecting the Company which, if adversely determined
either individually or in the aggregate, would adversely affect the Company’s
obligations under the Agreements. No proceedings that could result in the
liquidation or dissolution of the Company are pending or contemplated.

7. Incumbency of Officers. The below named persons have been duly elected or
appointed, and have been duly qualified as officers of the Company holding the
respective office below set forth opposite his or her name, and the signature
below set forth opposite his or her name is his or her genuine signature.

 

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Name

 

Office

 

Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Repurchase Agreement.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.

Dated:                     

    [Seal]

 

GREEN TREE SERVICING LLC By:  

 

Name:   Title:  

I             ,             of [Seller], hereby certify that             is the
duly elected, qualified and action             of [Seller] and that the
signature appearing above is the genuine signature of such person.

IN WITNESS WHEREOF, I have hereunto signed my name.

Dated:                     

    [Seal]

 

GREEN TREE SERVICING LLC By:  

 

Name:   Title:  

 

L-2