EXHIBIT 10.1

 

LOAN AGREEMENT

Dated March 30, 2007

by and among

ACCREDITED HOME LENDERS, INC.,

as Borrower,

ACCREDITED MORTGAGE LOAN REIT TRUST,

as Borrower,

ACCREDITED HOME LENDERS HOLDING CO.

as a Guarantor,

LENDING ENTITIES parties hereto

as Lenders,

FARALLON CAPITAL MANAGEMENT, L.L.C.,

as Administrative Agent,

and

FARALLON CAPITAL MANAGEMENT, L.L.C.,

as Collateral Agent,

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LOAN AGREEMENT

This LOAN AGREEMENT dated as of March 30, 2007 (as amended, supplemented or
modified from time to time, this “Agreement”) is entered into by and among
ACCREDITED HOME LENDERS, INC., a California corporation (“AHL”), and ACCREDITED
MORTGAGE LOAN REIT TRUST, a Maryland real estate investment trust (the “REIT”;
together with AHL, each individually a “Borrower” and collectively, the
“Borrowers”), ACCREDITED HOME LENDERS HOLDING CO., a Delaware corporation
(“Holdings”), each of the lending entities that from time to time is a party
hereto (each individually a “Lender” and collectively, the “Lenders”), FARALLON
CAPITAL MANAGEMENT, L.L.C., as administrative agent for the Lenders (in such
capacity, together with its successors and assigns, if any, in such capacity,
the “Administrative Agent”), and FARALLON CAPITAL MANAGEMENT, L.L.C., as
collateral agent for the Lenders (in such capacity, together with its successors
and assigns, if any, in such capacity, the “Collateral Agent”).

ARTICLE I

DEFINITIONS

1.01. Certain Defined Terms. The following terms used in this Agreement shall
have the following meanings, applicable both to the singular and the plural
forms of the terms defined:

“Aames Acquisition” means those series of transactions under which Holdings and
certain of its Affiliates acquired interests in the assets of Aames Investment
Corporation and it Affiliates pursuant to that Agreement and Plan of Merger,
dated as of May 24, 2006.

“Acceptable SPV” means a Person which issues Structured Securities Debt.

“Accommodation Obligation” means any Contractual Obligation, contingent or
otherwise, of any Loan Party with respect to any Indebtedness, obligation or
liability of another, if the primary purpose or intent thereof by the Loan Party
incurring the Accommodation Obligation is to provide assurance to the obligee of
such Indebtedness, obligation or liability of another Person that such
Indebtedness, obligation or liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders thereof
will be protected (in whole or in part) against loss in respect thereof
including, without limitation, direct and indirect guarantees, endorsements
(except for collection or deposit in the ordinary course of business), notes
co-made or discounted, recourse agreements, take-or-pay agreements, keep-well
agreements, agreements to purchase or repurchase such Indebtedness, obligation
or liability or to provide any security therefor or to provide funds for the
payment or discharge thereof, agreements to maintain solvency, assets, level of
income, or other financial condition, and agreements to make payment other than
for value received. The amount of any Accommodation Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the primary
obligation with respect to which such Accommodation Obligation is made (or, if
less, the maximum amount of such primary obligation for which such Person may be
liable pursuant

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to the terms of the instrument evidencing such Accommodation Obligation) or, if
not stated or determinable, the maximum reasonably anticipated liability with
respect thereto (assuming such Person is required to perform thereunder), as
determined by such Person in good faith.

“Adjusted Tangible Net Worth” means, for any Person, Net Worth of such Person
plus (a) Subordinated Debt (provided that Subordinated Debt shall not be taken
into account to the extent that it would cause Adjusted Tangible Net Worth to be
comprised of greater than 25% Subordinated Debt) plus minority interest in
preferred securities/subsidiary as shown on the most recent financial statement
of such Person, minus (b) all intangible assets, including goodwill, patents,
tradenames, trademarks, copyrights, franchises, any organizational expenses,
deferred expenses (except those related to Structured Securities Debt or
SFAS91), prepaid expenses, prepaid assets, receivables from shareholders,
unconsolidated Affiliates or employees, and any other asset as shown as an
intangible asset on the balance sheet of such Person on a consolidated basis as
determined at a particular date in accordance with GAAP

“Administrative Agent” has the meaning ascribed to such term in the introductory
paragraph hereto.

“Administrative Agent Account” means the account identified on Schedule 1.01(A)
into which the Borrowers shall make all payments to the Administrative Agent for
the benefit of the Agents and the Lenders under this Agreement and the other
Loan Documents.

“Adversary Proceeding” means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of a Loan Party) at law or in
equity, or before or by any Governmental Authority, domestic or foreign, whether
pending or, to the knowledge of a Loan Party, threatened against or adversely
affecting such Loan Party or property of such Loan Party.

“Affiliate” means, as applied to any specified Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, such specified Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling”, “controlled by”
and “under common control with”), as applied to any specified Person, means the
possession, directly or indirectly, of the power to vote ten percent (10%) or
more of the Securities having voting power for the election of directors of such
specified Person or otherwise to direct or cause the direction of the management
and policies of such specified Person, whether through the ownership of voting
Securities or by contract or otherwise; provided, however, when “Affiliate” is
used in connection with any Loan Party, Farallon and its affiliates shall be
excluded from the definition of “Affiliate”.

“Agents” means collectively, the Administrative Agent and the Collateral Agent.

“Agent-Related Persons” means the Administrative Agent and any successor agents
thereto (in accordance with the terms of this Agreement), and the Collateral
Agent and any successor agents thereto (in accordance with the terms of this
Agreement), together with their respective Affiliates, and the officers,
directors, employees, members, managing members, agents, attorneys-in-fact and
shareholders of such Persons and their Affiliates.

“Agreement” has the meaning ascribed to such term in the preamble hereto.

 

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“AHL” has the meaning ascribed to such term in the preamble hereto.

“AHL Cash Collateral Accounts” has the meaning ascribed to such term in
Section 11.01(a), and will include the AHL Cash Flow Account and the AHL Deposit
Collateral Account.

“AHL Cash Flow Account” has the meaning ascribed to such term in
Section 11.01(b).

“AHL Deposit Collateral Account” has the meaning ascribed to such term in
Section 11.01(b).

“Applicable Interest Rate” means, with respect to the outstanding principal
amount of the Term A Loans and the Term B Loans and the other Obligations,
13% per annum, and with respect to the outstanding principal amount of the Term
C Loans, 9% per annum for the sixty day period immediately following the Closing
Date and 13% per annum for all times thereafter.

“Assignment and Acceptance” means an Assignment and Acceptance substantially in
the form of Exhibit A attached hereto and made a part hereof (with blanks
appropriately completed) delivered to the Administrative Agent in connection
with an assignment of a Lender’s interest under this Agreement in accordance
with Section 13.01.

“Available Borrowing Capacity” means available and unused borrowing capacity
which may be drawn upon by Holdings or any of its consolidated Subsidiaries no
later than the next Business Day. “Available Borrowing Capacity” shall not
include any borrowing capacity if any event or circumstance has occurred which
would prevent Holdings or such Subsidiary from drawing on the borrowing capacity
or cause the related lender to have no obligation to make funds available.

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §§ 101 et
seq.), as amended from time to time, and any successor statute.

“Borrower” and “Borrowers” has the meaning ascribed to such terms in the
preamble hereto.

“Business Day” means a day, which is not a Saturday or Sunday or a legal holiday
and on which banks are not required or permitted by law or other governmental
action to close in New York, New York.

“Capital Lease” means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.

“Capitalized Lease Obligations” means, with respect to any Person, obligations
of such Person and its Subsidiaries under Capitalized Lease, and, for purposes
hereof, the amount of any such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.

 

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“Cash Collateral Accounts” means, collectively, the AHL Cash Collateral Accounts
and the REIT Cash Collateral Account.

“Cash Equivalents” means (a) securities with maturities of 90 days or less from
the date of acquisition, issued or fully guaranteed or insured by the United
States Government or any agency thereof; (b) certificates of deposit and
eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of a Commercial Bank; (c) repurchase
obligations of a Commercial Bank, 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 A1
or the equivalent thereof by S&P or P1 or the equivalent thereof by Moody’s and
in either case maturing within 90 days after the date of acquisition;
(e) securities with maturities of 90 days or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody’s; (f) securities with maturities of 90 days or less from the date of
acquisition backed by standby letters of credit issued by a Commercial Bank; 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” means each occurrence of any of the following:

 

  (a) Holdings shall have entered into (i) a merger agreement or any other
agreement that would cause or result in a Change of Control Transaction or
(ii) any agreement for the sale of all or substantially all of the assets of
Holdings;

 

  (b) the commencement of any tender or exchange offer for the Capital Stock of
Holdings; or

 

  (c) any public announcement of any of the foregoing.

“Change of Control Event” means the public announcement by Holdings with respect
to a Change of Control and the approval of such Change of Control by the Board
of Directors of Holdings and the shareholders of Holdings.

“Change of Control Option has the meaning ascribed to such term in Section 2.07.

“Change of Control Option Period” means the period commencing on the date that a
Change of Control Event occurs and ending on the ninetieth day following the
consummation of such Change of Control.

“Change of Control Premium” means an amount equal to 2.0% of the amount of the
Loans required to be repaid pursuant to Section 2.07.

“Change of Control Transaction” means any Person or group of Persons (other than
(i) Holdings, (ii) any Subsidiary or (iii) any employee or director benefit plan
or stock plan of Holdings or a Subsidiary or any trustee or fiduciary with
respect to any such plan when acting

 

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in that capacity or any trust related to any such plan) shall have acquired
beneficial ownership of shares representing more than 50% of the combined voting
power represented by the outstanding common voting stock of Holdings (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations thereunder).

“Closing Date” means the date on which all of the conditions precedent in
Section 5.01 have been satisfied or waived in writing and the Loans have been
funded pursuant to Section 2.01(a).

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute and any regulations or guidelines promulgated
thereunder.

“Collateral” means all assets and property subject to the Lien purported to be
created by the Collateral Documents.

“Collateral Agent” has the meaning ascribed to such term in the introductory
paragraph hereto.

“Collateral Documents” means the Security Agreements, Pledge Agreements, each
UCC Financing Statement, the Control Account Agreements, each and any other
agreement or instrument pursuant to which any Loan Party or any other Person
grants a Lien to the Collateral Agent to secure the Obligations.

“Combined REIT Debt” means, as of any date of determination, the sum of (i) the
aggregate outstanding principal balance under the REIT Replacement Repo
Facility, if any, as of such date, plus the aggregate outstanding principal
amount of the Term A Loans and the Term C Loans.

“Commercial Bank” means a commercial bank having capital and surplus in excess
of $500,000,000.

“Commitments” means, with respect to a Lender, such Lender’s Term A Loan
Commitment, Term B Loan Commitment and Term C Loan Commitment; “Commitments”
means the Term A Loan Commitments, the Term B Loan Commitments and the Term C
Loan Commitments of all the Lenders, the aggregate amount of which shall not
exceed $230,000,000.

“Compliance Certificate” has the meaning ascribed to such term in
Section 7.01(d).

“Contingent Obligation” means, with respect to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness (“primary
obligations”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, (i) the direct or
indirect guaranty, endorsement (other than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of a primary obligor, (ii) the
obligation to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii) any
obligation of such Person, whether or not contingent, (A) to purchase any such
primary obligation or any property constituting direct or indirect security

 

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therefor, (B) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (C) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (D) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation with respect to which such Contingent
Obligation is made (or, if less, the maximum amount of such primary obligation
for which such Person may be liable pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the
maximum reasonably anticipated liability with respect thereto (assuming such
Person is required to perform thereunder), as determined by such Person in good
faith.

“Contractual Obligation” means, as applied to any Person, any provision of any
Securities issued by that Person or any indenture, mortgage, deed of trust,
security agreement, pledge agreement, guaranty, contract, undertaking, agreement
or instrument to which that Person is a party or by which it or any of its
properties is bound, or to which it or any of its properties is subject.

“Control Account Agreement” means, with respect to a Securities Account or a
Deposit Account, an agreement, in form and substance reasonably satisfactory to
the Collateral Agent, which effectively gives “control” (as defined in the UCC)
to the Collateral Agent in such Securities Account and all investment property
contained therein or Deposit Account and all funds contained therein, as the
case may be.

“Controlled Group” means all members of a controlled group of corporations and
all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414 of the Code or Section 4001 of
ERISA.

“Default” means an event which, with the giving of notice or the lapse of time,
or both, would constitute an Event of Default.

“Deposit Account” means a “deposit account” as that term is defined in the UCC.

“Disbursement Account” means the account identified on Schedule 1.01(A).

“Disposition” means any transaction, or series of related transactions, pursuant
to which a Loan Party sells, assigns, transfers or otherwise disposes of any
property or assets (whether now owned or hereafter acquired) to any other
Person, in each case whether or not the consideration therefor consists of cash,
securities or other assets owned by the acquiring Person.

“Dollar”, “Dollars” and the symbol “$” mean lawful money of the United States of
America.

 

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“Eligible Assignee” means (i) any Affiliate of Farallon, (ii) any Lender,
(iii) any other Institutional Investor other than a Non-U.S. Person and (iv) any
other Person approved by the Borrowers, which approval shall not be unreasonably
withheld or delayed.

“Environmental Laws” means all present or future federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case relating to Environmental Matters.

“Environmental Lien” means a Lien in favor of any Governmental Authority for any
(i) liabilities under any Environmental Laws or (ii) damages arising from, or
costs incurred by such Governmental Authority in response to, a Release or
threatened Release of a Hazardous Material.

“Environmental Matters” means any matter arising out of or relating to health
and safety, or pollution or protection of the environment, including any of the
foregoing relating to the presence, use, production, generation, handling,
transport, treatment, storage, disposal, distribution, discharge, release,
control or cleanup of any Hazardous Material.

“Equity Interests” means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including, without
limitation, any securities convertible into or exchangeable for such corporate
stock or any warrants, options or other rights for the purchase or acquisition
of any such corporate stock, and (ii) with respect to any Person that is not a
corporation, any and all partnership or other equity interests of such Person,
including, without limitation, any securities convertible into or exchangeable
for such partnership or equity interests or any warrants, options or other
rights for the purchase or acquisition of any of such partnership or other
equity interests.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Event of Default” means any of the occurrences set forth in Section 10.01 after
the expiration of any applicable grace or cure period and the giving of any
applicable notice, in each case as expressly provided in Section 10.01.

“Existing Defaults” means those defaults and events of default occurring prior
to the date hereof and described on Schedule 1.01(B) attached hereto.

“Existing Liens” means those liens described on Schedule 9.03.

“Farallon” means Farallon Capital Management, L.L.C.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any Governmental Authority succeeding to its functions.

“Fiscal Year” means the fiscal year of Holdings and its Subsidiaries, which
period shall be the 52 week period ending on December 31 of each year.

 

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“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

“Governing Documents” means, (a) with respect to any corporation, (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation, (ii) the by-laws (or the equivalent governing
documents) of the corporation and (iii) any document setting forth the
designation, amount and/or relative rights, limitations and preferences of any
class or series of such entity’s Equity Interests; and (b) with respect to any
general partnership, (i) the partnership agreement (or the equivalent
organizational documents) of such partnership and (ii) any document setting
forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; and (c) with respect to any
limited partnership, (i) the partnership agreement (or the equivalent
organizational documents) of such partnership, (ii) a certificate of limited
partnership (or the equivalent organizational documents) and (iii) any document
setting forth the designation, amount and/or relative rights, limitations and
preferences of any of the partnership interests; and (d) with respect to any
limited liability company, (i) the certificate of limited liability (or
equivalent filings) of such limited liability company, (ii) the operating
agreement (or the equivalent organizational documents) of such limited liability
company, and (iii) any document setting forth the designation, amount and/or
relative rights, limitations and preferences of any of such company’s membership
interests.

“Governmental Authority” means any nation or government, any federal, state,
local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

“Governmental Entity” means any national, federal, state, provincial, local or
other government or any court of competent jurisdiction, legislature,
governmental agency, administrative agency or commission or other governmental
authority or instrumentality, having jurisdiction for the United States, any of
its states or political subdivisions thereof, or any other country or any
political subdivisions thereof.

“Guaranties” means the Guaranties dated as of the date hereof made by certain
Loan Parties in favor of the Administrative Agent and the Lenders, as such
guaranties may be amended, supplemented or otherwise modified from time to time.

“Hazardous Material” means (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws; (b) petroleum and its refined products; (c) polychlorinated biphenyls;
(d) any substance exhibiting a hazardous waste characteristic, including but not
limited to, corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any raw materials, building
components, and manufactured products containing hazardous substances, including
but not limited to asbestos-containing materials.

 

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“Hedging Agreement” means any and all transactions, agreements, or documents now
existing or hereafter entered into by a Loan Party which provide for an interest
rate, credit, commodity or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging the Borrower’s exposure to fluctuations in interest
or exchange rates, loan, credit exchange, security or currency valuations or
commodity prices.

“Hedging Obligation” means, with respect to any Person, any liability of such
Person under any Hedging Agreement.

“Holdings” means Accredited Home Lenders Holding Co, a Delaware corporation.

“Indebtedness” means, as applied to any Person at any time, without duplication
(a) all indebtedness, obligations or other liabilities of such Person (i) for
borrowed money or evidenced by debt securities, debentures, acceptances, notes
or other similar instruments, and any accrued interest, fees and charges
relating thereto, (ii) under profit payment agreements or in respect of
obligations to redeem, repurchase or exchange any Securities of such Person or
to pay dividends in respect of any stock, (iii) with respect to letters of
credit issued and banker’s acceptances issued for such Person’s account, (iv) to
pay the deferred purchase price of property or services, except accounts
payable, accrued expenses and deferred revenue arising in the ordinary course of
business, (v) in respect of Capital Leases which have been or should be recorded
as liabilities on a balance sheet of such Person in accordance with GAAP;
(vi) which are Accommodation Obligations or (vii) which are Hedging Obligations
of such Person; (b) all indebtedness, obligations or other liabilities of such
Person or others secured by a Lien on any property of such Person, whether or
not such indebtedness, obligations or liabilities are assumed by such Person,
all as of such time; (c) all preferred stock subject (upon the occurrence of any
contingency or otherwise) to mandatory redemption prior to the Maturity Date;
(d) all indebtedness of any partnership of which such Person is a general
partner; and (e) all contingent Contractual Obligations with respect to any of
the foregoing.

“Indemnified Matters” has the meaning ascribed to such term in Section 13.03.

“Indemnitees” has the meaning ascribed to such term in Section 13.03.

“Institutional Investor” means any commercial, investment or merchant bank,
insurance company, finance company, mutual fund, registered money or asset
manager, savings and loan association, credit union, registered investment
advisor, pension fund, investment company, licensed broker or dealer, “qualified
institutional buyer” (as such term is defined under Rule 144A promulgated under
the Securities Act, or any successor law, rule or regulation).

“Intellectual Property” means all (i) patents and patent applications,
(ii) copyrights and registrations thereof, (iii) mask works and registrations
and applications for registration thereof, (iv) computer software, data and
documentation, (v) trade secrets and

 

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confidential business information, whether patentable or unpatentable and
whether or not reduced to practice, know-how, inventions, manufacturing and
production processes and techniques, research and development information,
copyrightable works, financial, marketing and business data, pricing and cost
information, business, finance and marketing plans, customer and prospective
customer lists and information, and supplier and prospective supplier lists and
information, (vi) trademarks, service marks, trade names, domain names and
applications and registrations therefor and (vii) other proprietary rights
relating to any of the foregoing.

“Intercreditor Agreement” means the Intercreditor Agreement dated as of March
30, 2007 among the Administrative Agent, the Collateral Agent, the Lenders,
JPMorgan Chase Bank, National Association, as Senior Agent, and the Senior
Secured Creditors referred to therein, as such agreement may be amended,
supplemented and restated from time to time.

“Interest Payment Date” means June 1, September 1, December 1 and March 1 of
each year, commencing with June 1, 2007.

“Investment” means, with respect to any Person, (i) any purchase or other
acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person, (ii) any purchase by that Person of all
or substantially all of the assets of a business conducted by another Person,
and (iii) any direct or indirect loan, advance (other than prepaid expenses,
accounts receivable, advances to employees and similar items made or incurred in
the ordinary course of business) or capital contribution by that Person to any
other Person, including all Indebtedness to such Person arising from a sale of
any Property by such Person other than in the ordinary course of its business.
The amount of any Investment shall be the original cost of such Investment, plus
the cost of all additions thereto less the amount of any return of capital or
principal to the extent such return is in cash (or by actual permanent reduction
of any Indebtedness to such Person) with respect to such Investment without any
adjustments for increases or decreases in value or write-ups, write-downs or
write-offs with respect to such Investment.

“Investor Rights Agreement” means that certain Investor Rights Agreement entered
into on the date hereof by and among Holdings and the investors referred to
therein.

“JPMorgan” means JPMorgan Chase Bank, National Association.

“JPMorgan Facility” means the 9/06 Senior Secured Credit Agreement, dated as of
September 29, 2006 among JPMorgan, as a lender and as administration agent and
representative for all of the Lenders party thereto, and Accredited Home
Lenders, Inc., a California corporation.

“Key Persons” means James A. Konrath, Joseph J. Lydon, Stuart D. Marvin and
Jeffrey W. Crawford.

“Lender” and “Lenders” have the respective meanings ascribed to such term in the
preamble to this Agreement, and shall include any other Person made a party to
this Agreement as a “Lender” in accordance with the provisions hereof.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
conditional sale agreement, deposit arrangement, security interest, encumbrance,
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever in respect of any
Property of a Person, whether granted voluntarily or

 

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imposed by law, and includes the interest of a lessor under a Capital Lease or
under any financing lease having substantially the same economic effect as any
of the foregoing and the filing of any financing statement or similar notice
(other than a financing statement filed by a “true” lessor pursuant to § 9-505
of the Uniform Commercial Code), naming the owner of such property as debtor,
under the Uniform Commercial Code or other comparable law of any jurisdiction.

“Liquidity” means, as of any date of determination, an amount equal to the sum
of (i) the Available Borrowing Capacity on such date, plus (ii) the cash and
Cash Equivalents on deposit in accounts of Holdings or any of its consolidated
Subsidiaries on such date, plus (iii) cash on deposit in the Cash Collateral
Accounts on such date.

“List of Closing Documents” means the List of Closing Documents attached hereto
and made a part hereof as Exhibit F.

“Loan Account” means an account maintained hereunder by Administrative Agent on
its books of account, at Administrative Agent’s office and with respect to the
Borrowers, in which the Borrowers will be charged with all Loans made to, and
all other Obligations incurred by, the Borrowers.

“Loan Documents” means this Agreement, the Notes, the Guaranties, the Collateral
Documents, the Warrants, the Investors Rights Agreement, any Hedging Agreement
and all other instruments, agreements and written Contractual Obligations among
any Loan Party and the Collateral Agent, the Administrative Agent and/or the
Lenders delivered to the Agents pursuant to or in connection with the
transactions contemplated hereby.

“Loan Parties” means Holdings, each Borrower and each direct and indirect
Subsidiary of Holdings.

“Loans” means, collectively, the Term A Loans, the Term B Loans and the Term C
Loans.

“Margin Stock” means “margin stock” as such term is defined in Regulation U.

“Material Adverse Effect” means a material adverse change in, or a material
adverse effect upon, (i) the condition (financial or otherwise), operations,
assets, properties, business, financial performance or prospects of Holdings and
its Subsidiaries, taken as a whole, (ii) the ability of any Loan Party to
perform any of its obligations under any Loan Document to which it is a party,
(iii) the legality, validity or enforceability of this Agreement or any other
Loan Document, (iv) the rights and remedies of the Collateral Agent or the
Lenders under any Loan Document, or (v) the validity, perfection or priority of
a Lien in favor of the Collateral Agent or Lenders on any material portion of
the Collateral; provided, however, that no “Material Adverse Effect” shall be
deemed to have occurred to the extent that any such material adverse change in,
or material adverse effect upon, the condition (financial or otherwise),
operations, assets, properties, business, financial performance or prospects of
Holdings and its Subsidiaries is specifically disclosed on Schedule 5.01(f).

“Maturity Date” means March 30, 2012.

 

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“Multiemployer Pension Plan” means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any member of the
Controlled Group may have any liability.

“Net Cash Proceeds” means, (i) with respect to any Disposition by any Person,
the amount of cash received (directly or indirectly) from time to time (whether
as initial consideration or through the payment of deferred consideration) by or
on behalf of such Person or any of its Subsidiaries or Affiliates, in connection
therewith after deducting therefrom, only (A) the reasonable expenses related
thereto reasonably incurred by such Person in connection therewith, (B) transfer
taxes paid by such Person in connection therewith and (C) the principal amount
of, and any accrued and unpaid interest on, any Indebtedness (and any costs and
expenses related thereto) secured by any Lien on any asset that is the subject
of the Disposition (other than Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection with such
Disposition, and (ii) with respect to the issuance or incurrence of any
Indebtedness by any Person, or the sale or issuance by any Person of any shares
or units of its Equity Interest, the aggregate amount of cash received (directly
or indirectly) from time to time (whether as initial consideration or through
the payment of deferred consideration) by or on behalf of such Person or any of
its Subsidiaries or Affiliates in connection therewith after deducting therefrom
only reasonable brokerage commissions, underwriting fees and discounts, legal
fees and other reasonable customary fees and expenses and commissions.

“Net Worth” means, with respect to any Person, an amount equal to, on a
consolidated basis, such Person’s stockholder equity (determined in accordance
with GAAP).

“Non-U.S. Lender” has the meaning ascribed to such term in Section 3.02(d).

“Non-U.S. Person” means any Person that is not a “United States person” as
defined in Section 7701(a)(30) of the Code.

“Note” has the meaning ascribed to such term in Section 2.03(b).

“Notice of Borrowing” means a notice substantially in the form of Exhibit C
attached hereto and made a part hereof.

“Obligations” means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by any Loan Party to the Administrative Agent, the
Collateral Agent, any Lender, any Affiliate of such Lender, or any Person
entitled to indemnification pursuant to Section 13.03 of this Agreement, of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification,
Hedging Obligations, foreign exchange contract or in any other manner, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired arising under or in connection with the transactions contemplated
hereby. The term includes, without limitation, all interest (including any
interest that, but for the provisions of the Bankruptcy Code, would have
accrued), charges, expenses, fees, attorneys’ fees and disbursements and any
other sum chargeable to the Loan Parties under this Agreement, the Notes or any
other Loan Document.

 

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“Other Taxes” has the meaning ascribed to such term in Section 3.02(b).

“Ownership Limitation Exemption” means a validly adopted resolution of the Board
of Trustees of the REIT, certified by the REIT’s Secretary, pursuant to which
said Board of Trustees expressly grants to the Agents and Mortgage Investments
Funding, L.L.C., under Section 1(F) of Article VIII of the Declaration of Trust,
an exemption from the Ownership Limitation contained in Section 1(A) of that
Article.

“Pension Plan” means a “pension plan”, as such term is defined in Section 3(2)
of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Borrower or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.

“Permits” means any permit, approval, authorization, license, variance, or
permission required from a Governmental Authority under an applicable
Requirement of Law.

“Permitted Liens” means the Liens permitted under Section 9.03.

“Person” means any natural person, corporation, limited partnership, general
partnership, joint stock company, joint venture, association, company, trust,
bank, trust company, land trust, business trust, limited liability company or
other organization, whether or not a legal entity, and any Governmental
Authority.

“Plan” means an employee benefit plan defined in Section 3(3) of ERISA (other
than a Multiemployer Plan) in respect of which the Borrower or any ERISA
Affiliate is, or within the immediately preceding six (6) years was, an
“employer” as defined in Section 3(5) of ERISA.

“Pledge Agreements” means the Pledge Agreements dated as of the date hereof made
by certain Loan Parties in favor of the Collateral Agent, as such pledge
agreements may be amended, supplemented or otherwise modified from time to time.

“Preferred Shares” means the Series A Preferred Stock issued by the REIT.

“Prepayment Fee” has the meaning ascribed to such term in Section 4.02(b).

“Pro Rata Share” means, with respect to any Lender, the percentage obtained by
dividing (i) the outstanding principal amount of such Lender’s Loans, by
(ii) the aggregate principal amount of all Lenders’ Loans.

“Property” means any and all interests in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.

“Qualified Securitization Transaction” means any transaction or series of
transactions that have been or may be entered into by any Loan Party in
connection with or reasonably related to a transaction or series of transactions
in which Holdings or any of its Subsidiaries may sell, convey or otherwise
transfer to another Loan Party, or may grant a security interest in, any
mortgage loans and related assets of such Loan Party.

 

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“Register” has the meaning ascribed to such term in Section 13.01(c).

“Regulation T” means Regulation T of the Federal Reserve Board.

“Regulation U” means Regulation U of the Federal Reserve Board.

“Regulation X” means Regulation X of the Federal Reserve Board.

“REIT” has the meaning ascribed to such term in the preamble hereto.

“REIT Cash Collateral Account” has the meaning ascribed to such term in
Section 11.01(a).

“REIT Opinion” means a legal opinion from counsel to the REIT to the Board of
Trustees of the REIT, in form and substance acceptable to the Administrative
Agent, opining that neither (i) the Pledge of the Common Shares of the REIT to
the Collateral Agent or foreclosure thereupon nor (ii) the grant of the Warrants
to the Lenders or exercise thereof nor (iii) the ownership by the Agents of the
Shares of the REIT subject to the Pledge and/or to the Warrants, will violate
Sections 1(A)(3) and 1(A)(4) of Article VIII of the REIT Declaration of Trust or
cause the REIT to otherwise lose its status as a real estate investment trust
under the Internal Revenue Code of 1986, as amended.

“REIT Replacement Repo Facility” means a repurchase facility with respect to the
Residuals, on terms and conditions reasonably satisfactory to the Administrative
Agent.

“REIT Repo Facility” means that certain Master Repurchase Agreement, dated as of
December 29, 2006, among Bear Stearns International Limited and REIT, as amended
from time to time.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, seeping, migrating, dumping or
disposing of any Hazardous Material (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Material) into the indoor or outdoor environment, including ambient air, soil,
surface or ground water.

“Remedial Action” means all actions taken to (i) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address Hazardous
Materials in the indoor or outdoor environment; (ii) prevent or minimize a
Release or threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; (iii) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (iv) any other actions
authorized by 42 U.S.C. § 9601.

“Required Lenders” means, at any time, Lenders whose Pro Rata Shares aggregate
more than 50%.

 

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“Requirements of Law” means, as to any Person, the charter and by-laws or other
organizational or governing documents of such Person, and any law, 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 including,
without limitation, the Securities Act, the Securities Exchange Act, Regulations
T, U and X, ERISA, the Fair Labor Standards Act and any certificate of
occupancy, zoning ordinance, building, environmental or land use requirement or
Permit or environmental, labor, employment, occupational safety or health law,
rule or regulation.

“Residuals” means all the residual cash flows in the REIT.

“Residual Value” means the value of the Residuals calculated as set forth in a
discounted cash flow model using a 15% discount rate and good faith assumptions
set forth in Schedule 1.01(C) attached hereto.

“Restricted Payments” means, with respect to any Person, (i) any dividend or
other distribution, direct or indirect, on account of any shares of any class of
capital stock of, partnership interest of or other Equity Interest of, such
Person, now or hereafter outstanding, except a dividend payable solely in shares
of that class of stock or in any junior class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of, partnership interest of or other equity interest
of, such Person now or hereafter outstanding, (iii) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to, any
subordinated indebtedness, and (iv) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of capital stock of,
partnership interest of or other Equity Interest of, such Person now or
hereafter outstanding.

“Section 856 Trust” has the meaning ascribed to such term in Section 6.01(cc).

“Securities” means any stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or any certificates of interest, shares,
or participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the Obligations.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

“Securities Account” means a “securities account” as that term is defined in the
UCC.

 

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“Security Agreements” means the Security Agreements dated as of the date hereof
made by the Borrowers and certain Loan Parties in favor of the Collateral Agent,
as such security agreements may be amended, supplemented or otherwise modified
from time to time.

“SFAS91” means Financial Accounting Standards Board (FASB) Statement No. 91,
Accounting for Nonrefundable Fees and Costs Associated with Originating or
Acquiring Loans and Initial Direct Costs of Leases.

“Solvent”, when used with respect to any Person, means that at the time of
determination:

(a) the fair market value of its assets is in excess of the total amount of its
liabilities (including, without limitation, contingent liabilities); and

(b) the present fair saleable value of its assets is greater than its probable
liability on its existing debts as such debts become absolute and matured; and

(c) it is then able and expects to be able to pay its debts (including, without
limitation, contingent debts and other commitments) as they mature; and

(d) it has capital sufficient to carry on its business as conducted and as
proposed to be conducted.

“Structured Securities Debt” means any Indebtedness incurred by an Acceptable
SPV, provided that (i) such Indebtedness is non-recourse to any shareholders or
equity owner of such Acceptable SPV, (ii) such Indebtedness is publicly or
privately issued Indebtedness of the Acceptable SPV and (iii) such Indebtedness
is rated by at least one rating agency.

“Subordinated Debt” means, Indebtedness of any Person which is (i) unsecured,
(ii) no part of the principal of such Indebtedness is required to be paid
(whether by way of mandatory sinking fund, mandatory redemption, mandatory
prepayment or otherwise) prior to the Maturity Date and (iii) the payment of the
principal of and interest on such Indebtedness and other obligations of such
Person in respect of such Indebtedness are subordinated to the prior payment in
full of the Obligations on terms and conditions approved in writing by the
Administrative Agent and all other terms and conditions of which are
satisfactory in form and substance to the Administrative Agent.

“Subsidiary” means, with respect to any Person at any date, any corporation,
limited or general partnership, limited liability company, trust, association or
other entity (i) the accounts of which would be consolidated with those of such
Person in such Person’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP or (ii) of which more than 50%
of (A) the outstanding Equity Interests having (in the absence of contingencies)
ordinary voting power to elect a majority of the board of directors of such
corporation, (B) the interest in the capital or profits of such partnership or
limited liability company or (C) the beneficial interest in such trust or estate
is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such Person.

 

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“Tax Return” means any report, return or other information filed with any taxing
authority with respect to Taxes imposed upon or attributable to the operations
of the Business.

“Taxes” has the meaning ascribed to such term in Section 3.02(a).

“Term A Loans” has the meaning ascribed to such term in Section 2.01(a).

“Term A Loan Commitment” means, with respect to a Lender, the obligation of such
Lender to make Term A Loans pursuant to the terms and conditions of this
Agreement, and which shall not exceed the principal amount set forth opposite
such Lender’s name on the signature pages hereof; “Term A Loan Commitments”
means the aggregate principal amount of the Term A Loan Commitments of all the
Lenders, which amount shall not exceed $70,000,000.

“Term B Loans” has the meaning ascribed to such term in Section 2.01(a).

“Term B Loan Commitment” means, with respect to a Lender, the obligation of such
Lender to make Term B Loans pursuant to the terms and conditions of this
Agreement, and which shall not exceed the principal amount set forth opposite
such Lender’s name on the signature pages hereof; “Term B Loan Commitments”
means the aggregate principal amount of the Term B Loan Commitments of all the
Lenders, which amount shall not exceed $130,000,000.

“Term C Loans” has the meaning ascribed to such term in Section 2.01(a).

“Term C Loan Commitment” means, with respect to a Lender, the obligation of such
Lender to make Term C Loans pursuant to the terms and conditions of this
Agreement, and which shall not exceed the principal amount set forth opposite
such Lender’s name on the signature pages hereof; “Term C Loan Commitments”
means the aggregate principal amount of the Term C Loan Commitments of all the
Lenders, which amount shall not exceed $30,000,000.

“Third Party” means a Person who or which is neither a party nor an Affiliate of
a party.

“UCC Financing Statement” has the meaning assigned to such term in the Uniform
Commercial Code.

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as enacted
in the State of New York, as it may be amended from time to time.

“United States” means the fifty (50) states of the United States of America and
the District of Columbia.

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

“Warrants” means the Warrants to purchase 3,226,431 shares of Common Stock from
Holdings substantially in the form of Exhibit E attached hereto and made a part
hereof.

 

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1.02. Computation of Time Periods. In this Agreement, in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding”. Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed. Any period
determined hereunder by reference to a month or months or year or years shall
end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.

1.03. Accounting Terms. For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP.

1.04. Other Terms. Terms not otherwise defined herein which are defined in, or
used in, Article 9 of the Uniform Commercial Code shall have the respective
meanings assigned to such terms in Article 9 of the Uniform Commercial Code.

ARTICLE II

AMOUNTS AND TERMS OF LOANS

2.01. Loan Facility.

(a) Loans. Subject to the terms and conditions set forth in this Agreement, each
Lender severally agrees to make (i) a term loan to the REIT (each individually,
a “Term A Loan” and, collectively, the “Term A Loans”) on the Closing Date in an
amount not to exceed at any time such Lender’s Term A Loan Commitment, (ii) a
term loan to AHL (each individually, a “Term B Loan” and, collectively, the
“Term B Loans”) on the Closing Date in an amount not to exceed at any time such
Lender’s Term B Loan Commitment and (iii) a term loan to REIT (each
individually, a “Term C Loan” and, collectively, the “Term C Loans”) on the
Closing Date in an amount not to exceed at any time such Lender’s Term C Loan
Commitment.

(b) Notice of Borrowing. When the Borrowers desire to borrow under this
Section 2.01, the Borrowers shall deliver to the Administrative Agent a Notice
of Borrowing, signed by it, no later than 11:00 a.m. (New York time) at least
two (2) Business Days in advance of the proposed Closing Date. Such Notice of
Borrowing shall specify the proposed Closing Date (which shall be a Business
Day). In lieu of delivering such a Notice of Borrowing, the Borrowers may give
the Administrative Agent a telephonic notice of any proposed borrowing by the
time required under this Section 2.01(b) if it confirms such notice by delivery
of the Notice of Borrowing to the Administrative Agent promptly, but in no event
later than 5:00 p.m. (New York time) on the same day. Any Notice of Borrowing
(or telephonic notice in lieu thereof) given pursuant to this Section 2.01(b)
shall be irrevocable and binding on the Borrowers.

 

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(c) Making the Loans. (i) Each Lender shall deposit an amount equal to its
Commitment with the Administrative Agent in the Administrative Agent Account in
immediately available funds, not later than 12:00 p.m. (New York City time) on
the Closing Date. Subject to the satisfaction of the conditions precedent set
forth in Article V, the Administrative Agent shall make the proceeds of such
amounts received by it available to the Borrowers not later than 3:00 p.m. (New
York time) at the Administrative Agent’s office in San Francisco, California on
the Closing Date and shall disburse such proceeds in an amount equal to
$100,000,000 to the REIT in accordance with the written directions of the REIT
and $130,000,000 to AHL in accordance with the written directions of AHL.

(ii) All Loans under this Agreement shall be made by the Lenders simultaneously
and proportionately to their Pro Rata Shares of the Commitments. The failure of
any Lender to deposit the amount described in clause (i) above with the
Administrative Agent on the Closing Date shall not relieve any other Lender of
its obligations hereunder to make its Loan on the Closing Date. No Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make a Loan hereunder nor shall the Commitment of any Lender be increased or
decreased as a result of any such failure, and each Lender shall be obligated to
make the Loans required to be made by it by the terms of this Agreement
regardless of the failure by any other Lender.

2.02. Repayment of Loans. The principal amount of the Loans shall be payable in
full in Dollars on the Maturity Date.

2.03. Evidence of Debt; Register; Lenders’ Books and Records; Notes.

(a) Lenders’ Evidence of Debt. Each Lender shall maintain on its internal
records an account or accounts evidencing the Obligations of the Borrowers to
such Lender, including the amounts of the Loans made by it and each repayment
and prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Borrowers, absent manifest error; provided, that the failure to make
any such recordation, or any error in such recordation, shall not affect the
Borrowers’ Obligations in respect of any applicable Loans; and provided further,
in the event of any inconsistency between the Register and any Lender’s records,
the recordations in the Register shall govern.

(b) Notes. If so requested by any Lender by written notice to the Borrowers
(with a copy to the Administrative Agent) at least two Business Days prior to
the Closing Date, or at any time thereafter, the applicable Borrower shall
execute and deliver to such Lender (and/or, if applicable and if so specified in
such notice, to any Person who is an assignee of such Lender pursuant to
Section 13.01) on the Closing Date (or, if such notice is delivered after the
Closing Date, promptly after such Borrower’s receipt of such notice) one or more
promissory notes, each substantially in the form of Exhibit B attached hereto
and made a part hereof (all such promissory notes and all amendments thereto,
replacements thereof and substitutions therefor being collectively referred to
as the “Notes”; and “Note” means any one of the Notes), in such denominations
requested by such Lender to evidence such Lender’s Loan to such Borrower.

 

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2.04. Use of Proceeds of Loan. The proceeds of the Term A Loans and Term B Loans
shall be used (i) to fund repurchase obligations (including, for the avoidance
of doubt, early payment default claims) of the Borrowers, (ii) to satisfy margin
calls from warehouse lenders, (iii) to fund loan originations, (iv) pay all
transaction costs, expenses and fees incurred in connection with the Loan
Documents, (v) to repay a portion of the outstanding amount under the REIT Repo
Facility, and (vi) for general working capital and business purposes of
Borrowers. The proceeds of the Term C Loans shall be used to repay the
outstanding amount under the REIT Repo Facility.

2.05. Authorized Officers, Employees and Administrative Agent. On the date
hereof and from time to time thereafter, the Borrowers shall deliver to the
Administrative Agent a certificate setting forth the names of the officers,
employees and agents of the Borrower who are authorized to request Loans on
behalf of the Borrowers, and containing a specimen signature of each such
officer, employee or agent. The officers, employees and agents so authorized
shall also be authorized to act for the Borrowers in respect of all other
matters relating to the Loan Documents. The Administrative Agent shall be
entitled to rely conclusively on each such officer’s, employee’s or agent’s
authority to request the Loans and to act for the Borrowers until the
Administrative Agent receives written notice to the contrary. In addition, the
Administrative Agent shall be entitled to rely conclusively on any written
notice purportedly sent to it by telecopy by any Borrower that it believes in
good faith to have been sent by such Borrower. The Administrative Agent shall
have no duty to verify the authenticity of the signature appearing on, or any
telecopy or facsimile of, any written Notice of Borrowing or any other document,
and, with respect to an oral request for such a Loan, the Administrative Agent
shall have no duty to verify the identity of any person representing himself or
herself as one of the officers, employees or agents authorized to make such
request or otherwise to act on behalf of the Borrowers. The Administrative Agent
and the Lenders shall not incur any liability to any Borrower or any other
Person in acting upon any facsimile or telephonic notice referred to above which
the Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of such
Borrower.

2.06. Manner and Time of Payment. (a) Payments. All payments of principal of and
interest on the Loans and other Obligations (including, without limitation, fees
and expenses) which are payable to the Administrative Agent or the Lenders shall
be made without set-off, counterclaim, deduction or other defense, condition or
reservation of right, in immediately available funds, deposited to the
Administrative Agent Account not later than 11:00 a.m. (New York time) on the
date due. Thereafter, payments received by the Administrative Agent shall be
distributed to each Lender in accordance with its Pro Rata Share in accordance
with the provisions of Section 2.06(c) on the date received, if received prior
to 11:00 a.m., and on the next succeeding Business Day if received thereafter,
by the Administrative Agent.

(b) Except as provided in Section 2.01 hereof, if any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of any Obligation in excess of its ratable
share of payments on account of similar obligations obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such participations
in such similar obligations held by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from

 

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such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender’s ratable
share (according to the proportion of (i) the amount of such Lender’s required
repayment to (ii) the total amount so recovered from the purchasing Lender of
any interest or other amount paid by the purchasing Lender in respect of the
total amount so recovered). Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.06 may, to the
fullest extent permitted by law, exercise all of its rights (including the
Lender’s right of set-off) with respect to such participation as fully as if
such Lender were the direct creditor of such Borrower in the amount of such
participation.

(c) Apportionment of Payments. (i) Subject to the provisions of
Section 2.06(c)(ii), all payments of principal and interest in respect of
outstanding Loans and all payments of fees (other than as set forth in
Section 4.01) and all other payments in respect of any other Obligation shall be
allocated among the Lenders, in proportion to their respective Pro Rata Shares
or otherwise as provided herein or, in respect of payments not made on account
of Loans, as designated by the Person making payment at the time when such
payment is made. All such payments and any other proceeds of Collateral or other
amounts received by the Administrative Agent from or on behalf of the Borrower
shall be promptly applied to pay all Obligations of the Borrower then due and
payable.

(ii) After the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and shall upon the acceleration of the Obligations
pursuant to Section 10.01, apply all payments in respect of any Obligations and
all proceeds of Collateral to the Obligations in the following order:

(A) first, to pay Obligations in respect of any expense reimbursements,
indemnities or other liabilities then due to the Administrative Agent or the
Collateral Agent;

(B) second, to pay Obligations in respect of any fees then due to the Agents and
the Lenders;

(C) third, to pay interest due in respect of the Loans;

(D) fourth, to pay the principal outstanding on the Loans; and

(E) fifth, to the ratable payment of all other Obligations;

provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the Obligations described in any of the foregoing
clauses (A) through (E), the available funds being applied with respect to any
such Obligations referred to in any one of such clauses shall be allocated to
the payment of such Obligations in such clause ratably, based on the proportion
of each Agent’s and each Lender’s interest in the aggregate outstanding
Obligations described in such clauses.

 

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(d) Payments on Non-Business Days. Whenever any payment to be made by the
Borrower hereunder or under the Note is stated to be due on a day which is not a
Business Day, the payment shall instead be due on the next succeeding Business
Day, and any such extension of time shall be included in the computation of the
payment of interest and fees hereunder.

2.07. Change of Control. Upon a Change of Control Event, the Lenders shall have
the option (the “Change of Control Option”) to demand that the Borrowers pay any
or all of the Loans. The Lenders may exercise such Change of Control Option at
any time during the Change of Control Option Period by giving notice to the
Borrowers that the Lenders are demanding that the Borrower repay the Loans. In
the event that the Lenders give notice to the Borrowers that it is exercising
the Change of Control Option with respect to a Change of Control at least
fifteen (15) days prior to the consummation of the transaction causing such
Change of Control, the Borrowers shall pay the Loans specified in such notice,
together with the Change of Control Premium and all accrued and unpaid interest,
on the date such Change of Control is consummated. In the event that the Lenders
give notice to the Borrowers that it is exercising the Change of Control Option
with respect to a Change of Control after the fifteenth day prior to the
consummation of the transaction causing such Change of Control, the Borrowers
shall pay the Loans specified in such notice, together with the Change of
Control Premium and all accrued and unpaid interest, on the thirtieth Business
Day following written demand for such payment.

ARTICLE III

PAYMENTS AND PREPAYMENTS

3.01. Prepayments of Loans. The Borrowers may prepay the Loans in whole upon at
least five (5) Business Days’ prior written notice to the Administrative Agent
provided that the Prepayment Fee, if any, is paid. Any notice of prepayment
given to the Administrative Agent under this Section 3.01(a) shall specify
(i) the date of prepayment, (ii) the aggregate principal amount of the
prepayment, and (iii) the amount of the Prepayment Fee as calculated in
accordance with Section 4.02(a). When notice of prepayment is delivered as
provided herein, the principal amount of all Loans and the Prepayment Fee shall,
if applicable, become due and payable on the prepayment date specified in such
notice.

3.02. Taxes. (a) Payments Free and Clear of Taxes. Any and all payments by the
Borrowers hereunder, under the Notes or under any other Loan Document shall be
made free and clear of and without deduction or withholding for any and all
present or future taxes, levies, imposts, duties, fees, deductions, charges or
withholdings, and all interest, penalties, additions to tax and liabilities with
respect thereto, excluding, in the case of each Agent and each Lender, taxes
imposed on its net income, capital, profits or gains and franchise taxes imposed
on it, in each case by (i) the United States, (ii) the Governmental Authority of
the jurisdiction in which the Administrative Agent’s office is located or
(iii) the Governmental Authority in which such Person is organized, managed,
controlled or doing business, in each case including all political subdivisions
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities, being hereinafter referred to as “Taxes”). If the
Borrowers shall be required by law to withhold or deduct any Taxes from or in
respect of any sum payable hereunder, under the Notes or under any other Loan
Document to any Lender, (t) such sum payable shall be increased as may be
necessary so that after making all required withholdings or deductions
(including withholdings or deductions applicable to additional sums payable
under

 

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this Section 3.02) such Lender receives an amount equal to the sum it would have
received had no such withholdings or deductions been made, (u) the Borrowers
shall make such withholdings or deductions, and (v) the Borrowers shall pay the
full amount withheld or deducted to the relevant taxation authority or other
authority in accordance with applicable law.

(b) Other Taxes. In addition, the Borrowers agree to pay any present or future
stamp, value-added or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from and which relate directly to (i) any
payment made under any Loan Document or (ii) the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Notes or any
other Loan Document (hereinafter referred to as “Other Taxes”).

(c) Indemnification. The Borrowers will indemnify each Lender and each Agent
against, and reimburse each on demand for, the full amount of all Taxes and
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any Governmental Authority on amounts payable under this Section 3.02 and any
additional income or franchise taxes resulting therefrom) incurred or paid by
such Lender or such Agent (as the case may be) or any Affiliate of such Lender
or Agent and any liability (including penalties, interest, and reasonable
out-of-pocket expenses paid to third parties) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
any amount payable to any Person under this Section 3.02 submitted by such
Person to the Borrowers shall, absent manifest error, be final, conclusive and
binding upon all parties hereto. This indemnification shall be made within
thirty (30) days from the date such Person makes written demand therefor and
within thirty (30) days after the receipt of any refund of the Taxes or Other
Taxes following final determination that the Taxes or Other Taxes which gave
rise to the indemnification were not required to be paid, such Person shall
repay to such Borrower the amount of such indemnity paid by such Borrower, net
of all out-of-pocket expenses of Agent or such Lender, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that Borrower, upon the request
of Agent or such Lender, agrees to repay the amount paid over to Borrower (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) to Agent or such Lender in the event Agent or such Lender is required
to repay such refund to such Governmental Authority. This Section 3.02(c) shall
not be construed to require Agent or any Lender to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to Borrower or any other Person.

(d) Withholding Exemptions.

(i) Each Borrower hereby acknowledges and agrees that the Obligations pursuant
to the Loans constitute registered obligations for United States withholding tax
purposes. Each Lender that is a Non-U.S. Person (each, a “Non-U.S. Lender”)
agrees that it will, not more than ten Business Days after the date such
Non-U.S. Lender becomes a party to this Agreement (or designates a new lending
office) deliver to Borrower and Agent two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8IMY (in each case claiming
eligibility of the Non-U.S. Lender for benefits of an income tax treaty to which
the United States is a party), or United States Internal Revenue Service Form
W-8ECI, or any subsequent versions thereof or successors thereto; or in the case
of a Non-U.S. Lender claiming

 

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exemption from United States federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of portfolio interest, (x) a
certificate of a duly authorized officer of such Non-U.S. Lender to the effect
that such Non-U.S. Lender is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a controlled
foreign corporation receiving interest from a related person within the meaning
of Section 881(c)(3)(C) of the Code (such certificate, an “Exemption
Certificate”) and (y) two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8IMY, or applicable successor form, certifying
as to such Non-U.S. Lender’s foreign status.

(ii) Upon Borrower’s reasonable request and within a reasonable time after such
Borrower’s request, each Lender that is a U.S. Person shall deliver to Borrower
and Agent two copies of United States Internal Revenue Service Form W-9 (or
applicable successor form) to establish that such Lender is entitled to receive
all payments from Borrower hereunder and under any other Loan Document free and
clear from withholding of United States federal income tax.

(iii) Each Lender further undertakes to deliver to each of Borrower and Agent
(x) renewals or additional copies of such form (or any successor form) on or
before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by Borrower or Agent. Borrower hereby agrees that all forms, Exemption
Certificates or amendments described in this Section 3.02(d), if properly
completed and executed, shall evidence that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes or, in the case of a Lender claiming treaty
benefits, a reduced rate of deduction or withholding.

(iv) If a Lender which is otherwise exempt from or subject to a reduced rate of
withholding tax becomes subject to Taxes because of its failure to deliver a
form required pursuant to this Section 3.02(d), Borrower shall take such steps
as such Lender shall reasonably request to assist such Lender to recover such
Taxes.

(v) Any Lender, if requested by Borrower or Agent, shall deliver documentation
prescribed by applicable law or reasonably requested by Borrower or Agent as
will enable Borrower or Agent to determine whether or not such Lender is subject
to backup withholding or information reporting requirements.

(e) Receipts. Within thirty (30) days after the date of any written request by
Administrative Agent of evidence of payment of Taxes or Other Taxes by the
Borrowers, the Borrowers will furnish to the Administrative Agent the original
or a certified copy of a receipt or other documentation reasonably satisfactory
to the Administrative Agent evidencing payment thereof or a certificate of the
Borrowers stating that no Taxes or Other Taxes are due and payable. The
Borrowers will furnish to the Administrative Agent upon the Administrative
Agent’s request from time to time a certificate stating that all Taxes and Other
Taxes of which it is aware that are due have been paid and that no additional
Taxes or Other Taxes of which it is aware are due.

 

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(f) Limitation. Any notice given by any Lender or other Person under this
Section 3.02 shall be effective only if given within six months after such
Lender or other Person becomes aware or should have become aware of the events
giving rise to such notice.

(g) Survival. The obligations of the Borrowers under this Section 3.02 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

3.03. Increased Capital. If after the date hereof any Lender determines that
(i) the adoption or implementation of or any change in or in the interpretation
or administration of any law or regulation or any guideline or request from any
central bank or other Governmental Authority exercising jurisdiction, power or
control over any Lender (whether or not having the force of law), compliance
with which affects or would affect the amount of capital required or expected to
be maintained by such Lender or any corporation controlling such Lender and
(ii) the amount of such capital is increased by or based upon the making or
maintenance by any Lender of its Loans or other advances made hereunder or the
existence of any Lender’s obligation to make Loans, then, in any such case, upon
written demand by such Lender (with a copy of such demand to the Administrative
Agent), the Borrowers agree to pay to the Administrative Agent for the account
of such Lender within ten (10) Business Days of written demand therefor, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation therefor. Such demand shall be
accompanied by a statement certifying in reasonable detail as to the amount of
such compensation and include a brief summary of the basis for such demand. Such
statement shall be conclusive and binding for all purposes, in the absence of
manifest error.

ARTICLE IV

INTEREST AND FEES

4.01. Interest on the Loans and Other Obligations.

(a) Rate of Interest. The outstanding principal amount of all Loans and the
outstanding amount of all other Obligations shall bear interest on the unpaid
amount thereof from the date such Loans are made and such other Obligations are
due until such principal amount and such Obligations are paid in full at the
rate per annum equal to the Applicable Interest Rate

(b) Interest Payments. Interest accrued pursuant to Section 4.01(a) on the
outstanding principal amount of the Loans shall be payable in arrears in Dollars
on each Interest Payment Date. Interest accrued at the Default Rate shall be
payable in arrears on demand in Dollars. Interest accrued on the principal
balance of all other Obligations shall be payable on demand in Dollars.

(c) Computation of Interest. Interest on the Loans and all other Obligations
shall be computed on the basis of the actual number of days elapsed in the
period during which interest accrues and a year of 360 days. In computing
interest on any Loan, the date of the making of the Loan shall be included and
the date of payment shall be excluded; provided, however, if a Loan is repaid on
the same day on which it is made, one (1) day’s interest shall be paid on such
Loan. Each Borrower hereby authorizes the Administrative Agent to, and the

 

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Administrative Agent may, charge the Loan Account with the amount of the
interest due under this Section 4.01. The Administrative Agent agrees to provide
the Borrowers with a statement of the interest due; provided, however, failure
to provide such statement shall not, under any circumstances or in any event,
result in any liability whatsoever on the part of the Lenders or the Agents.

4.02. Fees.

(a) Prepayment Fee. If the Borrowers prepay the Term A Loans or the Term B Loans
pursuant to Section 3.01(a), the Borrowers shall pay to the Administrative
Agent, for the account of the Lenders in accordance with their respective Pro
Rata Shares, an early termination fee (the “Prepayment Fee”) as follows: (i) if
the prepayment occurs during the period from the Closing Date to the date which
is the first anniversary of the Closing Date, an amount equal to seven percent
(7%) of the amount of such prepayment, (ii) if the prepayment occurs during the
period from the date which is the first anniversary of the Closing Date to the
date which is the second anniversary of the Closing Date, an amount equal to
seven percent (7%) of the amount of such prepayment, (iii) if the prepayment
occurs during the period from the date which is the second anniversary of the
Closing Date to the date which is the third anniversary of the Closing Date, an
amount equal to five percent (5%) of the amount of such prepayment, (iv) if the
prepayment occurs during the period from the date which is the third anniversary
of the Closing Date to the date which is the fourth anniversary of the Closing
Date, an amount equal to three percent (3%) of the amount of such prepayment,
and (v) if the prepayment occurs during the period from the date which is the
fourth anniversary of the Closing Date to the Maturity Date, an amount equal to
zero. The Prepayment Fee shall be payable on the date such prepayment is made.
For avoidance of doubt, no Prepayment Fee shall be payable in connection with
prepayments under Section 9.08(b).

(b) Payment of Fees. All fees specified or referred to herein due to the
Administrative Agent or any Lender will be fully earned and nonrefundable when
paid. Each Borrower hereby authorizes the Administrative Agent to, and the
Administrative Agent may, charge the Loan Account with the amount of the fees or
charges due under this Section 4.02.

ARTICLE V

CONDITIONS TO LOANS

5.01. Conditions Precedent to the Loans. The obligation of each Lender on the
Closing Date to make its Loans shall be subject to the satisfaction of each of
the following conditions precedent (unless waived in writing by each of the
Lenders):

(a) Documents. The Administrative Agent (on behalf of itself and the Lenders)
shall have received, in form and substance reasonably satisfactory to the
Administrative Agent, on or before the Closing Date all of the following:

(i) this Agreement, the Notes, the Collateral Documents, the other Loan
Documents and all other agreements, documents, instruments, certificates,
opinions and corporate resolutions described in the List of Closing Documents,
each duly executed where appropriate and in form and substance satisfactory to
the Lenders and in sufficient copies for each of the Lenders; and

 

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(ii) such additional documentation as the Administrative Agent and any Lender
may reasonably request.

(b) Collateral; Perfection of Liens. The Administrative Agent shall have
received complete and accurate information from Holdings and its Subsidiaries
with respect to the name and the location of the principal place of business and
chief executive office for each Loan Party; all necessary UCC financing
statements shall have been filed and all other filings and recordings shall have
been made; all filing and recording fees and taxes shall have been paid or duly
provided for. The Administrative Agent shall be satisfied that all Liens granted
to the Collateral Agent with respect to all Collateral are valid and effective
and all material Liens shall be perfected and of first priority (and a second
priority Lien on the assets secured by the JPMorgan Facility). All certificates
representing Equity Interests included in the Collateral shall have been
delivered to the Collateral Agent (with duly executed stock powers, as
appropriate) and all instruments included in the Collateral shall have been
delivered to the Collateral Agent (duly endorsed to the Administrative Agent).
The Administrative Agent shall be satisfied that the Collateral Agent has a
first priority Lien on Residuals of the REIT with a Residual Value of at least
$150,000,000.

(c) No Legal Impediments. Except as disclosed on Schedule 5.01(c), no law,
regulation, order, judgment or decree of any Governmental Authority shall, and
the Administrative Agent shall not have received any notice that any action,
suit, investigation, litigation or proceeding is pending or overtly threatened
in any court or before any arbitrator or Governmental Authority which shall,
(i) purport to enjoin, prohibit, restrain or otherwise affect the making of the
Loan or to materially impair the Collateral or (ii) that has resulted or could
reasonably be expected to impose or result in the imposition of a Material
Adverse Effect.

(d) Consents. Each Loan Party shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person and shall have obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority, in each
case, as may be necessary to allow such Loan Party, lawfully and without risk of
rescission, (i) to execute, deliver and perform, in all material respects, its
obligations under each Loan Document to which it is, or is to be, a party and
each other agreement or instrument to be executed and delivered by it pursuant
thereto or in connection therewith and (ii) to consummate the transactions
contemplated by the Loan Documents.

(e) Compliance. Each Loan Party shall be in compliance with all Requirements of
Law except that which (i) could not reasonably be expected to result in a
Material Adverse Change or (ii) has been disclosed on Schedule 5.01(e) attached
hereto.

(f) No Change in Condition. Except as set forth in Schedule 5.01(f) attached
hereto, no material adverse change in the business, financial performance,
assets, operations, prospects, or condition (financial or otherwise) of Holdings
and its Subsidiaries shall have occurred since December 31, 2006.

 

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(g) Fees and Expenses Paid. There shall have been paid to the Administrative
Agent all reasonable reimbursement for all legal, tax and regulatory costs and
expenses (including, without limitation, fees and expenses of counsel to the
Agents) on work performed through the date hereof and work to be performed
through the Closing Date due and payable on or before the Closing Date up to a
maximum of $1,500,000.

(h) JPMorgan Financing. JPMorgan shall have entered into the Intercreditor
Agreement with the Agents, in form and substance satisfactory to the
Administrative Agent, pursuant to which JPMorgan shall have (i) consented to a
second lien by the Collateral Agent on the same assets that are securing the
JPMorgan Facility, (ii) agreed to cap the outstanding amount under the servicing
rights financing to $49,000,000, and (iii) waived all defaults under the
JPMorgan Facility.

(i) REIT Repo Facility. The REIT Repo Facility with Bear Stearns International
Limited shall have been terminated.

(j) Warehouse Facility. The Administrative Agent shall be satisfied that (A) the
Borrowers have access to and availability under warehouse facilities from either
existing warehouse lenders that have waived all existing defaults under their
respective warehouse facilities on terms and conditions satisfactory to the
Agent or new warehouse lenders under new warehouse facilities containing terms
and conditions satisfactory to the Administrative Agent and (B) the Borrowers
have availability and the right to borrow at least $750,000,000 under the
warehouse facilities referred to in clause (A).

(k) Legal Opinions. The Administrative Agent shall have received legal opinions
from counsel for the Loan Parties as further specified on the List of Closing
Documents, in form and substance satisfactory to the Administrative Agent.

(l) REIT Opinion. The Administrative Agent shall have received fully and validly
executed copies of (i) the REIT Opinion and (ii) the Ownership Limitation
Exemption.

(m) Financial Statements. Holdings will represent to the Administrative Agent
and the Lenders that, to the best of its knowledge, Holdings’ 2006 10-K, when
filed, will not contain any material changes, except as disclosed on Schedule
5.01(m) attached hereto, from the draft previously provided, other than (i) to
reflect the approximately $150,000,000 loss on sale of loans, (ii) the write
down of Holdings’ deferred tax asset, (iii) the creation and write-off of
goodwill related to the Aames Acquisition, (iv) the inclusion of a going concern
qualification in Grant Thornton’s audit opinion, and (v) a material weakness
relating to AHL controls relating to non-recurring transactions, such as an
acquisition.

(n) Financial Information. The Borrowers shall have delivered to the
Administrative Agent and the Lenders (i) an unaudited consolidated balance sheet
of AHL and its Subsidiaries dated not earlier than two days prior to the Closing
Date showing tangible net worth of not less than $275,000,000 as of such date
and (ii) a certificate of the principal financial officer of AHL certifying as
to such balance sheet and neither Holdings nor any of its subsidiaries has
knowledge after reasonable inquiry or is aware of any information or other
matter that would make the financial information set forth therein materially
inaccurate or incomplete. Such unaudited consolidated balance sheet shall
reflect the items disclosed in clauses (i), (ii) and (iii) of Section 5.01(m)
above.

 

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(o) Warrants. The Administrative Agent shall have received the Warrants and the
Investor Rights Agreement, each in form and substance satisfactory to the
Administrative Agent.

(p) Cash Collateral. Concurrent with the funding of the Loans, AHL shall have
deposited $30,000,000 into the AHL Deposit Collateral Account.

(q) No Default. No Event of Default or Default shall have occurred and be
continuing or would result from the making of the Loans requested to be made on
the Closing Date.

(r) Representations and Warranties. All of the representations and warranties
contained in Section 6.01 and in the other Loan Documents shall be true and
complete in all material respects on and as of the Closing Date, both before and
immediately after giving effect to the making of the Loans.

(s) The Administrative Agent and the Lenders shall have received fully and
validly executed copies of (i) the REIT Opinion and (ii) the Ownership
Limitation Exemption.

(t) Closing Date. The Closing Date shall have occurred prior to April 2, 2007.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

6.01. Representations and Warranties. In order to induce the Lenders to enter
into this Agreement and to make the Loans, Holdings and each Borrower hereby
represents and warrants as follows:

(a) Organization, Good Standing, Etc. Each Loan Party (i) is duly organized,
validly existing and, to the extent applicable in such jurisdiction, in good
standing under the laws of its jurisdiction of organization or formation as
identified in Schedule 6.01(a), (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and to make
the borrowings hereunder, and to execute and deliver each Loan Document to which
it is a party, and to consummate the transactions contemplated thereby, and
(iii) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except where the failure to so qualify or to be in good standing would not
reasonably be expected to have a Material Adverse Effect.

(b) Authority. (i) Each Loan Party has the requisite power and authority to
execute, deliver and perform each of the Loan Documents to which it is a party.

 

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(ii) No other action or proceeding on the part of any Loan Party is necessary to
execute, deliver and perform each of the Loan Documents to which it is a party
or to consummate the transactions contemplated thereby.

(iii) Each of the Loan Documents to which any Loan Party is a party has been
duly executed and delivered by such Loan Party and constitutes the legal, valid
and binding obligation of such Loan Party, enforceable against such Loan Party
in accordance with its terms, except as such enforceability may be limited by
(i) bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and (ii) general principles of equity
relating to enforceability (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

(c) No Conflict. The execution, delivery and performance by each Loan Party of
each Loan Document to which it is a party and the consummation of the
transactions contemplated thereby do not and will not (i) conflict with the
Governing Documents of such Loan Party, (ii) violate any Requirements of Law or
any material Contractual Obligation of such Loan Party, or (iii) result in or
require the creation or imposition of any Lien whatsoever upon any of the
property or assets of such Loan Party other than the liens in favor of the
Collateral Agent as contemplated herein.

(d) Capitalization. On the Closing Date, the issued and outstanding Equity
Interests of each Loan Party are as set forth on Schedule 6.01(d)(i). All of the
issued and outstanding Equity Interests of each Loan Party have been validly
issued and are fully paid and nonassessable, and except as set forth on Schedule
6.01(d)(ii), the holders thereof are not entitled to any preemptive, first
refusal or other similar rights. Except as set forth on Schedule 6.01(d)(iii),
there are no plans or arrangements in existence relating to the issuance of
Equity Interests of a Loan Party. Except as set forth on Schedule 6.01(d)(iv),
there are (1) no outstanding debt or equity securities of a Loan Party and no
outstanding obligations of a Loan Party convertible into or exchangeable for, or
warrants, options or other rights for the purchase or acquisition from such Loan
Party, or other obligations of such Loan Party to issue, directly or indirectly,
any Equity Interests of any such Person, and (2) no “phantom stock” rights,
“stock appreciation rights” or other rights whose value is determined with
respect to the income or capital appreciation of a Loan Party.

(e) Subsidiaries. Schedule 6.01(e) sets forth the ownership interest of each
Loan Party in its Subsidiaries as of the Closing Date.

(f) Consents. The execution, delivery and performance by each Loan Party of each
Loan Document to which it is a party and the consummation of the transactions
contemplated thereby do not and will not require any registration with, consent
or approval of, or notice to, or other action to, with or by any Governmental
Authority or any other Person.

(g) Financial Position of the Loan Parties. All financial statements, pro forma
balance sheets and other financial information delivered to the Administrative
Agent are fairly stated in all material respects. The foregoing financial
statements and pro forma balance sheets were prepared in conformity with GAAP.
No Loan Party has any contingent liability or liability for any Taxes, long-term
leases or commitments, not reflected in the foregoing financial statements which
will have or is reasonably likely to have a Material Adverse Effect.

 

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(h) Adverse Proceedings. Except as set forth on Schedule 6.01(h), there are no
Adverse Proceedings, individually or in the aggregate, that could reasonably be
expected to result in a Material Adverse Effect. Except as set forth on Schedule
6.01(h), no Loan Party (i) is in material violation of any Requirements of Law
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Change, or (ii) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.

(i) No Material Adverse Effect. Except as disclosed on Schedule 5.01(m), since
December 31, 2006, there has occurred no event which has had or is reasonably
likely to have a Material Adverse Effect.

(j) Payment of Taxes. All tax returns and material reports regarding taxes
required to be filed by Holdings and its Subsidiaries have been timely filed
(other than pursuant to applicable extensions) and all taxes, assessments, fees
and other governmental charges shown on such returns have been paid when due and
payable, except such taxes, if any, as are reserved against in accordance with
GAAP and are being contested in good faith by appropriate proceedings.

(k) Performance. Except as disclosed in a Schedule 6.01(k), no Loan Party has
received notice, or has knowledge, that it is in default in the performance,
observance or fulfillment of any material Contractual Obligations applicable to
it.

(l) Disclosure. The representations and warranties of each Loan Party contained
in the Loan Documents and all certificates and other documents delivered
pursuant to the terms thereof, to such Loan Party’s knowledge, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading in any material
respect. No Loan Party has intentionally withheld any fact from any Agent or
Lender with regard to any matter which will have or is reasonably likely to have
a Material Adverse Effect.

(m) Requirements of Law. Except as set forth on Schedule 6.01(m), each Loan
Party is in compliance in all material respects with all Requirements of Law
applicable to it and its business.

(n) Environmental Matters. Each Loan Party and its operations and Property
comply in all respects with all applicable Environmental Laws, except where
noncompliance has not resulted or would not be reasonably likely to have a
Material Adverse Effect. Each Loan Party has obtained all Permits necessary
under Environmental Laws for its operations and Property and all such Permits
are in good standing and such Loan Party is in compliance with all

 

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terms and conditions of such Permits except, in each case or in the aggregate,
such as has not resulted or would not be reasonably likely to have a Material
Adverse Effect. No Loan Party nor its operations is subject to any order from or
written settlement agreement with any Governmental Authority or private party or
any judicial or administrative proceeding or investigation respecting any
Environmental Law, except for any such order or written settlement agreement
under which neither the Loan Party nor its operations have any outstanding
obligations. No Loan Party nor its operations is subject to any Remedial Action
or other Liabilities and Costs arising from the Release, at levels in excess of
standards or objectives established by applicable Environmental Laws or
applicable guidelines issued by Governmental Authorities, or threatened Release
of Hazardous Material into the indoor or outdoor environment except such as has
not resulted or would not be reasonably likely to have a Material Adverse
Effect. No Loan Party has filed any notice under any Requirement of Law
indicating treatment, storage or disposal of a hazardous waste, as that term is
defined under 40 CFR Part 261 or any applicable state equivalent except such as
has not resulted or would not be reasonably likely to have a Material Adverse
Effect. No Loan Party has filed any notice under applicable Requirement of Law
reporting a Release of Hazardous Materials into the indoor or outdoor
environment except such as has not resulted or would not be reasonably likely to
have a Material Adverse Effect. No Environmental Liens have attached to any
Property of any Loan Party securing any obligations. No Loan Party has received
any written notice or claim to the effect that it is or may be liable to any
Person as a result of the Release or threatened Release of Hazardous Materials
into the indoor or outdoor environment except such as has not resulted or would
not be reasonably likely to have a Material Adverse Effect.

(o) Securities Activities. Neither Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock.

(p) Government Regulation. No Loan Party is subject to regulation under the
(i) Public Utility Holding Company Act of 1935, as amended, or, as the case may
be, the Public Utility Holding Company Act of 2005, enacted as part of the
Energy Policy Act of 2005, Pub. L. No. 109-58 as codified at §§ 1261 et seq.,
and the regulations adopted thereunder, as amended, (ii) the Federal Power Act,
(iii) the Investment Company Act of 1940 or (iv) under any other federal or
state statute or regulation which may limit its ability to incur Indebtedness or
which may otherwise render all or any portion of the Obligations unenforceable.
No Loan Party is a “registered investment company” or a company “controlled” by
a “registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.

(q) Solvency. Each Loan Party is and, upon the incurrence of the Obligations by
such Loan Party, will be, Solvent.

(r) Patents, Trademarks, Permits. Except as set forth on Schedule 6.01(r), each
Loan Party owns, is licensed or otherwise has the lawful right to use the
permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes necessary and sufficient for the
conduct of its business as currently conducted which are material to its
condition (financial or otherwise), operations, performance and

 

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prospects, except for “off-the-shelf” software. There are no claims pending or,
to such Loan Party’s knowledge, overtly threatened that such Loan Party is
infringing or otherwise adversely affecting the rights of any Person with
respect to such permits and other governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how and processes, except for such
claims and infringements as do not, in the aggregate, give rise to any liability
on the part of such Loan Party which has or is reasonably likely to have a
Material Adverse Effect.

(s) Assets and Properties. Each Loan Party has good and marketable title to all
of its assets and property (tangible and intangible), and all such assets and
property are free and clear of all Liens, other than the Permitted Liens and the
Liens in favor of the Collateral Agent as contemplated herein.

(t) Material Agreements. Schedule 6.01(t)(1) contains a complete and accurate
list of all the material Contractual Obligations in effect on the Closing Date,
and except as set forth on Schedule 6.01(t)(2), all such material Contractual
Obligations are in full force and effect and no defaults currently exist
thereunder as of the Closing Date.

(u) No Default. Except as set forth on Schedule 6.01(k), no Loan Party is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except, in each case, where such default or
defaults, if any, could not reasonably be expected to result in a Material
Adverse Effect.

(v) Insurance. The policies of insurance maintained by or for the benefit of the
Loan Parties set forth on Schedule 6.01(v) have been previously made available
to the Administrative Agent prior to the Closing Date and are in full force and
effect and are of a nature and provide such coverage as is customarily carried
by businesses of equivalent size and character of Holdings and its Subsidiaries,
taken as a whole, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for such Persons.

(w) Real Property. Set forth on Schedule 6.01(w) is a complete and accurate
list, as of the Closing Date, of the addresses of all real property owned or
leased by any Loan Party, together with, in the case of leased property, the
name and mailing address of the lessor of such property.

(x) Pension Plans. Except as set forth on Schedule 6.01(x), during the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement or the making of any Loan, (i) no steps have been taken to
terminate any Pension Plan and (ii) no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under
Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which is reasonably expected to result
in the incurrence by the Borrower of any material liability, fine or penalty.
All contributions (if any) have been made to any Multiemployer Pension Plan that
are required to be made by the Borrower or any other member of the Controlled
Group under the terms of the plan or of any collective bargaining agreement or
by applicable law; neither the Borrower nor any member of

 

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the Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan or
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Borrower nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.

(y) Employee and Labor Matters. There is (i) no unfair labor practice complaint
pending or, to any Loan Party’s knowledge, threatened against such Loan Party
before any Governmental Authority and no grievance or arbitration proceeding
pending or, to such Loan Party’s knowledge, threatened against such Loan Party
which arises out of or under any collective bargaining agreement, (ii) no
strike, labor dispute, slowdown, stoppage or similar action or grievance pending
or, to any Loan Party’s knowledge, threatened against such Loan Party and
(iii) to any Loan Party’s knowledge, no union representation question existing
with respect to the employees of such Loan Party and no union organizing
activity taking place with respect to any of the employees of any of them, that,
in the case of (i), (ii) and (iii) would reasonably be expected to have a
Material Adverse Effect.

(z) Security Interests. Each Collateral Document creates in favor of the
Collateral Agent, for the ratable benefit of the Lenders, the Administrative
Agent and the Collateral Agent, a legal, valid and enforceable security interest
in the Collateral secured thereby, free of all Liens except for the Permitted
Liens.

(aa) Certain Fees. No broker’s or finder’s fee or commission will be payable
with respect to this Agreement or any of the transactions contemplated hereby
other than payments to Bear Stearns International Limited and Friedman,
Billings, and Ramsey.

(bb) Patriot Act. To the extent applicable, each Loan Party is in compliance, in
all material respects, with the (i) Trading with the Enemy Act, as amended, and
each of the foreign assets control regulations of the Untied States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the
Loans will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

(cc) Section 856 Trust Status. The REIT, (i) for all taxable years commencing
with the REIT’s taxable year ending December 31, 2004 through December 31, 2006,
has been subject to taxation as a real estate investment trust (a “Section 856
Trust”) within the meaning of Section 856 of the Code and has been organized and
operated in conformity with the

 

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requirements for qualification and taxation as a Section 856 Trust for such
years, (ii) has operated since December 31, 2006 to the date hereof in a manner
that will permit it to qualify as a Section 856 Trust for the taxable year that
includes the date hereof, and (iii) intends to continue to operate in such a
manner as to permit it to continue to qualify as a Section 856 Trust for the
2007 taxable year and subsequent years. The REIT has not received any notice
that a challenge to the REIT’s status as a Section 856 Trust is pending or
threatened.

(dd) Debt to Adjusted Tangible Net Worth Ratio. After giving effect to the
incurrence of the Loans by the Borrowers, the Debt to Adjusted Tangible Net
Worth Ratio (as defined in the JPMorgan Facility) of Holdings and its
Subsidiaries will not exceed 17:00 to 1:00.

ARTICLE VII

REPORTING COVENANTS

Holdings and the Borrowers covenant and agree until payment in full of the
Obligations:

7.01. Financial Statements. Holdings and its Subsidiaries shall maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP, and each of the financial statements described below shall be
prepared from such system and records. Holdings and the Borrowers shall deliver
or cause to be delivered to the Administrative Agent:

(a) Monthly Reports. Promptly when available and in any event within thirty
(30) days after the end of each fiscal month, consolidated balance sheets of
Holdings and its Subsidiaries at the end of such fiscal month, together with
consolidated statements of earnings and cash flows for such fiscal month and for
the period beginning with the first day of such Fiscal Year and ending on the
last day of such fiscal month, together with a comparison with the corresponding
period of the previous Fiscal Year and, with respect to the statements of
earnings and cash flows, a comparison with the budget for such period of the
current Fiscal Year and a description of the material variances and the reasons
for such variances, certified by the principal financial officer, the controller
or the treasurer of Holdings.

(b) Quarterly Reports. Promptly when available and in any event within
forty-five (45) days after the end of each fiscal quarter (except the last
fiscal quarter of each Fiscal Year), consolidated balance sheets of Holdings and
its Subsidiaries as of the end of such fiscal quarter, together with
consolidated statements of earnings and cash flows for such fiscal quarter and
for the period beginning with the first day of such Fiscal Year and ending on
the last day of such fiscal quarter, together with a comparison with the
corresponding period of the previous Fiscal Year and, with respect to the
statements of earning and cash flows, a comparison with the budget for such
period of the current Fiscal Year and a description of the material variances
and the reasons for such variances, certified by the principal financial
officer, the controller or the treasurer of Holdings.

(c) Annual Reports. Promptly when available and in any event within ninety
(90) days after the close of each Fiscal Year (other than Fiscal Year 2006 which
shall be delivered to the Administrative Agent when Holdings files its annual
report for Fiscal Year 2006

 

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with the Securities Exchange Commission): a copy of the annual audited report of
Holdings and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets and consolidated statements of earnings and cash
flows of Holdings and its Subsidiaries as of the end of such Fiscal Year, fairly
and accurately presenting the financial condition of Holdings and its
Subsidiaries as at such date and the results of operations of Holdings and its
Subsidiaries for such fiscal year and setting forth in each case in comparative
form the corresponding figures for the corresponding period of the preceding
fiscal year and, with respect to the statements of earnings and cash flow, a
separate document providing a description of the material variances and the
reasons for such variances, all in reasonable detail, prepared in accordance
with GAAP consistently applied, with such financial statements audited by
independent certified public accountants at the end of such Fiscal Year,
certified without qualification (except for the items disclosed on Schedule
7.01(c) with respect to Fiscal Year 2006) by Grant Thornton or other independent
auditors of recognized standing selected by Holdings and reasonably acceptable
to the Administrative Agent, together with a written statement from such
accountants to the effect that in making the examination necessary for the
signing of such annual audit report by such accountants, nothing came to their
attention that caused them to believe that the Loan Parties were not in
compliance with any provision of this Agreement insofar as such provision
relates to accounting matters or, if something has come to their attention that
caused them to believe that the Loan Parties were not in compliance with any
such provision, describing such non-compliance in reasonable detail.

(d) Compliance Certificates. Contemporaneously with the furnishing of a copy of
each annual audited report pursuant to Section 7.01(c) and each set of quarterly
statements pursuant to Section 7.01(b), a duly completed compliance certificate
in the form of Exhibit D, attached hereto and made a part hereof (the
“Compliance Certificate”), with appropriate insertions, dated the date of such
annual report or such quarterly statements and signed by the principal financial
officer, the controller or the treasurer of Holdings, containing (i) a
computation of the financial covenants set forth in Section 9.08 and to the
effect that such officer has not become aware of any Event of Default or Default
that has occurred and is continuing or, if there is any such event, describing
it and the steps, if any, being taken to cure it, and (ii) a written statement
of Holdings’ management setting forth a discussion of Holdings’ financial
condition, changes in financial condition and results of operations.

(e) Management Reports. Promptly upon receipt by Holdings or any other Loan
Party, copies of all detailed financial and management reports submitted to
Holdings or such Loan Party by independent auditors in connection with each
annual or interim audit made by such auditors of the books of Holdings or such
Loan Party.

(f) Business and Financial Plan. As soon as practicable, and in any event within
thirty (30) days prior to the beginning of each Fiscal Year, a business and
financial plan, a marketing and business plan for the Borrowers for such Fiscal
Year (including an operating budget) prepared in a manner consistent with the
projections delivered by the Borrowers to the Administrative Agent on or prior
to the Closing Date or otherwise in a manner reasonably satisfactory to the
Administrative Agent, accompanied by a certificate of the principal financial
officer, the controller or the treasurer of the Borrower to the effect that
(i) such projections were prepared by the Borrowers in good faith, (ii) the
Borrowers have a reasonable basis for the assumptions contained in such
projections and (iii) such projections have been prepared in accordance with
such assumptions.

 

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7.02. Notice of Default, Litigation and ERISA Matters. Promptly upon knowledge
of any of the following, the Borrowers shall deliver or cause to be delivered to
the Administrative Agent written notice describing the same and the steps being
taken by the Loan Party affected thereby with respect thereto:

(a) the occurrence of a Default or an Event of Default;

(b)(i) within five (5) Business Days from knowledge thereof, any litigation,
arbitration or governmental investigation or proceeding not previously disclosed
by the Borrowers to the Administrative Agent which has been instituted or, to
the knowledge of any Loan Party, is threatened in writing against any Loan Party
or to which any of the properties of any thereof is subject which, if decided
adversely against such Loan Party might reasonably be expected to have a
Material Adverse Effect within thirty (30) days and (ii) on the tenth day of
each month, all litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Borrowers to the Administrative Agent
which has been instituted or, to the knowledge of any Loan Party, is threatened
in writing against any Loan Party or to which any of the properties of any
thereof is subject which involves an amount in controversy in excess of
$5,000,000;

(c) within five (5) Business Days from knowledge thereof, the institution of any
steps by any member of the Controlled Group or any other Person to terminate any
Pension Plan, or the failure of any member of the Controlled Group to make a
required contribution to any Pension Plan (if such failure is sufficient to give
rise to a Lien under Section 302(f) of ERISA) or to any Multiemployer Pension
Plan, or the taking of any action with respect to a Pension Plan which could
result in the requirement that the Borrower furnish a bond or other security to
the Pension Benefit Guaranty Corporation or such Pension Plan, or the occurrence
of any event with respect to any Pension Plan or Multiemployer Pension Plan
which is reasonably likely to result in the incurrence by any member of the
Controlled Group of any material liability, fine or penalty (including any claim
or demand for withdrawal liability or partial withdrawal from any Multiemployer
Pension Plan), or any material increase in the contingent liability of any Loan
Party with respect to any post-retirement welfare plan benefit, or any notice
that any Multiemployer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of an excise tax, that any such plan is or has been funded at a rate
less than that required under Section 412 of the Code, that any such plan is or
may be terminated, or that any such plan is or may become insolvent;

(d) any cancellation or material change in any insurance maintained by any Loan
Party; or

(e) any other event (including, but not limited to the enactment or
effectiveness of any law, rule or regulation) which might reasonably be expected
to have a Material Adverse Effect.

 

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7.03. Other Information. Promptly, and in any case within ten (10) Business Days
after receiving a request therefor from the Administrative Agent or the Required
Lenders, the Borrowers shall prepare and deliver, or cause to be prepared and
delivered, to the Administrative Agent and the Lenders such other information as
from time to time may be reasonably requested by the Administrative Agent or the
Required Lenders.

ARTICLE VIII

AFFIRMATIVE COVENANTS

Holdings and the Borrowers covenant and agree until payment in full of the
Obligations:

8.01. Existence, etc. Each Loan Party shall at all times maintain its existence
and preserve and keep, or cause to be preserved and kept, in full force and
effect its rights and franchises material to its businesses except where the
loss or termination of such rights and franchises does not have or is not
likely, individually or in the aggregate, to have a Material Adverse Effect.

8.02. Powers; Conduct of Business. Each Loan Party shall qualify and remain
qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified except for those jurisdictions where
failure to so qualify does not have or is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect.

8.03. Compliance with Laws, etc. Each Loan Party shall (a) except as set forth
on Schedule 5.01(e), comply with all Requirements of Law and all restrictive
covenants affecting such Loan Party or its business, property, assets or
operations and (b) obtain as needed all Permits necessary for its operations and
maintain such Permits in good standing, except in the case where noncompliance
with either clause (a) or (b) above does not have or is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect.

8.04. Payment of Taxes and Claims. Each Loan Party shall pay (a) all taxes,
assessments and other governmental charges imposed upon it or on any of its
properties or assets or in respect of any of its franchises, business, income or
property before any penalty or interest accrues thereon, and (b) all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable prior to the same becoming
subject to a Lien upon any of such Person’s properties or assets and prior to
the time when any penalty or fine shall be incurred with respect thereto;
provided, however, that no such taxes, assessments and governmental charges
referred to in clause (a) above or claims referred to in clause (b) above need
be paid if being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if adequate reserves shall have been set
aside therefor in accordance with GAAP; provided, further, however, that each
Loan Party shall promptly pay or cause to be paid any valid judgment enforcing
any such taxes and cause the same to be satisfied of record.

8.05. Insurance. (a) Each Loan Party shall maintain with financially sound and
reputable insurers, reasonably satisfactory to the Agents, insurance against
such liabilities

 

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referred to in Section 6.01(v) in the amount set forth on Schedule 6.01(v) in
the policies provided on such Schedule and made available to the Administrative
Agent prior to the Closing Date or such higher amounts as is customary at the
time; and, upon request of the Administrative Agent, furnish to the
Administrative Agent a certificate setting forth in reasonable detail the nature
and extent of all insurance maintained by the Loan Parties.

8.06. Books and Records; Inspection of Property; Discussions. Each Loan Party
shall keep its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP. Each Loan Party shall permit at any reasonable time and with reasonable
notice (or at any time without notice if an Event of Default exists), the
Administrative Agent and its representatives (i) to inspect the properties and
operations of such Loan Party, (ii) to visit any or all of its offices, (iii) to
discuss its financial matters with its officers and its independent auditors
(and such Loan Party hereby authorizes such independent auditors to discuss such
financial matters of such Loan Party with the Administrative Agent or any
representative thereof), (iv) to examine (and, at the expense of such Loan
Party, photocopy extracts from) any of its books or other records, (v) to
perform appraisals with respect to the Collateral, and (vi) to inspect, audit,
check and make copies of and extracts from the books, records, computer data,
computer programs, journals, orders, receipts, correspondence and other data
relating to the Collateral. The Borrowers shall pay the reasonable costs and
expenses of the Administrative Agent for up to two (2) such inspections, visits,
appraisals and audits made by the Administrative Agent or its representatives
during each Fiscal Year, provided, however, if an Event of Default has occurred
and is continuing, the Borrowers shall pay all reasonable costs and expenses of
the Administrative Agent for all such inspections, visits, appraisals and audits
made by the Administrative Agent or its representative during the continuance of
an Event of Default.

8.07. ERISA Compliance. Each Loan Party shall, and shall cause to the best of
its ability, each ERISA Affiliate to, establish, maintain and operate all Plans
to comply in all material respects with the provisions of ERISA, the Code, all
other applicable laws, and the regulations and interpretations thereunder and
the respective requirements of the governing documents for such Plans.

8.08. Maintenance of Properties. Each Loan Party shall maintain and preserve all
of their properties which are necessary or material in the proper conduct of
their business in good working order and condition, ordinary wear and tear
excepted, and comply in all material respects with the provisions of all
material leases to which each of them is a party as lessee or under which each
of them occupies property, so as to prevent any material loss or forfeiture
thereof or thereunder.

8.09. Maintenance of Licenses, Contracts, Permits, Intellectual Property, etc.
Each Loan Party shall maintain in full force and effect all material licenses,
permits, governmental approvals, franchises, contract rights, authorizations or
other material rights necessary for the operation of its business, and each Loan
Party shall notify the Administrative Agent, promptly after learning thereof, of
the suspension, cancellation, revocation or discontinuance of or of any pending
or overtly threatened action or proceeding seeking to suspend, cancel, revoke or
discontinue any material license, permit, governmental approval, franchise
authorization or right. Each Loan Party shall maintain in full force and effect,
and pay

 

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all costs and expenses relating to, all of its intellectual property that is
material to its business; and each Loan Party shall aggressively pursue in the
infringement by any Person of its intellectual property if, in the absence of
any such action, such infringement is reasonably likely to have a Material
Adverse Effect.

8.10. Condemnation. Immediately upon learning of the institution of any
proceeding for the condemnation or other taking of any of the owned or leased
real property of any Loan Party which would reasonably be expected to have a
Material Adverse Effect, such Loan Party shall notify the Administrative Agent
of the pendency of such proceeding, and permit the Administrative Agent to
participate in any such proceeding, and from time to time will deliver to the
Administrative Agent all instruments reasonably requested by the Administrative
Agent to permit such participation.

8.11. Change in Collateral; Collateral Records. Each Loan Party shall (i) give
the Administrative Agent and the Collateral Agent not less than thirty
(30) days’ prior written notice of any change in the location of any Collateral
from the locations set forth on Schedule 8.11, (ii) advise the Collateral Agent
promptly, in sufficient detail, of any change which would reasonably be expected
to have a Material Adverse Effect relating to the value of the Collateral or the
Lien granted thereon and (iii) execute and deliver to the Collateral Agent for
the benefit of the Lenders from time to time, solely for the Collateral Agent’s
convenience in maintaining a record of Collateral, such written statements and
schedules, maintained by such Loan Party in the ordinary course of business, as
the Collateral Agent may reasonably require, designating, identifying or
describing the Collateral.

8.12. Further Assurances. Each Loan Party shall take such actions as are
necessary or as the Administrative Agent or Collateral Agent may reasonably
request from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, mortgages, deeds of trust, financing
statements and other documents, the filing or recording of any of the foregoing,
and the delivery of stock certificates and other collateral with respect to
which perfection is obtained by possession) to ensure that the Obligations are
secured by substantially all of the assets of such Loan Party.

8.13. Warehouse Facility. The Borrowers will use best efforts to enter into a
committed warehouse facility, which is not a repurchase facility and is
acceptable to the Administrative Agent, such acceptance not to be unreasonably
withheld, within the sixty (60) days immediately following the Closing Date. The
Borrowers agree that 50% of the Dollar amount of all new loan originations will
go into such committed warehouse facility.

8.14. REIT Status. The REIT shall maintain its status as a domestic trust or
corporation that qualifies as a real estate investment trust under the
provisions of Sections 856, et seq. of the Internal Revenue Code.

8.15. REIT Replacement Repo Facility. The REIT shall use its best efforts to
enter into a REIT Replacement Repo Facility, the proceeds of which shall repay
the aggregate outstanding principal amount of the Term C Loans.

 

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ARTICLE IX

NEGATIVE COVENANTS

Holdings and the Borrowers covenant and agree until payment in full of the
Obligations:

9.01. Indebtedness. No Loan Party shall, directly or indirectly, create, incur,
assume or otherwise become or remain liable with respect to any Indebtedness,
except:

(a) the Obligations;

(b) Hedging Obligations incurred for bona fide hedging purposes and not for
speculation;

(c) Indebtedness under facilities existing on the Closing Date as set forth on
Schedule 9.01 in amounts up to the committed amounts under such facilities;

(d) Capital Leases and purchase money Indebtedness incurred by a Loan Party to
finance the acquisition of fixed assets in an aggregate amount not to exceed
$5,000,000 at any time;

(e) any Qualified Securitization Transaction that is non recourse (other than
recourse traditionally given in securitization transactions, such as in respect
of breaches of representations and warranties and servicing covenants) to
Holdings and its Subsidiaries;

(f) any warehouse facility, the terms and conditions of which are either
(i) satisfactory to the Administrative Agent (provided that if the
Administrative Agent does not respond within three Business Days from the date
documents with respect to such transaction have been delivered to the
Administrative Agent, the Administrative Agent shall have been deemed to have
consented) or (ii) substantially similar to a warehouse facility that has been
previously approved by the Administrative Agent in writing;

(g) Indebtedness in respect of performance, surety or appeal bonds provided in
the ordinary course of business; and

(h) intercompany Indebtedness of Holdings or any Subsidiary of Holdings owing to
another Loan Party provided that that such intercompany Indebtedness shall not
exceed such amounts incurred in the ordinary course of business consistent with
past practices.

9.02. Mergers, Consolidations, Sales. No Loan Party (other than Holdings) shall
be a party to any merger, consolidation or sale of all or substantially all of
the assets, or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person, or sell, transfer, convey or lease all or
substantially all of its assets; provided that any Loan Party (other than the
REIT and its Subsidiaries and Canadian Subsidiaries) may merge or consolidate
with and into or sell all or substantially all of its assets to another Loan
Party (other than the REIT and its Subsidiaries and

 

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Canadian Subsidiaries) if (i) the Administrative Agent shall have a perfected
pledge of and security interest in and to, the Equity Interest and other assets
of the surviving Person as the Administrative Agent had immediately prior to
such merger or consolidation and (ii) the surviving Person delivers to the
Administrative Agent reasonably satisfactory documentation necessary to create,
perfect or maintain the collateral position of the Collateral Agent therein.

9.03. Liens. No Loan Party shall, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to its assets (whether now owned
or hereafter acquired), except:

(a) Liens securing the Obligations;

(b) Existing Liens;

(c) Liens securing Indebtedness permitted under Section 9.01(d), (e) and (f);

(d) easements, rights of way, restrictions, minor defects or irregularities in
title and other similar Liens not interfering in any material respect with the
ordinary conduct of the business of the Loan Parties;

(e) Liens for taxes not yet due or that are being contested in good faith,
provided that adequate reserves with respect thereto are maintained on the books
of the Holdings or any of its Subsidiaries, as the case may be, in conformity
with GAAP;

(f) landlord liens for rent not yet due and payable, and carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business that are not overdue for a period of
more than sixty (60) days or that are being contested in good faith;

(g) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation;

(h) deposits to secure liability to insurance carriers under insurance or
self-insurance arrangements, and deposits to secure the performance of bids,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;

(i) any interest or title of a lessor under any lease entered into by the
Borrower or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased; and

(j) any attachment or judgment Lien not constituting an Event of Default.

9.04. Change in Nature of Business. The Loan Parties, taken as a whole, shall
not make any material change in the nature of their business as such business is
carried on at the Closing Date.

 

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9.05. Restricted Payments. No Loan Party shall make any Restricted Payment,
except that (i) the REIT may make the 9.75% dividend on the Preferred Shares and
dividends on its common equity and (ii) each Subsidiary of Holdings may make
dividends on its Equity Interests.

9.06. Transactions with Affiliates. Except for transactions among the Loan
Parties consistent with past practices and for transactions among the Loan
Parties not consistent with past practices provided that such transactions do
not exceed $10,000,000, no Loan Party shall, directly or indirectly, enter into
or permit to exist any transaction with any of its Affiliates, except that (i) a
Loan Party may enter into such a transaction if the terms are not less favorable
to such Loan Party than those that might be obtained in an arm’s length
transaction at the time from a Person who is not an Affiliate as determined by
the Board of Directors of such Loan Party, provided that if such transaction is
in excess of $50,000,000, such determination shall be made by an investment firm
that is a Third Party, and (ii) to the extent consistent with maintaining the
REIT’s status as a Section 856 Trust, the REIT may make loans to AHL.

9.07. Federal Reserve Regulations. The Borrowers shall not use any Loan or the
proceeds of any Loan under this Agreement for any purpose that would cause such
Loans to be margin loans under the provisions of Regulation T, U or X.

9.08. Financial Covenants.

(a) Minimum Liquidity. The Borrowers will maintain Liquidity of at least
$75,000,000 at all times. In the event that the Borrowers’ Liquidity is less
than $150,000,000 at any time, or if Management of any Borrower believes such
event is reasonably likely to occur, the Borrowers shall give the Administrative
Agent prompt notice of such event.

(b) Residual Values. The Residual Value will at all times equal or exceed 125%
of the Combined REIT Debt. If at any time the Administrative Agent believes that
the Residual Value does not exceed 125% of the Combined REIT Debt, then the
Administrative Agent may request that the REIT determine the Residual Value as
of a particular date and the parties agree to the following procedures in
connection with such request:

(i) If the REIT determines that the Residual Value does not exceed 125% of the
Combined REIT Debt, then the Administrative Agent, upon notice to the Borrowers,
may demand that the Borrowers repay the Combined REIT Debt within thirty
(30) days, at no premium, provided that the Borrowers may, in lieu of repaying
the Combined REIT Debt, deposit cash in the REIT Cash Collateral Account in an
amount equal to the difference between 125% of the Combined REIT Debt and the
average of the Administrative Agent’s determination and the REIT’s
determination.

(ii) If the REIT determines that the Residual Value does exceed 125% of the
Combined REIT Debt, then the Administrative Agent will select a third party
independent valuation firm, reasonably acceptable to the Borrowers, to determine
the Residual Value. If the Residual Value received from the third party
valuation firm is greater than 125% of the Combined REIT Debt, no further action
may be taken by the Administrative Agent under this Section 9.08(b) with respect
to that particular request. If

 

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the Residual Value received from the third party valuation firm is less than
125% of the Combined REIT Debt, then the Administrative Agent, upon notice to
the Borrowers, may demand that the Borrowers repay the Combined REIT Debt within
thirty (30) days, at no premium, provided that the Borrowers may, in lieu of
repaying the Combined REIT Debt, deposit cash in the REIT Cash Collateral
Account in an amount equal to the difference between 125% of the Combined REIT
Debt and the average of the Administrative Agent’s determination and the
third-party valuation firm’s determination.

(iii) The Borrowers may refinance the Combined REIT Debt with another facility,
as long as such facility is not a repurchase financing structure and such
facility does not exceed the lesser of $100,000,000 or the amount outstanding of
the Combined REIT Debt at the time the Combined REIT Debt is repaid. If such
Combined REIT Debt is not paid off by the Borrowers within 30 days following
receipt by the Borrowers of the notice by the Agent, then the Agent may exercise
any and all of its rights and remedies and take any other action deemed
necessary to protect the Collateral Agent’s interest in the Residuals.

9.09. Modification of Governing Documents. No Loan Party shall amend, modify or
otherwise change its Governing Documents other than changes which may not have
an adverse effect on the any Agent’s or any Lender’s interest. The REIT shall
not increase the 9.75% dividend on the Preferred Stock.

9.10. Inconsistent Agreements. No Loan Party shall enter into any agreement
containing any provision which would (a) be violated or breached by any
borrowing by the Borrowers hereunder or by the performance by any Loan Party of
any of its obligations hereunder or under any other Loan Document, (b) other
than Qualified Securitization Transactions, Capital Leases and purchase money
Indebtedness permitted by Section 9.01(d) and warehouse facilities permitted by
Section 9.01(f), prohibit any Loan Party from granting to the Collateral Agent a
Lien on any of its assets or (c) other than Qualified Securitization
Transactions and the Indebtedness of Section 9.01(f), create or permit to exist
or become effective any encumbrance or restriction on the ability of any of its
Subsidiaries to (i) pay dividends or make other distributions to any Borrower or
any other applicable Loan Party, or pay any Indebtedness owed to a Borrower or
any other Loan Party, (ii) make loans or advances to a Borrower or
(iii) transfer any of its assets or properties to a Borrower.

9.11. Investments. No Loan Party shall make or permit to exist any Investment in
any other Person, except:

(a) Investments existing on the Closing Date and identified on Schedule 9.11;

(b) Cash Equivalents;

(c) Investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

 

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(d) Investment consisting of any deferred portion of the sales price received in
connection with any Disposition permitted under Section 9.17(f);

(e) Investments by a Loan Party in another Loan Party (other than the REIT and
the Canadian Subsidiaries) provided that the aggregate amount of Investments
under this clause (e) by way of contributions to capital or purchases of Equity
Interests made by such Loan Party shall not exceed such amounts invested in the
ordinary course of business consistent with past practices;

(f) Loans and advances by a Loan Party to the REIT or the Canadian Subsidiaries
to support the growth of such Person provided that the Collateral Agent has a
first priority Lien in the intercompany receivable arising from such loans and
advances;

(g) Investments by a Loan Party in a securitization Subsidiary of Holdings in
the ordinary course of business consistent with past practices;

(h) Investments consisting of loans or advances to employees of Holdings or any
Subsidiary in the ordinary course of business and consistent with past practices
in an aggregate amount not to exceed $1,000,000 outstanding at any one time;

(i) Investments in mortgage loans, repurchase loans, real estate owned,
delinquent loans, pay-down of warehouse facilities to offset warehouse balances
outstanding and hold-back on whole loan sales, each in the ordinary course of
business consistent with past practices;

(j) Investments in residual interest in or subordinated securities issued by or
under a Qualified Securitization Transaction; and

(k) other Investments by Holdings or any of its Subsidiaries; provided that the
sum of the aggregate amount of Investments under this clause, shall not exceed
$5,000,000.

9.12. Issuance of Equity. No Loan Party (other than Holdings) shall issue any
additional Equity Interests except to the extent that such Equity Interests are
held by a Loan Party and pledged to the Collateral Agent pursuant to reasonably
satisfactory documentation.

9.13. Fiscal Year. Holdings and its Subsidiaries shall not change its Fiscal
Year.

9.14. Investment Company Act of 1940. No Loan Party shall, with knowledge,
engage in any business, enter into any transaction, use any securities or take
any other action that would cause it to become subject to the registration
requirements of the Investment Company Act of 1940, as amended, by virtue of
being an “investment company” or a company “controlled” by an “investment
company” not entitled to an exemption within the meaning of such Act.

9.15. Securities Accounts. No Loan Party shall establish or maintain any
Securities Account unless the Collateral Agent shall have received a Control
Account Agreement in respect of such Securities Account. Each Loan Party shall
comply in all material respects with the provisions of each Control Account
Agreement to which it is a party.

 

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9.16. Environmental. No Loan Party shall permit the use, handling, generation,
storage, treatment, release or disposal of Hazardous Materials at any property
owned or leased by such Loan Party except in compliance with Environmental Laws
and so long as such use, handling, generation, storage, treatment, release or
disposal of Hazardous Materials does not result in a Material Adverse Effect.

9.17. Disposition. No Loan Party shall enter into or consummate any Disposition,
except for (a) ordinary course securitization issuances, replacement of
warehouse collateral, placing unencumbered loans into a warehouse facility in
anticipation of a securitization for the benefit of the REIT and sales of whole
loans, (b) Dispositions of inventory or obsolete, damaged, worn out or surplus
property disposed of in the ordinary course of its business, (c) a lease or
sublease of real property in the ordinary course of business, (d) Dispositions
of accounts receivable or mortgage loans in connection with the compromise or
collection thereof in the ordinary course of business, (e) Dispositions of any
license of software or other intellectual property in the ordinary course of
business, and (f) any other Disposition (i) for fair market value and the
consideration received consists of no less than 75% in cash and (ii) the Net
Cash Proceeds received from such Disposition, together with the Net Cash
Proceeds of all other assets disposed of pursuant to this clause since the
Closing Date, does not exceed (individually or in the aggregate) $2,000,000 over
the term of this Agreement. AHL shall not transfer warehoused loans to the REIT
and the REIT shall not enter into any repo/financing transactions under any of
its warehouse facilities other than in anticipation of a pending securitization
of all such loans and, in the event of such an anticipated securitization, the
loans can not be transferred to the REIT prior to the fifteenth day prior to the
expected securitization closing date.

ARTICLE X

EVENTS OF DEFAULT; RIGHTS AND REMEDIES

10.01. Events of Default. Each of the following occurrences shall constitute an
Event of Default under this Agreement:

(a) Failure to Make Payments When Due. The Borrowers shall fail to pay any
principal of the Loans when due (including as provided under Section 2.07); or
shall fail to pay any interest on the Loans or any other Obligation when such
interest or Obligation shall become due and such failure shall continue for
three (3) Business Days after notice by the Administrative Agent has been given
to the Borrowers.

(b) Breach of Representation or Warranty. Any representation or warranty made or
deemed to have been made by any Loan Party under, relating to or in connection
with this Agreement, the Note, any of the other Loan Documents or any
certificate or statement furnished by any Loan Party pursuant to or in
connection with this Agreement shall be false or misleading in any material
respect when made.

 

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(c) Breach of Certain Covenants. Any Loan Party shall fail duly and punctually
to perform or observe (i) any agreement, covenant or obligation binding on such
Loan Party under Section 7.02, Section 7.03, the second sentence of
Section 8.06, Article IX or Article XI; or (ii) any agreement, covenant,
covenant or obligations binding on such Loan Party under Section 7.01 and such
failure continues for a period of five (5) Business Days thereafter; or
(iii) any agreement, covenant, covenant or obligations binding on such Loan
Party under Section 8.01; Section 8.05; the first sentence of Section 8.06;
Section 8.11; or Section 8.12 and such failure continues for a period of fifteen
(15) days thereafter.

(d) Other Defaults. Any Loan Party shall fail duly and punctually to perform or
observe any term, covenant or obligation binding on such Loan Party under this
Agreement or under any other Loan Document (other than as described in Sections
10.01(a) or (c)), and such failure shall continue for thirty (30) days after any
Loan Party knew, or, in the exercise of due care, should have known, of such
failure.

(e) Default as to Other Indebtedness. Any Loan Party shall fail to make any
payment when due, including any applicable grace periods, (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness (other than an Obligation) if the aggregate amount of such
other Indebtedness is $5,000,000 or more; or any breach, default or event of
default shall occur, or any other condition shall exist under any instrument,
agreement or indenture pertaining to any such Indebtedness, if the effect
thereof (with or without the giving of notice or lapse of time or both) is to
cause an acceleration, mandatory redemption or other required repurchase of such
Indebtedness or, as to Indebtedness, permit the holder or holders of such
Indebtedness to accelerate the maturity of any such Indebtedness or require a
redemption or other repurchase of such Indebtedness; or any Indebtedness if the
aggregate amount of such Indebtedness is $5,000,000 shall be declared to be due
and payable (by acceleration or otherwise) or required to be prepaid, redeemed
or otherwise repurchased by any Loan Party (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof; or the holder or
holders of any Lien, securing obligations of $5,000,000 or more, shall commence
foreclosure of such Lien upon property of any Loan Party; provided, however, an
Existing Default shall not constitute an Event of Default under this subsection
(e) for a period of sixty (60) days following the Closing Date unless a Person
is exercising remedies as a result of such Existing Default or the Loan Parties
fail to comply with Section 8.15; provided that if a Change of Control Event
occurs prior to the expiration of such sixty day period, such period shall be
extended by an additional thirty (30) days.

(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) An involuntary
case shall be commenced against any Loan Party and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days; or a court
having jurisdiction in the premises shall enter a decree or order for relief in
respect of any Loan Party in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal, state, local
or foreign law; or the board of directors of any Loan Party (or any committee
thereof) adopts any resolution or otherwise authorizes any action to approve any
of the foregoing.

(ii) A decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having

 

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similar powers over any Loan Party or over all or a substantial part of the
assets of any Loan Party shall be entered; or an interim receiver, trustee or
other custodian of any Loan Party or of all or a substantial part of the assets
of any Loan Party shall be appointed or a warrant of attachment, execution or
similar process against any substantial part of the assets of any Loan Party
shall be issued and any such event shall not be stayed, dismissed, bonded or
discharged; or the board of directors of any Loan Party (or any committee
thereof) adopts any resolution or otherwise authorizes any action to approve any
of the foregoing.

(g) Voluntary Bankruptcy; Appointment of Receiver, etc. Any Loan Party shall
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its assets; or any Loan Party shall make any
assignment for the benefit of creditors or shall be unable or fail, or shall
admit in writing its inability, to pay its debts as such debts become due, or
the board of directors of any Loan Party (or any committee thereof) adopts any
resolution or otherwise authorizes any action to approve any of the foregoing.

(h) Judgments and Attachments. Any money judgment (other than a money judgment
covered by insurance as to which the insurance company has acknowledged
coverage), writ or warrant of attachment, or similar process against any Loan
Party or any assets of any Loan Party involving in any case an amount in excess
of $10,000,000 is entered and shall remain undischarged, unvacated, unbonded or
unstayed for a period of thirty (30) days, unless such money judgment, writ or
warrant of attachment, or similar process is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and only if
adequate reserves shall have been set aside therefor in accordance with GAAP.

(i) Dissolution. Any order, judgment or decree shall be entered against any Loan
Party decreeing its involuntary dissolution or split up and such order shall
remain undischarged and unstayed for a period of thirty (30) days; or any Loan
Party shall otherwise dissolve or cease to exist.

(j) Loan Documents. At any time, for any reason, (i) any Loan Document ceases to
be in full force and effect or any Loan Party seeks to repudiate its obligations
thereunder or the Liens intended to be created thereby are, or any Loan Party
seeks to render such Liens, invalid or unperfected, or (ii) Liens in favor of
the Collateral Agent contemplated by the Loan Documents shall, at any time, for
any reason, be invalidated or otherwise cease to be in full force and effect, or
such Liens shall be subordinated or shall not have the priority contemplated
hereby or by the other Loan Documents.

(k) ERISA Liabilities. Any Termination Event (as defined in ERISA) occurs which
will or is reasonably likely to subject either the Borrower or an ERISA
Affiliate to a liability that exceeds $10,000,000.

(l) Waiver Application. The plan administrator of any Benefit Plan applies under
Section 412(d) of the Code for a waiver of the minimum funding standards of
Section 412(a) of the Code and the Administrative Agent believes that the
substantial business hardship upon which the application for the waiver is based
could subject either the Borrower or any ERISA Affiliate to liability that
exceeds $10,000,000.

 

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(m) Material Adverse Effect. The occurrence of any event having a Material
Adverse Effect.

An Event of Default shall be deemed “continuing” until cured or waived in
writing in accordance with Section 13.05.

10.02. Rights and Remedies.

(a) Acceleration and Termination. Upon the occurrence of any Event of Default
described in Section 10.01(f) or 10.01(g), the Commitment shall automatically
and immediately terminate and the unpaid principal amount of, and any and all
accrued interest on, the Obligations and all accrued fees shall automatically
become immediately due and payable, without presentment, demand, or protest or
other requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by each Loan
Party, and the obligations of the Lenders to make Loans hereunder shall
thereupon terminate; and upon the occurrence and during the continuance of any
other Event of Default, the Administrative Agent may, and at the written
direction of the Required Lenders shall, declare (i) that the Commitment is
terminated, whereupon the Commitment shall immediately terminate, and/or
(ii) the unpaid principal amount of, and any and all accrued interest on, the
Obligations and all accrued fees to be, and the same shall thereupon be,
immediately due and payable, without presentment, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration, except as may be specifically provided for herein).

(b) Enforcement. Each Loan Party acknowledges that in the event any Loan Party
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement or any other Loan Document, any remedy of law may prove to
be inadequate relief to the Administrative Agent, the Collateral Agent or any
Lender; therefore, each Loan Party agrees that the Administrative Agent, the
Collateral Agent or any Lender shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.

ARTICLE XI

CASH COLLATERAL

11.01. Cash Collateral Accounts.

(a) Establishment of Accounts. On or prior to the Closing Date, (i) AHL shall
have established two Deposit Account which are subject to a Control Account
Agreement (the “AHL Cash Collateral Accounts”) and (ii) the REIT shall have
established a Deposit Account which is subject to a Control Account Agreement
(the “REIT Cash Collateral Account”).

 

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(b) Deposits. AHL has directed the REIT and its Board of Directors that all
dividends to be paid on the common stock of the REIT shall be paid directly to
one of the AHL Cash Collateral Accounts (“AHL Cash Flow Account”). In addition,
Holdings agrees that promptly upon the receipt by it or any Subsidiary of any
federal tax refund for 2006 or 2007, it shall deposit, or cause to be deposited,
such refund directly into the AHL Cash Flow Account. To the extent that the
dividends paid on the common stock of the REIT are not paid directly to AHL Cash
Flow Account, AHL hereby agrees to deposit all such dividends into the AHL Cash
Flow Account promptly upon AHL’s receipt thereof and, pending deposit, to hold
such dividends in trust for the benefit of the Collateral Agent, the
Administrative Agent and the Lenders. $30,000,000 shall be deposited by AHL on
the Closing Date in the other AHL Cash Collateral Account (the “AHL Deposit
Collateral Account”).

(c) Use of Funds on Deposit. The funds on deposit in the AHL Deposit Collateral
Account may be used by AHL to support and invest in any Qualified Securitization
Transactions permitted under Section 9.01 and for the equity component of
committed warehouse lines of credit permitted under Section 9.01, provided that
the Collateral Agent has a first priority perfected security interest in the
residual and subordinated interests held by one or more Loan Parties of such new
securitizations (the “AHL Deposit Collateral Account Permitted Purposes”). If an
Event of Default has occurred, the Collateral Agent shall have the right to
terminate AHL’s access to the AHL Deposit Collateral Account, provided however
AHL may continue to use the funds on deposit in the AHL Deposit Collateral
Account for AHL Deposit Collateral Account Permitted Purposes with the consent
of the Collateral Agent, which consent shall not be unreasonably withheld. So
long as no Default or Event of Default has occurred and the Liquidity is not
below $75,000,000, AHL shall have access to funds on deposit in the AHL Cash
Flow Account. At any time that the Liquidity is below $75,000,000, 50% of all
dividends on the common stock of the REIT and 100% of any federal tax refund
relating to the 2006 and 2007 calendar year-end will remain in the AHL Cash Flow
Account. If any Default or Event of Default occurs, all dividends of the common
stock of the REIT and 100% of any federal tax refund relating to the 2006 and
2007 calendar year-end will remain in the AHL Cash Flow Account during the
existence of such Default or Event of Default.

(d) Cash Collateral Accounts. The Cash Collateral Accounts shall be under the
sole dominion and control of the Collateral Agent. The Collateral Agent alone
shall have power of withdrawal from the Cash Collateral Accounts, except as
provided in the next sentence. Upon the terms and subject to the conditions set
forth in the Control Account Agreements and provided that no Default and Event
of Default shall have occurred, AHL shall have access to the funds on deposit in
the AHL Cash Collateral Accounts in accordance with Section 11.01(c). Upon a
Default or an Event of Default, the Collateral Agent may terminate AHL’s access
to such funds.

(e) Funds on Deposit. Upon an Event of Default, the Collateral Agent may direct
that all funds received in the Cash Collateral Accounts shall be transferred to
the Administrative Agent for application to the Loans. So long as no Default or
Event of Default has occurred and is continuing, funds on deposit in the REIT
Cash Collateral Account shall be released to the extent it is established,
pursuant to procedures substantially similar to those set forth in Section 9.06,
that the Residual Value equals or exceeds 125% of the Combined REIT Debt.

 

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ARTICLE XII

THE AGENTS

12.01. Appointment Powers and Immunities; Delegation of Duties, Liability of
Agents.

(a) Each Lender hereby designates and appoints the Administrative Agent as its
administrative agent under this Agreement and the other Loan Documents and the
Collateral Agent as its collateral agent under this Agreement and the other Loan
Documents. Each Lender hereby irrevocably authorizes each such Agent to take
such action on such Lender’s behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Each
such Agent agrees to act as such on the express conditions contained in this
Article XII. The provisions of this Article XII are solely for the benefit of
the Administrative Agent, Collateral Agent, and the Lenders. The Borrower shall
not have any rights as a third party beneficiary of any of the provisions
contained herein. Any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document notwithstanding, each such Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, nor shall each such Agent have or be deemed to have any fiduciary
relationship with any of the Lenders and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against each such Agent;
it being expressly understood and agreed that the use of the word “Agent” is for
convenience only and that each such Agent is merely the representative of the
Lenders, and has only the contractual duties set forth in this Agreement and the
other Loan Documents. Except as expressly otherwise provided in this Agreement,
each such Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which such Agent is expressly entitled to
take or assert under or pursuant to this Agreement and the other Loan Documents.
No Lender shall have any right of action whatsoever against each such Agent as a
result of such Agent acting or refraining from acting hereunder pursuant to such
discretion and any action taken or failure to act pursuant to such discretion
shall be binding on the Lenders. Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides rights
or powers to Administrative Agent or Collateral Agent, each of the Lenders agree
that, as long as this Agreement remains in effect: (i) (A) Administrative Agent
shall have the right to maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Obligations, the
Loans, Collections, and related matters, and (B) Collateral Agent shall have the
right to maintain, in accordance with its customary business practices, ledgers
and records reflecting the status of the Collateral and related matters;
(ii) Collateral Agent shall have the right to execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to the Loan Documents; (iii) Administrative Agent shall have the
right to exclusively receive, apply, and distribute the Collections as provided
in the Loan Documents; (iv) Administrative Agent shall have the right to open
and maintain such bank accounts and lock boxes as Administrative Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collections and, on behalf of Collateral
Agent, with respect to the Collateral; (v) (A) Administrative Agent shall have
the right to perform, exercise,

 

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and enforce any and all other rights and remedies of the Lenders with respect to
the Borrower, the Obligations, the Collections, or otherwise related to any of
same as provided in the Loan Documents, and (B) Collateral Agent shall have the
right to perform, exercise, and enforce any and all other rights and remedies of
the Lenders with respect to Borrower, the Obligations, the Collateral, or
otherwise related to any of same as provided in the Loan Documents; and
(vi) Administrative Agent and Collateral Agent each shall have the right to
incur and pay such fees, charges, and expenses under the Loan Documents as such
Agent reasonably may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.
Administrative Agent may deem and treat the payee of any Obligation as the
holder thereof for all purposes of the Loan Documents unless and until a notice
of the assignment or transfer of such Obligation shall have been filed with
Administrative Agent. Each Lender further consents to (y) the execution,
delivery, and performance by Administrative Agent or Collateral Agent of each
Loan Document entered into by such Agent on behalf of the Lenders as
contemplated by this Agreement, and (z) the terms of such Loan Documents.

(b) Except as otherwise provided in this section, each of Administrative Agent
and Collateral Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. Each of Administrative Agent and Collateral Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects as long as such selection was made in compliance with this
section and without gross negligence or willful misconduct.

(c) None of the Agent-Related Persons shall (i) be liable for any action taken
or omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any Lender for any recital, statement, representation or warranty made
by any Borrower or Affiliate of any Borrower, or any officer or director
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Administrative Agent or Collateral Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower.

12.02. Reliance by Agents. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by such Agent. Each Agent shall be fully justified in failing
or refusing to take any action under this Agreement or any other Loan Document
unless it first shall receive such advice or concurrence of the Lenders as it
deems appropriate and until such instructions are

 

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received, such Agent shall act, or refrain from acting, as it deems advisable.
If any Agent so requests, it first shall be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent in all cases shall be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all Lenders.

12.03. Defaults. Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest, fees, and expenses required
to be paid to Administrative Agent for the account of the Lenders, except with
respect to Events of Default of which Administrative Agent has actual knowledge,
and unless Administrative Agent shall have received written notice from a Lender
or Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a “Notice of Default”. Administrative
Agent promptly will notify the Lenders of its receipt of any such notice or of
any Event of Default of which Administrative Agent has actual knowledge. If any
Lender obtains actual knowledge of any Event of Default, such Lender promptly
shall notify the other Lenders and each Agent of such Event of Default. Each
Lender shall be solely responsible for giving any notices to its participants,
if any. Subject to Sections 12.02 and 12.07, each Agent shall take such action
with respect to such Default or Event of Default as may be requested by the
Required Lenders in accordance with Article X; provided, however, that unless
and until such Agent has received any such request, such Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.

12.04. Rights as a Lender.

(a) With respect to its Commitments and the Loans made by it, Farallon (and any
successor acting as Administrative Agent, if any, as permitted by
Section 12.08(a) hereof) in its capacity as a Lender under the Loan Documents
shall have the same rights, privileges and powers under the Loan Documents as
any other Lender and may exercise the same as though it were not acting as
Administrative Agent, and the term “Lender” or “Lenders” shall, unless the
context otherwise indicates, include Administrative Agent in its individual
capacity. Farallon (and any successor acting as Administrative Agent) and its
affiliates may (without having to account for the same to any Lender) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with Borrower (and any of its
Affiliates) as if it were not acting as Administrative Agent, and Farallon (and
its successors) and its affiliates may accept fees and other consideration from
Borrower for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.

(b) With respect to its Commitments and the Loans made by it, Farallon (and any
successor acting as Collateral Agent, if any, as permitted by Section 12.08(b)
hereof) in its capacity as a Lender under the Loan Documents shall have the same
rights, privileges and powers under the Loan Documents as any other Lender and
may exercise the same as though it were not acting as Collateral Agent, and the
term “Lender” or “Lenders” shall, unless the context otherwise indicates,
include Collateral Agent in its individual capacity. Farallon (and any

 

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successor acting as Collateral Agent) and its affiliates may (without having to
account for the same to any Lender) accept deposits from, lend money to, make
investments in and generally engage in any kind of banking, trust or other
business with Borrower (and any of its Affiliates) as if it were not acting as
Collateral Agent, and Farallon and its affiliates may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.

12.05. Costs and Expenses; Indemnification. Each Agent may incur and pay fees,
costs, and expenses under the Loan Documents to the extent such Agent deems
reasonably necessary or appropriate for the performance and fulfillment of its
functions, powers, and obligations pursuant to the Loan Documents, including
without limiting the generality of the foregoing, court costs, reasonable
attorneys fees and expenses, costs of collection by outside collection agencies
and auctioneer fees and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not any Borrower is obligated to reimburse
the Lenders for such expenses pursuant to the Loan Agreement or otherwise. Each
Lender hereby agrees that it is and shall be obligated to pay to or reimburse
Agent for the amount of such Lender’s Pro Rata Share thereof (in accordance with
its Commitment). Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand the Agent-Related Persons
(without limiting the obligation of Borrower to do so), according to their Pro
Rata Shares (in accordance with their respective total Commitments), from and
against any and all Indemnified Matters (including without limitation
Indemnified Matters arising under any Environmental Law as provided in
Section 13.03); provided, however, that no Lender shall be liable for the
payment to the Agent-Related Persons of any portion of such Indemnified Matters
resulting solely from such Person’s gross negligence or willful misconduct as
determined in a final order by a court of competent jurisdiction. Without
limitation of the foregoing, each Lender shall reimburse Administrative Agent or
Collateral Agent, as the case may be, upon demand for such Lender’s ratable
share of any costs or out-of-pocket expenses (including attorneys fees and
expenses) incurred by such Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein. The undertaking
in this section shall survive the payment of all Obligations hereunder and the
resignation or replacement of any Agent.

12.06. Non-Reliance on Agents and Other Lenders. Each Lender acknowledges that
none of the Agent-Related Persons has made any representation or warranty to it,
and that no act by any Agent hereinafter taken, including any review of the
affairs or Property of Borrower, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to each Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower and any other Person (other than the Lenders) party
to a Loan Document, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own

 

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credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower and any
other Person (other than the Lenders) party to a Loan Document. Except for
notices, reports and other documents expressly herein required to be furnished
to the Lenders by Agent, no Agent shall have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, Property, financial and other condition or
creditworthiness of Borrower and any other Person party to a Loan Document that
may come into the possession of any of the Agent-Related Persons.

12.07. Failure to Act. Except for action expressly required of any Agent under
the Loan Documents, such Agent shall in all cases be fully justified in failing
or refusing to act under any Loan Document unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 12.05 against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.

12.08. Resignation of Agent.

(a) The Administrative Agent may resign at any time by notice to the Lenders and
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been appointed by the Required Lenders and have accepted such
appointment within 30 days after the retiring Administrative Agent’s giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent. Upon the acceptance of
any appointment as the Administrative Agent by a successor Administrative Agent,
such successor Administrative Agent shall thereupon succeed to and become vested
with all the rights, remedies, powers, privileges, duties and obligations of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations, under the Loan Documents. After any
retiring Administrative Agent’s resignation as Administrative Agent, the
provisions of this Article XII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.

(b) Collateral Agent may resign at any time by notice to the Lenders and
Borrower. Upon any such resignation, Required Lenders shall have the right to
appoint a successor Collateral Agent. If no successor Collateral Agent shall
have been appointed by Required Lenders and have accepted such appointment
within 30 days after the retiring Collateral Agent’s giving of notice of
resignation, then the retiring Collateral Agent may, on behalf of Lenders,
appoint a successor Collateral Agent. Upon the acceptance of any appointment as
Collateral Agent by a successor Collateral Agent, such successor Collateral
Agent shall thereupon succeed to and become vested with all the rights,
remedies, powers, privileges, duties and obligations of the retiring Collateral
Agent, and the retiring Collateral Agent shall be discharged from its duties and
obligations, under the Loan Documents. After any retiring Collateral Agent’s
resignation as Collateral Agent, the provisions of this Article XII shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Collateral Agent.

 

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12.09. Collateral Sub-Agents. The Lenders by its execution and delivery of this
Agreement (or any joinder hereto or any Assignment and Acceptance hereunder),
agrees that, in the event it shall hold any monies or other investments on
account of Borrower, such monies or other investments shall be held in the name
and under the control of the Administrative Agent or such Lender, and the
Administrative Agent or such Lender shall hold such monies or other investments
as a collateral sub-agent for Collateral Agent under this Agreement and the
other Loan Documents. Borrower by its execution and delivery of this Agreement
hereby consents to the foregoing.

12.10. Communications by Borrower. Except as otherwise provided in this
Agreement, any communications of the Borrower with respect to the Loan Documents
shall be with Administrative Agent or Collateral Agent, as the case may be, and
such Borrower shall be under no obligation to communicate directly with the
Lenders.

12.11. Collateral Matters.

(a) The Lenders hereby irrevocably authorize Collateral Agent, at its option and
in its sole discretion, to release any Lien on any Collateral (i) upon the
termination of the Commitments and payment and satisfaction in full by the
Borrower of all Obligations or (ii) in accordance with the provisions of the
Loan Documents. Except as provided above or expressly provided in any other Loan
Document, Collateral Agent will not execute and deliver a release of any Lien on
any Collateral without the prior written authorization of the Required Lenders.

(b) Collateral Agent shall have no obligation whatsoever to any other Lenders to
assure that the Collateral exists or is owned by Borrower or is cared for,
protected, or insured or has been encumbered, or that the Lenders’ Liens have
been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Collateral Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, subject to the terms and conditions contained herein,
Collateral Agent may act in any manner it may deem appropriate, in its sole
discretion given Collateral Agent’s own interest in the Collateral in its
capacity as one of the Lenders and that Collateral Agent shall have no other
duty or liability whatsoever to any other Lender as to any of the foregoing,
except as otherwise provided herein.

12.12. Restrictions on Actions by Administrative Agent and the Lenders; Sharing
Payments.

(a) Administrative Agent and each of the Lenders agrees that it shall not,
without the express consent of Collateral Agent, and that it shall, to the
extent it is lawfully entitled to do so, upon the request of Administrative
Agent and Collateral Agent, set off against the Obligations, any amounts owing
by such Lenders to Borrower or any accounts of Borrower now or hereafter
maintained with such Lenders. Administrative Agent and each of the Lenders
further agrees that it shall not, unless specifically requested to do so by
Collateral Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral the purpose of
which is, or could be, to give such Lenders any preference or priority against
the other Lenders with respect to the Collateral.

 

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(b) Subject to Section 12.04, if, at any time or times any Lender shall receive
(i) by payment, foreclosure, setoff or otherwise, any proceeds of Collateral or
any payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Administrative Agent pursuant to the terms of this
Agreement, or (ii) payments from Administrative Agent in excess of such Lender’s
ratable portion of all such distributions by Administrative Agent, such Lender
promptly shall turn the same over to Administrative Agent, in kind, and with
such endorsements as may be required to negotiate the same to Administrative
Agent, or in same day funds, as applicable, for the account of the Lenders and
for apportionment and application to the Obligations in accordance with
Section 2.06(c) hereof.

12.13. Several Obligations; No Liability. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of an Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Administrative Agent (if any) to
make any credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lenders. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 12.05, no Agent or any Lender shall have
any liability for the acts of the other Agent or any other Lender. No Lender
shall be responsible to Borrower or any other Person for any failure by any
other Lender to fulfill its obligations to make credit available hereunder, nor
to advance for it or on its behalf in connection with its Commitment, nor to
take any other action on its behalf hereunder or in connection with the
financing contemplated herein.

ARTICLE XIII

MISCELLANEOUS

13.01. Assignments and Participations. (a) This Agreement shall be binding upon
and inure to the benefit of Borrowers and the Lenders and their respective
successors and assigns; provided, however, that Borrowers may not assign or
transfer any of their rights hereunder without the prior written consent of the
Lenders, which consent may be granted or withheld in the Lenders’ sole
discretion and any such assignment without the Lenders’ prior written consent
shall be null and void. Each Lender may at any time sell, assign or participate
its rights and obligations under this Agreement to an Eligible Assignee without
notice to or the consent of the Borrowers or any other Lenders.

(b) Limitations on Assignments. Each assignment shall be subject to the
following conditions: (i) each assignment shall be of a constant, and not a
varying, ratable percentage of all of the assigning Lender’s rights and
obligations in respect of its interest being

 

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assigned under this Agreement and its Note and, in the case of a partial
assignment, shall be in a minimum principal amount of $40,000,000 and shall be
an integral multiple of $100,000 except that such limitations shall not apply to
an assignment by any Lender of any portion of its rights and obligations to
another Lender, or an assignment by any Lender of any portion of its rights and
obligations to an Affiliate of such Lender, or an assignment by any Lender of
all of its rights or obligations to another Person, (ii) each such assignment
shall be to an Eligible Assignee, and (iii) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $5,000; provided, however, any Lender may
assign any or all of its rights and obligations under this Agreement to any of
its Affiliates without notice to or consent of the Borrower or the
Administrative Agent and without being subject to the foregoing conditions
(including the payment of the processing and recordation fee). Upon such
execution, delivery, acceptance and recording in the Register, from and after
the effective date specified in each Assignment and Acceptance and accepted by
the Administrative Agent (which effective date shall not be any earlier than the
date on which the Administrative Agent so accepts and records the Assignment and
Acceptance in the Register), (x) the assignee thereunder shall, in addition to
any rights and obligations hereunder held by it immediately prior to such
effective date, if any, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and shall, to the
fullest extent permitted by law, have the same rights and benefits hereunder as
if it were an original Lender hereunder and (y) the assigning Lender shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of such
assigning Lender’s rights and obligations under this Agreement, the assigning
Lender shall cease to be a party hereto).

(c) The Register. The Administrative Agent, acting for this purpose as agent for
the Borrower, shall maintain at its address a copy of each Assignment and
Acceptance delivered to and accepted by it and a register (the “Register”) for
the recordation of the names and addresses of the Lenders and the Commitment of
each Lender from time to time and whether such Lender is an original Lender or
the assignee of another Lender pursuant to an Assignment and Acceptance. The
Administrative Agent shall incur no liability of any kind to the Borrower, any
Lender or any other Person with respect to its maintenance of the Register or
the recordation of information therein subject to the Agents gross negligence or
willful misconduct. The Register shall include a control account and a
subsidiary account for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent from the Borrowers hereunder and each
Lender’s share thereof. The Administrative Agent will render a monthly statement
of such accounts to the Borrowers. Each such statement shall be deemed final,
binding and conclusive upon the Borrowers in all respects as to all matters
reflected therein (absent manifest error) unless the Borrowers, within thirty
(30) days after the date such statement is rendered, delivers to the
Administrative Agent written notice of any objections which the Borrowers may
have to any such statement. In that event, only those items expressly objected
to in such notice shall be deemed to be disputed by the Borrowers. The entries
in the Register shall be final, conclusive and binding upon the Borrowers

 

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for all purposes, absent manifest error, and the Borrowers and each other Loan
Party, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice. No assignment shall be effective unless and until the Assignment and
Acceptance has been accepted by the Administrative Agent and registered in the
Register.

(d) Fee. Upon its receipt of an Assignment and Acceptance executed by the
assigning Lender and an Eligible Assignee and a processing and recordation fee
of $5,000 (payable by the assigning Lender or the assignee, as shall be agreed
between them), the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in compliance with this Agreement and in substantially
the form of Exhibit A hereto, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrowers and the other Lenders.

(e) Participations. Each Lender may sell participations to one or more
commercial banks, lending institutions, finance companies, insurance companies,
other financial institutions or funds in or to all or a portion of its rights
and obligations under and in respect of any and all facilities under this
Agreement (including, without limitation, all or a portion of any or all of its
Commitments hereunder); provided, however, that (i) such Lender’s obligations
under this Agreement (including, without limitation, its Commitments hereunder)
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, (iv) such participant must be an Eligible
Assignee, and (v) such participant’s rights to agree or to restrict such
Lender’s ability to agree to the modification, waiver or release of any of the
terms of the Loan Documents or to the release of any Collateral covered by the
Loan Documents, to consent to any action or failure to act by any party to any
of the Loan Documents or any of their respective Affiliates, or to exercise or
refrain from exercising any powers or rights which any Lender may have under or
in respect of the Loan Documents or any Collateral, shall be limited to the
right to consent to (A) the increase in the Commitment of the Lender from whom
such participant purchased a participation, (B) the reduction of the principal
of, or rate or amount of interest on, the Loans subject to such participation
(other than by the payment or prepayment thereof), (C) the postponement of any
date fixed for any payment of principal of, or interest on, the Loan(s) subject
to such participation (except with respect to any modifications of the
provisions relating to prepayments of Loans and other Obligations) and (D) the
release of any guarantor of the Obligations or all or a substantial portion of
the Collateral.

(f) Information Regarding the Borrower. Any Lender may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 13.01, disclose to the assignee or participant or proposed assignee
or participant, any information relating to any of the Borrower or any other
Loan Party furnished to such Lender by the Administrative Agent or by or on
behalf of such Borrower or such Loan Party; provided that, prior to any such
disclosure, such assignee or participant, or proposed assignee or participant,
shall agree to preserve the confidentiality of any confidential information
described therein pursuant to the terms of this Agreement.

 

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(g) Payment to Participants. Anything in this Agreement to the contrary not
withstanding, in the case of any participation, all amounts payable by the
Borrower under the Loan Documents shall be calculated and made in the manner and
to the parties required hereby as if no such participation had been sold.

(h) Lenders’ Creation of Security Interests. Notwithstanding any other provision
set forth in this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this Agreement and its Note
(including, without limitation, Obligations owing to it and the Note held by it)
in favor of any Federal Reserve Bank of the Federal Reserve Board without
consent of any of the Borrower or the Administrative Agent. Lender will give
notice of such security interest, provided that the failure to do so will in no
way create any liability on the part of the Lender.

13.02. Expenses.

(a) Through Closing Date. The Borrowers agree upon demand to pay, or reimburse
each Agent for, all legal, tax and regulatory costs and expenses (including,
without limitation, fees and expenses of counsel to the Agents) on work
performed through the date hereof and work to be performed through the Closing
Date up to a maximum of $1,500,000.

(b) Following Closing Date. The Borrowers agree upon demand to pay, or reimburse
each Agent for, all reasonable out-of-pocket costs and expenses of every type
and nature incurred (it being understood that Farallon is not changing an
administration fee) by such Agent after the Closing Date in connection with
(i) the interpretation of this Agreement, the other Loan Documents and the
making of the Loans hereunder; (ii) the ongoing administration of this Agreement
and the Loans, including consultation with attorneys in connection therewith and
with respect to such Agent’s rights and responsibilities under this Agreement
and the other Loan Documents; (iii) the protection, collection or enforcement of
any of the Obligations or the enforcement of any of the Loan Documents; (iv) the
commencement, defense or intervention in any court proceeding relating in any
way to the Obligations, the assets of any Loan Party, any Loan Party, this
Agreement or any of the other Loan Documents; (v) the response to, and
preparation for, any subpoena or request for document production with which such
Agent is served or deposition or other proceeding in which such Agent is called
to testify, in each case, relating in any way to the Obligations, the assets of
any Loan Party, any Loan Party, this Agreement or any of the other Loan
Documents; and (vi) any amendments, consents, waivers, assignments,
restatements, or supplements to any of the Loan Documents and the preparation,
negotiation, and execution of the same.

(c) After Default. The Borrowers further agree to pay or reimburse each Agent
and each Lender upon demand for all out-of-pocket costs and expenses, including,
without limitation, reasonable attorneys’ fees incurred by such Agent or Lender
after the occurrence of an Event of Default (i) in enforcing any Loan Document
or any of the Obligations or any security therefor or exercising or enforcing
any other right or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit

 

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arrangements provided under this Agreement in the nature of a “work-out” or in
any insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding relating to the Obligations, the
Property, any Loan Party and related to or arising out of the transactions
contemplated hereby or by any of the other Loan Documents; and (iv) in taking
any other action in or with respect to any suit or proceeding (bankruptcy or
otherwise) described in clauses (i) through (iii) above.

13.03. Indemnity. The Borrowers further agree to defend, protect, indemnify, and
hold harmless each Agent and each Lender and each of their respective
Affiliates, and their respective officers, directors, employees, members,
managing members, agents, attorneys-in-fact and shareholders (collectively, the
“Indemnitees”) from and against any and all liabilities, obligations, losses
(other than loss of profits), damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(excluding income, franchise and similar taxes and including, without
limitation, the fees, expenses and disbursements of legal counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees in any
manner relating to or arising out of (a) this Agreement, the Notes, the other
Loan Documents, or any act, event or transaction related or attendant thereto,
the making of the Loans, the use or intended use of the proceeds of the Loans,
or any of the transactions contemplated by the Loan Documents, or (b) any
liabilities and costs under any Environmental Law or common law principles
arising from or in connection with the past, present or future operations of any
Loan Party or any of its predecessors in interest, or, the past, present or
future environmental condition of any Property of any Loan Party, the presence
of asbestos-containing materials at any Property of any Loan Party or the
Release or threatened Release of any Hazardous Material into the environment
from any Property of any Loan Party or to which any Loan Party sent any
Hazardous Material for treatment, storage disposal or recycling (collectively,
the “Indemnified Matters”); provided, however, the Borrowers shall have no
obligation to an Indemnitee hereunder with respect to Indemnified Matters caused
by or resulting from the willful misconduct or gross negligence of such
Indemnitee, as determined by a court of competent jurisdiction in a judgment or
order. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, each Borrower shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnitees.

13.04. Setoff. In addition to any Liens granted under the Loan Documents and any
rights now or hereafter granted under applicable law, upon the occurrence and
during the continuance of any Event of Default, each Lender and any Affiliate of
such Lender (at its option but only with the prior written consent of all
Lenders) is hereby authorized by each Borrower and each other Loan Party at any
time and from time to time, without notice to any Person (any such notice being
hereby expressly waived) to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured (but not
including trust accounts)) and any other Indebtedness at any time held or owing
by the Lenders or any of their respective Affiliates to or for the credit or the
account of such Borrower or such other Loan Party against and on account of the
Obligations of the Borrowers to the Lenders or any of their respective
Affiliates, including,

 

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but not limited to, all Loans and all claims of any nature or description
arising out of or in connection with this Agreement or the Notes, irrespective
of whether or not (i) the Lenders shall have made any demand hereunder or
(ii) the Lenders shall have declared the principal of and interest on the Loans
and other amounts due hereunder and under the Notes to be due and payable as
permitted by Article X and even though such Obligations may be contingent or
unmatured. The Lenders agree to notify Borrowers, Collateral Agent and
Administrative Agent promptly after any such set-off and application made by the
Lenders provided that the failure to give such notice to the Borrowers shall not
affect the validity of such set-off and application.

13.05. Amendments and Waivers. Unless otherwise provided in this Agreement, no
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by any Loan Party or any Lenders
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders (or by Administrative Agent and Collateral
Agent, in each case, at the written request of the Required Lenders), and, with
respect to amendment, by the Borrowers, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by Borrower, all the Lenders, Administrative Agent
and Collateral Agent do any of the following:

(a) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document;

(b) reduce the principal of, or the rate of interest specified herein, on any
Loan, or any fees or other amounts payable hereunder or under any other Loan
Document, or forgive, compromise, or cancel any of the Obligations;

(c) amend this Section or any provision of the Agreement providing for consent
or other action by all Lenders;

(d) release Collateral other than as permitted by Section 12.11, or subordinate
any security interest or liens of Collateral Agent for the benefit of the
Lenders;

(e) change the definition of “Required Lenders” or “Pro Rata Share”;

(f) release any Loan Party from any Obligation for the payment of money, or
agree to subordinate any of the Obligations in right of payment to any other
Indebtedness;

(g) permit the sale of all or substantially all of the assets of any Loan Party;

(h) amend any of the provisions of Article XIII;

and, provided further, however, that (1) no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent, affect the rights or
duties of the Administrative Agent under this Agreement or any other Loan
Document, (2) no amendment, waiver or consent shall, unless in writing and
signed by Collateral Agent, affect the rights or duties of Collateral Agent
under this Agreement or any other Loan Document, and (3) each of the Lenders is
hereby

 

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deemed to have instructed the Collateral Agent (A) to release its Liens as to
the property which is the subject of any asset sale, assignment or other
disposition of property or assets which is permitted hereunder without any
further consent of any Lender, and (B) to take such other actions as are
necessary or desirable to facilitate any such disposition. The foregoing
notwithstanding, any amendment, modification, waiver, consent, termination, or
release of or with respect to Article XII shall not require the consent by or
the agreement of any Loan Party.

13.06. Notices. (a) Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, faxed or sent by courier service or United States
certified mail and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of a facsimile or three (3) Business Days
after deposit in the United States mail with postage prepaid and properly
addressed. Notices to the Administrative Agent pursuant to Article II shall not
be effective until received by the Administrative Agent. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 13.06) shall be as set forth below each
party’s name on the signature pages hereof, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties to this Agreement.

(b) Each Loan Party agrees to indemnify and hold harmless each Indemnitee from
and against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind or nature (including, without limitation, reasonable fees and disbursements
of counsel to any such Indemnitee) which may be imposed on, incurred by or
asserted against any such Indemnitee in any manner relating to or arising out of
any action taken or omitted by such Indemnitee in good faith in reliance on any
notice or other written communication in the form of a facsimile purporting to
be from the Borrower; provided that such Loan Party shall have no obligation
under this Section 13.06(b) to an Indemnitee with respect to any indemnified
matter caused by or resulting from the gross negligence or willful misconduct of
that Indemnitee, as determined by a court of competent jurisdiction in a
judgment or order.

13.07. Survival of Warranties and Agreements. All representations and warranties
made herein and all obligations of the Borrower in respect of taxes,
indemnification and expense reimbursement shall survive the execution and
delivery of this Agreement and the other Loan Documents, the making and
repayment of the Loans and the termination of this Agreement and shall not be
limited in any way by the passage of time or occurrence of any event and shall
expressly cover time periods when the Agents or Lenders may have come into
possession or control of any assets of any Loan Party.

13.08. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of the Administrative Agent, the Collateral Agent or the
Lenders in the exercise of any power, right or privilege under this Agreement,
the Notes or any of the other Loan Documents shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing under this Agreement, the Notes and
the other Loan Documents are cumulative to and not exclusive of any rights or
remedies otherwise available.

 

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13.09. Marshalling; Payments Set Aside. None of the Administrative Agent, the
Collateral Agent or any Lender shall be under any obligation to marshal any
assets in favor of any Borrower, any other Loan Party or any other Person or
against or in payment of any or all of the Obligations. To the extent that any
Borrower makes a payment or payments to any Lender or Agent, or any of such
Persons exercises its rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, right and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

13.10. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.

13.11. Severability. In case any provision in or obligation under this
Agreement, the Notes or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

13.12. Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
or be given any substantive effect.

13.13. GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

13.14. Limitation of Liability. No claim may be made by the Borrowers, any other
Loan Party or any other Person against any Agent, any Lender or their respective
Affiliates, directors, officers, employees, attorneys or agents of any of them
for any special, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement or the Notes or the other Loan
Documents, or any act, omission or event occurring in connection therewith; and
each Borrower and each other Loan Party hereby waive, release and agree not to
sue upon any such claim for any such damages, whether or not accrued and whether
or not known or suspected to exist in its favor.

13.15. Successors and Assigns. This Agreement, the Notes and the other Loan
Documents shall be binding upon the parties thereto and their respective
successors and assigns and shall inure to the benefit of the parties thereto and
the successors and permitted assigns of the Lenders. The rights hereunder of the
Borrowers and the other Loan Parties, or any interest therein, may not be
assigned without the written consent of the Lenders.

 

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13.16. Certain Consents and Waivers.

13.17. CONSENT TO JURISDICTION, SERVICE OF PROCESS AND VENUE. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER HEREBY IRREVOCABLY ACCEPTS IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION
13.06, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING.
BORROWER HEREBY IRREVOCABLY APPOINTS CT CORPORATION, 111 EIGHTH AVENUE, NEW
YORK, NEW YORK, 10011, AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT OR
LENDER TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER
JURISDICTION. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, BORROWER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

13.18. WAIVER OF JURY TRIAL, ETC. BORROWER, EACH AGENT AND EACH LENDER HEREBY
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES OR OTHER LOAN DOCUMENTS,
OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT
DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR
ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. BORROWER CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH LENDER WOULD NOT, IN THE EVENT OF

 

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ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.
BORROWER HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE LENDERS ENTERING INTO THIS AGREEMENT.

13.19. Counterparts; Effectiveness; Inconsistencies. This Agreement and any
amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective against the Loan Parties,
the Administrative Agent, the Collateral Agent and each Lender on the date
hereof when each such party hereto executes and delivers this Agreement. This
Agreement and each of the other Loan Documents shall be construed to the extent
reasonable to be consistent one with the other, but to the extent that the terms
and conditions hereof are actually inconsistent with the terms and conditions of
any other Loan Document, this Agreement shall govern.

13.20. Entire Agreement. This Agreement, taken together with all of the other
Loan Documents, embodies the entire agreement and understanding among the
parties hereto and supersedes all prior agreements and understandings, written
and oral, relating to the subject matter hereof.

13.21. Confidentiality. The Lenders, Administrative Agent and Collateral Agent
shall hold all nonpublic information of the Loan Parties obtained pursuant to
the requirements of this Agreement in accordance with Administrative Agent’s,
Collateral Agent’s and each Lender’s customary procedures for handling
confidential information of this nature and in accordance with safe and sound
practices and in any event may make disclosure reasonably required by a bona
fide offeree, transferee or participant in connection with the contemplated
transfer or participation or as required or requested by any Governmental
Authority or representative thereof or pursuant to legal process and shall
require any such offeree, transferee or participant to agree (and require any of
its offerees, transferees or participants to agree) to comply with this
Section 13.22. In no event shall any Agent or Lender be obligated or required to
return any materials furnished by any Loan Party.

13.22. Integration. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

13.23. Interpretation. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against any Agent, any Lender or the
Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.

 

ACCREDITED HOME LENDERS, INC.,
as Borrower By:     /s/ James A. Konrath Title:     Chief Executive Officer  
Address:  

15253 Avenue of Science

 

San Diego, CA 92128

  ACCREDITED MORTGAGE LOAN REIT TRUST,
as Borrower By:     /s/ James A. Konrath Title:     Chief Executive Officer
Address:  

15253 Avenue of Science

 

San Diego, CA 92128

  ACCREDITED HOME LENDERS HOLDINGS CO.,
as a Guarantor By:     /s/ James A. Konrath Title:     Chief Executive Officer
Address:  

15253 Avenue of Science

 

San Diego, CA 92128

 

 

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FARALLON CAPITAL MANAGEMENT, L.L.C.,
as Administrative Agent By:     /s/ Jason E. Moment Title:   Managing Member
Address:  

1 Maritime Plaza

Suite 2100

San Francisco, CA 94111

Att: Monica Landry & Colby Clark

FARALLON CAPITAL MANAGEMENT, L.L.C.,
as Collateral Agent By:     /s/ Jason E. Moment Title:   Managing Member
Address:  

1 Maritime Plaza

Suite 2100

San Francisco, CA 94111

Att: Monica Landry & Colby Clark

MORTGAGE INVESTMENTS FUNDING, L.L.C.,
as Lender By: Farallon Capital Management, L.L.C., its Manager By:     /s/ Jason
E. Moment Title:   Managing Member Address:  

1 Maritime Plaza

Suite 2100

San Francisco, CA 94111

Att: Monica Landry & Colby Clark