EXHIBIT 10.1

EXECUTION VERSION

 

LOAN AND SECURITY AGREEMENT

dated as of November 17, 2006

among

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent for the Various Lenders

and

VARIOUS LENDERS

and

HOMEBANC MORTGAGE CORPORATION,

as a Borrower

and

HOMEBANC CORP.,

as a Borrower

and

KEYBANK NATIONAL ASSOCIATION,

as Syndication Agent

and

COMMERZBANK AKTIENGESELLSCHAFT NEW YORK BRANCH AND GRAND CAYMEN BRANCH, BNP
PARIBAS AND US BANK NATIONAL ASSOCIATION,

as Documentation Agents

and

J.P. MORGAN SECURITIES INC.

as Sole Bookrunner and Sole Lead Arranger

 

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EXECUTION VERSION

 

 

 

TABLE OF CONTENTS

 

Page

 

 

SECTION 1    DEFINITIONS AND INTERPRETATIONS

1

 

 

SECTION 2    LOANS

21

 

 

SECTION 3    PAYMENTS, FEES, ACCOUNTS

22

 

 

SECTION 4    BORROWING BASE DEFICIENCIES

24

 

 

SECTION 5    CONDITIONS PRECEDENT

25

 

 

SECTION 6    REQUIREMENTS OF LAW AND TAXES

28

 

 

SECTION 7    REPRESENTATIONS AND WARRANTIES

32

 

 

SECTION 8    COVENANTS

33

 

 

SECTION 9    EVENTS OF DEFAULT; TERMINATION EVENT

35

 

 

SECTION 10  SECURITY AGREEMENT

38

 

 

SECTION 11  THE LENDERS

45

 

 

SECTION 12  ACTIONS REQUIRING CONSENT

48

 

 

SECTION 13  ADMINISTRATIVE AGENT

50

 

 

SECTION 14  INDEMNIFICATION AND EXPENSES

53

 

 

SECTION 15  RECORDING OF COMMUNICATIONS

54

 

 

SECTION 16  SINGLE AGREEMENT

54

 

 

SECTION 17  SET-OFF

55

 

 

SECTION 18  NOTICES AND OTHER COMMUNICATIONS

55

 

 

SECTION 19  ENTIRE AGREEMENT; SEVERABILITY

55

 

 

SECTION 20  NON-ASSIGNABILITY

56

 

 

SECTION 21  TAX TREATMENT

58

 

 

SECTION 22  TERMINABILITY

58

 

 

SECTION 23  GOVERNING LAW

58

 

 

 

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SECTION 24  SUBMISSION TO JURISDICTION; WAIVERS

58

 

 

SECTION 25  NO WAIVERS, ETC

59

 

 

SECTION 26  RESERVED

59

 

 

SECTION 27  PERIODIC DUE DILIGENCE REVIEW

59

 

 

SECTION 28  MISCELLANEOUS

60

 

 

SECTION 29  CONFIDENTIALITY

61

 

 

SECTION 30  RESERVED

61

 

 

SECTION 31  DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

61

 

 

SECTION 32  CONFLICTS

62

 

 

SECTION 33  AUTHORIZATIONS

62

 

 

SECTION 34  GENERAL INTERPRETIVE PRINCIPLES

62

 

 

SECTION 35  AMENDMENTS

63

 

 

SECTION 36  JOINT AND SEVERAL

63

 

SCHEDULES:

1

Commitments

 

2

Funding Shares

 

3

Authorized Representatives

 

4

Eligible Collateral

 

5

Lenders

 

6

Reserved

 

7

Qualified Subordinated Debt

EXHIBITS:

A

Request for Borrowing

 

B

Note

 

C

Reserved

 

D

Assignment Agreement

 

E

Form of Opinion

 

F

Asset Schedule

 

G

Reserved

 

H

Section 6.2 Certificate

 

I

Subordination Provisions

 

J

LIBOR Period Selection Confirmation

 

 

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LOAN AND SECURITY AGREEMENT

This LOAN AND SECURITY AGREEMENT, dated as of November 17, 2006 (the
“Agreement”), is entered into by and among HOMEBANC CORP., a Georgia Corporation
(“HB Corp.” and a “Borrower”), HOMEBANC MORTGAGE CORPORATION, a Delaware
corporation (“HMC”, a “Borrower” and, together with HB Corp., the “Borrowers”),
the LENDERS party hereto from time to time, and JPMORGAN CHASE BANK, N.A.
(“JPMorgan”), as Administrative Agent for the benefit of the Lenders (together
with its permitted successors in such capacity, “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, in order to finance Servicing Receivables and Servicing Rights owned by
the Borrowers from time to time, each Borrower has requested that the
Administrative Agent and Lenders make available to each Borrower a senior,
secured, revolving line of credit and the Lenders and the Administrative Agent
have agreed to do so on the terms and subject to the conditions of this
Agreement;

WHEREAS, each Borrower has agreed to secure all of their Obligations by granting
to Administrative Agent, for the benefit of Lenders, a first priority Lien on
all of the Collateral; and

NOW, THEREFORE, in consideration of the premises, the mutual agreements stated
below and other good and valuable consideration, the receipt and sufficiency of
which are each hereby acknowledged, the parties hereby agree as follows.

Section 1.          Definitions and Interpretations. As used herein, the
following terms shall have the following meanings (all terms defined in this
Section 1 or in other provisions of this Agreement in the singular to have the
same meanings when used in the plural and vice versa):

“Acknowledgment Agreement” shall mean an acknowledgment agreement in the form
prescribed by Fannie Mae or Freddie Mac to be executed by the Borrowers, the
Administrative Agent and such Agency as a condition to each Borrower’s pledging
Fannie Mae or Freddie Mac (as the case may be) Servicing Rights to the
Administrative Agent for the benefit of the Lenders.

“Acquisition Price” shall mean the actual cash amount either Borrower has paid
with respect to the related Servicing Rights.

“Additional Collateral” shall have the meaning set forth in Section 10.1(c)
hereof.

“Additional Eligible Collateral” shall have the meaning set forth in
Section 4.1(a) hereof.

 

 

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“Administration Agreement” shall have the meaning set forth in the Repurchase
Agreement.

“Administrative Agent” shall have the meaning defined in the preamble hereof.

“Administrative Fee” shall have the meaning set forth in the Repurchase
Agreement.

“Administrative Questionnaire” shall mean a form sent by the Administrative
Agent to an assignee in accordance with Section 20.2 hereof.

“Advance Rate” shall mean:

(a)          with respect to Assets which are Servicing Rights, on the date
hereof and up to but not including the Termination Date, 67.5%;

 

(b)

with respect to Assets which are T&I Advances, 90%;

 

 

(c)

with respect to Assets which are P&I Advances, 90%; and

 

 

(d)

with respect to Assets which are Enforcement Advances, 90%.

“Affiliate” shall mean with respect to any Person, any “affiliate” of such
Person, as such term is defined in the Bankruptcy Code.

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

“Agency MBS” shall mean an MBS issued by an Agency.

“Agency Servicing Rights” shall mean Servicing Rights of either Borrower with
respect to Mortgage Loans that are subject to an Agency MBS or a whole loan
transfer to an Agency.

“Agreement” shall mean this Loan and Security Agreement, dated as of November
17, 2006, as it may be amended, supplemented or otherwise modified from time to
time. For the avoidance of doubt this Agreement is the “Loan Agreement” as
defined in the Repurchase Agreement.

“Appraisal” shall mean (i) an appraisal of a Mortgaged Property by a licensed
appraiser that satisfies the Underwriting Guidelines, and who is experienced in
estimating the value of property of that same type in the community where it is
located, and who is not a director, officer or employee of either Borrower or
any of its Affiliates, or related as a parent, sibling or child to either
Borrower or any of its Affiliates’ respective directors or officers, members,
managers or any of their spouses, a signed copy of the written report of which
Appraisal is in the possession of the either Borrower or the Servicer or (ii) an
AVM as permitted pursuant to the applicable Servicing Contract.

 

 

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“Approved Fund” shall mean any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

“Asset” shall mean any Servicing Receivables or Servicing Rights pledged to
secure the Obligations hereunder as more particularly set forth on a loan by
loan or pool basis or otherwise on the related Asset Schedules.

“Asset Schedule” shall mean a list of Assets delivered from time to time by
either Borrower to the Administrative Agent, substantially in the form of
Exhibit F hereof.

“Assignment Agreement” shall mean an agreement substantially in the form of
Exhibit D hereof.

“Authorized Representative” shall mean, for purposes of this Agreement only, an
agent of the applicable party, as listed in Schedule 3 hereof, as amended.

“Available Commitment Amount” shall mean, with respect to each Lender, the
lesser of (a) (i) such Lender’s Commitments under this Agreement minus (ii) such
Lender’s Loans outstanding under this Agreement and (b) such Lender’s Commitment
under the Repurchase Agreement (as a Buyer thereunder) minus the sum of (i) such
Lender’s Loans outstanding under this Agreement plus (ii) such Lender’s Purchase
Price (as a Buyer thereunder and as defined in the Repurchase Agreement)
outstanding under the Repurchase Agreement.

“Available Loan Amount” shall mean the lesser of (a) the Maximum Loan Amount
minus the aggregate outstanding principal balance of Loans hereunder, and (b)
(i) Maximum Purchase Price minus (ii) the sum of (A) the aggregate outstanding
Purchase Price (as defined under the Repurchase Agreement) plus (B) the
aggregate outstanding principal balance of Loans hereunder.

“AVM” shall mean an estimate of the current value of a tract or parcel
determined by using an automated valuation model, dated no earlier than six (6)
months before the determination date.

“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as
amended from time to time.

“Borrower” shall have the meaning defined in the preamble hereof.

“Borrowing Base Deficiency” shall have the meaning set forth in Section 4.1(a)
hereof.

“Borrowing Date” shall mean the date of the making of a Loan.

“BPO” shall mean an opinion of the fair market value of a Mortgaged Property,
dated no earlier than six (6) months before the determination date, given by a
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agent or broker (who is not an employee or Affiliate of any Borrower) which
generally includes three comparable sales and three comparable listings.

“Breakage Costs” shall have the meaning set forth in Section 2.4(d) hereof.

“Business Day” shall mean a day other than (i) a Saturday or Sunday, or (ii) any
day on which banking institutions are authorized or required by law, executive
order or governmental decree to be closed in the States of New York or Texas.

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

“Ceiling Rate” shall mean, on any day, the maximum nonusurious rate of interest
permitted for that day by whichever of applicable federal or New York law
permits the higher interest rate, stated as a rate per annum.

“Change in Control” shall mean:

 

(a)

With respect to HB Corp.:

(i)      the sale, transfer, or other disposition of all or substantially all of
HB Corp.’s assets (excluding any such action taken in connection with any
securitization transaction);

(ii)     any Person shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934 except that for purposes of this definition, a Person shall
not be deemed to have acquired beneficial ownership of securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person until
such tendered securities are accepted for purchase or exchange), directly or
indirectly, of either (i) voting stock of HB Corp. (or other securities
convertible into such voting stock) representing more than twenty percent (20%),
or thirty percent (30%) with respect to Fidelity Investments, of the combined
voting power of all voting stock of HB Corp. or (ii) more than twenty percent
(20%), or thirty percent (30%) with respect to Fidelity Investments, of the
outstanding shares of any class or series of capital stock of HB Corp.; or

(iii)   any Person shall have succeeded in having so many of such Person’s
nominees elected to the board of directors of HB Corp. that such nominees, when
added to any existing directors remaining on the board of directors of HC after
such election who were previously nominated by or are Affiliates of such Person,
comprise a majority of the board of directors of HB Corp.; and

 

 

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(b)

With respect to HMC:

(i)      a sale of substantially all of HMC’s assets to a Person or related
group of Persons other than HB Corp.; or

(ii)     the occurrence of any event after which HB Corp. no longer holds
(whether directly or through one or more intermediaries) one hundred percent
(100%) of the capital stock of HMC and voting control in any election of HMC’s
directors.

“Closing Date” shall mean the date on which the initial Loan is made.

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

“Collateral” shall have the meaning defined in Section 10.1(a).

“Collateral Value” shall mean at any time, (a) with respect to Servicing
Receivables, the applicable Advance Rate multiplied by Servicer’s Servicing
Claim thereto and (b) with respect to Servicing Rights, the lesser of (i) the
applicable Advance Rate multiplied by the lesser of (A) the Market Value of the
Servicing Rights, (B) the Acquisition Price, (C) the Servicing Rights Value and
(D) the book value of such Servicing Rights as set forth in the books of such
Borrower and (ii) 1% of the unpaid principal balance of the Mortgage Loans
related to the Servicing Rights; provided, that the following limitations shall
apply:

(a)          each Asset that is not Eligible Collateral because it does not
satisfy in all material respects one or more of the conditions to eligibility
stated for it in this Agreement shall have zero Collateral Value;

(b)          if either Borrower’s claim under any Asset is in good faith
rejected, repudiated, stayed, held back or disputed by the trustee or holder of
a related MBS or serviced whole loan (or anyone claiming by, through or under
any of them) or attached, garnished or sequestered by any court of competent
jurisdiction, or either Borrower learns of any reasonably plausible grounds for
any such rejection, repudiation, stay, holdback, dispute, attachment,
garnishment or sequestration then the Collateral Value of that Asset shall be
zero;

(c)          if either Borrower shall default in the performance of any of its
obligations under a Servicing Contract related to any Asset and if such default
continues beyond the period of grace provided under the Servicing Contract, if
any, and, if the effect of such default is to cause, or to permit the Person for
whom each Borrower performs servicing under such Servicing Contract (or a
trustee or custodian on behalf of such Person) to cause, such Borrower’s right
to collect all or any material part of its Asset under such Servicing Contract
to be materially diminished, delayed or impaired, then the Collateral Value of
that Asset shall be zero;

 

 

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(d)          if it shall become reasonably apparent to either Borrower that the
prospects for collection of any Asset or the related Collateral are materially
impaired, then the Collateral Value of that Asset shall be zero;

(e)          if, with respect to a Servicing Receivables Loan, the related
Mortgage Loan is 90 days or more delinquent and the Administrative Agent has not
received (i) a BPO or (ii) an updated BPO or Appraisal within 180 days after
receipt of the previous BPO, in each case in respect to the related Mortgaged
Property, then the Collateral Value of that Asset may be reduced to zero or such
other value as the Administrative Agent may determine in its sole discretion;

(f)           if the Administrative Agent reasonably determines that the
prospects for payment of any Asset or the related Collateral are materially
impaired and gives the Borrowers written notice of that determination and the
Borrowers are unable to furnish the Administrative Agent, on or before fifteen
(15) days after such notice, evidence reasonably sufficient to convince the
Administrative Agent that such prospects are not materially impaired, then the
Collateral Value of that Asset shall be zero or such other value as reasonably
determined by the Administrative Agent;

 

(g)

Reserved;

(h)          any Asset related to a Servicing Contract under which a notice of
termination of servicing has been delivered with or without cause, then on the
date of such termination, the Collateral Value of that Asset shall be zero;

(i)           a termination of servicing shall have occurred under a Servicing
Contract related to any Asset, then the Collateral Value of that Asset shall be
zero;

(j)           if a Servicing Rights Value is not delivered quarterly, then upon
notice to the Borrowers and the Borrowers’ failure to deliver such Servicing
Rights Value within ten (10) days of such notice, then the Collateral Value of
that Asset may be reduced to zero or such other value as the Administrative
Agent may determine in its sole discretion;

(k)          if a P&I Advance related to a Servicing Receivables Loan is
outstanding hereunder for a period greater than thirty (30) days or if an
Enforcement Advance or a T&I Advance related to a Servicing Receivables Loan is
outstanding hereunder for a period greater than eighteen (18) months, then the
Collateral Value of that Asset shall be zero;

(l)           if a Mortgage Loan becomes a “VA no bid mortgage loan” then upon
becoming such “VA no bid mortgage loan” the Collateral Value of the related
Servicing Receivables Loan shall be zero;

(m)         the aggregate Collateral Value of Assets that are P&I Advances shall
not exceed 10% of the Maximum Loan Amount;

 

 

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(n)          the aggregate Collateral Value of Assets that are T&I Advances and
Enforcement Advances, combined, shall not exceed 10% of the Maximum Loan Amount;
and

(o)          the aggregate Collateral Value of Assets that are Intra-period MSR
Advances shall not exceed 10% of the Maximum Loan Amount.

(p)          if an Intra-period MSR Advance is outstanding hereunder for a
period greater than ninety (90) days, then the Collateral Value of that Asset
shall be zero.

provided, further, that the reduction for any reason of the Collateral Value of
any Collateral shall not itself affect or impair Administrative Agent’s Lien
with respect to that item of Collateral.

“Commitment” shall mean, for any day, the maximum amount a Lender is committed
on that day to make Loans to the Borrowers pursuant to the terms hereof. The
Commitments for the Lenders are as set forth on Schedule 1, as it may be amended
and restated from time to time (and shall be deemed immediately amended to
reflect any assignment made in accordance with Section 20.2 hereof upon the
effectiveness of such assignment).

“Commitment Period” shall mean the period from and including the Closing Date to
but not including the Termination Date or such earlier date on which the
Commitment shall have terminated pursuant to this Agreement.

“Confidential Terms” shall have the meaning set forth in Section 29 hereof.

“Costs” shall have the meaning specified in Section 14(a) hereof.

“Daily Reset LIBOR Rate” shall mean, for any day, the rate of interest per annum
that is equal to the rate per annum determined by Administrative Agent to be the
average of the interest rates available to it in accordance with the
then-existing practices in the interbank market in London, England at
approximately 11:00 a.m. London time, as set forth on Telerate Page 3750, for
that day for the offering to Administrative Agent by leading dealers in such
interbank market for delivery on that day for one month U.S. dollar deposits of
One Million Dollars ($1,000,000), where the term is used in respect of the LIBOR
Adjusted Rate; provided that if for any reason Administrative Agent cannot
determine such rate for any day, then LIBOR Rate for that day shall be the rate
of interest per annum that is equal to the arithmetic mean of the rates
appearing on the Bloomberg British Bankers Association LIBOR page as of 11:00
a.m., London time, on that date for the offering by such institutions as are
named therein to prime banks in the Eurodollar interbank market in London,
England, for delivery on that day of one month U.S. dollar deposits of One
Million Dollars ($1,000,000).

“Declining Lender” shall have the meaning set forth in Section 2.1(b) hereof.

“Default” shall mean an Event of Default or an event that with notice or lapse
of time or both would become an Event of Default.

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

 

 

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“Due Diligence Cap” shall mean $20,000.

“Due Diligence Costs” shall have the meaning set forth in Section 27 hereof.

“Eligible Collateral” shall mean any Asset listed on an Asset Schedule which
complies with the factors listed on Schedule 4 hereof.

“Enforcement Advance” shall mean any servicing, enforcement or protective
advances made by Borrower under a Servicing Contract (other than T&I Advances)
(a) to pay the costs of protecting or enforcing the value of the Mortgaged
Property; and advances to pay the costs of realizing on the value of any such
security in connection with the Serviced Loans and (b) which is fully
recoverable by Borrower out of sums that are both required and expected to be
paid to Borrower in the ordinary course of its servicing of the Serviced Loans
under such Servicing Contract, on a first priority of (reimbursement) payment
basis and on a pool level basis.

“Event of Default” shall have the meaning set forth in Section 9.1 hereof.

“Event of Insolvency” shall mean, for any Person:

(a)          that such Person or any Affiliate shall discontinue or abandon
operation of its business; or

(b)          that such Person or any Affiliate shall fail to, or admit in
writing its inability to, pay its debts as they become due; or

(c)          a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
such Person or any Affiliate in an involuntary case under any applicable
bankruptcy, insolvency, liquidation, reorganization or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
trustee, custodian, sequestrator, conservator or other similar official of such
Person or any Affiliate, or for any substantial part of its property, or for the
winding-up or liquidation of its affairs and such proceeding shall not have been
dismissed within sixty (60) days of its filing; or

(d)          the commencement by such Person or any Affiliate of a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or such Person’s or any Affiliate’s consent to the entry of
an order for relief in an involuntary case under any such law, or consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator, conservator or other similar official of such
Person, or for any substantial part of its property, or any general assignment
for the benefit of creditors; or

 

(e)

that such Person or any Affiliate shall become insolvent; or

(f)           if such Person or any Affiliate is a corporation, such Person or
any Affiliate, or any of their subsidiaries, shall take any corporate action in
furtherance of, or

 

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the action of which would result in any of the actions set forth in the
preceding clause (a), (b), (c), (d) or (e).

“Excluded Taxes” shall have the meaning specified in Section 6.2(e) hereof.

“Expenses” shall mean all present and future expenses reasonably incurred by or
on behalf of the Administrative Agent or Lenders in connection with this
Agreement or any of the other Loan Documents and any amendment, supplement or
other modification or waiver related hereto or thereto, whether incurred
heretofore or hereafter, which expenses shall include the cost of title, lien,
judgment and other record searches; reasonable attorneys’ fees; and costs of
preparing and recording any UCC financing statements or other filings necessary
to perfect the security interest created hereby.

“Facility Fee” shall have the meaning set forth in the Repurchase Agreement.

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

“Fidelity Insurance” shall mean insurance coverage with respect to employee
errors, omissions, dishonesty, forgery, theft, disappearance and destruction,
robbery and safe burglary, property (other than money and securities) and
computer fraud.

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

“Free Adjusted Balances Equivalent” shall mean, for each day of each calendar
month (whether a whole or partial month), the lesser of:

(a)          the sum of (x) the daily average of the collected balances in all
demand deposit accounts and non-interest bearing money market accounts
maintained by each Borrower (or maintained by an Affiliate of either Borrower at
either Borrower’s request) with JPMorgan as a Lender during that month (although
no Borrower or any of its Affiliates shall have any obligation whatsoever to
maintain any deposits with JPMorgan as a Lender) less all amounts required and
applied (or to be applied) (i) to satisfy reserve and deposit insurance
requirements allocable to that month and (ii) to compensate JPMorgan as a Lender
for (1) services rendered to either Borrower or any of its Affiliates for that
month if and to the extent, if any, that such services are not separately billed
and paid for, or (2) any agreed reductions for that month in interest, fees and
other normal banking charges other than interest and fees that are part of the
obligations to JPMorgan as a Lender, with each element calculated in accordance
with JPMorgan as a Lender’s system of allocating reserve and deposit insurance
requirements, charges for services and reductions in other normal banking
charges, and as that system may be changed from time to time without notice plus
(y) unless the subject calendar month is January (carryovers after a rolling
three (3) month period and from one calendar year to the next are not
permitted), an amount equal to such adjusted daily average collected balances
for the immediately preceding calendar month (including any similarly unapplied
adjusted balances carried over from a prior month or months) not applied to
compensate JPMorgan as a Lender for such services or agreed reductions incurred
in such prior month; and

 

 

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(b)          the daily average outstanding Loans owed to JPMorgan as a Lender of
all Loans outstanding during that month.

Administrative Agent’s determination of the Free Adjusted Balances Equivalent
for any month shall be conclusive, absent manifest error.

“Funding Share” shall mean the ratio of (a) a Lender’s Commitment and (b) the
aggregate Commitment of all the Lenders.

“GAAP” shall mean generally accepted accounting principles in the United States
of America, applied on a consistent basis and applied to both classification of
items and amounts, and shall include, without limitation, the official
interpretations thereof by the Financial Accounting Standards Board, its
predecessors and successors. The requirement that such principles be applied on
a consistent basis means that the accounting principles observed in a current
period shall be comparable in all material respects to those applied in an
earlier period, with the exception of changes in generally accepted accounting
principles and changes in application to which the Borrowers’ independent
certified public accountants have agreed and which changes and their effects are
summarized in the subject Borrowers’ financial statements following such
changes.

“Governmental Authority” shall mean any nation or government, any state, county,
municipality or other political subdivision thereof or any governmental body,
agency, authority, department or commission (including, without limitation, any
taxing authority) or any instrumentality or officer of any of the foregoing
(including, without limitation, any court or tribunal) exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any corporation, partnership or other entity directly or
indirectly owned by or controlled by the foregoing.

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

“Indebtedness” shall mean, with respect to any Person without duplication:
(a) obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business so
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payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) obligations of such Person under repurchase
agreements, sale/buy-back agreements or like arrangements; (f) Indebtedness of
others Guaranteed by such Person; (g) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person; and
(h) Indebtedness of general partnerships of which such Person is a general
partner; and (i) Capital Lease Obligations of such Person.

“Indemnified Party” shall have the meaning specified in Section 14(a) hereof.

“Interest Payment” shall have the meaning set forth in Section 3.1 hereof.

“Interest Rate” shall mean with respect to (a) Loans up to and including the
Free Adjusted Balances Equivalent a rate per annum equal to the applicable
Margin and (b) all other Loans a rate per annum equal to the sum of (i) the
LIBOR Adjusted Rate plus (ii) the applicable Margin.

For purposes of this Agreement, the Interest Rate set forth in clause (a) of
this definition will be allocated to the amount of Loans owed to JPMorgan as
Lender up to and including the Free Adjusted Balances Equivalent based on the
date on which the related Loan becomes subject to this Agreement, commencing
from the earliest date to the most recent date. To the extent that there is
availability under the Available Loan Amount, but the portion of the amount of
Loans proposed by the Borrowers for purchase by JPMorgan as Lender would
otherwise exceed the Free Adjusted Balances Equivalent, then to the extent that
such Free Adjusted Balances Equivalent would be exceeded, the Interest Rate set
forth in clause (b) of this definition shall be applied. For the avoidance of
doubt, the Interest Rate set forth in clause (a) of this definition shall only
apply to the portion of the Loans the Borrowers owe to JPMorgan as Lender from
time to time, as determined by the Administrative Agent and the priority of
payments shall be allocated in accordance with the provisions of this Agreement
and furthermore in no event shall the Interest Rate set forth in clause (a) of
this definition apply to any Loans the Borrowers owe to any other Lenders. The
Administrative Agent’s calculations with respect thereto shall be conclusive
absent manifest error.

“Interest Rate Protection Agreement” shall mean, with respect to any or all of
the Assets, any short sale of US Treasury Securities, or futures contract, or
mortgage related security, or Eurodollar futures contract, or options related
contract, or interest rate swap, cap or collar agreement or similar arrangements
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, either generally or under specific
contingencies, entered into by either Borrower in accordance with either
Borrower’s hedging policies and procedures.

“Intra-period MSR Advance” shall mean any Servicing Rights Loan made on any day
other than a Servicing Rights Valuation Date until such time as a Servicing
Rights Valuation Date has occurred.

 

 

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“JPMorgan” shall have the meaning defined in the preamble.

“Lender” shall mean JPMorgan Chase Bank, N.A. and those Lenders listed on
Schedule 5, hereof, as amended from time to time, and their successors in
interest and assigns.

“LIBOR Adjusted Rate” shall mean, on any day, a rate per annum equal to the
lesser of:

(a)          the quotient of (x) the LIBOR Rate or the Daily Reset LIBOR Rate,
as selected by Borrowers in the LIBOR Period Selection Confirmation, for that
day divided by (y) 1.00 minus the applicable LIBOR Reserve Requirement; and

 

(b)

the Ceiling Rate for that day.

For avoidance of doubt, the LIBOR Adjusted Rate for any Loan for which an
effective LIBOR Period Selection Confirmation (and related Request for Borrowing
to the extent such Loan was then being requested to be made) was not received by
the Administrative Agent two (2) Business Days prior to (x) the date such Loan
was made or (y) any Reset Date for such Loan, shall bear interest at the Daily
Reset LIBOR Rate until two (2) Business Days after the date of the delivery to
the Administrative Agent of a LIBOR Period Selection Confirmation with respect
to such Loan.

“LIBOR Period” shall mean a period of one month, two months or three months, as
selected by the Borrowers, commencing and including the immediately preceding
Reset Date (or, with respect to the first LIBOR Period for the Loan, from and
including the Borrowing Date) to but excluding the following Reset Date of the
immediately succeeding LIBOR Period, unless otherwise agreed to by the
Administrative Agent and the Borrowers in writing. For the avoidance of doubt,
(i) if the Daily Reset LIBOR Rate is selected by the Borrowers then the LIBOR
Period shall mean a period from one Business Day until the next Business Day and
(ii) no LIBOR Period may extend beyond the Termination Date.

“LIBOR Period Selection Confirmation” shall mean a confirmation of the LIBOR
Period selected by the Borrowers in the form of Exhibit J hereto.

“LIBOR Rate” shall mean, for any day during the applicable LIBOR Period, the
rate of interest per annum that is equal to the rate per annum determined by
Administrative Agent to be the average of the interest rates available to it in
accordance with the then-existing practices in the interbank market in London,
England at approximately 11:00 a.m. London time, as set forth on Telerate Page
3750 at such time, on the date that is two (2) Business Days prior to the first
day of such LIBOR Period for the offering to Administrative Agent by leading
dealers in such interbank market for delivery on that first day of one
(1) month, two (2) months or three (3) months as applicable, U.S. dollar
deposits of One Million Dollars ($1,000,000), where the term is used in respect
of the LIBOR Adjusted Rate; provided that if for any reason Administrative Agent
cannot determine such rate for any day, then LIBOR Rate for that day shall be
the rate of interest per annum that is equal to the arithmetic mean of the rates
appearing on the Bloomberg British Bankers Association LIBOR page as of 11:00
a.m., London time, on the day prior to the date for the offering by such
institutions as are named therein to prime banks in the Eurodollar

 

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interbank market in London, England, for delivery on that day of one (1) month,
two (2) months or three (3) months as applicable, U.S. dollar deposits of One
Million Dollars ($1,000,000).

“LIBOR Reserve Requirement” shall mean, for any day, the stated maximum rate
(expressed as a decimal fraction) for all reserves required to be maintained for
that day or during that period (including basic, supplemental, marginal and
emergency reserves) against “eurocurrency liabilities,” as defined in
Regulation D, all as specified by any Governmental Authority, including those
imposed under Regulation D. Each determination of the LIBOR Reserve Requirements
by Administrative Agent may be computed using any reasonable method and, absent
manifest error, shall be conclusive and binding.

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

“Loan” shall mean a Servicing Receivables Loan and a Servicing Rights Loan.

“Loan Document” shall mean any of this Agreement, the Notes and any
subordination provisions substantially in the form of Exhibit I hereto contained
in any indenture or other agreement.

“Margin” shall mean, so long as no Event of Default has occurred and is then
continuing:

 

(a)

the Collateral of which are Servicing Receivables, 1.50%; and

 

(b)

the Collateral of which are Servicing Rights, 1.75%.

 

“Majority Lenders” shall mean, for any day, the Lenders with aggregate
Commitments evidencing sixty-six and two-thirds percent (66 2/3%) or more of
(a) the aggregate Commitments if on that day the Lenders are committed to make
Loans under the Agreement or (b) the aggregate outstanding principal balance of
Loans if on or after that day the Lenders’ Commitments have expired or have been
terminated and have not been reinstated.

“Mark-to-Market” shall have the meaning specified in Section 4.1(a) hereof.

“Market Value” shall mean, as of any date with respect to any Asset, the price
at which such Asset could readily be sold as determined by the Administrative
Agent in its sole discretion, taking into account (and in no event exceeding)
the mid-point value ascribed thereto by the Valuation Agent. The Market Value of
any Asset will be determined by the Administrative Agent in its sole good faith
discretion, taking into account customary factors such as market conditions,
interest rates and other factors deemed appropriate by the Administrative Agent.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
Property, business, operations, financial condition or prospects of any Borrower
or any Affiliate thereof, (b) the ability of either Borrower or any Affiliate
thereof to perform its obligations under any of the Loan Documents to which it
is a party, (c) the validity or enforceability of any of the

 

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Loan Documents or (d) the rights and remedies of the Administrative Agent or
Lenders under any of the Loan Documents.

“Maturity Date” shall mean the Termination Date.

“Maximum Purchase Price” shall have the meaning set forth in the Repurchase
Agreement.

“Maximum Loan Amount” shall mean SEVENTY-FIVE MILLION DOLLARS ($75,000,000).

“MBS” shall mean collateralized mortgage obligations and other mortgage-backed
securities.

“Mortgage” shall mean each mortgage, assignment of rents, security agreement and
fixture filing, deed of trust, deed to secure debt, or similar instrument
creating and evidencing a lien on real property and other property and rights
incidental thereto.

“Mortgage Loan” shall mean any first or second lien, one-to-four-family
residential mortgage loan evidenced by a Mortgage Note and secured by a
Mortgage, which Mortgage Loan is related to the Collateral that is subject to a
Loan hereunder.

“Mortgage Note” shall mean the promissory note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.

“Mortgaged Property” shall mean the real property securing repayment of the debt
evidenced by a Mortgage Note.

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

“New Lender” shall mean a bank or other lending institution that becomes a
Lender as a result of the events described in Section 11.4.

“Non-Excluded Taxes” shall have the meaning set forth in Section 6.2(a) hereof.

“Non-Exempt Lender” shall have the meaning specified in Section 6.2(e) hereof.

“Note” shall mean, with respect to any Loan, a promissory note in the form of
Exhibit B, as it may be amended, supplemented or otherwise modified from time to
time.

“Obligations” shall mean (a) any amounts due and payable by the Borrowers to
Administrative Agent and/or Lenders in connection with a Loan hereunder,
together with interest thereon (including interest which would be payable as
post-petition interest in connection with any bankruptcy or similar proceeding)
and all other fees or expenses which are payable hereunder or under any of the
Loan Documents and (b) all other obligations or amounts due and payable by the
Borrowers under the Repurchase Documents.

 

 

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“Operating Account” shall mean the following accounts of the HB. Corp. and HMC:

With respect to HB Corp.:

Account No. 00113398359

JPMorgan Chase Bank, N.A., ABA No. 021000021,

Attn: Mortgage Banking Warehouse Services – Wanda Carr

 

With respect to HMC:

Account No. 00113207618

JPMorgan Chase Bank, N.A., ABA No. 021000021,

Attn: Mortgage Banking Warehouse Services – Wanda Carr,

“Other Taxes” shall have the meaning set forth in Section 6.2(b) hereof.

“P&I Advance” shall mean any advance (a) made by either Borrower under a
Servicing Contract, to cover due, but uncollected principal and interest
payments on Serviced Loans, including Serviced Loans with respect to which the
related Mortgaged Property is being held pending liquidation and (b) which is
fully recoverable by either Borrower out of sums that are both required and
expected to be paid to either Borrower in the ordinary course of its servicing
of the Serviced Loans under such Servicing Contract, on a first priority of
(reimbursement) payment basis and on a pool level basis.

“Participant” shall have the meaning set forth in Section 20.1 hereof.

“Payment Account” shall mean each Borrower’s non-interest bearing demand
checking account, for HB Corp. 730141421 and for HMC 730141413, to be maintained
with Administrative Agent and to be used for (a) the Administrative Agent’s
deposits of the Loans to the Borrowers and payments constituting the proceeds of
principal from any Assets (other than regular principal and interest payments on
the underlying Mortgage Loans); (b) the Administrative Agent’s deposits of
principal and interest payments for the Loans received from either Borrower or
for either Borrower’s account and (c) only if and when (i) no Default has
occurred unless it has been either cured by the Borrowers or waived in writing
by the Administrative Agent and (ii) no Event of Default has occurred unless the
Administrative Agent has declared in writing that it has been cured or waived,
the Administrative Agent’s transfer to the Operating Account of (x) the amount
of the Loans and (y) proceeds from a third party investor in excess of the
amount Loans. The Payment Account is (and shall continuously be) part of the
Collateral. The Payment Account shall be subject to setoff by the Administrative
Agent for the benefit of the Administrative Agent and any Lender. The Payment
Account shall be a controlled account from which the Borrowers shall have no
right to directly withdraw funds, but instead such funds may be withdrawn or
paid out only against the order of a designee of the Administrative Agent,
although under the circumstances described in clause (c) of the first sentence
of this definition and subject to the conditions specified in that clause, the
Administrative Agent shall use diligent and reasonable efforts to cause proceeds
from a third party investor in excess of the amount of the Loans that are
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are deposited to the Payment Account before 1:00 p.m. (Central Time) on a
Business Day to be transferred to the Operating Account on that same Business
Day, but in any event no later than the next Business Day.

“Payment Date” shall mean the fifteenth (15) day of each month, or if such date
is not a Business Day, the next Business Day.

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

“Post-Default Rate” s shall mean a rate equal to the lesser of (a) the sum of
(i) the Interest Rate and (ii) three percent (3.00%); and (b) the Ceiling Rate
for that day.

“Pro Rata” shall mean for any Lender, the ratio of that Lender’s aggregate
outstanding funded Loan amount to the aggregate outstanding principal balance of
all Loans for all Lenders. On any day, the Lenders will each own an undivided
interest in the Loans, both principal and accrued interest, and a corresponding
undivided interest in all Collateral and all rights to the Collateral equal to
that Lender’s undivided ownership interest in the Loans, that bears the same
ratio to the entire aggregate outstanding principal balance of all Loans as that
Lender’s Pro Rata share of the funded Loan amount bears to the aggregate
principal balance of all Loans outstanding, subject to the following adjustment:
if at any time or times, any Lender fails to fund any of its Funding Share(s) of
any Loan and one or more of the other Lenders at its option funds it, then:

(a)         the respective ownership interests in the Loans of both
(1) Declining Lender and (2) the Lender (or Lenders) that paid the corresponding
amount for such Funding Share(s), shall be proportionately decreased and
increased, respectively, to the same extent as if their respective Commitments
were changed in direct proportion to the unreimbursed balance outstanding from
time to time thereafter of the amount so funded;

(b)        the Declining Lender’s share of all future distributions of any
payments and prepayments on the Loans shall be paid Pro Rata among such other
Lenders in accordance with their respective unrecovered amount paid on account
of such Declining Lender’s Funding Share(s) to the Lender(s) that so funded such
Declining Lender’s Funding Share(s) until all such funding Lender(s) have been
fully repaid the amount so funded; and

(c)         such adjustment shall remain in effect until such time as the
Lender(s) that funded such Funding Share(s) have been so fully repaid.

If no other Lender funds the share of the Declining Lender, then the Pro Rata
ownership interest in the Loans of the Lenders shall be changed, in that case so
that each Lender’s Pro Rata ownership interest in the Loans is equal to the
ratio of that Lender’s aggregate outstanding Loans to the aggregate outstanding
Loans for all Lenders. Notwithstanding the change in the Lenders’ Pro Rata
ownership interests in the Loans due to any Lender’s failure to fund its Funding
Share(s) of any Loan(s), such failure to fund shall not diminish any Lender’s
funding obligations for Funding Share(s) of any subsequent Loan(s).

 

 

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“Proceeds” shall mean (i) all “proceeds” as defined in Article 9 of the UCC, and
(ii) whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.

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

“Qualified Subordinated Debt” shall mean Indebtedness of the either Borrower to
any Person (i) the papers evidencing, securing, governing or otherwise related
to which Indebtedness impose covenants and conditions on the debtor under them
that are no more restrictive or onerous than the covenants and conditions
imposed on either Borrower, as applicable, under this Agreement, (ii) that is
subordinated to the Obligations pursuant to a currently effective indenture or
other agreement containing subordination language substantially in the form of
Exhibit I (except that Qualified Subordinated Debt listed on Schedule 7 will not
contain provision 15.7 of Exhibit I) and (iii) the principal of which is not due
and payable until six (6) months or more after the Termination Date. For
purposes of this definition and the agreements that constitute Qualified
Subordinated Debt, this Agreement shall be deemed debt for borrowed money.

“Recourse Servicing Contract” shall mean a Servicing Contract with respect to
which the Servicer is obligated to repurchase or indemnify the holder for the
related Mortgage Loans in respect of defaults on such Mortgage Loans.

“Redemption Amount” shall mean an amount equal to then current Collateral Value
of any item of Collateral to be redeemed, as determined by the Administrative
Agent which in no event shall exceed the outstanding principal balance of the
Loans as of such date of determination.

“Register” shall have the meaning defined in Section 20.3.

“Regulation D” shall mean Regulation D promulgated by the Board of Governors of
the Federal Reserve System (or any successor), 12 C.F.R. Part 204, or any other
regulation when promulgated to replace the prior Regulation D and having
substantially the same function.

“REIT” shall mean a real estate investment trust, as defined in Section 856 of
the Code, as may be amended from time to time.

“Related Security” shall mean with respect to any Asset, (a) all security
interests or Liens and property subject thereto from time to time, if any,
purporting to secure payment of such Asset, whether pursuant to the related
Servicing Contract or otherwise, together with all financing statements covering
any collateral securing such Asset; (b) all guarantees, indemnities, letters of
credit, insurance or other agreements or arrangements of any kind from time to
time supporting or securing the payment of such Asset whether pursuant to the
related Servicing Contract or otherwise; (c) the rights to payment in respect of
such Asset under the related Servicing Contract, and all records relating to,
and any other contracts associated with, such Assets, and (d) any and all
Proceeds of the foregoing. Related Security for Servicing Rights shall not
include any Servicing Receivables not otherwise financed by a Lender by Loans.

 

 

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“Replacement Lender” shall mean the Lender who is replacing the Retiring Lender.

“Repurchase Agreement” shall mean that certain Master Repurchase Agreement,
dated as of October 31, 2006, among the Administrative Agent, the Buyers (as
defined therein) party thereto from time to time, and the Borrowers, as the same
may be amended or modified from time to time.

“Repurchase Document” shall have the meaning set forth in the Repurchase
Agreement.

“Repurchase Document Termination” shall have the meaning set forth in
Section 10.1(c) hereof.

“Repurchase Rights” shall have the meaning set forth in Section 10.1(c) hereof.

“Request for Borrowing” shall have the meaning set forth in Section 2.4(a)
hereof.

“Requirement of Law” shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation, procedure 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.

“Reset Date” shall mean for each LIBOR Period, the last Business Day of such
LIBOR Period.

“Retiring Lender” shall have the meaning set forth in Section 11.4 hereof.

“SEC” shall mean the Securities and Exchange Commission.

“Section 6.2 Certificate” shall have the meaning specified in Section 6.2(e)
hereof.

“Securities Exchange Act of 1934” or “1934 Act” shall have the meaning set forth
in Section 31(a) hereof.

“Securities Investor Protection Act of 1970” or “SIPA” shall have the meaning
set forth in Section 31(a) hereof.

“Serviced Loan” shall mean a Mortgage Loan serviced or required to be serviced
by Servicer under any Servicing Contract, regardless of whether the actual
servicing is done by a subservicer retained by Servicer.

“Servicer” shall mean HMC or HB Corp., or any successor or permitted assigns or
any other Person approved by Administrative Agent in writing.

 

 

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“Servicer Advance” shall mean a P&I Advance, an Enforcement Advance or a T&I
Advance. For the avoidance of doubt, in no event shall any Servicer Advance
securing a Servicing Receivables Loan be made in respect of a Servicing Contract
governing a transaction other than an Agency MBS or a securitization.

“Servicing Claim” shall mean an enforceable and liquidated money claim of
Servicer against (i) the trustee of MBSs backed by Serviced Loans in respect of
which Servicer made the related Servicer Advance(s), (ii) such Serviced Loans’
customers and their accounts, (iii) an insurer of such Serviced Loans or
(iv) another identified Person, for reimbursement of the relevant type(s) of
Servicer Advance(s) made by Servicer pursuant to its obligation or right as
Servicer to do so under a Servicing Contract.

“Servicing Contracts” shall mean, collectively, those residential servicing
agreements for Mortgage Loans approved by the Administrative Agent that are not
Recourse Servicing Contracts, under which either Borrower is the Servicer and
which, (a) in the case of each Servicing Contract between either Borrower and
Fannie Mae or Freddie Mac, is subject to an Acknowledgment Agreement with Fannie
Mae or Freddie Mac executed and delivered within sixty (60) days of the date
hereof, as applicable; (b) is with a holder or custodian for a holder of the
Serviced Loans who is acceptable to the Administrative Agent, (c) is not a
subservicing arrangement, and (d) that is owned by either Borrower free and
clear of all Liens (other than the Administrative Agent’s Lien for the benefit
of the Lenders).

“Servicing Receivables” shall mean, collectively, the reimbursement rights
relating to Servicer Advances under each Servicing Contract, each and every
other right of each Borrower to be repaid or reimbursed for the Servicer
Advances under a Servicing Contract, whether now existing or hereafter arising,
and whether or not constituting an “account” or a “general intangible” under the
UCC but not evidenced by “chattel paper” or an “instrument” as defined in the
UCC, and the Related Security.

“Servicing Receivables Loan” shall mean each Loan made by a Lender to a Borrower
on account of Servicing Receivables, net of any repayments thereof.

“Servicing Rights” shall mean each Borrower’s rights and interests under any
Servicing Contract, including the rights to service the Serviced Loans that are
the subject matter of such Servicing Contract and to receive compensation
(whether direct or indirect) for such servicing.

“Servicing Rights Loan” shall mean each advance made by a Lender to the
Borrowers on account of Servicing Rights, net of any repayments thereof.

“Servicing Rights Value” shall mean (a) with respect to Servicing Rights other
than Intra-period MSR Advances, the midpoint value of the Servicing Rights, as
determined at least on a fiscal quarterly basis by the Valuation Agent (the
“Servicing Rights Appraised Value”) and (b) with respect to Intra-period MSR
Advances, the most recent Servicing Rights Appraised Value expressed as a
percentage of par and multiplied by the outstanding principal balance of the
related Mortgage Loans.

 

 

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“Servicing Rights Valuation Date” shall mean a date on which the Administrative
Agent receives the Servicing Rights Appraised Value.

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

“T&I Advance” shall mean any servicing or protective advances made by either
Borrower under a Servicing Contract (other than an Enforcement Advance) (a)
including, but not limited to, advances made to pay taxes and insurance premiums
or otherwise fund escrow accounts and (b) which is fully recoverable by either
Borrower out of sums that are both required and expected to be paid to either
Borrower in the ordinary course of its servicing of the Serviced Loans under
such Servicing Contract, on a first priority of (reimbursement) payment basis
and on a pool level basis.

“Taxes” shall have the meaning set forth in Section 6.2(a) hereof.

“Termination Date” shall mean the earlier of (i) October 30, 2007 and (ii) the
date the Repurchase Agreement is terminated, cancelled or otherwise is no longer
in full force and effect..

“Termination Event” shall have the meaning set forth in Section 9.2.

“Underwriting Guidelines” shall have the meaning set forth in the Repurchase
Agreement.

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral or the continuation,
renewal or enforcement thereof is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, “Uniform Commercial Code” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.

“Valuation Agent” shall mean an independent appraiser or broker that is (i)
nationally known as an expert in valuing Servicing Rights and (ii) acceptable to
the Administrative Agent.

 

 

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Section 2.

Loans.

2.1          Commitments. (a)  Subject to the terms and conditions of this
Agreement and provided no Default or Event of Default has occurred, each Lender
severally agrees to make Loans to each Borrower in the aggregate amount at any
one time outstanding up to but not exceeding the lesser of (i) such Lender’s
Commitment and (ii) the Available Commitment Amount. Amounts borrowed pursuant
to this  2.1(a) may be repaid and reborrowed during the Commitment Period. The
Lenders’ respective Commitments are set forth on Schedule 1 hereof. The
fractions to be applied to determine the respective Funding Shares of the
Lenders are the fractions of each Loan set forth on Schedule 2. Each Lender
shall be obligated to fund only that Lender’s own Funding Share(s) of any Loan
requested, and no Lender shall be obligated to each Borrower or any other Lender
to fund a greater share of any Loan.

(b)          No Lender shall be excused from funding its applicable Funding
Share(s) of any Loan merely because any other Lender has failed or refused to
fund its relevant Funding Share(s) of that or any other Loan. If any Lender
fails to fund its Funding Share(s) of any Loan (a “Declining Lender”), (i) the
Administrative Agent as a Lender (in its sole and absolute discretion) may
choose to fund the Funding Share(s) of the Declining Lender, or (ii) the
Administrative Agent as a Lender and/or one or more of the other Lenders who are
willing to do so shall have the right (but no obligation) to fund the Declining
Lender’s Funding Share(s) in the proportion that the Commitment of each bears to
the sum of the Commitments of all Lenders that have funded (or are funding)
their own Funding Shares of that Loan.

(c)          Regardless of whether the other Lenders fund the Funding Share(s)
of the Declining Lender, the respective ownership interests of the Lenders in
the Loan shall be adjusted Pro Rata as described in the definition thereof.

(d)          Should the Administrative Agent as a Lender fund the Declining
Lender’s Funding Share of any Loan, then the Declining Lender shall have the
obligation to the Administrative Agent, the Borrowers and the other Lenders
under this Agreement to deliver such amount to the Administrative Agent in
collected funds on the next Business Day.

(e)          Notwithstanding that multiple Lenders are making Loans in the
amount of their respective Funding Shares of the Loans under this Agreement, all
Loans shall be deemed a single Loan and all of the Collateral shall be security
for all of the Obligations thereunder.

 

2.2

Reserved.

2.3          Notes. Each Borrower shall execute and deliver to each Lender on
the Closing Date a Note or Notes to evidence such Lender’s Loans in a face
principal amount equal to that Lender’s Commitment as of the Closing Date.

2.4          Procedures for Borrowing. (a)  The Borrowers may borrow under this
Agreement during the Commitment Period on any Business Day; provided, that the
Borrowers shall have given the Administrative Agent notice (each, a “Request for
Borrowing”), which notice (i) shall be substantially in the form of Exhibit A,
(ii) shall be signed by an Authorized Representative of the Borrowers and be
received by the Administrative Agent prior to 10:00 a.m. (Central time) on the
requested Borrowing Date, (iii) shall specify (A) whether the Loan is a

 

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Servicing Rights Loan or a Servicing Receivables Loan (and specifying the
related Assets); (B) the dollar amount of the Loan requested and (C) the
Collateral Value of Assets and the amount of the Loans (including the requested
Loans) outstanding and (iv) shall be accompanied by an Asset Schedule including
the information required therein.

(b)          Upon the Administrative Agent’s receipt of the Request for
Borrowing, the Administrative Agent will provide notice (either electronic or
via fax) to each Lender by 2:00 p.m. (Central time) of such Lender’s Pro Rata
share thereof. Each Lender shall wire their Pro Rata share to the Administrative
Agent via a federal funds wire transfer to the following account within two
hours of notice thereof or 4:00 p.m. (Central time) whichever is earlier:

JPMorgan Chase Bank, N.A.

ABA: 021-0000-21

Attention: Mortgage Banking Warehouse Services-- Wanda Carr

Phone: 713-427-6391

For Credit To: HomeBanc Mortgage Corporation and HomeBanc Corp.

Account Number: 00100381681

JPMorgan Chase Real Estate Wire Transfer Clearing Account

(c)          Except as provided herein, upon satisfaction or waiver of the
conditions precedent specified herein, Administrative Agent shall make the
proceeds of such Loans available to each Borrower on the applicable Borrowing
Date by causing an amount of same day funds in Dollars equal to the proceeds of
all such Loans received by Administrative Agent from Lenders to be credited to
the Payment Account.

(d)          If either Borrower fails to meet the conditions precedent set forth
in Section 5.2 after it makes a Request for Borrowing and before the applicable
Loan is made or if either Borrower repays, in whole or in part, a Loan on any
day which is not the last day of the applicable LIBOR Period for such Loan, the
Borrowers shall indemnify the Administrative Agent for the benefit of the
Lenders and hold the Administrative Agent and Lenders harmless from any
out-of-pocket losses, costs and/or expenses which the Administrative Agent or
any Lender sustains or incurs arising from the reemployment of funds obtained by
the Administrative Agent or any Lender hereunder or from fees payable to
terminate the deposits from which such funds were obtained, in each case for the
remainder of the applicable period (“Breakage Costs”). The Administrative Agent
shall deliver to the Borrowers a statement setting forth the amount and basis of
determination of any Breakage Costs in such detail as determined in good faith
by the Administrative Agent to be adequate, it being agreed that such statement
and the method of its calculation shall be adequate and shall be conclusive and
binding upon each Borrower, absent manifest error.

 

Section 3.

Payments, Fees, Accounts.

3.1          Interest. On each Payment Date the Borrowers shall pay to
Administrative Agent for the benefit of the Lenders the accrued and unpaid
interest on the Loans (each such payment, an “Interest Payment”). Interest shall
accrue each day on the unpaid principal amount of the Loans at a rate per annum
equal to the Interest Rate based on a 360 day year for the actual days elapsed.
Notwithstanding the preceding sentence, if the Borrowers fail to make all or
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of the Interest Payment by 4:00 p.m. (Central time) on any Payment Date or the
date which is two (2) Business Days after receipt of notice of such Interest
Payment, whichever is earlier, the Interest Rate shall be equal to the
Post-Default Rate until the Interest Payment is received in full by
Administrative Agent.

3.2          Principal. The outstanding principal amount of the Loans shall be
due and payable in full without notice or demand on the Maturity Date. Each
Borrower agrees to make such monthly payments of principal and interest to the
Administrative Agent for Pro Rata distribution to the Lenders and application to
the Obligations, in accordance with the other provisions of this Agreement. On
the twenty-fifth (25th) day of each calendar month before the Maturity Date, the
Borrowers shall pay to the Administrative Agent, as a mandatory principal
prepayment for Pro Rata distribution to the Lenders and application to the
Obligations in accordance with the other provisions of this Agreement, an amount
equal to the lesser of (i) the aggregate amounts collected by the Servicer in
respect of the Servicing Receivables for the prior calendar month or (ii) the
then-outstanding principal balance of all Servicing Receivables Loans.

3.3          Prepayments. The Borrowers shall have the right to prepay the
outstanding Loans in whole or in part, from time to time and subject to Section
2.4(d) hereof without premium or penalty. Unless otherwise specified by the
Borrowers, all prepayments shall be applied to Servicing Rights Loans first.

3.4          Fees. The Borrowers shall pay the Facility Fee and Administrative
Fee in accordance with the terms of the Repurchase Agreement without giving
effect to any termination thereof.

3.5          Payment Account. Except as otherwise provided herein, all payments
under this Agreement, on the Notes and under the Loan Documents shall be paid to
the Administrative Agent for deposit in the Payment Account which shall be at
all times maintained with JPMorgan. The Payment Account shall at all times be
part of the Collateral and subject to set-off by Administrative Agent for Pro
Rata distribution to the Lenders.

3.6          General Provisions Regarding Payments. All payments by either
Borrower of principal, interest, fees and other Obligations shall be made in
Dollars in same day funds, without defense, set-off or counterclaim, free of any
restriction or condition, and delivered to Administrative Agent not later than
4:00 p.m. (Central time) on the date due by wire transfer to the Payment
Account.

(a)          Any payment in respect of any Loan on a date when interest is due
and payable with respect to such Loan shall be applied to the payment of
interest before application to principal.

(b)          Whenever any payment to be made hereunder shall be stated to be due
on a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.

(c)          If and to the extent any payment is not made when due under this
Agreement, any Note or any of the other Loan Documents, each Borrower authorizes

 

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Administrative Agent and each Lender (for the Pro Rata account and benefit of
all of the Lenders) then or at any time thereafter to charge any amounts so due
and unpaid against any or all of either Borrower’s accounts with Administrative
Agent or any of the Lenders; provided, such right to charge either Borrower’s
accounts shall not apply to any escrow, trust or other deposit accounts
designated as being held by either Borrower on behalf of third party owners of
the escrowed funds other than Affiliates of either Borrower. Administrative
Agent agrees to use reasonable efforts to promptly advise the Borrowers prior to
any charge made pursuant to this Section, but its failure to do so will not
affect the validity or collectibility of such charge.

(d)          Any payment received after 1:00 p.m. (Central time) shall be deemed
to have been received by Administrative Agent on the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of Default in
accordance with the terms of Section 9.1(a).

(e)          If an Event of Default shall have occurred and not otherwise been
waived, and the maturity of the Obligations shall have been accelerated pursuant
to Section 9.1, all payments or proceeds received by Administrative Agent
hereunder in respect of any of the Obligations, shall be applied in accordance
with the application arrangements described in Section 10.13.

3.7          Pro Rata Distribution. All payments received by the Administrative
Agent from the Borrowers pursuant to this Agreement shall be distributed by the
Administrative Agent to the Lenders Pro Rata in accordance with their respective
ownership interests in the Loans. Such distributions from the Administrative
Agent to each Lender shall be made by initiating a federal wire transfer by 3:00
p.m. (Central time) on the Business Day when such funds are received in
immediately available funds directly to the Lenders or to such account at
another financial institution as is designated from time to time by the Lenders
in writing and shall be made on the same Business Day received by the
Administrative Agent.

 

3.8

[Reserved]

3.9          Use of Proceeds. The proceeds of the Loans shall be used
exclusively by the Borrowers to finance the Assets.

3.10       Recourse. Notwithstanding anything else contrary contained or implied
herein or in any other Loan Document, each Lender shall have full, unlimited
recourse against each Borrower and its assets in order to satisfy the
Obligations.

 

Section 4.

Borrowing Base Deficiencies.

4.1          Collateral Values. (a)  If, at any time the aggregate outstanding
principal balance of all Loans exceeds the aggregate outstanding Collateral
Value of all Eligible Collateral in effect at such time, as determined by the
Administrative Agent in its sole good faith discretion (the “Borrowing Base
Deficiency”), then the Administrative Agent may by notice to the Borrowers (as
such notice is more particularly set forth below, a “Mark-to-Market”), require
the Borrowers to transfer to the Administrative Agent for the benefit of Lenders
cash or Eligible Collateral (“Additional Eligible Collateral”) so that the
aggregate Collateral Value of the Eligible Collateral, as applicable, including
any such Additional Eligible Collateral, will thereupon equal

 

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or exceed the aggregate outstanding principal balance of all Loans. If
Administrative Agent delivers a Mark-to-Market to the Borrowers on or prior to
10:00 a.m. (Central time) on any Business Day, then the Borrowers shall transfer
cash or Additional Eligible Assets to Administrative Agent for the benefit of
Lenders no later than 1:00 p.m. (Central time) that day. In the event the
Administrative Agent delivers a Mark-to-Market to the Borrowers after 10:00 a.m.
(Central time) on any Business Day, the Borrowers shall be required to transfer
cash or Additional Eligible Assets no later than 1:00 p.m. (Central time) on the
subsequent Business Day.

(b)          Administrative Agent’s election, in its sole and absolute
discretion, not to make a Mark-to-Market at any time there is a Borrowing Base
Deficiency shall not in any way limit or impair its right to make a
Mark-to-Market at any time a Borrowing Base Deficiency exists.

(c)          Any cash transferred to the Administrative Agent pursuant to
Section 4.1(a) above shall be credited to the outstanding principal balance of
the applicable Loans.

(d)          On any day, the aggregate outstanding principal amount of Loans
under this Agreement shall in no event exceed the lesser of (i) the Maximum Loan
Amount and (ii) the Maximum Purchase Price minus the outstanding Purchase Price
under the Repurchase Agreement. The Borrowers shall, if notice that the
aggregate outstanding principal balance of all Loans exceeds the lesser of the
foregoing clauses (i) or (ii); (a) is given on before 10:00 a.m. (Central time),
by 1:00 p.m. (Central time) on that same Business Day or (b) is given after
10:00 a.m. (Central time), by 11:00 a.m. (Central time) on the next Business
Day, in each case, prepay the Loans in whole or in part to the Administrative
Agent for the benefit of Lenders such that after giving effect to such
prepayment the aggregate outstanding principal amount of the Loans does not
exceed the lesser of (i) the Maximum Loan Amount and (ii) the Maximum Purchase
Price minus the outstanding Purchase Price under the Repurchase Agreement.

 

Section 5.

Conditions Precedent.

5.1          Initial Loan. Each Lender’s obligation to make the initial Loan
hereunder is subject to the satisfaction, immediately prior to or concurrently
with the making of such Loan, of the condition precedent that Administrative
Agent shall have received from the Borrowers any fees and expenses payable
hereunder and all of the following documents, each of which shall be
satisfactory to Administrative Agent, Lenders and their counsel in form and
substance:

(a)          Loan Documents. The Loan Documents shall be duly executed by the
parties thereto and delivered to the Administrative Agent;

(b)          Opinions of Counsel. An opinion or opinions of outside counsel to
the Borrowers, substantially in the form of Exhibit E or such other form
reasonably acceptable to the Administrative Agent;

(c)          Organizational Documents. A certificate of corporate existence of
each Borrower delivered to Administrative Agent prior to the Closing Date (or if
unavailable, as soon as available thereafter) and an officer’s certificate
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Repurchase Agreement or such other form reasonably acceptable to the
Administrative Agent including certified copies of their articles of
incorporation, by-laws, resolutions and incumbency (or equivalent documents) of
each Borrower and of all corporate or other authority for each Borrower with
respect to the execution, delivery and performance of the Loan Documents and
each other document to be delivered by each Borrower from time to time in
connection herewith;

(d)          Security Interest. Evidence that all other actions necessary or, in
the opinion of Administrative Agent, desirable to perfect and protect
Administrative Agent’s interest in the Assets and other Collateral have been
taken, including, without limitation, UCC searches and duly authorized and filed
Uniform Commercial Code financing statements on Form UCC-1;

(e)          Insurance. Evidence that each Borrower has added Administrative
Agent as agent for the Lenders as an additional loss payee under their Fidelity
Insurance and copies thereof; and

(f)           Other Documents. Such other documents as Administrative Agent may
reasonably request, in form and substance reasonably acceptable to
Administrative Agent.

5.2          Conditions to Each Loan. The obligation of each Lender to make any
Loan on any Borrowing Date, including the Closing Date, are subject to the
satisfaction of the following conditions precedent:

(a)          No Termination Event, Default or Event of Default shall have
occurred and be continuing under the Loan Documents;

(b)          Both immediately prior to the making of the Loan and also after
giving effect thereto and to the intended use thereof, the representations and
warranties made by each Borrower in Section 7 hereof, shall be true, correct and
complete in all material respects on and as of such Borrowing Date with the same
force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date);

(c)          The amount requested in the Request for Borrowing does not exceed
the Available Loan Amount;

(d)          After giving effect to the requested Loan, the Collateral Value of
all Eligible Collateral is not less than the Loans;

(e)          Subject to the Administrative Agent’s and each Lender’s right to
perform one or more Due Diligence Reviews pursuant to Section 27 hereof, the
Administrative Agent and each Lender shall have completed its due diligence
review of the Assets, and such other documents, records, agreements,
instruments, mortgaged properties or information relating to such Assets as the
Administrative Agent and each Lender in its sole discretion deems appropriate to
review and such review shall be satisfactory to the Administrative Agent and
each Lender in its sole discretion;

(f)           Upon request, the Administrative Agent shall have received from
outside counsel to the Borrowers an updated favorable opinion or opinions, in
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satisfactory to the Administrative Agent, covering and updating such matters
that were originally addressed in the initial opinion issued and which the
Administrative Agent in good faith deems appropriate to update;

(g)          The Administrative Agent shall have received (i) all fees under the
Repurchase Agreement and (ii) all fees and expenses of counsel to the
Administrative Agent as contemplated by Sections 14(b) and 27 which amount, at
the Administrative Agent’s option, may be withheld from any amounts hereunder;

(h)          Each Request for Borrowing delivered by either Borrower hereunder
shall constitute a certification by the Borrowers that all the conditions set
forth in this Section 5.2 (other than clause (j) below) have been satisfied
(both as of the date of such notice or request and as of the date of such
purchase);

(i)           The Borrower requesting the related Servicing Rights Loan has
delivered a copy of the related purchase and sale agreement prior to the date of
such Servicing Rights Loan, unless such time shall have been extended by the
Administrative Agent in its sole discretion upon request by the Borrowers;

(j)           The Administrative Agent shall have received the applicable
Servicing Contract relating to any Asset, in form and substance reasonably
satisfactory to the Administrative Agent in its sole discretion and any
amendment or modification related thereto;

(k)          No Lender shall be obligated to fund a Servicing Receivables Loan
until the related Servicing Contract has been approved by the Administrative
Agent in its sole discretion; and

(l)           The Borrowers shall have selected the LIBOR Period for any portion
of the Loans that bear (or, absent such selection, would bear) interest at the
Daily Reset LIBOR Rate, as follows; provided that the Borrowers may not have
more than eight (8) LIBOR Periods with respect to outstanding Loans at any given
time:

(A)         In order to select the LIBOR Period, the Borrowers shall give
Administrative Agent telephonic notice not later than 10:00 a.m. two (2)
Business Days prior to the first day of the LIBOR Period being selected,
specifying:

(1)          the Business Day when the selection is to become effective; and

(2)          the principal amount of the Loans for which the selection is being
made;

(B)         Borrowers shall confirm the telephonic notice in writing by not
later than the close of business on the same day, by forwarding to
Administrative Agent a completed and signed LIBOR Period Selection Confirmation
in the form of Exhibit J. Confirmation shall be made by telecopy and an original
signed by an Authorized Representative shall be mailed the same day.

 

 

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Section 6.

Requirements of Law and Taxes.

6.1          Requirements of Law. (a)  If any Requirement of Law (other than
with respect to any amendment made to any Lender’s certificate of incorporation
and by-laws or other organizational or governing documents) or any change in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:

(i)      shall subject any Lender to any Tax or increased Tax of any kind
whatsoever with respect to this Agreement or any Loan or change the basis of
taxation of payments to such Lender in respect thereof;

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

 

(iii)

shall impose on any Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender reasonably deems to be material, of entering,
continuing, committing to make or maintaining any Loan or to reduce any amount
due or owing hereunder in respect thereof, then, in any such case, the Borrowers
shall promptly pay such Lender such additional amount or amounts as calculated
by such Lender in good faith as will compensate such Lender for such increased
cost or reduced amount receivable equal to such increased costs or additional
amounts reasonably determined by such Lender.

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

(c)          If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 6.1, Administrative Agent shall notify the Borrowers of
the event by reason of which it has become so entitled, however, the Borrowers
shall not be required to pay any such amounts accruing more than two (2) years
prior to the date of any request for payment. A

 

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certificate as to any additional amounts payable pursuant to this Section 6.1
submitted by such Lender shall be conclusive in the absence of manifest error.

6.2          Taxes. (a) Any and all payments by each Borrower under or in
respect of this Agreement or any other Loan Documents to which each Borrower is
a party shall be made free and clear of, and without deduction or withholding
for or on account of, any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities (including penalties,
interest and additions to tax) with respect thereto, whether now or hereafter
imposed, levied, collected, withheld or assessed by any taxation authority or
other Governmental Authority (collectively, “Taxes”), unless required by law. If
either Borrower shall be required under any applicable Requirement of Law to
deduct or withhold any Taxes from or in respect of any sum payable under or in
respect of this Agreement or any of the other Loan Documents to any Lender, (i)
such Borrower shall make all such deductions and withholdings in respect of
Taxes, (ii) such Borrower shall pay the full amount deducted or withheld in
respect of Taxes to the relevant taxation authority or other Governmental
Authority in accordance with any applicable Requirement of Law, and (iii) the
sum payable by such Borrower shall be increased as may be necessary so that
after such Borrower has made all required deductions and withholdings (including
deductions and withholdings applicable to additional amounts payable under this
Section 6.2) such Lender receives an amount equal to the sum it would have
received had no such deductions or withholdings been made in respect of
Non-Excluded Taxes. For purposes of this Agreement the term “Non-Excluded Taxes”
are Taxes other than, in the case of a Lender, Taxes that are imposed on its
overall net income (and franchise taxes imposed in lieu thereof) by the
jurisdiction under the laws of which such Lender is organized or of its
applicable lending office, or any political subdivision thereof, unless such
Taxes are imposed as a result of such Lender having executed, delivered or
performed its obligations or received payments under, or enforced, this
Agreement or any of the other Loan Documents (in which case such Taxes will be
treated as Non-Excluded Taxes).

(b)          In addition, each Borrower hereby agrees to pay any present or
future stamp, recording, documentary, excise, property or value-added taxes, or
similar taxes, charges or levies that arise from any payment made under or in
respect of this Agreement or any other Loan Document or from the execution,
delivery or registration of, any performance under, or otherwise with respect
to, this Agreement or any other Loan Document (collectively, “Other Taxes”).

(c)          The Borrowers will indemnify each Lender for, and hold it harmless
against, the full amount of Non-Excluded Taxes and Other Taxes, and the full
amount of Taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 6.2 imposed on or paid by such Lender and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. The indemnity by the Borrowers provided for in this
Section 6.2(c) shall apply and be made whether or not the Non-Excluded Taxes or
Other Taxes for which indemnification hereunder is sought have been correctly or
legally asserted. Amounts payable by the Borrowers under the indemnity set forth
in this Section 6.2(c) shall be paid within ten (10) days from the date on which
the Administrative Agent makes written demand therefor on behalf of such Lender.

 

(d)

Reserved.

 

 

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(e)          Each Lender (including for avoidance of doubt any assignee,
successor or participant) that either (i) is not incorporated under the laws of
the United States, any State thereof, or the District of Columbia or (ii) whose
name does not include “Incorporated,” “Inc.,” “Corporation,” “Corp.,” “P.C.,”
“insurance company,” or “assurance company” (a “Non-Exempt Lender”) shall
deliver or cause to be delivered to the Borrowers the following properly
completed and duly executed documents:

(i)      in the case of a Non-Exempt Lender that is not a United States person,
a complete and executed (x) U.S. Internal Revenue Form W-8BEN with Part II
completed in which such Lender claims the benefits of a tax treaty with the
United States providing for a zero or reduced rate of withholding (or any
successor forms thereto), including all appropriate attachments or (y) a U.S.
Internal Revenue Service Form W-8ECI (or any successor forms thereto); or

(ii)    in the case of an individual, (x) a complete and executed U.S. Internal
Revenue Service Form W-8BEN (or any successor forms thereto) and a certificate
substantially in the form of Exhibit H (a “Section 6.2 Certificate”) or (y) a
complete and executed U.S. Internal Revenue Service Form W-9 (or any successor
forms thereto); or

(iii)   in the case of a Non-Exempt Lender that is organized under the laws of
the United States, any State thereof, or the District of Columbia, a complete
and executed U.S. Internal Revenue Service Form W-9 (or any successor forms
thereto), including all appropriate attachments; or

(iv)   in the case of a Non-Exempt Lender that (x) is not organized under the
laws of the United States, any State thereof, or the District of Columbia and
(y) is treated as a corporation for U.S. federal income tax purposes, a complete
and executed U.S. Internal Revenue Service Form W-8BEN claiming a zero rate of
withholding (or any successor forms thereto) and a Section 6.2 Certificate; or

(v)     in the case of a Non-Exempt Lender that (A) is treated as a partnership
or other non-corporate entity, and (B) is not organized under the laws of the
United States, any State thereof, or the District of Columbia, (x)(i) a complete
and executed U.S. Internal Revenue Service Form W-8IMY (or any successor forms
thereto) (including all required documents and attachments) and (ii) a
Section 6.2 Certificate, and (y) without duplication, with respect to each of
its beneficial owners and the beneficial owners of such beneficial owners
looking through chains of owners to individuals or entities that are treated as
corporations for U.S. federal income tax purposes (all such owners, “beneficial
owners”), the documents that would be required by clause (i), (ii), (iii), (iv),
(vi), (vii) and/or this clause (v) with respect to each such beneficial owner if
such beneficial owner were such Lender, provided, however, that no such
documents will be required with respect to a beneficial owner to the extent the
actual Lender is determined to be in compliance with the requirements for
certification on behalf of its beneficial owner as may be provided in applicable
U.S. Treasury regulations, or the requirements of this clause (v) are otherwise
determined to be unnecessary, all such determinations under this clause (v) to
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such Lender shall be provided an opportunity to establish such compliance as
reasonable; or

(vi)   in the case of a Non-Exempt Lender that is disregarded for U.S. federal
income tax purposes, the document that would be required by clause (i), (ii),
(iii), (iv), (v), (vii) and/or this clause (vi) of this Section 6.2(e) with
respect to its beneficial owner if such beneficial owner were such Lender; or

(vii)  in the case of a Non-Exempt Lender that (A) is not a United States person
and (B) is acting in the capacity as an “intermediary” (as defined in U.S.
Treasury Regulations), (x)(i) a U.S. Internal Revenue Service Form W-8IMY (or
any successor form thereto) (including all required documents and attachments)
and (ii) a Section 6.2 Certificate, and (y) if the intermediary is a
“non-qualified intermediary” (as defined in U.S. Treasury Regulations), from
each person upon whose behalf the “non-qualified intermediary” is acting the
documents that would be required by clause (i), (ii), (iii), (iv), (v), (vi),
and/or this clause (vii) with respect to each such person if each such person
were such Lender.

If the forms referred to above in this Section 6.2(e) that are provided by a
Lender at the time such Lender first becomes a party to this Agreement or, with
respect to a grant of a participation, the effective date thereof, indicate a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be treated as Taxes other than “Non-Excluded Taxes”
(“Excluded Taxes”) and shall not qualify as Non-Excluded Taxes unless and until
such Lender provides the appropriate form certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate shall be considered Excluded Taxes
solely for the periods governed by such form. If, however, on the date a Person
becomes an assignee, successor or participant to this Agreement, Lender
transferor was entitled to indemnification or additional amounts under this
Section 6.2, then such Lender assignee, successor or participant shall be
entitled to indemnification or additional amounts to the extent (and only to the
extent), that such Lender transferor was entitled to such indemnification or
additional amounts for Non-Excluded Taxes, and such Lender assignee, successor
or participant shall be entitled to additional indemnification or additional
amounts for any other or additional Non-Excluded Taxes.

(f)           For any period with respect to which such Lender has failed to
provide the Borrowers with the appropriate form, certificate or other document
described in subsection (e) of this Section 6.2 (other than (i) if such failure
is due to a change in any applicable Requirement of Law, or in the
interpretation or application thereof, occurring after the date on which a form,
certificate or other document originally was required to be provided, (ii) if
such form, certificate or other document otherwise is not required under
subsection (e) of this Section 6.2, or (iii) if it is legally inadvisable or
otherwise commercially disadvantageous for such Lender to deliver such form,
certificate or other document), such Lender shall not be entitled to
indemnification or additional amounts under subsection (a) or (c) of this
Section 6.2 with respect to Non-Excluded Taxes imposed by the United States by
reason of such failure; provided, however, that should a Lender become subject
to Non-Excluded Taxes because of its failure to deliver a form, certificate or
other document required hereunder, the Borrowers shall take such steps as the
Administrative Agent shall reasonably request on behalf of such Lender, to
assist such Lender in recovering such Non-Excluded Taxes.

 

 

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(g)          Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 6.2 shall survive the termination of this Agreement in
accordance with the applicable statute of limitations. Nothing contained in this
Section 6.2 shall require such Lender to make available any of its tax returns
or any other information that it deems to be confidential or proprietary.

Section 7.          Representations and Warranties. Each Borrower represents and
warrants, to the Administrative Agent and the Lenders that as of each Borrowing
Date and as of the date of this Agreement and at all times while the Loan
Documents are in full force and effect and any Loans are outstanding hereunder:

7.1          Incorporation By Reference. The representations and warranties set
forth in Section 11 of the Repurchase Agreement (without giving effect to any
termination thereof) and all defined terms used therein as in effect on the date
hereof are hereby incorporated herein by reference with the same force and
effect as though made by the Borrowers hereunder. Notwithstanding any subsequent
termination or other circumstance which would cause the Repurchase Agreement to
no longer be in effect or binding upon the parties, no amendment to any
representation or warranty in Section 11 of the Repurchase Agreement or to any
defined term used therein shall be deemed amended hereunder unless consented to
as required under Section 12 hereof; provided that for these purposes the
following defined terms used in Section 11 of the Repurchase Agreement shall
have the meaning set forth below:

 

(a)

Seller shall mean Borrower;

 

(b)

Buyer shall mean Lender;

 

(c)          Administrative Agent shall mean the Administrative Agent as defined
herein;

 

(d)

Purchase Date shall mean Borrowing Date;

 

 

(e)

Purchased Mortgage Loan shall mean Asset;

 

 

(f)

Repurchase Agreement shall mean this Agreement;

 

 

(g)

Repurchase Document shall mean Loan Document;

 

 

(h)

Mortgage Loan Schedule shall mean Asset Schedule;

 

(i)

Mortgage Loan shall mean Asset;

 

 

(j)

Repurchase Assets shall mean Collateral;

 

 

(k)

Transaction shall mean a borrowing of a Loan; and

 

(l)           provided further that any representation or warranty in Section 11
of the Repurchase Agreement regarding Underwriting Guidelines or HELOC
provisions shall not apply hereto.

 

 

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7.2          Servicing Contracts. Each Servicing Contract related to any Asset
has been identified to, reviewed and approved by the Administrative Agent for
purposes of financing either Borrower’s acquisition or retention of Eligible
Servicing Rights hereunder.

Section 8.           Covenants. Each Borrower covenants to the Administrative
Agent and the Lenders that as of each Borrowing Date and as of the date of this
Agreement and at all times while the Loan Documents are in full force and effect
and any Loans are outstanding hereunder:

8.1          Incorporation By Reference. The covenants set forth in Section 12
of the Repurchase Agreement (without giving effect to any termination thereof)
and all defined terms used therein as in effect on the date hereof are hereby
incorporated herein by reference with the same force and effect as though made
by the Borrowers hereunder. Notwithstanding any subsequent termination or other
circumstance which would cause the Repurchase Agreement to no longer be in
effect or binding upon the parties, no amendment to any covenant in Section 12
of the Repurchase Agreement or to any defined term used therein shall be deemed
amended hereunder unless consented to as required under Section 12 hereof;
provided that for these purposes the following defined terms used in Section 12
of the Repurchase Agreement shall have the meaning set forth below:

 

(a)

Seller shall mean Borrower;

 

(b)

Buyer shall mean Lender;

 

(c)          Administrative Agent shall mean the Administrative Agent as defined
herein;

 

(d)

Purchase Date shall mean Borrowing Date;

 

 

(e)

Purchased Mortgage Loan shall mean Asset;

 

 

(f)

Repurchase Agreement shall mean this Agreement;

 

 

(g)

Repurchase Document shall mean Loan Document;

 

 

(h)

Mortgage Loan Schedule shall mean Asset Schedule;

 

 

(i)

Mortgage Loan shall mean Asset;

 

 

(j)

Repurchase Assets shall mean Collateral;

 

 

(k)

Eligible Mortgage Loan shall mean Eligible Collateral;

 

(l)

Transaction shall mean a borrowing of a Loan; and

 

(m)         provided further that any covenant in Section 12 of the Repurchase
Agreement regarding Underwriting Guidelines or HELOC provisions shall not apply
hereto.

 

 

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8.2          Pay Notes. The Borrowers will pay or cause to be paid when due the
principal, interest and all other amounts due or hereafter owing under this
Agreement, the Notes and the other Loan Documents

8.3          Notice of Proceedings or Adverse Change. In addition to those
notices set forth in Section 12(c)(iv) of the Repurchase Agreement, the
Borrowers shall give notice to the Administrative Agent immediately after a
responsible officer of the Borrowers has any knowledge of:

(a)          the transfer or loss of any Servicing Contract that relates to any
Asset, and the reason for such transfer or loss, if known to the Borrowers;
provided that no such notice to the Administrative Agent shall be required in
respect of a transfer of any Servicing Contract that does not result in a
reduction to the Collateral Value of any Asset.

8.4          Other Reporting. In addition to those reports set forth in Section
12(e) of the Repurchase Agreement, the Borrowers shall furnish to Administrative
Agent for the benefit of Lenders:

(i)      Monthly, a report of all Servicer Advances made and outstanding
categorized as T&I Advances, Enforcement Advances and P&I Advances and the aging
period with respect thereof.

(ii)     Monthly, a delinquent mortgage loan report summarizing (or upon request
of the Administrative Agent, detailing) Serviced Loans (i) in default for thirty
(30) days or more and categorized by age of delinquency for thirty (30), sixty
(60) and ninety (90) or more days, (ii) in foreclosure, or (iii) in bankruptcy.

 

(iii)

Quarterly, a current written Servicing Rights Value.

 

(iv)

Upon request, a current Asset Schedule.

 

8.5          Fannie Mae and Freddie Mac. The pledge of each Borrower’s right,
title and interest in Servicing Rights under Servicing Contracts (a) with Fannie
Mae only secure each Borrower’s debt to the Lenders in accordance with the
provisions of Section 10.3 hereof and (b) with Freddie Mac only secure each
Borrower’s debt to the Lenders in accordance with the provisions of Section 10.5
hereof.

8.6          Servicing Contracts. Each Borrower will not (a) enter into any
Servicing Contract for the servicing of any Assets that has not been reviewed
and approved in writing by the Administrative Agent, which approval the
Administrative Agent agrees not to unreasonably withhold, condition or delay or
(b) approve or acquiesce in any transfer of servicing of any Assets to a
Servicer, or pursuant to a Servicing Contract, that has not been approved by the
Administrative Agent, which approval the Administrative Agent agrees not to
unreasonably withhold, condition or delay or (c) pledge or grant any security
interest in any Servicing Contract related to an Asset to any Person other than
the Administrative Agent for the benefit of the Lenders.

 

 

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8.7          Servicing Practices. Borrowers shall not change their servicing
policies or procedures in effect on the date hereof to the extent that such
changes are inconsistent with the applicable Servicing Contract or contrary to
the Mortgage Bankers Association of America’s Uniform Single Audit Program for
Mortgage Bankers.

8.8          Onsite Operational Audits. Borrowers shall permit the
Administrative Agent to arrange for a third party selected by the Administrative
Agent to conduct an onsite operational audit of the Borrowers’ books and records
pertaining to the Servicing Receivables and the Eligible Collateral twice per
calendar year during normal business hours and in a manner that does not
unreasonably interfere with the Borrowers’ conduct of their business; provided
that the Administrative Agent reserves the right to conduct interim audits at
any time or to arrange for such audits at any other time the Administrative
Agent reasonably deems necessary.

 

Section 9.

Events of Default; Termination Event.

9.1          Events of Default. If any of the following events (each an “Event
of Default”) occur, the Administrative Agent, for the benefit of the Lenders,
shall have the rights set forth in Section 10.11, as applicable:

(a)          Payment Failure. Either Borrower shall default under this Agreement
in the payment of (i) a Mark-to-Market; (ii) any Interest Payment or principal
payment or Facility Fee which has become due, on a Payment Date or a Maturity
Date or otherwise, whether by acceleration or otherwise, under the terms hereof
or (iii) Expenses, Obligations or any other sum, when the same shall become due
and payable, whether at the due date thereof, or by acceleration or otherwise;

(b)          Breach of Financial Representation or Covenant. The failure of the
Borrowers to perform, comply with or observe any term, covenant or agreement
applicable to each Borrower contained in Sections 12(a), (i), (j), (k), (r),
(s), (t), (u), (v), (w), (x), (z), (aa) or (dd) of the Repurchase Agreement as
incorporated by reference in Section 8 hereof; or

(c)          Breach of Non-Financial Representation. Any representation,
warranty or certification made or deemed made herein or in any other Loan
Document by the Borrowers or any certificate furnished to the Administrative
Agent pursuant to the provisions hereof or thereof or any information with
respect to the Assets furnished in writing by on behalf of the Borrowers shall
prove to have been untrue or misleading in any material respect as of the time
made or furnished (other than the representations and warranties set forth in
Schedule 4, which shall be considered solely for the purpose of determining the
Collateral Value of the Assets; unless (i) the Borrowers shall have made any
such representations and warranties with actual knowledge that they were
materially false or misleading at the time made; or (ii) any such
representations and warranties have been determined in good faith by the
Administrative Agent in its sole discretion to be materially false or misleading
on a regular basis); or

(d)          Breach or other Covenant. Either Borrower, as applicable, shall
fail to observe or perform any other covenant or agreement contained in this
Agreement (and not identified in clause (b) of Section 9.1) or any other Loan
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capable of being remedied, such failure to observe or perform shall continue
unremedied for a period of 30 days; or

(e)          Judgment. Any money judgment, writ or warrant of attachment or
similar process involving (i) any Borrower in excess of $5,000,000 in the
aggregate or (ii) any Borrower in excess of $5,000,000 (to the extent not
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage), shall be entered or filed against either
Borrower or any of its assets and shall remain undischarged, unvacated, unbonded
or unstayed for a period of sixty (60) days (or in any event later than five (5)
days prior to the date of any proposed sale thereunder); or

(f)           Insolvency. An Event of Insolvency shall have occurred with
respect to either Borrower; or

(g)          Enforceability. (i) Any Loan Document shall for whatever reason be
terminated or cease to be in full force and effect in all material respects or
shall not be enforceable in all material respects in accordance with its terms,
or (ii) any Lien granted pursuant thereto shall fail to be perfected and of
first priority, or (iii) any Person (other than the Administrative Agent for the
benefit of the Lenders) shall contest the validity, enforceability, perfection
or priority of any Lien granted pursuant thereto which has not been dismissed or
otherwise addressed in a manner acceptable to the Administrative Agent or
otherwise waived as an Event of Default by the Administrative Agent (subject to
the Lenders’ approval hereunder within three (3) Business Days of the date such
Lien was first contested, or (iv) any party thereto (other than the
Administrative Agent for the benefit of the Lenders) shall seek to disaffirm,
terminate, limit or reduce its obligations hereunder; or

(h)          Cross-Default. The Borrowers, or any of their Affiliates shall be
in default under (i) the Repurchase Agreement, or (ii) any Indebtedness, in
excess of $5,000,000 individually or in the aggregate, of Borrowers or of any of
their Affiliates which default (1) involves the failure to pay a matured
obligation, or (2) permits the acceleration of the maturity of obligations by
any other party to or beneficiary with respect to such Indebtedness, or
(iii) any other contract, in excess of $5,000,000 individually or in the
aggregate, to which each Borrower or any of their Affiliates is a party which
default (1) involves the failure to pay a matured obligation, or (2) permits the
acceleration of the maturity of obligations by any other party to or beneficiary
of such contract; or

 

(i)

Reserved; or

(j)           Going Concern. Either Borrower’s audited financial statements or
notes thereto or other opinions or conclusions stated therein shall be qualified
or limited by reference to the status of either Borrower as a “going concern” or
reference of similar import; or

(k)          Change in Control. A Change in Control shall have occurred unless
the Administrative Agent consents in writing (subject to the Lenders’ approval
as contemplated hereunder); or

 

 

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(l)           Inability to Perform. An officer of either Borrower shall admit
its inability to, or its intention not to, perform any of either Borrower’s
Obligations hereunder or under any other Loan Document; or

(m)         Servicing Rights. Either Borrower’s rights to service Mortgage
Loans, in the aggregate, under one or more Servicing Contracts the value of
which rights, in the aggregate, to each Borrower (as reasonably estimated by the
Administrative Agent) equals or exceeds ten percent (10%) or more of either
Borrower’s portfolio of Servicing Rights shall be terminated for cause (i.e., on
account of act(s) or omission(s) by either Borrower; or

 

(n)

Reserved; or

(o)          REIT Status. The failure of HB Corp. to at any time continue to be
(i) qualified as and “publicly traded” as a real estate investment trust as
defined in Section 856 of the Code and (ii) entitled to a dividend paid
deduction under Section 857 of the Code with respect to dividends paid by it
with respect to each taxable year for which it claims a deduction on its Form
1120 – REIT filed with the United States Internal Revenue Service for such year,
or the entering into by HB Corp. of any material “prohibited transactions” as
defined in Sections 857(b)(6) of the Code unless approved in writing by the
Administrative Agent (subject to the Lenders’ approval hereunder); or

Upon the occurrence of any Event of Default described in Section 9.1(f)
automatically, and upon the occurrence and continuance of any other Event of
Default, at the request of (or with the consent of) Majority Lenders and upon
notice to the Borrowers by Administrative Agent: (A) the Commitments shall
immediately terminate; (B) the aggregate principal of all Loans, all accrued and
unpaid interest thereon, all fees and all other Obligations under this Agreement
and the other Loan Documents, shall become due and payable immediately, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by each Borrower and (C) Administrative Agent may
exercise any and all of its rights and remedies under applicable law (including
the UCC) or at equity, hereunder and under the other Loan Documents.

 

9.2

Termination Event

(a)          If the following event (a “Termination Event”) occurs, the
Administrative Agent shall have the rights set forth in Section 9.2(b):

(i)      any Material Adverse Effect shall occur, in each case as determined by
the Administrative Agent in its sole good faith determination, or any other
condition shall exist which, in the Administrative Agent’s sole good faith
determination, constitutes a material impairment of any Borrower’s ability to
perform its obligations under this Repurchase Agreement or any other Repurchase
Document.

(b)          Upon the occurrence of a Termination Event, the Administrative
Agent may in its sole discretion, immediately terminate the Commitments. The
Borrowers shall repay any Loans outstanding hereunder within 30 days following
receipt of a request therefor from the Administrative Agent following the
occurrence of a Termination Event.

 

 

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Section 10.

Security Agreement.

10.1       Collateral; Security Interest. (a)  All of each Borrower’s right,
title and interest in, to and under each of the following items of property,
whether now owned or hereafter acquired, now existing or hereafter created and
wherever located, is hereinafter referred to as the “Collateral”:

 

(i)

all Assets;

 

 

(ii)

all Servicing Rights owned by either Borrower from time to time;

(iii)   all Servicing Receivables that are (i) related to any Servicing Contract
or any Asset identified on a loan by loan or pool basis on any Asset Schedule or
(ii) identified on any Asset Schedule whether on a loan by loan or pool basis or
otherwise;

(iv)    the Servicing Contracts listed on any Asset Schedule and any other
Servicing Contract related to the Assets;

 

(v)

all records, instruments or other documentation evidencing any Asset;

(vi)    all “general intangibles”, “accounts”, “chattel paper”, “securities
accounts”, “investment property”, “deposit accounts” and “money” as defined in
the Uniform Commercial Code relating to or constituting any and all of the
foregoing (including, without limitation, in the case of Servicing Rights
related to the Assets, all of each Borrower’s rights, title and interest in and
under the related Servicing Contracts);

(vii)  any and all replacements, substitutions, distributions on or proceeds of
any and all of the foregoing;

(viii)               the Payment Account and all monies from time to time on
deposit therein; and

(ix)    any and all replacements, substitutions or distributions on, and all
Proceeds, products, accessions, rents and profits of or in respect of any of the
foregoing.

(b)          Each Borrower hereby assigns, pledges and grants a security
interest in all of its right, title and interest in, to and under the Collateral
to Administrative Agent for the benefit of the Lenders to secure the Obligations
including, without limitation, the repayment of principal of and interest on all
Loans and all other amounts owing to the Lenders hereunder, under the Notes and
under the other Loan Documents and all other amounts owing by each Borrower to
any Lender. Each Borrower agrees to mark its computer records and tapes to
evidence the interests granted to Administrative Agent.

(c)          The Administrative Agent and the Borrowers hereby agree that in
order to further secure the Borrowers’ Obligations hereunder, each Borrower
hereby grants to the Administrative Agent for the benefit of the Lenders a
security interest in (i) as of the date hereof, the Borrowers’ rights (but not
its obligations) under the Repurchase Documents including without limitation any
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thereunder whether now owned or hereafter acquired, now existing or hereafter
created (collectively, the “Repurchase Rights”) and (ii) as of the Repurchase
Document Termination, all collateral however defined or described under the
Repurchase Documents to the extent not otherwise included under the definitions
of Collateral or Repurchase Rights (such collateral, “Additional Collateral”).
As of the Repurchase Document Termination (as defined below), all Additional
Collateral shall be deemed to be part of Collateral. For the avoidance of doubt,
the Repurchase Rights shall be deemed to be part of the Collateral as of the
date hereof. The Borrowers shall deliver an irrevocable instruction to the
administrative agent under the Repurchase Documents that upon receipt of notice
of an Event of Default under this Agreement, the administrative agent thereunder
is authorized and instructed to remit to the Administrative Agent hereunder
directly any amounts otherwise payable to either Borrower and to deliver to the
Administrative Agent all collateral otherwise deliverable to the Borrowers. In
furtherance of the foregoing, such notice shall also require, upon repayment of
the outstanding Purchase Price under the Repurchase Agreement and termination of
all obligations of the Administrative Agent and Buyers thereunder or other
termination of the Repurchase Documents following repayment of all obligations
thereunder (each a “Repurchase Document Termination”), that the Repurchase
Document administrative agent deliver to the Administrative Agent hereunder any
collateral then in its possession or control.

(d)          The security interest granted by the Borrowers to the
Administrative Agent for the benefit of the Lenders hereunder is for security
only and does not subject the Administrative Agent or any Lender to any
obligation or liability of the Borrowers with respect to or arising out of any
of the Collateral.

10.2       Further Assurances. At any time and from time to time, upon the
written request of Administrative Agent, and at the sole expense of the
Borrowers, the Borrowers shall promptly and duly execute and deliver, or will
promptly cause to be executed and delivered, such further instruments and
documents and take such further action as Administrative Agent may reasonably
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the UCC
in effect in any jurisdiction with respect to the Liens created hereby. Each
Borrower also hereby authorizes Administrative Agent to file any such financing
or continuation statement to the extent permitted by applicable law.

10.3       Limited Pledge of Fannie Mae Servicing. Notwithstanding anything to
the contrary herein or any of the other Loan Documents, the pledge of the
Borrowers’ right, title and interest in mortgage servicing rights under
servicing contracts with Fannie Mae shall only secure the Borrowers’ debt to the
Lenders incurred for the purposes of (a) purchasing additional Mortgage Loan
servicing rights, (b) purchasing a mortgage banking company (including a
management buyout of an existing mortgage banking company) or (c) securing a
warehouse line of credit; provided, that the foregoing provisions of this
paragraph shall be deemed automatically supplemented or amended if and to the
extent Fannie Mae supplements or amends the corresponding requirement, whether
in its rules, regulations, guides, Servicing Contracts, Acknowledgment
Agreements, or published announcements or otherwise waives or grants exceptions
from such requirement, and in each instance, with the same substantive force and
effect; provided further that the security interest created hereby is subject to
the following provision to be included in each financing statement filed in
respect hereof:

 

 

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The security interest created by this financing statement is subject and
subordinate to all rights, powers, and prerogatives of Fannie Mae under and in
connection with (i) the terms and conditions of that certain Acknowledgment
Agreement, with respect to the security interest, by and between Fannie Mae,
HomeBanc Mortgage Corporation and HomeBanc Corp. (each a “Debtor” and
collectively the “Debtors”) and JP Morgan Chase Bank, N.A., as Administrative
Agent for various Lenders under that certain Loan and Security Agreement dated
as of November 17, 2006, (ii) the Mortgage Selling and Servicing Contract and
all applicable Pool Purchase Contracts between Fannie Mae and the Debtors, and
(iii) the Selling Guide, Servicing Guide, and other Guides, as each of such
Guides is amended from time to time ((ii) and (iii) collectively, the “Fannie
Mae Contract”), which rights, powers, and prerogatives include, without
limitation, the right of Fannie Mae to terminate the Fannie Mae Contract with or
without cause and the right to sell, or have transferred, the Servicing Rights
as therein provided.

 

10.4

Reserved.

10.5       Limited Pledge of Freddie Mac Servicing. Notwithstanding anything to
the contrary contained herein or in any of the other Loan Documents, the pledge
of each Borrower’s right, title and interest in mortgage servicing rights under
Servicing Contracts with Freddie Mac shall only secure the Borrowers’
indebtedness and obligations to Administrative Agent (as agent and
representative of the Lenders) incurred for (i) the purposes of securing (a) a
warehouse line of credit and used for one of the purposes set forth in clauses
(b) through (e), (b) a loan whose proceeds have been or will be used to acquire
rights in such Freddie Mac Servicing Contract in accordance with the provisions
of the Freddie Mac Sellers’ and Servicers’ Guide, (c) a loan whose proceeds have
been or will be used to acquire assets of, or stock issued by, the respective
Borrowers, (d) a loan whose proceeds have been or will be used to purchase from
another mortgage banking company the contract right to service Serviced Loans,
or to purchase assets of, or stock issued by, such company, (e) a loan whose
proceeds have been or will be used as working capital, or (ii) any other purpose
which Freddie Mac, in its sole and absolute discretion, considers to be
consistent with the purposes of its Acknowledgment Agreement to be executed
among the Borrowers, the Administrative Agent and Freddie Mac, and accordingly
permits; provided, that the foregoing provisions of this paragraph shall be
deemed automatically supplemented or amended if and to the extent Freddie Mac
supplements or amends the corresponding requirement, whether in its rules,
regulations, guides, Servicing Contracts, Acknowledgment Agreements or published
announcements or otherwise waives or grants exceptions from such requirement,
and in each instance, with the same substantive force and effect; and provided
further that the security interest created hereby is subject to the following
provision to be included in each financing statement filed in respect hereof:

The security interest referred to in this financing statement is subject and
subordinate in each and every respect (a) to all rights, powers and prerogatives
of one or more of the following: the

 

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Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National
Mortgage Association (“Fannie Mae”), the Government National Mortgage
Association (“Ginnie Mae”) or such other investors that own mortgage loans, or
which guaranty payments on securities based on and backed by pools of mortgage
loans, identified on the exhibit(s) or schedule(s) attached to this financing
statement (the “Investors”); and (b) to all claims of an Investor arising out of
any and all defaults and outstanding obligations of the debtor to the Investor.
Such rights, powers and prerogatives of the Investors may include, without
limitation, one or more of the following: the right of an Investor to disqualify
the debtor from participating in a mortgage selling or servicing program or a
securities guaranty program with the Investor; the right to terminate contract
rights of the debtor relating to such a mortgage selling or servicing program or
securities guaranty program; and the right to transfer and sell all or any
portion of such contract rights following the termination of those rights.

10.6       Acknowledgement Agreements. Notwithstanding any other provision
hereof to the contrary, the Administrative Agent may elect, but shall not be
obligated, to treat Assets which are Agency Servicing Rights as having zero
Collateral Value until the date (which in no event shall be prior to the date
that is sixty (60) days following the date hereof) on which an Acknowledgment
Agreement covering such Assets has been executed and delivered by the Borrowers,
the Administrative Agent and Fannie Mae, Freddie Mac or such other investor, as
applicable.

10.7       Right of Redemption from Pledge. Provided no Event of Default has
occurred and is continuing (provided, Administrative Agent may elect to allow
redemption even if an uncured and unwaived Event of Default has occurred if
Administrative Agent reasonably believes at that time that doing so would be in
Lenders’ interest), the Borrowers may from time to time redeem one or more items
of Collateral from pledge by either:

(a)          paying, or causing to be paid, to Administrative Agent for deposit
in the Payment Account, for application to the outstanding balance of Loans and
Pro Rata distribution to Lenders for their application to prepayment of the
principal balances of the Notes, the Redemption Amount for the item(s) of
Collateral to be released; or

(b)          delivering substitute Collateral that (x) is Eligible Collateral;
(y) will increase the aggregate outstanding Collateral Value of all Eligible
Collateral to a Collateral Value at least equal to the aggregate outstanding
Loans and (z) is acceptable to the Administrative Agent;

after which, in either case, Administrative Agent shall release the redeemed
Collateral to the Borrowers or their designee promptly upon written request made
by either Borrower and at its cost, and the Borrowers shall promptly receipt, or
shall cause its designee to promptly receipt, for such released Collateral in
writing to Administrative Agent. Further, Administrative Agent shall execute UCC
release(s) of such redeemed Collateral, or otherwise appropriately confirm such

 

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release in writing, prepared at the Borrowers’ expense if, when and in such form
as the Borrowers, may reasonably request.

10.8       Acquittance. Acceptance by each Borrower of any Collateral delivered
to it pursuant to any provision of this Agreement (whether or not the recipient
issues a receipt for it) or shipping by Administrative Agent of Collateral in
substantial compliance with shipping instructions given by the Borrowers or
their designee shall be a complete and full acquittance for the Collateral so
delivered or shipped, and Administrative Agent shall thereby be released and
discharged from any and all liability or responsibility for it arising then or
thereafter.

10.9       Administrative Agent’s Appointment Attorney-in-Fact. (a)  Each
Borrower hereby irrevocably constitutes and appoints the Administrative Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Borrower and in the name of such Borrower or in its own
name, from time to time in the Administrative Agent’s discretion, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be reasonably necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Borrower
hereby gives the Administrative Agent the power and right, on behalf of such
Borrower, without assent by, but with notice to, the Borrowers, if an Event of
Default shall have occurred and be continuing, to do the following:

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

(ii)     to pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral;

(iii)   (A) to direct any party liable for any payment under any Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) to sign and endorse any invoices,
assignments, verifications, notices and other documents in connection with any
Collateral; (D) to commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any proceeds thereof and to enforce any other right in respect of
any Collateral; (E) to defend any suit, action or proceeding brought against
such Borrower with respect to any Collateral; (F) to settle, compromise or
adjust any suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as the Administrative
Agent may deem appropriate; and (G) generally, to sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any Collateral as
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Agent were the absolute owner thereof for all purposes, and to do, at the
Administrative Agent’s option and the Borrowers’ expense, at any time, and from
time to time, all acts and things which the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent’s Liens thereon and to effect the intent of this Agreement, all as fully
and effectively as the Borrowers might do.

(b)          Each Borrower hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.

(c)          Each Borrower also authorizes the Administrative Agent, if an Event
of Default shall have occurred, from time to time, to execute, in connection
with any sale provided for in Section 10.11 hereof, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral.

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

10.10     Performance by Administrative Agent of Each Borrower’s Obligations. If
either Borrower fails to perform or comply with any of their agreements
contained in the Loan Documents and Administrative Agent may itself perform or
comply, or otherwise cause performance or compliance, with such agreement, the
reasonable out-of-pocket expenses of Administrative Agent incurred in connection
with such performance or compliance, together with interest thereon at a rate
per annum equal to the Post-Default Rate, per annum, shall be payable by the
Borrowers to Administrative Agent upon ten (10) days notice that such amounts
are due and payable, unless an Event of Default shall have occurred and is
continuing, in which case such amounts shall be due and payable on demand and,
in either case, shall constitute Obligations.

10.11     Remedies. If an Event of Default shall occur and be continuing, the
Administrative Agent may exercise, in addition to all other rights and remedies
granted to it in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Uniform Commercial Code. Without limiting the
generality of the foregoing, the Administrative Agent may seek the appointment
of a receiver, liquidator, conservator, trustee, or similar official in respect
of one or both of the Borrowers or any of Borrowers’ property. Without limiting
the generality of the foregoing, if an Event of Default has occurred and is
continuing, the Administrative Agent without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required under this Agreement or by law referred to below) to or upon the
Borrowers or any other Person (each and all of which demands, presentments,
protests, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
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sell, lease, assign, give option or options to purchase, or otherwise dispose of
and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels or as an entirety at public or private sale
or sales, at any exchange, broker’s board or office of the Administrative Agent
or elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Borrowers,
which right or equity is hereby waived or released. Administrative Agent may
sell the Collateral without giving any warranties as to the Collateral.
Administrative Agent may specifically disclaim or modify any warranties of title
or the like. This procedure will not be considered to adversely effect the
commercial reasonableness of any sale of the Collateral. Each Borrower further
agrees, at the Administrative Agent’s request, to assemble the Collateral and
make it available to the Administrative Agent at places which the Administrative
Agent shall reasonably select, whether at the Borrowers’ premises or elsewhere.
The Administrative Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent hereunder, including
without limitation reasonable attorneys’ fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Administrative
Agent may elect, and only after such application and after the payment by the
Borrowers of any other amount required or permitted by any provision of law,
including without limitation Section 9-615 of the Uniform Commercial Code, need
the Administrative Agent account for the surplus, if any, to the Borrowers. To
the extent permitted by applicable law, each Borrower waives all claims, damages
and demands it may acquire against the Lenders or the Administrative Agent
arising out of the exercise by the Administrative Agent of any of its rights
hereunder, other than, in the case of the Administrative Agent, those claims,
damages and demands arising from the gross negligence or willful misconduct of
the Administrative Agent. If any notice of a proposed sale or other disposition
of Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition. The
Borrowers shall remain liable for any deficiency (plus accrued interest thereon
at the Post-Default Rate, per annum,) if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Obligations and the
reasonable fees and disbursements, of any attorneys employed by the
Administrative Agent to collect such deficiency. In addition, the Borrowers
shall be liable to the Administrative Agent and the Lenders for damages in an
amount equal to the cost (including all fees, expenses, Breakage Costs and
commissions) of entering into replacement transactions and entering into or
terminating hedge transactions in connection with or as a result of an Event of
Default.

10.12     Limitation on Duties Regarding Preservation of Collateral.
Administrative Agent’s duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the UCC or otherwise, shall be to deal with it in the same manner as
Administrative Agent deals with similar property for its own account. Subject to
the immediately preceding sentence, neither Administrative Agent nor any of its
directors, officers or employees shall be liable for failure to demand, collect
or realize upon all or any part of the Collateral or for any delay in doing so
or shall be under any obligation to sell or otherwise dispose of any Collateral
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except for its or their own gross negligence or willful misconduct.
Administrative Agent or Lenders may, but shall not be obligated to, advance any
sums or do any act or thing necessary to uphold and enforce the Lien and
priority of any other Lien instrument included in the Collateral or the security
intended to be afforded by it, including payment of delinquent taxes or
assessments and insurance premiums, or to preserve or reinstate any hedging
arrangements or mechanisms. All advances, charges, reasonable costs and
expenses, including reasonable attorneys’ fees and disbursements, incurred or
paid by Administrative Agent or Lenders in exercising any right, power or remedy
conferred by this Agreement or any of the other Loan Documents, or in its
enforcement in each case after an Event of Default has occurred and is
continuing, together with interest thereon, at the Interest Rate from the time
of demand for its payment until ten (10) days thereafter, and at the Interest
Rate plus 3%, per annum, from ten (10) days after demand until repaid, shall
become a part of principal balance outstanding under the Notes (Pro Rata with
the respective principal balances of the Notes at the time of expenditure) and
shall be secured by all security for the Notes.

10.13     Application of Proceeds. The Administrative Agent agrees with the
Lenders that the proceeds of any sale or other enforcement of Administrative
Agent’s security interest in all or any part of the Collateral shall be applied
by Administrative Agent:

first, to the payment of all costs and fees payable by the Borrowers to the
Administrative Agent and the Lenders pursuant to this Agreement;

second, to the Administrative Agent for the benefit of Lenders in payment of any
accrued and unpaid interest;

third, to the Administrative Agent for the benefit of Lenders in payment of any
principal of the Loans that is due;

fourth, without limiting the rights of Administrative Agent under Section 4 of
this Agreement, to the Administrative Agent to be applied as set forth in
Section 4.1 hereof, in the amount of any unpaid Borrowing Base Deficiency; and

fifth, to the payment of the outstanding principal balances of the Loans, Pro
Rata.

10.14     Powers Coupled with an Interest. All powers of attorney,
authorizations and agencies herein contained are irrevocable until the later to
occur of (x) the date on which the Obligations shall have been irrevocably paid
in full and (y) the Termination Date and are powers coupled with an interest.

10.15     Release of Security Interest. Upon termination of this Agreement and
repayment to Lenders of all Obligations and the performance of all obligations
under the Loan Documents Administrative Agent shall release its security
interest in any remaining Collateral.

 

Section 11.

The Lenders.

11.1       Lenders’ Cooperation. The Lenders agree to cooperate among themselves
and with the Administrative Agent and from time to time upon the Administrative
Agent’s request, to execute and deliver such papers as may be reasonably
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Administrative Agent, to effectively administer and service the Assets and Loans
in the manner contemplated by this Agreement and the Loan Documents.

11.2       Lenders’ Sharing Arrangement. (a)  Each of the Lenders agrees that if
it should receive any amount (whether by voluntary payment, realization upon
security, the exercise of the right of set-off, or otherwise) which is
applicable to the payment of the principal of, or interest or fees on, any
Loans, of an amount that with respect to the related sum or sums received (or
receivable) by the other Lenders is in greater proportion than that Lender’s Pro
Rata share of the Loans, then such Lender receiving such excess amount shall
purchase from the other Lenders an interest in the Obligations of the Borrowers
under this Agreement or any of the Loan Documents in such amount as shall result
in a proportional participation by all of the Lenders in such excess amount;
provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery; and further provided that the
provisions of this Section 11.2 shall not apply to the Administrative Fees under
the Repurchase Agreement.

(b)          Each Lender acknowledges that they have rights to each Borrower’s
rights (but not the obligations) under the Repurchase Agreement and have been
granted a Lien thereon as additional security. Each Lender agrees for the sole
benefit of the Buyers under the Repurchase Agreement that any rights under the
Repurchase Agreement that are for the benefit of the Lenders under this
Agreement shall be subordinate and junior to any rights of the Buyers
thereunder.

 

11.3

Lenders’ Acknowledgement.

(a)          Each Lender other than JPMorgan hereby acknowledges that JPMorgan
has made no representations or warranties with respect to the Loans or
Collateral other than as expressly set forth in this Agreement and that JPMorgan
shall have no responsibility (in its capacity as a Lender, the Administrative
Agent, or in any other capacity or role) for:

 

(i)

the collectability of the Loans; or

(ii)     the value, validity, effectiveness, genuineness, enforceability, or
sufficiency of any Collateral or any property at any time covered thereby; or

(iii)   any recital, statement, representation or warranty of the Borrowers or
any of its Subsidiaries or Affiliates in this Agreement or in any other writing
at any time furnished by or on behalf of the Borrowers or any of its Affiliates
or Subsidiaries in connection with this Agreement, any of the other Loan
Documents; or

(iv)    the legality, validity, enforceability, or any legal effect of any of
the Loan Documents as against either Borrower, or any insurance, bond or similar
device purportedly protecting any obligation to the Lenders or any Collateral;
or

(v)     the financial condition of either Borrower or any of its Subsidiaries or
Affiliates, the status, health or viability of any industry in which any of them
is involved, the prospects for repayment of the Loans, or the effectiveness of
any of the provisions of the Loan Documents (including the financial covenants,
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or any aspect of their implementation or administration at any time to reduce or
control risks of any type, to produce returns, profits, yields or spreads or to
reduce or control losses; or

(vi)    the truthfulness, accuracy or completeness of any information at any
time supplied or to be supplied in connection with either Borrower or any of its
Subsidiaries or Affiliates, or otherwise with respect to the Loans, any
Collateral, or any source of equity or other financing for any of such
companies, or whether any such information is current or meets the requirements
of the Loan Documents; or

(vii)  any failure of either Borrower or any other obligor under this Agreement
or any of the other Loan Documents to perform any of its obligations thereunder.

(b)          Each such Lender acknowledges and agrees that, independently and
without reliance on the Administrative Agent or any other Lender, and based on
the financial statements and other information furnished by each Borrower, its
Subsidiaries and Affiliates, and such other documents and information as such
Lender deems necessary or appropriate (all of which such Lender has obtained and
reviewed to enable it to make the decision described in clause (i) below), such
Lender:

(i)      has made its own complete analysis of the credit quality of the
Borrowers and its Subsidiaries and the Loans and its documentation, and its own
decision to make its Commitment and enter into this Agreement and the other Loan
Documents; and

(ii)     will continue, until the Loans are paid in full and such Lender’s
Commitment has terminated, to make its own credit analysis and its own decision
to take or not to take any action in connection with the Loans, this Agreement
and the other Loan Documents provided, that nothing contained in this clause
shall be construed to release any Lender from its obligations hereunder or under
the Agreement, each in accordance therewith; and

(iii)   will, until the Loans are paid in full and such Lender’s Commitment has
terminated, rely solely on their own information on the Borrowers and will not
rely on the Administrative Agent with respect to such information.

11.4       Replacement Lender. If any Lender becomes entitled to claim any
additional amounts pursuant to Section 6.1(b) of this Agreement, the Lender
shall promptly notify the Administrative Agent of the event by reason of which
it has become so entitled. Provided that no Default or Event of Default has
occurred and with the consent of the Majority Lenders, the Borrowers may seek to
replace a Lender (a “Retiring Lender”) who claims compensation pursuant to
Section 6.1(b) of this Agreement. The replacement of a Retiring Lender pursuant
to this Section 11.4 shall be effective on the tenth (10th) Business Day
following the date of a notice to the Retiring Lender and each other Lender
through the Administrative Agent, subject to satisfaction of the following
conditions:

(a)          A Retiring Lender shall assign all of its rights, obligations and
liabilities under the Loan Documents to a Replacement Lender; provided that (i)
the Retiring Lender shall have received the written consent of the
Administrative Agent and each of the Borrowers (which

 

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consent shall not be unreasonably withheld or delayed provided, that the
Borrowers’ consent shall not be required if (A) the Replacement Lender is a
Lender; (B) the Replacement Lender is an Affiliate of a Lender; (C) the
Replacement Lender is an Approved Fund or (D) an Event of Default has occurred
and is continuing) and (ii) each such assignment shall be substantially in the
form of Exhibit D, and with the Retiring Lender to have no further right or
obligation with respect to the rights and obligations assigned to and assumed by
the Replacement Lender. Upon such assignment, the Replacement Lender shall be a
Lender for all purposes under this Agreement and the other Loan Documents, and
the Commitments shall be adjusted appropriately;

(b)          the Replacement Lender(s) shall pay to the Retiring Lender an
amount equal in the aggregate to the sum of (x) the aggregate outstanding Loans
owing to the Retiring Lender, together with all accrued and unpaid interest
thereon, and (y) the Retiring Lender’s share of any accrued and unpaid fees
under this Agreement; and

(c)          the Borrowers shall have paid to the Administrative Agent for the
account of the Retiring Lender an amount equal to all obligations then due and
payable pursuant to this Agreement to the Retiring Lender by the Borrowers (but
not including those obligations of the Borrowers owing but not yet due that are
referred to in clause (b) above).

Each Replacement Lender that is a New Lender shall become a Lender and the
Retiring Lender shall cease to be a Lender; provided that this Agreement shall
continue to govern the rights and obligations of a Retiring Lender with respect
to any Loans or other actions taken by such Retiring Lender while it was a
Lender. The Borrowers agree to execute such papers, notes and agreements as are
reasonably necessary to substitute the Replacement Lender for the Retiring
Lender, including documents necessary to protect all liens and security
interests of the Replacement Lender.

 

Section 12.

Actions Requiring Consent.

12.1       Actions Requiring All Lenders’ Consent. Without the written consent
or ratification of all Lenders, the Administrative Agent shall not:

(a)          increase the Maximum Loan Amount or increase (other than as
provided for in Section 2.1(b)) or extend any Lender’s Commitment;

(b)          agree to any reduction in the principal amount of any Loan, the
Interest Rate or any fee, excluding the Administrative Fee in the Repurchase
Agreement;

(c)          agree to any change to any of the conditions precedent to Loans
specified in Section 5 of this Agreement.

(d)          release any material Lien held under the Loan Documents other than
in accordance with the Loan Documents;

(e)          accept, and enter into any Loan with non Eligible Collateral or
change the definitions of Collateral Value or Advance Rate;

 

 

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(f)           change any Lender’s Funding Share of a Loan other than in
accordance with the express provisions of the Loan Documents;

(g)          agree to any change in the nature of the Lenders’ respective
Commitments from several to joint, in whole or in part;

 

(h)

agree to any change to the definition of “Majority Lenders”

(i)           extend the Termination Date or any Payment Date or any other date
for payment of principal, interest or fees (excluding the Administrative Fee
under the Repurchase Agreement) other than in accordance with the express
provisions of the Loan Documents;

(j)           release any Borrower from any of its obligations under the
Repurchase Documents or Loan Documents;

(k)          change the definition of Pro Rata or the distribution provisions of
Section 3.7 or Section 11.2 hereof; or

 

(l)

agree to any change in this Section 12.1.

12.2       Actions Requiring Majority Lenders’ Consent. Without limitation of
Section 12.1 and without the written consent or ratification of the Majority
Lenders, the Administrative Agent shall not:

(a)          Notify the Borrowers that the Commitments are terminated or that
the maturity of all or any part of the Loans shall have been declared due unless
an Event of Default described in any of Sections 9.1(f), (j) or (l) of this
Agreement has occurred and is continuing.

(b)          exercise any of the remedies for default described in Section 9 or
Section 10.11 of this Agreement.

 

(c)

waive any Event of Default under the Loan Documents.

(d)          make or consent to any materially adverse amendment, modification
or waiver of any of the terms, covenants, provisions or conditions of the Loan
Documents.

 

(e)

approve any Change in Control.

(f)           except as otherwise expressly provided for in this Section, cause
or permit any material change in the terms of any affirmative or negative
covenants in (or incorporated in) this Agreement.

(g)          cause or permit any material change in the eligibility standards
for Assets under this Agreement or materially change the definition of any type
of Eligible Collateral.

(h)          approve either Borrower’s declaration or payment of any
distribution directly or indirectly to either Borrower’s members or shareholders
after any Default or Event of Default has occurred and is continuing or, after
the payment of which dividend or distribution,

 

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would exist, to the extent prohibited by Section 12(t) of the Repurchase
Agreement, incorporated by reference in Section 8 hereof.

(i)           approve either Borrower’s making any advance to (or declining or
deferring any payment due from) any member or shareholder, as applicable, or any
Subsidiary that is not wholly-owned by either of the Borrowers if at the time of
or immediately after such action the Borrowers’ Adjusted Tangible Net Worth
would be less than the minimum amount specified in Section 12(k)(ii) of the
Repurchase Agreement, incorporated by reference in Section 8 hereof.

(j)           permit additional Indebtedness pursuant to Section 12(dd)(v) of
the Repurchase Agreement as incorporated herein by reference.

(k)          approve any Servicer other than HomeBanc Mortgage Corporation, or
any of its successors or permitted assigns which consent to such approval shall
not be unreasonably withheld; provided that no consent or approval shall be
required for the Servicer to appoint any subservicer in accordance with its
customary servicing practices.

12.3       Administrative Agent’s Discretionary Actions. Except as provided in
Section 12.1 and Section 12.2, in its capacity as Administrative Agent and
without seeking or obtaining the consent of any of the other Lenders (although
it may elect to obtain such consent before acting it if deems that desirable),
the Administrative Agent may:

(a)          agree or consent to any change in the handling of the Collateral
which in the Administrative Agent’s reasonable judgment is unlikely to have a
Material Adverse Effect;

(b)          release, reconvey or change, in whole or in part, any Collateral
which is required to be released or reconveyed in accordance with the Loan
Documents;

(c)          permit either Borrower to incur additional Indebtedness not
otherwise set forth in Section 12(cc) of the Repurchase Agreement; and

(d)          do or perform any act or thing which, in the Administrative Agent’s
reasonable judgment, is necessary or appropriate to enable the Administrative
Agent to properly discharge and perform its duties under this Agreement or any
other Loan Document, or which in its reasonable judgment is necessary or
appropriate to preserve or protect the validity, integrity or enforceability of
the Loan Documents, the Collateral, the financial condition, operations or
prospects in respect of each Borrower or to preserve and protect the interest of
the Lenders in any of the foregoing.

 

Section 13.

Administrative Agent.

13.1       Appointment of Administrative Agent. JPMorgan Chase is hereby
appointed Administrative Agent hereunder and under the other Loan Documents and
each Lender hereby authorizes Administrative Agent to act as its Administrative
Agent in accordance with the terms hereof and the other Loan Documents.
Administrative Agent hereby agrees to act upon the express conditions contained
herein and the other Loan Documents, as applicable. The provisions of this
Section 13 are solely for the benefit of Administrative Agent and Lenders

 

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and the Borrowers shall not have any rights as a third party beneficiary of any
of the provisions thereof. In performing its functions and duties hereunder,
Administrative Agent shall act solely as an Administrative Agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for the Borrowers.

13.2       Powers and Duties. In its capacity as Administrative Agent and until
all Loans are fully paid and satisfied, the Administrative Agent shall:

(a)          hold the Loan Documents and the Collateral for the benefit of
itself and each other Lender;

(b)          send, in accordance with this Agreement, bills to the Borrowers for
accrued interest, and other sums due and receive all payments of principal, and
other sums on account of the Loans or with respect to it;

(c)          use reasonable diligence to obtain from the Borrowers and promptly
remit to each Lender such Lender’s Pro Rata shares of interest and principal,
and other sums received by the Administrative Agent on account of the Loans or
with respect to it, in accordance with this Agreement;

(d)          use reasonable diligence to recover from the Borrowers all expenses
incurred that are reimbursable by the Borrowers, and promptly remit to each
Lender its Pro Rata share (if any) thereof;

(e)          enforce the terms of this Agreement, including, with the approval
or at the direction of the Majority Lenders, the remedies afforded the Lenders
pursuant to Section 9 and Section 10.11 hereof;

(f)           hold all security interests ratably for itself as a Lender and as
agent and bailee for and on behalf of the other Lender(s);

(g)          request from the Borrowers, and promptly forward to the other
Lenders, such information as the other Lenders may reasonably request the
Administrative Agent to obtain from the Borrowers (consistent with the terms of
this Agreement) including, without limitation, the reports and other information
provided by Borrowers from time to time pursuant to Section 8.4 hereof and
Section 12 of the Repurchase Agreement as incorporated herein; and

(h)          upon request of a Lender (such request not to be made more than
once per week), the Administrative Agent shall request the Borrowers to deliver
a current Asset Schedule to the Lenders.

13.3       Administrative Agent’s Representations to Lenders. The Administrative
Agent hereby represents and warrants to the Lenders (other than itself) that:

(a)          the Administrative Agent has delivered to each Lender true copies
of the originals of those Loan Documents which have been specifically requested
by that Lender; and

 

 

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(b)          the Administrative Agent has no current actual knowledge that any
Default or Event of Default has occurred and is continuing on the date of this
Agreement.

13.4       Administrative Agent’s Duty of Care, Express Negligence Waiver and
Release. AT ALL TIMES UNTIL THE LOANS HAVE BEEN PAID IN FULL, THE ADMINISTRATIVE
AGENT SHALL EXERCISE THE SAME DEGREE OF CARE IN ADMINISTERING THE LOANS AND THE
COLLATERAL AS JPMORGAN EXERCISES WITH RESPECT TO LOANS AND NOTES THAT ARE HELD
SOLELY BY JPMORGAN FOR ITS OWN ACCOUNT, AND THE ADMINISTRATIVE AGENT, IN ITS
CAPACITY AS ADMINISTRATIVE AGENT SHALL HAVE NO RESPONSIBILITY TO THE LENDERS
OTHER THAN TO EXERCISE SUCH STANDARD OF CARE AND, IN ANY EVENT, JPMORGAN SHALL
HAVE NO LIABILITY WITH RESPECT TO ANY OTHER LENDER'S PRO RATA INTEREST IN THE
LOANS EXCEPT FOR JPMORGAN'S OWN FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
EXCEPT IN THE CASE OF ITS OWN FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
NEITHER THE ADMINISTRATIVE AGENT, ANY LENDER, NOR ANY OF THEIR OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS SHALL BE LIABLE FOR ANY ACTION TAKEN
OR OMITTED TO BE TAKEN BY IT OR THEM UNDER THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS REASONABLY BELIEVED BY IT OR THEM TO BE WITHIN THE DISCRETION OR
POWER CONFERRED UPON IT OR THEM BY THE LOAN DOCUMENTS OR BE RESPONSIBLE FOR
CONSEQUENCES OF ANY ERROR OF JUDGMENT, THE LENDERS EXPRESSLY INTENDING TO HEREBY
WAIVE AND RELEASE ALL PRESENT AND FUTURE CLAIMS AND RIGHTS AGAINST THE
ADMINISTRATIVE AGENT (I) OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF
STRICT LIABILITY, OR (II) FOR DAMAGES OR INJURIES CAUSED OR CONTRIBUTED TO BY
ANY INDEMNIFIED PARTY'S SOLE OR CONCURRENT ORDINARY NEGLIGENCE THAT DOES NOT
AMOUNT TO GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IT BEING THE LENDERS'
INTENTION TO HEREBY INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THEIR OWN STRICT
LIABILITY AND THEIR OWN SOLE OR CONCURRENT ORDINARY NEGLIGENCE. Except as
otherwise specifically and expressly set forth in this Agreement, the
Administrative Agent shall not be responsible in any manner to anyone for the
effectiveness, enforceability, genuineness, validity or the due execution of
this Agreement, any supplement, amendment or restatement of it or of any other
Loan Documents or for any representation, warranty, document, certificate,
report or statement made or furnished in, under or in connection with this
Agreement or any of the other Loan Documents or be under any obligation to
anyone to ascertain or to inquire as to the performance or observation of any of
the terms, covenants or conditions of this Agreement or of the other Loan
Documents on the part of the Borrowers or anyone else. Without limiting the
generality of the foregoing provisions of this Section 13.4, the Administrative
Agent, in its capacities as Administrative Agent, may seek and rely upon the
advice of legal counsel in taking or refraining to take any action under any of
the Loan Documents or otherwise in respect of the Loans, the Collateral and its
parties, and shall be fully protected in relying in good faith upon such advice.

13.5       Resignation of the Administrative Agent. The Administrative Agent, or
any agent or agents hereafter appointed, at any time may resign by giving thirty
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written notice of resignation to the Borrowers and the Lenders and complying
with the applicable provisions of this Section 13.5. Upon receiving such notice
of resignation or removal, with the Borrowers’ consent, which consent shall not
unreasonably be conditioned, delayed or withheld (provided that a Borrower’s
consent shall not be required if an Event of Default has occurred and is
continuing), a successor Administrative Agent shall be promptly appointed by all
of the Lenders by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Administrative Agent and one copy to the
successor Administrative Agent. If no successor Administrative Agent is
appointed within thirty (30) days of such notice, the Administrative Agent may
assign its rights in the Collateral to one or more of the Lenders, which shall
hold the Collateral for the benefit of the Lenders subject to the rights and
privileges of the Administrative Agent.

13.6       Successor Administrative Agent. Any successor Administrative Agent
appointed as provided in Section 13.4 shall execute and deliver to the
Borrowers, the Lenders and to its predecessor Administrative Agent an instrument
accepting such appointment, and thereupon the resignation or removal of the
predecessor Administrative Agent shall become effective and such successor
Administrative Agent, without any further act, deed or conveyance, shall become
vested with all the rights and obligations of its predecessor, with like effect
as if originally named as the Administrative Agent; provided that upon the
written request of either Borrower, Majority Lenders or the successor
Administrative Agent, the Administrative Agent ceasing to act shall execute and
deliver (a) an instrument transferring to such successor Administrative Agent
all of the rights of the Administrative Agent so ceasing to act and (b) to such
successor Administrative Agent such instruments as are necessary to transfer the
Collateral to such successor Administrative Agent (including assignments of all
Collateral or Loan Documents). Upon the request of any such successor
Administrative Agent made from time to time, each Borrower shall execute any and
all papers necessary to more fully and certainly vest in and confirm to such
successor Administrative Agent all such rights.

13.7       Merger of the Administrative Agent. Any Person into which the
Administrative Agent may be merged or converted or with which it may be
consolidated, or any Person surviving or resulting from any merger, conversion
or consolidation to which the Administrative Agent shall be a party or any
Person succeeding to the commercial banking business of the Administrative
Agent, shall be the successor Administrative Agent without the execution or
filing of any paper or any further act on the part of any of the parties.

Section 14.        Indemnification and Expenses. (a) Each Borrower agrees to
hold the Administrative Agent and the Lenders, and their Affiliates and their
officers, directors, employees, agents and advisors and their respective
successors and assigns (each an “Indemnified Party”) harmless from and indemnify
any Indemnified Party against all liabilities, losses, damages, judgments, costs
and expenses of any kind which may be imposed on, incurred by or asserted
against such Indemnified Party (collectively, “Costs”), relating to or arising
out of this Agreement, any other Loan Document or any transaction contemplated
hereby or thereby, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, this Agreement, any other Loan
Document to which it is a party or any transaction contemplated hereby or
thereby, that, in each case, results from anything other than the Indemnified
Party’s gross negligence or willful misconduct. Without limiting the generality
of the foregoing, each Borrower agrees to hold any Indemnified Party harmless
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Party against all Costs with respect to all Assets relating to or arising out of
any taxes incurred or assessed in connection with the ownership of or security
interest in the Assets, that, in each case, results from anything other than the
Indemnified Party’s gross negligence or willful misconduct. In any suit,
proceeding or action brought by an Indemnified Party in connection with any
Assets for any sum owing thereunder, or to enforce any provisions of any Assets,
each Borrower will save, indemnify and hold such Indemnified Party harmless from
and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of the
account debtor or obligor thereunder, arising out of a breach by each Borrower
of any obligation thereunder or arising out of any other agreement, indebtedness
or liability at any time owing to or in favor of such account debtor or obligor
or its successors from each Borrower. Each Borrower also agrees to reimburse an
Indemnified Party as and when billed by such Indemnified Party for all the
Indemnified Party’s costs and expenses incurred in connection with the
enforcement or the preservation of the Administrative Agent’s and the Lenders’
rights under this Agreement, any other Loan Document or any transaction
contemplated hereby or thereby, including without limitation the reasonable fees
and disbursements of its counsel.

(b)          The Borrowers agree to pay as and when billed by the Administrative
Agent all of the out-of-pocket costs and expenses incurred by the Administrative
Agent in connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement, any other Loan
Document or any other documents prepared in connection herewith or therewith.
The Borrowers agree to pay as and when billed by the Administrative Agent all of
the reasonable out-of-pocket costs and expenses incurred in connection with the
consummation and administration of the transactions contemplated hereby and
thereby including without limitation filing fees and all the reasonable fees,
disbursements and expenses of counsel to the Administrative Agent (which amount
shall be deducted from the Loans advanced for the first Loan hereunder) and
costs and expenses required to be paid pursuant to Section 6 hereof. Subject to
the limitations set forth in Section 27 hereof, the Borrowers agree to pay the
Administrative Agent all the reasonable out of pocket due diligence, inspection,
testing and review costs and expenses incurred by the Administrative Agent and
the Lenders with respect to Assets pledged by either Borrower under this
Agreement, including, but not limited to, those out of pocket costs and expenses
incurred by the Administrative Agent and the Lenders pursuant to Sections 14(b)
and 27 hereof.

(c)          The obligations of the Borrowers from time to time to repay
principal and interest and Interest Payments and all other amounts due under
this Agreement shall be full recourse obligations of each Borrower.

Section 15.       Recording of Communications. The Administrative Agent, the
Lenders, the Borrowers shall have the right (but not the obligation) from time
to time to make or cause to be made tape recordings of communications between
its employees and those of the other party with respect to Loans upon notice to
the other party of such recording.

Section 16.        Single Agreement. The Administrative Agent, Lenders and the
Borrowers acknowledge that, and have entered hereinto and will enter into each
Loan hereunder in consideration of and in reliance upon the fact that, all Loans
hereunder constitute a single business and contractual relationship and that
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other Loans. Accordingly, each of the Administrative Agent, Lenders and the
Borrowers agree (i) to perform all of its obligations in respect of each Loan
hereunder, and that a default in the performance of any such obligations shall
constitute a default by it in respect of all Loans hereunder, (ii) that each of
the Administrative Agent and the Lenders shall be entitled to set off claims and
apply property held by them in respect of any Loan against obligations owing to
them in respect of any other Loan hereunder; (iii) that payments, deliveries,
and other transfers made by either of them in respect of any Loan shall be
deemed to have been made in consideration of payments, deliveries, and other
transfers in respect of any other Loans hereunder, and the obligations to make
any such payments, deliveries, and other transfers may be applied against each
other and netted and (iv) to promptly provide notice to the other after any such
set off or application.

Section 17.      Set-off. In addition to any rights and remedies of the
Administrative Agent and the Lenders hereunder and by law, the Administrative
Agent and the Lenders shall have the right, without prior notice to either
Borrower, any such notice being expressly waived by each Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by either
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent and the Lenders
or any Affiliate thereof to or for the credit or the account of the Borrowers,
or any Affiliate thereof. The Administrative Agent and the Lenders agree to
promptly notify the Borrowers after any such set-off and application made by
such Lender or Administrative Agent; provided that the failure to give such
notice shall not affect the validity of such set-off and application.

Section 18.        Notices and Other Communications. Except as otherwise
expressly permitted by this Agreement, all notices, requests and other
communications provided for herein (including without limitation any
modifications of, or waivers, requests or consents under, this Agreement) shall
be given or made in writing (including without limitation by telecopy or
electronic mail) delivered to the intended recipient at the addresses specified
below its signature line hereto, or, as to any party, at such other address as
shall be designated by such party in a written notice to each other party.
Except as otherwise provided in this Agreement and except for notices given
under Section 5 (which shall be effective only on receipt), all such
communications shall be deemed to have been duly given when transmitted by
telecopy or electronic mail or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.

Section 19.        Entire Agreement; Severability. This Agreement, together with
the Loan Documents, constitute the entire understanding between Administrative
Agent, Lenders and the Borrowers with respect to the subject matter they cover
and shall supersede any existing agreements, understandings, inducements and
conditions, express or implied, oral or written between the parties containing
general terms and conditions for repayment Loans. By acceptance of this
Agreement, Administrative Agent, Lenders and the Borrowers acknowledge that they
have not made, and are not relying upon, any statements, representations,
promises or undertakings not contained in this Agreement. Each provision and
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treated as separate and independent from any other provision or agreement herein
and shall be enforceable notwithstanding the unenforceability of any such other
provision or agreement.

Section 20.        Non-Assignability. The rights and obligations of the parties
under this Agreement and under any Loan shall not be assigned by either Borrower
without the prior written consent of the Administrative Agent and the Lenders in
accordance with the terms hereof. Subject to the foregoing, this Agreement and
any Loans shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. Nothing in this Agreement express
or implied, shall give to any Person, other than the parties to this Agreement
and their successors hereunder, any benefit of any legal or equitable right,
power, remedy or claim under this Agreement.

20.1       Participations. (a) Any Lender may, without the consent of the
Borrowers or the Administrative Agent, sell participations to one or more banks
or other entities (a “Participant”) in all or a portion of such Lender’s Pro
Rata shares of Loans, or Commitment; provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent and the other Lenders shall
continue to be obligated hereunder or under this Agreement only to, and shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described herein that affects such Participant. Subject
to Section 20.1(b) below and only to the extent the Borrowers have been notified
of such participation in writing, each Borrower agrees that each Participant
shall be entitled to the benefits of Section 6 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to Section 20.2.
To the extent permitted by law and only to the extent the Borrowers have been
notified of such participation in writing, each Participant also shall be
entitled to the benefits of Section 17 as though it were a Lender, provided such
Participant agrees to be subject to Section 11 as though it were a Lender.

(b)          A Participant shall not be entitled to receive any greater payment
under Section 6 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with each Borrower’s prior written
consent. A Participant that is organized under the laws of a jurisdiction other
than that of the United States shall not be entitled to the benefits of Section
6 unless each Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrowers, to comply with
Section 6 as though it were a Lender.

20.2       Assignments. (a) No Borrower may assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of the
Administrative Agent and the Lenders (and any attempted assignment or transfer
by either Borrower without such consent shall be null and void).

 

 

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(b)          Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of the Borrowers and the
Administrative Agent. Provided that the consent of each Borrower shall not be
required if (i) the assignee is a Lender (including assignees thereof); (ii) the
assignee is an Affiliate of a Lender; (iii) the assignee is an Approved Fund or
(iv) if an Event of Default has occurred and is continuing and provided further
that the consent of the Administrative Agent shall not be required if the
assignee is (i) a Lender (including assignees thereof); (ii) an Affiliate of a
Lender; or (iii) an Approved Fund.

(c)          Except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender’s Commitment or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment shall not be less than
$10,000,000 unless each of the Borrowers and the Administrative Agent otherwise
consent, provided that no such consent of the Borrowers shall be required if an
Event of Default has occurred and is continuing.

(d)          The parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment Agreement substantially in the form of
Exhibit D hereof and shall pay to the Administrative Agent a processing and
recordation fee of $3,500 and the assignee, if the assignee is not a current
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire in form and substance acceptable to the Administrative Agent.

(e)          Upon such assignment, the assignee shall be a Lender for all
purposes under this Agreement and the other Loan Documents, if the assignment is
an assignment of all of the assignor’s interest in the Loans and its security to
an assignor, the assignor shall be automatically released from all of its
obligations and liabilities hereunder and under the Repurchase Documents, and,
whether it is such a complete assignment or only a partial assignment, the
Commitments shall be adjusted appropriately, and the parties agree to approve in
writing revised and updated versions of Schedules 1 and 2.

20.3       Register. The Administrative Agent shall maintain, as agent for the
Borrowers and Lenders, a register (the “Register”) on which it will record each
Lender’s rights hereunder, and each Assignment Agreement and participation. The
Register shall include the names and addresses of the Lender (including all
assignees, successors and participants) and the percentage or portion of such
rights and obligations assigned. Failure to make any such recordation, or any
error in such recordation shall not affect each Borrower’s obligations in
respect of such rights. If a Lender sells a participation in its rights
hereunder, it shall provide the Administrative Agent (as agent for each
Borrower), or maintain as agent of each Borrower, the information described in
this paragraph and permit the Administrative Agent (as agent for each Borrower)
to review such information as reasonably needed for the Administrative Agent (as
agent to each Borrower) to comply with its obligations under this Agreement or
under any applicable Requirement of Law.

20.4       Disclosure. Each Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 20.4, disclose to the assignee or participant or proposed assignee or
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information relating to the Borrowers or any of its Subsidiaries or to any
aspect of the Loans that has been furnished to such Lender by or on behalf of
the Borrowers or any of its Subsidiaries; provided that such assignee or
participant agrees to hold such information subject to the confidentiality
provisions of this Agreement.

20.5       Federal Reserve Bank. Each Lender may at any time create a security
interest in all or any portion of its rights under this Agreement in favor of
any Federal Reserve Bank in accordance with regulations of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank. No such assignment shall release the assigning lender
from its obligations hereunder.

Section 21.        Tax Treatment. Each party to this Agreement acknowledges that
it is its intent for purposes of U.S. federal, state and local income and
franchise taxes, to treat each Loan as indebtedness of the Borrowers that is
secured by the Collateral and that the Collateral is owned by the Borrowers in
the absence of a Default by the Borrowers. All parties to this Agreement agree
to such treatment and agree to take no action inconsistent with this treatment,
unless required by law.

Section 22.        Terminability. Each representation and warranty made or
deemed to be made by entering into a Loan, herein or pursuant hereto shall
survive the making of such representation and warranty, and the Administrative
Agent shall not be deemed to have waived any Default that may arise because any
such representation or warranty shall have proved to be false or misleading,
notwithstanding that the Administrative Agent may have had notice or knowledge
or reason to believe that such representation or warranty was false or
misleading at the time the Loan was made. Notwithstanding any such termination
or the occurrence of an Event of Default, all of the representations and
warranties and covenants hereunder shall continue and survive. The obligations
of the Borrowers (i) under Section 14 and (ii) with respect to any Requirement
of Law or related change, modification or event contemplated by Section 6.1 that
occurs prior to the Termination Date, under Section 6.1, shall survive the
termination of this Agreement.

Section 23.     GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.

Section 24.       SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE
ADMINISTRATIVE AGENT, LENDERS AND BORROWERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY:

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

 

 

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

(c)          AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH
UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE
AGENT SHALL HAVE BEEN NOTIFIED;

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

(e)          THE, ADMINISTRATIVE AGENT, LENDERS AND BORROWERS HEREBY IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE LOANS CONTEMPLATED HEREBY OR THEREBY.

Section 25.       No Waivers, etc. No failure on the part of the Administrative
Agent to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law. An Event of Default shall be deemed to have occurred and be
continuing unless expressly waived by the Administrative Agent in writing or the
Administrative Agent has agreed in writing that such Event of Default has been
cured (in each case, subject to the Lenders’ approval as contemplated
hereunder).

 

Section 26.

Reserved.

Section 27.        Periodic Due Diligence Review. Each Borrower acknowledges
that the Administrative Agent and the Lenders have the right to perform
continuing due diligence reviews with respect to the Assets, for purposes of
verifying compliance with the representations, warranties and specifications
made hereunder, or otherwise, and each Borrower agrees that upon reasonable (but
no less than five (5) Business Days’) prior notice unless an Event of Default
shall have occurred, in which case no notice is required, to the Borrowers, the
Administrative Agent and the Lenders or their authorized representatives will be
permitted during normal business hours to examine, inspect, and make copies and
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agreements, instruments or information relating to such Assts in the possession
or under the control of either Borrower. Each Borrower also shall make available
to the Administrative Agent and the Lenders a knowledgeable financial or
accounting officer for the purpose of answering questions respecting the Assets.
Without limiting the generality of the foregoing, each Borrower acknowledges
that the Administrative Agent and the Lenders may finance Assets from each
Borrower based solely upon the information provided by either Borrower to the
Administrative Agent and the Lenders in the Asset Schedule and the
representations, warranties and covenants contained herein, and that the
Administrative Agent and the Lenders, at their option, have the right at any
time to conduct a partial or complete due diligence review on some or all of the
Assets pledged hereunder, including, without limitation, ordering broker’s price
opinions, new credit reports and new appraisals on the Assets including the
underlying Mortgaged Properties and otherwise regenerating the information used
to value such Asset. The Administrative Agent and the Lenders may value such
Assets itself or engage a third party to perform such valuation. Each Borrower
agrees to cooperate with the Administrative Agent and the Lenders and any third
party underwriter in connection with such underwriting, including, but not
limited to, providing the Administrative Agent and the Lenders and any third
party underwriter with access to any and all documents, records, agreements,
instruments or information relating to such Assets in the possession, or under
the control, of the Borrowers. Each Borrower further agrees that the Borrowers
shall pay all reasonable expenses incurred by the Administrative Agent and the
Lenders in connection with the Administrative Agent’s and the Lenders’
activities pursuant to this Section 27 (“Due Diligence Costs”); provided, that
such Due Diligence Costs hereunder and under the Repurchase Agreement, combined,
shall not exceed the Due Diligence Cap per calendar year unless a Default or
Event of Default shall have occurred, in which event the Administrative Agent
and the Lenders shall have the right to perform due diligence, at the sole
expense of Borrowers without regard to the dollar limitation set forth herein.
For the avoidance of doubt, the costs incurred by the Administrative Agent in
connection with onsite operational audits pursuant to Section 8.8 shall not be
subject to the Due Diligence Cap.

 

Section 28.

Miscellaneous.

(a)          Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.

(b)          Captions. The captions and headings appearing herein are for
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.

 

(c)

Acknowledgment. Each Borrower hereby acknowledges that:

(i)      it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;

(ii)    neither the Administrative Agent nor any Lender has any fiduciary
relationship to the Borrowers; and

 

 

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(iii)   no joint venture exists between the Administrative Agent or any Lender,
on the one hand, and the Borrowers on the other hand.

(d)          Documents Mutually Drafted. The Borrowers, Administrative Agent and
Lenders agree that this Agreement each other Loan Document prepared in
connection with the Loans set forth herein have been mutually drafted and
negotiated by each party, and consequently such documents shall not be construed
against either party as the drafter thereof.

Section 29.        Confidentiality. The Administrative Agent, Lenders and
Borrowers hereby acknowledge and agree that all written or computer-readable
information provided by one party to any other regarding the terms set forth in
any of the Loan Documents or the Loans contemplated thereby (the “Confidential
Terms”) shall be kept confidential and shall not be divulged to any party (other
than Affiliates and Subsidiaries thereof) without the prior written consent of
such other party except to the extent that (i) in such party’s opinion it is
necessary to do so in working with legal counsel, auditors, taxing authorities
or other governmental agencies or regulatory bodies or in order to comply with
any applicable federal or state laws, (ii) any of the Confidential Terms are in
the public domain other than due to a breach of this covenant, or (iii) in the
Event of a Default the Administrative Agent determines in good faith such
information to be necessary or desirable to disclose in connection with the
marketing and sales of the Assets or otherwise to enforce or exercise the
Administrative Agent’s rights hereunder, or (iv) to the extent a Lender deems
necessary or appropriate, in connection with an assignment or participation
under Section 20 of this Agreement or in connection with any hedging transaction
related to the Collateral. Notwithstanding the foregoing or anything to the
contrary contained herein or in any other Loan Document, the parties hereto may
disclose to any and all Persons, without limitation of any kind, the U.S.
federal, state and local tax treatment of the Loans, any fact that may be
relevant to understanding the U.S. federal, state and local tax treatment of the
Loans, and all materials of any kind (including opinions or other tax analyses)
relating to such U.S. federal, state and local tax treatment and that may be
relevant to understanding such tax treatment; provided that each Borrower may
not disclose (except as provided in clauses (i) through (iv) of this Section)
the name of or identifying information with respect to Administrative Agent or
any Lender or any pricing terms (including, without limitation, the Interest
Rate, Advance Rate and Facility Fee) or other nonpublic business or financial
information (including any sublimits and financial covenants) that is unrelated
to the U.S. federal, state and local tax treatment of the Loans and is not
relevant to understanding the U.S. federal, state and local tax treatment of the
Loans, without the prior written consent of the Administrative Agent or the
applicable Lender. The provisions set forth in this Section 29 shall survive the
termination of this Agreement for a period of one year following such
termination.

 

Section 30.

Reserved.

Section 31.       Disclosure Relating to Certain Federal Protections. The
parties acknowledge that they have been advised that:

(a)          in the case of Loans in which one of the parties is a broker or
dealer registered with the SEC under Section 15 of the Securities Exchange Act
of 1934 (“1934 Act”), the Securities Investor Protection Corporation has taken
the position that the provisions of the

 

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Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to any Loan hereunder;

(b)          in the case of Loans in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Loan hereunder; and

(c)          in the case of Loans in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Loan
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation or the National Credit Union Share Insurance Fund, as
applicable.

Section 32.        Conflicts. In the event of any conflict between the terms of
this Agreement and any other Loan Document, the documents shall control in the
following order of priority: first, the terms of this Agreement shall prevail
and then the terms of the Loan Documents shall prevail.

Section 33.       Authorizations. Any of the persons whose signatures and titles
appear on Schedule 3 are authorized, acting singly, to act for the Borrowers or
Administrative Agent, as the case may be, under this Agreement.

 

Section 34.

General Interpretive Principles.

(a)          the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;

(b)          accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;

(c)          references herein to “Articles,” “Sections,” “Subsections,”
“Paragraphs,” and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;

(d)          a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;

(e)          the words “herein,” “hereof,” “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
provision;

(f)           the term “include” or “including” shall mean without limitation by
reason of enumeration;

(g)          all times specified herein or in any other Loan Document (unless
expressly specified otherwise) are Central times unless otherwise stated; and

 

 

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(h)          all references herein or in any Loan Document to “good faith” means
good faith as defined in Section 1-201(19) of the UCC as in effect in the State
of New York.

Section 35.        Amendments. This Agreement may not be amended or modified,
except by a writing signed by the parties hereto and subject to the terms
hereof.

Section 36.        Joint and Several. Each Borrower shall be jointly and
severally liable for the full, complete and punctual performance and
satisfaction of all obligations of either Borrower under this Agreement.
Accordingly, each Borrower waives any and all notice of creation, renewal,
extension or accrual of any of the Obligations and notice of or proof of
reliance by Administrative Agent or any Lender upon such Borrower’s joint and
several liability. Each Borrower waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon such Borrower with
respect to the Obligations. When pursuing its rights and remedies hereunder
against either Borrower, Administrative Agent and any Lender may, but shall be
under no obligation to, pursue such rights and remedies hereunder against either
Borrower or any other Person or against any collateral security for the
Obligations or any right of offset with respect thereto, and any failure by
Administrative Agent or any Lender to pursue such other rights or remedies or to
collect any payments from such Borrower or any such other Person to realize upon
any such collateral security or to exercise any such right of offset, or any
release of such Borrower or any such other Person or any such collateral
security, or right of offset, shall not relieve such Borrower of any liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of Administrative Agent or any
Lender against such Borrower.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

HomeBanc Mortgage Corporation, as a Borrower,

By:   /s/ JAMES L. KRAKAU                              

Name: James L. Krakau

Title: Senior Vice President and Treasurer

Address for Notices:

2002 Summit Blvd, Suite 100

Atlanta, Georgia 30319

Attention: Treasurer

Telecopier No.: 404-705-7915

Telephone No: 404-459-7720

E-mail: cmcguire@homebanc.com and

 

jkrakau@homebanc.com

HomeBanc Corp., as a Borrower,

By:   /s/ JAMES L. KRAKAU                              

Name: James L. Krakau

Title: Senior Vice President and Treasurer

Address for Notices:

 

2002 Summit Blvd, Suite 100

Atlanta, Georgia 30319

Attention: Treasurer

Telecopier No.: 404-705-7915

Telephone No: 404-459-7720

E-mail: cmcguire@homebanc.com and

 

jkrakau@homebanc.com

 

 

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JPMORGAN CHASE BANK, N.A., as Administrative Agent and a Lender

By:   /s/ MICHAEL W. NICHOLSON                  

Name: Michael W. Nicholson

Title: Vice President

Address for Notices:

 

JPMorgan Chase Bank, N.A.

707 Travis

6th Floor North

Houston, Texas 77252

Attention: Michael Nicholson

Telecopier No.: (713) 216-1567

Telephone No.: (713) 216-5335

E-mail: Michael.Nicholson@chase.com

 

 

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BNP PARIBAS, as a Lender

 

By:

 /s/ BARRY S. FEIGANBAUM                      

Name: Barry S. Feiganbaum

Title: Managing Director

 

By:

 /s/ MARGUERITE L. LEHN                        

Name: Marguerite L. Lehn

Title: Vice President

Address for Notices:

787 Seventh Avenue, 28th Floor

New York, NY 10019

Attention: Kevin Ernst

Telecopier No.: (212) 841-2533

Telephone No.: (212) 471-7061]

 

 

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COMMERZBANK AKTIENGESELLSCHAFT NEW YORK BRANCH and GRAND CAYMAN BRANCH, as a
Lender

 

By:

 /s/ GERARD A. ARAW                                

Name: Gerard A. Araw

Title:  Assistant Vice President

 

By:

 /s/ MICHAEL P. MCCARTHY                      

Name: Michael P. McCarthy

Title:  Vice President

Address for Notices:

2 World Financial Center

New York, NY 10281

Attention: Joseph J. Hayes

Telecopier No.: (212) 266-7629

Telephone No.: (212) 266-7518

 

 

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US BANK NATIONAL ASSOCIATION, as a Lender

 

By:

 /s/ WILLIAM J. UMSCHEID                        

Name: William J. Umscheid

Title:  Vice President

Address for Notices:

800 Nicollet Mall

Mail Station BC-MN-HO3B

Minneapolis, MN 55402

 

Attention:

Mr. William Umscheid

Telecopier No.: (612) 303-2253

 

Telephone No.: (612) 303-3575

 

 

 

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KEYBANK NATIONAL ASSOCIATION, as a Lender

 

By:

 /s/ PAUL HENSON                                        

Name: Paul Henson

Title:  Executive Vice President

Address for Notices:

127 Public Square, OH-01-27-0406

Cleveland, OH 44114

Attention: Craig Platt

Telecopier No.: 216-689-4233

Telephone No.: 216-689-5608

 

 

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DB STRUCTURED PRODUCTS, INC., as a Lender

 

By:

 /s/ GLENN MINKOFF                                  

Name: GLENN MINKOFF

Title: DIRECTOR

 

By:

 /s/ JOHN MCCARTHY                                  

Name: John McCarthy

Title:  Authorized Signatory

Address for Notices:

60 Wall Street

New York, New York 10005

Attention: Tina Gu

Telecopier No.: 212-797-5150

Telephone No.: 212-250-0357

 

 

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FORTIS CAPITAL CORP., as a Lender

 

By:

 /s/ ALAN KROUK                                        

Name: Alan Krouk

Title:  Managing Director

Address for Notices:

520 Madison Avenue, 3rd Floor

New York, NY 10022

Attention: Barry Chung

Telecopier No.: (212) 340-5479

Telephone No.: (212) 340-5320

 

 

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BANK HAPOALIM BM, as a Lender

 

By:

 /s/ JAMES P. SURLESS                                

Name: JAMES P. SURLESS

Title:  VICE PRESIDENT

 

By:

 /CHARLES MCLAUGHLIN                        

Name: CHARLES McLAUGHLIN

Title:  SENIOR VICE PRESIDENT

Address for Notices:

1177 Avenue of the Americas

New York, NY 10036

Attention: Ms. Helen H. Gateson

Telecopier No.: (212) 782-2382

Telephone No.: (212) 782-2161

 

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Schedule 1

Commitments

 

LENDERS

COMMITMENTS

JPMorgan Chase Bank, N.A.

 

$18,750,000

KeyBank National Association

 

$15,000,000

Commerzbank Aktiengesellschaft New York and Grand Cayman Branch

 

$13,500,000

BNP Paribas

 

$7,500,000

US Bank National Association

 

$7,500,000

DB Structured Products, Inc.

 

$5,250,000

Fortis Capital Corp.

 

$5,250,000

Bank Hapoalim BM

 

$2,250,000

 

 

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Schedule 2

Funding Shares

 

LENDERS

FUNDING SHARE PERCENTAGES

JPMorgan Chase Bank, N.A.

 

25%

KeyBank National Association

 

20%

Commerzbank Aktiengesellschaft New York and Grand Cayman Branch

 

18%

BNP Paribas

 

10%

US Bank National Association

 

10%

DB Structured Products, Inc.

 

7%

Fortis Capital Corp.

 

7%

Bank Hapoalim BM

 

3%

 

 

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Schedule 3

AUTHORIZED REPRESENTATIVES

HOMEBANC CORP. NOTICES

Name:   James L. Krakau

Address:

2002 Summit Blvd., Suite 100

Atlanta, Georgia 30319

Telephone:   (404) 459-7720

Facsimile:     (404) 705-7915

With a copy to:

Name:   Charles W. McGuire

Address:

2002 Summit Blvd., Suite 100

Atlanta, Georgia 30319

Telephone:   (404) 459-7602

Facsimile:     (404) 705-2309

HOMEBANC CORP. AUTHORIZATIONS

Any of the persons whose signatures and titles appear below are authorized,
acting singly, to act for HB CORP. under this Loan and Security Agreement:

Name

Title

Signature

Kevin D. Race

President, Chief Operating Officer and Chief Financial Officer

 

Nicolas V. Chater

Executive Vice President and Deputy CFO

 

Debra F. Watkins

Executive Vice President

 

 

John Kubiak

Senior Vice President and Chief Investment Officer

 

Charles W. McGuire

Executive Vice President, General Counsel and Secretary

 

James L. Krakau

Senior Vice President and Treasurer

 

 

Alana L. Griffin

Senior Vice President, Assistant General Counsel and Assistant Secretary

 

Pamela Detrow

Senior Vice President and Assistant Secretary

 

Gregory Herron

Senior Vice President and Assistant Treasurer

 

Yancy Lockie

Vice President

 

 

Justina Jenkins

Authorized Employee

 

 

 

 

 

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AUTHORIZED REPRESENTATIVES

HOMEBANC MORTGAGE CORPORATION NOTICES

Name:   James L. Krakau

Address:

2002 Summit Blvd., Suite 100

Atlanta, Georgia 30319

Telephone:   (404) 459-7720

Facsimile:     (404) 705-7915

With a copy to:

Name:   Charles W. McGuire

Address:

2002 Summit Blvd., Suite 100

Atlanta, Georgia 30319

Telephone:   (404) 459-7602

Facsimile:     (404) 705-2309

HOMEBANC MORTGAGE CORPORATION AUTHORIZATIONS

Any of the persons whose signatures and titles appear below are authorized,
acting singly, to act for HMC under this Loan and Security Agreement:

Name

Title

Signature

Kevin D. Race

 

President and Chief Operating Officer

 

Nicolas V. Chater

Executive Vice President and Chief Financial Officer

 

Debra F. Watkins

 

Executive Vice President

 

John Kubiak

 

Senior Vice President

 

James L. Krakau

 

Senior Vice President and Treasurer

 

Alana L. Griffin

Senior Vice President and Assistant Secretary

 

Pamela Detrow

Senior Vice President and Assistant Secretary

 

Gregory Herron

Senior Vice President and Assistant Treasurer

 

Cameron Beane

 

Vice President

 

Yancy Lockie

 

Vice President

 

Kortney Rollinger

 

Authorized Employee

 

Marilyn Eberhardt

 

Vice President

 

 

 

 

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Heidi Buck

 

Limited Vice President

 

Janet Miller

 

Limited Vice President

 

Scott Mudge

 

Limited Vice President

 

Syreeta Butler

 

Limited Vice President

 

Teresa Crowell

 

Limited Vice President

 

Angeline McDonald

 

Limited Vice President

 

Dorothy Cooper

 

Limited Vice President

 

 

 

 

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ADMINISTRATIVE AGENT NOTICES

Name:   Michael Nicholson

Address:      JPMorgan Chase Bank, N.A.
707 Travis
6th Floor North
Houston, Texas 77252

Title:     Managing Director

Telephone:   (713) 216-5335

Facsimile:     (713) 216-1567

 

ADMINISTRATIVE AGENT AUTHORIZATIONS

Any of the persons whose signatures and titles appear below, including any other
authorized officers, are authorized, acting singly, to act for Administrative
Agent under this Loan and Security Agreement:

Name

Title

Signature

Michael Nicholson

 

 

 

 

 

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Schedule 4

Eligible Collateral

I.

A P&I Advance is Eligible Collateral if:

 

i.

it is in respect of a first or second lien Mortgage Loan;

 

ii.

it is due and payable to the applicable Borrower, and for which the applicable
Borrower has no actual knowledge that the full amount will not be collectible;

 

iii.

the debtor(s) under the related Mortgage(s) are already obligated to pay to (or
to the order of) the holder of that Mortgage Loan (or its servicer) when the
related (producing) P&I Advance is made;

 

iv.

the applicable Borrower has the indefeasible right under the applicable
Servicing Contract to reimburse itself in full out of sums thereafter collected
from such debtor(s) or realized from the security for the related Mortgage Loan
or pool of Mortgage Loans;

 

v.

there is no bona fide pending claim against the applicable Borrower for any
credit, allowance or adjustment;

 

vi.

it is enforceable without offset, bona fide counterclaim or bona fide defense;

 

vii.

the full recoverability of which the applicable Borrower has no reasonable basis
for doubt; and

 

viii.

the Administrative Agent (as a Lender and as agent for the other Lenders) has
been granted and continues to hold a readily enforceable, first priority
perfected Lien.

II.

A T&I Advance is Eligible Collateral if:

 

i.

it is in respect of a first lien Mortgage Loan.

 

ii.

it is due and payable to the applicable Borrower, and for which the applicable
Borrower has no actual knowledge that the full amount will not be collectible;

 

iii.

the debtor(s) under the related Mortgage(s) are already obligated to pay to (or
to the order of) the holder of that Mortgage Loan (or its servicer) when the
related (producing) T&I Advance is made;

 

iv.

the applicable Borrower has the indefeasible right under the applicable
Servicing Contract to reimburse itself in full out of sums thereafter collected
from such debtor(s) or realized from the security for the related Mortgage Loan
or pool of Mortgage Loans.

 

 

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v.

there is no bona fide pending claim against the applicable Borrower for any
credit, allowance or adjustment.

 

vi.

it is enforceable without offset, bona fide counterclaim or bona fide defense.

 

vii.

the full recoverability of which the applicable Borrower has no reasonable basis
for doubt.

 

viii.

the Administrative Agent (as a Lender and as agent for the other Lenders) has
been granted and continues to hold a readily enforceable, first priority
perfected Lien.

III.

An Enforcement Advance is Eligible Collateral if:

 

i.

it is in respect of a first lien Mortgage Loan.

 

ii.

it is due and payable to the applicable Borrower, and for which the applicable
Borrower has no actual knowledge that the full amount will not be collectible;

 

iii.

the debtor(s) under the related Mortgage(s) are already obligated to pay to (or
to the order of) the holder of that Mortgage Loan (or its servicer) when the
related (producing) Enforcement Advance is made;

 

iv.

the applicable Borrower has the indefeasible right under the applicable
Servicing Contract to reimburse itself in full out of sums thereafter collected
from such debtor(s) or realized from the security for the related Mortgage Loan
or pool of Mortgage Loans.

 

v.

there is no bona fide pending claim against the applicable Borrower for any
credit, allowance or adjustment.

 

vi.

it is enforceable without offset, bona fide counterclaim or bona fide defense.

 

vii.

the full recoverability of which the applciable Borrower has no reasonable basis
for doubt.

 

viii.

the Administrative Agent (as a Lender and as agent for the other Lenders) has
been granted and continues to hold a readily enforceable, first priority
perfected Lien.

IV.

A Servicing Right is Eligible Collateral if:

 

i.

it is owned by the applicable Borrower and gives the applicable Borrower the
right to service (and be compensated as servicer for servicing) a portfolio of
Mortgage Loans pursuant to a Servicing Contract and such Servicing Right is
pledged to the Administrative Agent for the benefit of the Lenders on a first
priority basis; provided that Agency Servicing Rights will not be Eligible
Collateral unless and until an appropriate Acknowledgment Agreement has been

 

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duly executed by and among the applicable Borrower, the Administrative Agent and
the relevant Agency within sixty (60) days following the date hereof.

 

ii.

the servicer will have no liability or financial obligation arising out of
borrower defaults or losses experienced upon liquidation of the related Mortgage
Loans, other than obligations to make advances of unpaid principal, interest,
taxes, insurance premiums, liquidation expenses, and property preservation
expenses pursuant to provisions that are customary for servicers of loans
backing MBSs to undertake, including provisions entitling the servicer to be
reimbursed for such advances in the ordinary course of servicing on a first
priority of (reimbursement) payment basis (i.e., before any payment from or on
account of those sums to or for the account of the holder(s) of the relevant
MBSs or whole Serviced Loans or to any other Person);

 

iii.

the servicer’s rights to act as servicer and to receive the servicing
compensation specified in the Servicing Contract (i) are subject to cancellation
without cause and the servicer is entitled to compensation related thereto or
(ii) are not subject to cancellation except for cause, or clean-up call
requirements, pursuant to termination provisions that are customary for
servicers of loans backing MBSs;

 

iv.

the servicer will be entitled to a servicing fee and other ancillary fees and
compensation that are customary for servicers servicing reasonably similar
Mortgage Loans pursuant to materially similar terms and conditions; and

 

v.

each Borrower requesting the Servicing Rights Loan (other than an Agency
Servicing Rights Loan) has delivered a copy of the related purchase and sale
agreement to the Administrative Agent prior to the date of such Servicing Rights
Loan, unless such time shall have been extended by the Administrative Agent in
its sole discretion upon request by the Borrowers.

 

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Schedule 5

Lenders

JPMorgan Chase Bank, N.A.

DB Structured Products, Inc.

Fortis Capital Corp.

Bank Hapoalim B.M.

KeyBank National Association

Commerzbank Aktiengesellschaft New York and Grand Cayman Branch

BNP Paribas

 

US Bank National Association

 

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Schedule 6

Reserved

 

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SCHEDULE 7

QUALIFIED SUBORDINATED DEBT

 

Trust Preferred Securities: Junior Subordinated Debentures to HMB Capital Trust
I in the amount of $51,547,000

 

Trust Preferred Securities: Junior Subordinated Debentures to HMB Capital Trust
IV in the amount of $82,475,000

 

Trust Preferred Securities: Junior Subordinated Debentures to HMB Capital Trust
V in the amount of $41,238,000

 

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Exhibit A

Request for Borrowing

[Letterhead of the requesting Borrower]

JPMorgan Chase Bank, N.A.

1111 Fannin, 12th Floor

Houston, TX 77002

 

Attention: Wanda Carr

Phone: (713) 427-6391

Facsimile: JPMorgan: 1-713-427-6449 or 6457

The undersigned, [HomeBanc Corp. (a “Borrower”)], [HomeBanc Mortgage
Corporation] (a “Borrower”), the JP Morgan Chase Bank, N.A., as a lender and as
agent and representative (the “Administrative Agent”) of the other lender(s) who
are parties to it as lenders, (all such lenders, including JPMorgan Chase Bank,
N.A. being herein called the “Lenders”) together executed a Loan and Security
Agreement dated November 17, 2006 (which, as it may been or may hereafter be
supplemented, amended or restated from time to time, is called the “Agreement”).
Any term defined in the Agreement and used in this Request for Borrowing shall
have the meaning given to it in the Agreement.

The Borrower currently qualifies under the Agreement for, and hereby request, a
Loan, in the specified amounts listed below, to be made on
_________________________, 200o (or, if the Administrative Agent is closed that
day, on the next day when it is not).

After giving effect as required by the Agreement to the requested Loan, the
outstanding principal balance of the Loan will not exceed the Available Loan
Amount.

The proceeds of the Loan should be deposited in the relevant Borrower’s Payment
Account, which shall be, with respect to HB Corp., number [ ], and with respect
HMC, number [ ] with JPMorgan Chase Bank, N.A.

The Borrower acknowledges that the Administrative Agent and the Lenders will
rely on the truth of each statement in this request and its attachments in
funding the requested Loan.

1.

REQUEST FOR NEW LOAN:

 

A.

P&I Advance: _______________________

 

B.

T&I Advance: _____________________

 

C.

Enforcement Advance: __________________

 

 

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D.

Intra-period MSR Advance: _________________

 

E.

Total of all Servicing Receivables: __________________

 

F.

Servicing Rights: _____________________

 

G.

Grand Total: ________________________

No Default has occurred under the Loan Documents that has not been cured by each
Borrower or declared in writing by the Administrative Agent to have been waived,
and no Event of Default has occurred under the Loan Documents that the
Administrative Agent has not declared in writing to have been cured or waived.

All items that the Borrower is required to furnish to the Administrative Agent,
its designated custodian or the Lenders for this requested Loan and otherwise
have been delivered, or will be delivered before this requested Loan is funded,
in all respects as required by the Agreement and the other Loan Documents.

The Borrower hereby warrants and represents to the Administrative Agent and the
Lenders that none of the Collateral (including, but not limited to, Collateral
described or referred to in this request) is pledged to any Person other than
the Administrative Agent or supports any borrowing or repurchase agreement
funding other than Loans under the Agreement.

The undersigned officer hereby certifies that all of the Borrowers’
representations and warranties (a) in the Agreement and all of the Loan
Documents (except only to the extent that (i) such a representation or warranty
speaks to a specific date or (ii) the facts on which a representation or
warranty is based have been changed by transactions or conditions contemplated
or expressly permitted by the Loan Documents), (b) in the Request for Borrowing,
are true and correct on the date of this Request for Borrowing and (c) that the
Borrower qualifies for funding of the requested Loan.

DATE: ____________, 20_____

HOMEBANC CORP.

By:                                                                           

Name:

Title:

 

 

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HOMEBANC MORTGAGE CORPORATION

By:                                                                           

Name:

Title:]

 

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Exhibit B

Note

$o

November 17, 2006

 

New York, New York

FOR VALUE RECEIVED, HOMEBANC CORP., a Delaware limited liability company
(“Borrower”) and HOMEBANC MORTGAGE CORPORATION (“Borrower”) hereby, jointly and
severally promise to pay to the order of o (the “Lender”), at the principal
office of the Lender at o, in lawful money of the United States, and in
immediately available funds, the principal sum of o DOLLARS ($o) (or such lesser
amount as shall equal the Lender’s Commitment), on the dates and in the
principal amounts provided in the Agreement, and to pay interest on the unpaid
principal amount of each such Loan, at such office, in like money and funds, for
the period commencing on the date of such Loan until such Loan shall be paid in
full, at the rates per annum and on the dates provided in the Agreement.

All loans, advances and all payments and prepayments made hereon may be (but are
not required to be) endorsed by or on behalf of the Lender on the schedule
attached hereto as Annex I or otherwise recorded in Lender’s computer or manual
records; provided that any failure to make notation of (a) any principal advance
or accrual of interest shall not cancel, limit or otherwise affect each
Borrower’s obligations or any Lender’s rights with respect to that advance or
accrual, or (b) any payment or permitted prepayment of principal or interest
shall not cancel, limit or otherwise affect either Borrower’s entitlement to
credit for that payment as of the date of its receipt by Lender.

This Note is the Note referred to in the Loan and Security Agreement dated as of
November 17, 2006 (as amended, supplemented or otherwise modified and in effect
from time to time, the “Agreement”) between the Borrowers, the Administrative
Agent and the Lenders party thereto from time to time, and evidences Loans made
by the Lenders thereunder. Terms used but not defined in this Note have the
respective meanings assigned to them in the Agreement.

Each Borrower agrees to pay all the Administrative Agent’s and Lenders’ costs of
collection and enforcement (including reasonable attorneys’ fees and
disbursements of the Administrative Agent’s and each Lenders’ counsel) in
respect of this Note in accordance with the Agreement, including, without
limitation, reasonable attorneys’ fees through appellate proceedings.

Notwithstanding the pledge of the Collateral, each Borrower hereby acknowledges,
admits and agrees that each Borrower’s obligations under this Note are recourse
obligations of the Borrowers to which each Borrower pledges its full faith and
credit.

Each Borrower, and any endorsers hereof, (a) severally waive diligence,
presentment, protest and demand and also notice of protest, demand, dishonor and
nonpayments of this Note, (b) expressly agree that this Note, or any payment
hereunder, may be extended from time to time, and consent to the acceptance of
further Collateral, the release of any Collateral for this Note, the release of
any party primarily or secondarily liable hereon, and (c) expressly agree

 

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that it will not be necessary for the Lender, in order to enforce payment of
this Note, to first institute or exhaust the Administrative Agent’s or Lenders’
remedies against any Borrower or any other party liable hereon or against any
Collateral for this Note. No extension of time for the payment of this Note, or
any installment hereof, made by agreement by the Administrative Agent with any
person now or hereafter liable for the payment of this Note, shall affect the
liability under this Note of either Borrower, even if such Borrower is not a
party to such agreement; provided, however, that the Administrative Agent and
the Borrowers, by written agreement between them, may affect the liability of
the Borrowers.

Any reference herein to the Lender shall be deemed to include and apply to every
subsequent holder of this Note. Reference is made to the Agreement for
provisions concerning optional and mandatory prepayments, Collateral,
acceleration and other material terms affecting this Note.

This Note shall be governed by and construed under the laws of the State of New
York (without reference to choice of law doctrine) whose laws each Borrower
expressly elects to apply to this Note. Each Borrower agrees that any action or
proceeding brought to enforce or arising out of this Note may be commenced in
the Supreme Court of the State of New York, Borough of Manhattan, or in the
District Court of the United States for the Southern District of New York.

 

HOMEBANC CORP.

as maker

By:                                                                           

Name:                                                               

 

Title:

 

HOMEBANC MORTGAGE CORPORATION

as maker

By:                                                                           

Name:                                                               

 

Title:

 

 

 

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ANNEX 1

to $____________

Note

LOANS AND PAYMENTS OF PRINCIPAL AND INTEREST

 

Date of Payment or Advance

Payment Applied on (or advance vs.) Principal

Payment Applied on Interest

Principal Balance

Interest Paid to

Name of Person Making Notation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit C

Reserved

 

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Exhibit D

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Loan and Security Agreement identified below (as
amended, the “Agreement”), receipt of a copy of which is hereby acknowledged by
the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereof are hereby agreed to and incorporated herein by reference and made a part
of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit, guarantees, included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor (in
its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as the
“Assigned Interest”). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.

1.

Assignor:

______________________________

2.

Assignee:

______________________________

[and is a Lender Affiliate of [identify Lender]]

3.

Borrower(s):

______________________________

4.

Agent: ______________________, as the agent and representative of the Lenders
under the Agreement

5.

Agreement: The [amount] Agreement dated as of _______ among [name of Borrower],
the Lenders parties thereto and [name of Agent], as Agent

6.

Assigned Interest:

 

 

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Aggregate Amount of Commitment/Commitments
for all Lenders

Amount of Commitment/Transactions
Assigned

Percentage Assigned of Commitment/Transactions

$

$

%

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY THE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:______________________________

Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:______________________________

Title:

[Consented to and] Accepted:

[NAME OF AGENT], as

Agent

By:

_________________________________

Title:

[Consented to:]

[NAME OF RELEVANT PARTY]

By:

_________________________________

Title:

 

 

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ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.

Representations and Warranties.

1.1.        Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower(s), any of its (their) Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Documents or (iv) the performance or observance
by the Borrower(s), any of its (their) Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

1.2.        Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Agreement, (ii) it
satisfies the requirements, if any, specified in the Agreement that are required
to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the
provisions of the Agreement as a Lender thereunder and, to the extent of the
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it
has received a copy of the Agreement, together with copies of the most recent
financial statements delivered pursuant to the Agreement, as applicable, and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Assumption
and to purchase the Assigned Interest on the basis of which it has made such
analysis and decision independently and without reliance on the Agent or any
other Lender, and (v) if it is a Person that is organized under the legal
requirements of any jurisdiction other than the United States of America or any
State thereof, attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2.            Payments. From and after the Effective Date, the Agent shall make
all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and

 

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other amounts) to the Assignor for amounts which have accrued to but excluding
the Effective Date and to the Assignee for amounts which have accrued from and
after the Effective Date.

3.            General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.

 

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Exhibit E

Form of Opinion

JPMorgan Chase Bank, N.A.

[Address]

 

Dear Sirs and Mesdames:

You have requested our opinion as counsel to HomeBanc Corp., a corporation
organized and existing under the laws of o (a “Borrower”) and HomeBanc Mortgage
Corporation, (a “Borrower” and together with HomeBanc Corp. the “Borrowers”)
with respect to certain matters in connection with that certain Loan and
Security Agreement, dated November 17, 2006 (the “Loan Agreement”), by and among
Borrowers, the Lenders party thereto from time to time and JPMorgan Chase Bank,
N.A. (the “Administrative Agent). The Loan Agreement, Guaranty and Electronic
Tracking Agreement are hereinafter collectively referred to as the “Governing
Agreements.” Capitalized terms not otherwise defined herein have the meanings
set forth in the Loan Agreement.

[We] [I] have examined the following documents:

 

1.

the Governing Agreements;

2.            unfiled copies of the financing statements listed on Schedule 1
(collectively, the “Financing Statements”) naming the Borrowers as Debtors and
the Administrative Agent as Secured Party and describing the Repurchase Assets
(as defined in the Loan Agreement) as to which security interests may be
perfected by filing under the Uniform Commercial Code of the States listed on
Schedule 1 (the “Filing Collateral”), which I understand will be filed in the
filing offices listed on Schedule 1 (the “Filing Offices”);

3.            the reports listed on Schedule 2 as to UCC financing statements
(collectively, the “UCC Search Report”);

4.            such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.

To the extent [we] [I] have deemed necessary and proper, [we] [I] have relied
upon the representations and warranties of the Borrowers contained in the Loan
Agreement. [We] [I] have assumed the authenticity of all documents submitted to
me [us] as originals, the genuineness of all signatures, the legal capacity of
natural persons and the conformity to the originals of all documents.

Based upon the foregoing, it is [our] [my] opinion that:

 

 

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1.            Each Borrower is duly organized, validly existing and in good
standing under the laws of the State of o o and is qualified to transact
business in, and is in good standing under, the laws of the [State of         ].

2.            The execution, delivery and performance by each Borrower of the
Governing Agreements to which they are a party, and the sales by each Borrower
and the pledge of the Collateral under the Loan Agreement have been duly
authorized by all necessary corporate action on the part of each Borrower. Each
of the Governing Agreements have been executed and delivered by each Borrower
are legal, valid and binding agreements enforceable in accordance with their
respective terms against each Borrower, subject to bankruptcy laws and other
similar laws of general application affecting rights of creditors and subject to
the application of the rules of equity, including those respecting the
availability of specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or with the
Administrative Agent’s, for the benefit of the Lenders, security interest in the
Assets.

3.            No consent, approval, authorization or order of, and no filing or
registration with, any court or governmental agency or regulatory body is
required on the part of each Borrower for the execution, delivery or performance
by each Borrower of the Governing Agreements to which it is a party or for the
sales by each Borrower under the Loan Agreement granting of a security interest
to the Administrative Agent for the benefit of the Lenders in the Collateral,
pursuant to the Loan Agreement.

4.            The execution, delivery and performance by each Borrower, and the
consummation of the transactions contemplated by the Governing Agreements to
which it is a party do not and will not (a) violate any provision of each
Borrower’s charter or by-laws, (b) violate any applicable law, rule or
regulation, (c) violate any order, writ, injunction or decree of any court or
governmental authority or agency or any arbitral award applicable to each
Borrower of which I [we] have knowledge (after due inquiry) or (d) result in a
breach of, constitute a default under, require any consent under, or result in
the acceleration or required prepayment of any indebtedness pursuant to the
terms of, any agreement or instrument of which I have knowledge (after due
inquiry) to which the Borrowers are a party or by which it is bound or to which
it is subject, or (except for the Liens created pursuant to the Loan Agreement)
result in the creation or imposition of any Lien upon any Property of the
Borrowers pursuant to the terms of any such agreement or instrument.

5.            There is no action, suit, proceeding or investigation pending or,
to the best of [our] [my] knowledge, threatened against the Borrowers which, in
[our] [my] judgment, either in any one instance or in the aggregate, would be
reasonably likely to result in any material adverse change in the properties,
business or financial condition, or prospects of the Borrowers or in any
material impairment of the right or ability of the Borrowers to carry on its
business substantially as now conducted or in any material liability on the part
of the Borrowers or which would draw into question the validity of the Governing
Agreements to which it is a party or the Assets or of any action taken or to be
taken in connection with the transactions contemplated thereby, or which would
be reasonably likely to impair materially the ability of the Borrowers to
perform under the terms of the Governing Agreements to which it is a party.

 

 

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6.            The Loan Agreement is effective to create, in favor of the
Administrative Agent for the benefit of the Lenders, a valid “security interest”
as defined in Section 1-201(37) of the Uniform Commercial Code in all of the
right, title and interest of the Borrowers in, to and under the Repurchase
Assets, [except that (a) such security interests will continue in Repurchase
Assets after its sale, exchange or other disposition only to the extent provided
in Section 9-315 of the Uniform Commercial Code,] (b) the security interests in
Repurchase Assets in which each Borrower acquires rights after the commencement
of a case under the Bankruptcy Code in respect of the Borrowers may be limited
by Section 552 of the Bankruptcy Code.

7.            (1)         Upon the filing of financing statements on Form UCC-1
naming the Administrative Agent as “Secured Party” and each Borrower as
“Debtor”, and describing the Repurchase Assets, in the jurisdictions and
recording offices listed on Schedule 1 attached hereto, the security interests
referred to in Section 6 above will constitute fully perfected security
interests under the Uniform Commercial Code in all right, title and interest of
the Borrowers in, to and under such Collateral, which can be perfected by filing
under the Uniform Commercial Code.

(2)          The UCC Search Report sets forth the proper filing offices and the
proper debtors necessary to identify those Persons who have on file in the
jurisdictions listed on Schedule 1 financing statements covering the Collateral
as of the dates and times specified on Schedule 2. The UCC Search Report
identifies no Person who has filed in any Filing Office a financing statement
describing the Collateral prior to the effective dates of the UCC Search Report.

8.            The Borrowers are not an “investment company”, or a company
“controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended.

Very truly yours,

 

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Exhibit F

Asset Schedule

FORM OF TOTAL PLEDGED SERVICING LIST

The following lists all Mortgage Loans and all pools of Mortgage Loans each of
the Borrower’s Servicing Rights for which are currently pledged to the
Administrative Agent, for the benefit of the Lenders, and comprise the entire
Assets which are Servicing Rights under the Loan and Security Agreement dated as
of November 17, 2006 among HomeBanc Corp. (a “Borrower”), HomeBanc Mortgage
Corporation (a “Borrower” and together with HomeBanc Corp. the “Borrowers”),
JPMorgan Chase Bank, N.A. (“JPMorgan”), as a lender and as agent and
representative of the other lenders party thereto from time to time (the
“Administrative Agent”), and such other lenders (collectively with JPMorgan, the
“Lenders”), as supplemented, amended or restated to date:

Each Borrower to list pools here with totaled columns for (i) the aggregate
principal sum of Serviced Loans in each pool and (ii) the aggregate principal
sum of Serviced Loans in each pool that (1) are past due for principal or
interest for less thirty (30) days or more, (2) are the subject of pending
bankruptcy or foreclosure proceedings or (3) have been converted (through
foreclosure or other proceedings in lieu of foreclosure) into real estate owned.

 

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Exhibit G

Reserved

 

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Exhibit H

Section 6.2 Certificate

Reference is hereby made to the Loan and Security Agreement dated as of
____________________ (as amended, restated, supplemented or otherwise modified
from time to time, the “Agreement”), among HomeBanc Corp. (a “Borrower”),
HomeBanc Mortgage Corporation (a “Borrower” and together with HomeBanc Corp. the
“Borrowers”), the Lenders party thereto from time to time and JPMorgan Chase
Bank, N.A. (the “Administrative Agent”). Pursuant to the provisions of
Section 6.2 of the Agreement, the undersigned hereby certifies that:

1.            It is a ___ natural individual person, ____ treated as a
corporation for U.S. federal income tax purposes, ____ disregarded for federal
income tax purposes (in which case a copy of this Section 6.2 Certificate is
attached in respect of its sole beneficial owner), or ____ treated as a
partnership for U.S. federal income tax purposes (one must be checked).

 

2.

It is the beneficial owner of amounts received pursuant to the Agreement.

3.            It is not a bank, as such term is used in section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”), or the Agreement is
not, with respect to the undersigned, a loan agreement entered into in the
ordinary course of its trade or business, within the meaning of such section.

4.            It is not a 10-percent shareholder of the Lender within the
meaning of section 871(h)(3) or 881(c)(3)(B) of the Code.

5.            It is not a controlled foreign corporation that is related to the
Lender within the meaning of section 881(c)(3)(C) of the Code.

6.            Amounts paid to it under the Loan Documents are not effectively
connected with its conduct of a trade or business in the United States.

[NAME OF UNDERSIGNED]

By: ________________________

Title: _______________________

Date: _______________, ______

 

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Exhibit I

Subordination Provisions

Section 15.1.    Agreement to Subordinate. The Company covenants and agrees, and
each holder of Debentures by such Securityholder’s acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article XV; and each holder of a Debenture, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.

The payment by the Company of the principal of, and premium, if any, and
interest on all Debentures shall, to the extent and in the manner hereinafter
set forth, be subordinated and junior in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, whether outstanding at the
date of this Indenture or thereafter incurred.

No provision of this Article XV shall prevent the occurrence of any default or
Event of Default hereunder.

Section 15.2.   Default on Senior Indebtedness. In the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness of the Company
following any grace period, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default and such
acceleration has not been rescinded or canceled and such Senior Indebtedness has
not been paid in full, then, in either case, no payment shall be made by the
Company with respect to the principal (including redemption) of, or premium, if
any, or interest on the Debentures.

In the event that, notwithstanding the foregoing, any payment shall be received
by the Trustee when such payment is prohibited by the preceding paragraph of
this Section 15.2, such payment shall, subject to Section 15.7, be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.

Section 15.3.    Liquidation, Dissolution, Bankruptcy. Upon any payment by the
Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due upon all Senior Indebtedness of the Company shall first be paid in
full, or payment thereof provided for in money in accordance with its terms,
before any payment is made by the Company, on account of the principal (and
premium, if any) or interest on the Debentures. Upon any such dissolution or
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reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, shall be paid by the
Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Securityholders
or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money’s worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.

In the event that, notwithstanding the foregoing, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, prohibited by the foregoing, shall be received by the Trustee before
all Senior Indebtedness is paid in full, or provision is made for such payment
in money in accordance with its terms, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of such Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Company, for application
to the payment of all Senior Indebtedness, remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness.

For purposes of this Article XV, the words “cash, property or securities” shall
not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XV with respect to
the Debentures to the payment of all Senior Indebtedness, that may at the time
be outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article XI of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article XI of this Indenture.
Nothing in Section 15.2 or in this Section shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.6 of this Indenture.

 

 

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Section 15.4.   Subrogation. Subject to the payment in full of all Senior
Indebtedness and termination of any related Commitments, the Securityholders
shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the
Company, applicable to such Senior Indebtedness until the principal of (and
premium, if any) and interest on the Debentures shall be paid in full. For the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Securityholders or the Trustee would be entitled except for the provisions of
this Article XV, and no payment over pursuant to the provisions of this Article
XV to or for the benefit of the holders of such Senior Indebtedness by
Securityholders or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness of the Company, and the holders of the
Debentures be deemed to be a payment or distribution by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XV are and are intended solely for the purposes of defining the
relative rights of the holders of the Securities, on the one hand, and the
holders of such Senior Indebtedness, on the other hand.

Nothing contained in this Article XV or elsewhere in this Indenture or in the
Debentures is intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company, other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XV of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company, received
upon the exercise of any such remedy.

Upon any payment or distribution of assets of the Company referred to in this
Article XV, the Trustee, subject to the provisions of Article VI of this
Indenture, and the Securityholders shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.

Section 15.5.    Trustee to Effectuate Subordination. Each Securityholder by
such Securityholder’s acceptance thereof authorizes and directs the Trustee on
such Securityholder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XV and
appoints the Trustee such Securityholder’s attorney-in-fact for any and all such
purposes.

 

 

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Section 15.6.     Notice by the Company. The Company shall give prompt written
notice to a Responsible Officer of the Trustee at the Principal Office of the
Trustee of any fact known to the Company that would prohibit the making of any
payment of monies to or by the Trustee in respect of the Debentures pursuant to
the provisions of this Article XV. Notwithstanding the provisions of this
Article XV or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee at the Principal Office of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least 2 Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within 2 Business Days prior to such date.

The Trustee, subject to the provisions of Article VI of this Indenture, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
or representative on behalf of such holder), to establish that such notice has
been given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder or holders. In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.

Section 15.7.    Notice to Senior Indebtedness Holders’ Agent. JPMorgan Chase
Bank, N.A. (“Chase”), acting in its capacity as agent and representative of the
present and future holders of the Senior Indebtedness (in that capacity, Chase
is herein referred to as the “Agent”) under the Loan and Security Agreement,
dated as of November 17, 2006, among the Company, Chase and certain lenders, as
it may be supplemented, amended, restated or replaced from time to time, has
consented to this Indenture conditioned on inclusion of the provisions of this
Section 15.7 and the other provisions of this Article XV. Upon the occurrence of
any default under Section 5.1(a) or Section 5.1(c), the Trustee shall use
commercially reasonable efforts to promptly give to the Agent, by registered or
certified mail, a written notice specifying such default or breach; provided
that the Trustee shall not, and shall not be deemed to, be liable to the Agent,
and of such lenders or any other Person (other than for the willful misconduct
or gross negligence of the Trustee) if the Trustee fails for any reason to give
such written notice. Such notice shall be given to the Agent addressed to the
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Houston, Texas 77002, or to such successor agent and/or such other address as
shall have been specified in a written notice actually received by the Trustee
at least ten (10) Business Days in advance of the giving of such written notice
by the Trustee. No failure of the Trustee to give any notice under this Section
15.7 shall constitute a default under Section 5.1 or otherwise under the 12/05
Amended and Restated Senior Credit Agreement.

Section 15.8.     Rights of the Trustee; Holders of Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article XV in respect of any Senior Indebtedness at any time held by it,
to the same extent as any other holder of Senior Indebtedness, and nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.

With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of such Senior Indebtedness and, subject
to the provisions of Article VI of this Indenture, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or deliver
to Securityholders, the Company or any other Person money or assets to which any
holder of such Senior Indebtedness shall be entitled by virtue of this Article
XV or otherwise.

Nothing in this Article XV shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.6.

Section 15.9.    Subordination May Not Be Impaired. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company, or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company, with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof that any such holder may have or otherwise be charged with.

 

Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Securityholders, without
incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Debentures to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, and any other Person.

EXHIBIT J

LIBOR PERIOD SELECTION CONFIRMATION

 

[Letterhead of Borrowers]

 

[Date]

 

JPMorgan Chase Bank, N.A.

707 Travis

6th Floor North

Houston, Texas 77252

 

Attention: Michael Nicholson

 

Ladies and Gentlemen:

 

Reference is made to that certain Loan and Security Agreement, dated as of
November 17, 2006 (the “Loan Agreement”), by and among HOMEBANC CORP. (“HB
Corp.” and a “Borrower”) and HOMEBANC MORTGAGE CORPORATION (“HMC” and a
“Borrower”, together with HB Corp., the “Borrowers”) and the Lenders party
thereto from time to time and JPMORGAN CHASE BANK, N.A. (the “Administrative
Agent”). Any term defined in the Repurchase Agreement and used in this LIBOR
Period Selection Confirmation shall have the meaning given to it in the Loan
Agreement.

 

This is a LIBOR Period Selection Confirmation made pursuant to Section 5 of the
Loan Agreement, and confirms Borrowers’ telephonic notice of the LIBOR Period
selected on ___________________________, 200__ by ______________________________
of Borrowers to ________________________________ of Administrative Agent at
approximately ______ __.m., Houston (i.e., Central) time.

 

In that telephonic notice, Borrowers selected the following LIBOR Period for the
following Transaction:

 

 

Effective Date of Selection

 

 

Purchase Price

 

 

LIBOR Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowers hereby warrant and represent to Administrative Agent and the Lenders
that:

 

 

(a)

no Default has occurred that has not been cured;

 

(b)          no Event of Default has occurred that has not been declared in
writing by Administrative Agent to have been cured or waived; and

 

(c)          Borrowers are currently allowed to make the selection(s) described
above under the terms of the Loan and Security Agreement.

 

HOMEBANC CORP.

 

By:

____________________________________

Name:

Title:

HOMEBANC MORTGAGE CORPORATION

 

By:

____________________________________

Name:

Title:

 

 

 

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