Exhibit 10.2

Execution Copy

MASTER REPURCHASE AGREEMENT

Dated as of February 28, 2007

Between

AMERICAN HOME MORTGAGE ACCEPTANCE, INC.,

AMERICAN HOME MORTGAGE CORP.,

AMERICAN HOME MORTGAGE INVESTMENT CORP.

and

AMERICAN HOME MORTGAGE SERVICING, INC.,

as Sellers

and

ABN AMRO BANK N.V.,

in its capacity as “Agent” for the “Purchasers”,

as Buyer

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Table of Contents

 

1.    Applicability    1 2.    Definitions    1 3.    Initiation; Confirmation;
Termination    13 4.    Margin Maintenance    15 5.    Collections    16 6.   
Security Interest    16 7.    Payment and Transfer    17 8.    Segregation of
Documents Relating to Purchased Mortgage Loans    17 9.    Substitution    17
10.    Representations and Warranties    18 11.    Events of Default    18 12.
   Servicing of the Purchased Mortgage Loans    24 13.    Single Agreement    24
14.    Notices and Other Communications    25 15.    Payment of Expenses;
Indemnity    26 16.    Buyer as Attorney-in-Fact    27 17.    Wire Instructions
   28 18.    Entire Agreement; Severability    28 19.    Non assignability;
Termination    28 20.    Counterparts    29 21.    GOVERNING LAW; CONSENT TO
JURISDICTION; WAIVER OF JURY TRIAL    29 22.    No Waivers, Etc.    29 23.   
Use of Employee Plan Assets    30 24.    Intent    30 25.    Disclosure Relating
to Certain Federal Protections    31 26.    Contribution with Respect to Seller
Obligations.    31 1.    Additional Representations    1 2.    Identification of
Purchasers    1 3.    Multiple Principals    1 4.    Interpretation of Terms   
1

EXHIBIT A ELIGIBLE MORTGAGE LOAN CRITERIA

EXHIBIT B CONCENTRATION PERCENTAGES

EXHIBIT C FORM OF CONFIRMATION

EXHIBIT D FORM OF INITIAL LOAN SCHEDULE

EXHIBIT E FORM OF REPURCHASE LOAN SCHEDULE

EXHIBIT F FORM OF SUPPLEMENTAL LOAN SCHEDULE

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MASTER REPURCHASE AGREEMENT

Dated as of February 28, 2007

Between:

AMERICAN HOME MORTGAGE ACCEPTANCE, INC., AMERICAN HOME

MORTGAGE CORP., AMERICAN HOME MORTGAGE INVESTMENT CORP. and

AMERICAN HOME MORTGAGE SERVICING, INC. (each, a “Seller”)

and

ABN AMRO BANK N.V., in its capacity as “Agent” for the “Purchasers” described
below (“Buyer”)

 

1. Applicability

From time to time the parties hereto may enter into transactions in which
American Home Mortgage Acceptance, Inc. (“AHMA”), American Home Mortgage Corp.
(“AHM”), American Home Mortgage Investment Corp. (“AHMIC”) and American Home
Mortgage Servicing, Inc. (“AHMS” and together with AHMA, AHM and AHMIC, the
“Sellers” and each a “Seller”) agrees to transfer to ABN AMRO Bank N.V. (“ABN
AMRO”), as “Agent” for the “Purchasers” described below (in such capacity,
“Buyer”) Mortgage Loans against the transfer of funds by Buyer, with a
simultaneous agreement by Buyer to transfer to such Seller such Mortgage Loans
at a date certain or on demand, against the transfer of funds by such Seller.
Each such transaction shall be referred to herein as a “Transaction” and shall
be governed by this Agreement (including any supplemental terms or conditions
contained in Annex I hereto or any other Annexes or Exhibits hereto and in the
Letter Agreement), as the same shall be amended from time to time in accordance
with the terms hereof and of the Letter Agreement.

 

2. Definitions.

“ABN AMRO” shall have the meaning specified in Paragraph 1 hereof.

“Accepted Servicing Practices” shall mean those mortgage servicing and
administering practices customarily required by Sellers for the Servicer of the
Mortgage Loans, in each case in accordance with (i) any and all applicable
federal, state and local laws, and the servicing provisions of the applicable
Agency Guidelines, (ii) the exercise by the Servicer of a level of care and
diligence no less stringent than the Servicer customarily employs and exercises
in servicing and administering similar construction mortgage loans for its own
account and that are in accordance with accepted mortgage servicing practices of
prudent lending institutions servicing mortgage loans of the same type as the
Mortgage Loans in the jurisdiction in which the related Mortgaged Properties are
located and (iii) the related Mortgage Contracts.

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“Account Control Agreement” shall mean the Account Control Agreement dated as of
the date hereof among the Sellers, the Servicer, the Agent and the Bank.

“Act of Insolvency” shall mean, with respect to any Person, the occurrence of
any of the events described in Paragraphs 11(a)(vi), (vii) or (viii) with
respect to such Person.

“Additional Purchased Mortgage Loans” shall have the meaning set forth in
Paragraph 4(a) hereof.

“Affected Party” shall have the meaning specified in the Letter Agreement.

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such
specified Person. For purposes of this definition, “control” when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract, or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

“Agency Agreement” shall mean that certain Agency Agreement, dated as of the
date hereof, among Buyer, the Group Agents and the Purchasers, as the same may
be amended, restated, supplemented or otherwise modified from time to time.

“Agency Guidelines” shall mean the FHLMC Guidelines, the GNMA Guidelines and the
FNMA Guidelines, as applicable, as such guidelines have been amended from time
to time with respect to Sellers.

“Agent” shall mean ABN AMRO, in its capacity as “Agent” for the Purchasers under
the Letter Agreement.

“Agent Fee Letter” shall mean the Agent Fee Letter, dated as of the date hereof,
among Sellers and the Agent, as the same may be amended, restated, supplemented
or otherwise modified from time to time.

“Agreement” shall mean this Master Repurchase Agreement, dated as of
February 28, 2007, among Sellers and Buyer, as amended, restated, supplemented
or otherwise modified from time to time.

“AHMH” shall mean American Home Mortgage Holdings, Inc. a Delaware corporation.

“AHMIC” shall mean American Home Mortgage Investment Corp., a Maryland
corporation.

“Authorized Representative” shall mean with respect to each Seller, any
representative of such Seller involved in, or responsible for, entering into
Transactions and with respect to each Seller and the Servicer, any
representative of such Seller and the Servicer

 

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authorized to act on such respective Seller’s or Servicer’s behalf, and whose
name appears on a list of authorized officers (or as may be designated by such
Person) furnished to the Buyer and Group Agents by the Sellers and the Servicer,
as such list may from time to time be amended.

“Bank” shall mean Deutsche Bank National Trust Company, in its capacity as the
bank which holds the Buyer’s Account.

“Bankruptcy Code” shall mean Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended by the Bankruptcy Reform Act and as further
amended from time to time or any successor statute.

“Bankruptcy Reform Act” shall mean the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005, effective as of October 17, 2005.

“Breakage Costs” shall mean all amounts owing by any Seller to the Agent for the
account of the Purchasers under Paragraph 7 of the Letter Agreement.

“Business Day” shall mean any day other than (i) a Saturday or Sunday or
(ii) any day on which banks located in New York City, New York or in Chicago,
Illinois, are authorized or required by law or executive order to be closed.

“Buyer’s Account” shall mean that certain collection account number 57564 in the
name of the Buyer held at the Bank.

“Collection Account” shall have the meaning specified in the Letter Agreement.

“Commitment Termination Date” shall have the meaning specified in the Letter
Agreement.

“Concentration Category” shall mean, with respect to the Mortgage Loans, each
category set forth in Exhibit B under the heading “Concentration Category”.

“Concentration Limit” shall mean, as of any date of determination, with respect
to the Mortgage Loans included in any Concentration Category, the product of
(a) the “Concentration Percentage” set forth in Exhibit B for such Concentration
Category as of such date and (b) the aggregate Outstanding Principal Balance of
all Purchased Mortgage Loans as of such date.

“Confirmation” shall mean a confirmation substantially in the form of Exhibit C
hereto delivered pursuant to Paragraph 3 hereof.

“Credit and Collection Policy” shall mean those credit and collection policies
and practices of Sellers and the Servicer, in existence on the date hereof
relating to originating, acquiring, servicing and enforcing Mortgage Loans
(including credit requirements as to the sellers, contractors, builders,
inspectors, custodians and servicers for any such Mortgage Loans) and the
foreclosure and liquidation of the related Mortgaged Properties, in each case as
delivered by each Seller to Agent and as subsequently modified from time to time
in accordance with the Transaction Documents.

 

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“Custodial Agreement” shall mean the Custodial Agreement dated as of the date
hereof, among Sellers, the Servicer, Buyer and the Custodian providing for the
custody of the Purchased Mortgage Loans, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

“Custodian” shall mean Deutsche Bank National Trust Company in its capacity as
custodian under the Custodial Agreement or any successor thereto mutually
agreeable to Buyer and Sellers.

“Daily Market Value Report” shall have the meaning specified in the Letter
Agreement.

“Default Rate” shall have the meaning specified in the Letter Agreement.

“Debtor Laws” shall mean all applicable liquidation, conservatorship,
bankruptcy, fraudulent transfer or conveyance, moratorium, arrangement,
receivership, insolvency, reorganization or similar laws from time to time in
effect affecting the rights of creditors generally.

“Defaulted Loan” shall mean a Mortgage Loan (i) as to which any Monthly Payment
remains unpaid for 90 days or more from the original due date for such Monthly
Payment, (ii) as to which an Act of Insolvency has occurred with respect to any
Mortgagor thereof, or (iii) which, consistent with the Credit and Collection
Policy, has been or should be written off as uncollectible.

“Delinquent Loan” shall mean a Mortgage Loan that is not reported as a Defaulted
Loan and (a) with respect to which any Monthly Payment, or part thereof, is 30
days or more past the original due date for such Monthly Payment, or (b) which,
consistent with the applicable Seller’s Credit and Collection Policy, has been
or should be classified as delinquent by such Seller.

“Electronic Tracking Agreement” shall mean the Electronic Tracking Agreement
dated the date hereof among the Agent, Sellers, the Servicer, MERS and MERSCORP,
INC., as such agreement may be amended, restated, supplemented or otherwise
modified from time to time.

“Eligible Mortgage Loan” shall have the meaning specified in Exhibit A.

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

“Event of Default” shall have the meaning specified in Paragraph 11.

“Excess Concentration Amount” shall mean, as of any date of determination, the
sum (without duplication) of the following amounts for each Concentration
Category: The amount for each Concentration Category equal to (a) the aggregate
Loan Collateral Value of all Eligible Mortgage Loans in such Concentration
Category, minus (b) the Concentration Limit applicable to such Concentration
Category.

 

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“FDIA” shall mean the Federal Deposit Insurance Act, as amended.

“Fee Letter” shall mean the Fee Letter, dated as of the date hereof, among
Sellers and the Group Agents party thereto from time to time, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

“FHA” shall mean the Federal Housing Administration, which is a subdivision of
HUD, or any successor thereto. The term “FHA” is used interchangeably in this
Agreement with the term “HUD”.

“FHLMC” shall mean the Federal Home Loan Mortgage Corporation, or any successor
thereto.

“FHLMC Guidelines” shall mean the Freddie Mac Seller and Servicer Guidelines, as
such guidelines may hereafter from time to time be amended.

“FICO Score” shall mean a statistical credit score obtained by many mortgage
lenders in connection with a loan application to help assess a borrower’s
creditworthiness. A FICO score is generated by models developed by a third party
and made available to lenders through Fair Isaac Corporation, TransUnion LLC,
Experian or any successor credit bureau. The FICO score is based on a borrower’s
historical credit data, including, among other things, payment history,
delinquencies on accounts, levels of outstanding indebtedness, length of credit
history, types of credit and bankruptcy experience.

“FNMA” shall mean the Federal National Mortgage Association, or any successor
thereto.

“FNMA Guidelines” shall mean the FNMA Selling and Servicing Guides and all
amendments or additions thereto.

“GAAP” shall mean generally accepted accounting principles as in effect in the
United States from time to time, consistently applied.

“GNMA” shall mean Government National Mortgage Association or any successor
thereto.

“GNMA Guidelines” shall mean the GNMA Mortgage-Backed Securities Guide 5500.3
and all amendments or additions thereto.

“Governmental Authority” shall mean any applicable nation or government, any
agency, department, state or other political subdivision thereof, or any
instrumentality thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Government Authority shall include, without limitation, each of FNMA, FHLMC,
FHA, HUD, VA and GNMA.

“Group Agents” shall have the meaning specified in the Letter Agreement.

 

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

“Indebtedness” shall mean, for any Person, without duplication, and at any time,
(a) all obligations required by GAAP to be classified on such Person’s balance
sheet as liabilities, (b) obligations secured (or for which the holder of the
obligations has an existing contingent or other right to be so secured) by any
Lien existing on property owned or acquired by such Person, (c) obligations that
have been (or under GAAP should be) capitalized for financial reporting
purposes, and (d) all guaranties, endorsements, and other contingent obligations
with respect to obligations of others.

“Initial Loan Schedule” shall mean a schedule of Purchased Mortgage Loans in the
form of Exhibit D delivered on the Initial Purchase Date.

“Initial Purchase Date” shall mean February 28, 2007.

“IRC” shall mean the Internal Revenue Code of 1986, as amended from time to time
and any successor statute.

“Letter Agreement” shall mean that certain letter agreement, dated as of the
date hereof, among Buyer, Sellers, the Servicer, the Group Agents and the
Purchasers, with respect to the Transactions contemplated hereunder, as the same
may be amended, restated, supplemented or otherwise modified from time to time.

“Lien” shall mean any security interest, mortgage, deed of trust, charge,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or other security agreement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement or any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement under the UCC or comparable law of any jurisdiction to evidence any of
the foregoing.

“Loan Collateral Value” shall mean, as of any date of determination with respect
to each Purchased Mortgage Loan, an amount equal to the lesser of (a) the then
Outstanding Principal Balance of such Mortgage Loan as of such date and (b) the
Market Value of such Mortgage Loan as of such date; provided that Mortgage Loans
which are not Eligible Mortgage Loans as of any date shall have a Loan
Collateral Value of zero.

“Loan Documents” shall mean with respect to each Purchased Mortgage Loan, all of
the Principal Mortgage Documents and all of the Other Mortgage Documents with
respect to such Mortgage Loan.

“Loan Schedule” shall mean the Initial Loan Schedule and each Supplemental Loan
Schedule, which shall in any event exclude any Mortgage Loans specified in any
Repurchase Loan Schedule.

“Loan-to-Value Ratio” shall mean, for any Mortgage Loan as of the related
Purchase Date, a fraction (expressed as a percentage) having (i) an amount equal
to the applicable Seller’s maximum funding commitment under the related Mortgage
Contract on the

 

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date of origination of such Mortgage Loan as its numerator; and (ii) as its
denominator, the appraised value of the related Mortgaged Property on the date
of origination of such Mortgage Loan.

“Lock-Box” shall have the meaning specified in the Letter Agreement.

“Manufactured Home” shall mean a single-family home constructed on a chassis at
a factory and shipped in one or more sections to a housing site, then installed
on a semi-permanent foundation.

“Margin Deficit” shall have the meaning specified in Paragraph 4(a) hereof.

“Margin Excess” shall have the meaning specified in Paragraph 4(b) hereof.

“Market Value” shall mean, as of any date with respect to any Purchased Mortgage
Loan, the fair market value of such Purchased Mortgage Loan determined as of the
prior Business Day and in accordance with Paragraph 3(d); provided, that the
Market Value of any Mortgage Loan which is not an Eligible Mortgage Loan shall
be zero.

“Material Adverse Effect” shall mean, with respect to any Person, any material
adverse effect on (i) the validity or enforceability of this Agreement or any
other Transaction Document, (ii) the business, operations, total Property or
financial condition of such Person, (iii) the Purchased Assets taken as a whole,
(iv) the enforceability or priority of the Lien in favor of Agent on any
material portion of the Purchased Assets, or (v) the ability of such Person to
fulfill its obligations under this Agreement or any other Transaction Document.

“MERS” shall mean Mortgage Electronic Registration Systems, Inc., a Delaware
corporation.

“Monthly Payment” shall mean with respect to any Mortgage Loan, the scheduled
monthly payment of principal and/or interest by the related Mortgagor on such
Mortgage Loan.

“Monthly Report” shall have the meaning specified in the Letter Agreement.

“Mortgage” shall mean the mortgage, deed of trust or other instrument creating a
lien on a fee simple estate in Mortgaged Property securing a Mortgage Note
together with any amendments, riders, addendums, modification agreements,
extensions or renewals thereof and any new mortgage taken in exchange or
substitution therefor in connection with a modification, conversion or
refinancing of such mortgage or the related Mortgage Note.

“Mortgage Contract” shall mean a residential construction loan agreement,
building loan agreement, loan agreement, construction loan agreement or other
financing agreement entered into by a Seller and a Mortgagor, evidencing the
related Seller’s obligation to provide funding of such Mortgagor’s construction
project and setting forth, among other things, the terms and provisions related
to the repayment of funds extended to the Mortgagor thereunder.

“Mortgage Loan” shall mean, at any time, any fixed rate or floating rate
mortgage loan which is secured by a Mortgage on real estate and which is made to
a Mortgagor for the

 

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construction of a new single family detached residential property pursuant to
the related Mortgage Contract, including all amounts owed or to be owed by such
Mortgagor with respect to all Mortgagor Advances advanced or to be advanced to
such Mortgagor under such Mortgage Contract, and includes (i) such mortgage loan
whether in the construction period or in the permanent loan term and (ii) any
mortgage loan secured by a Mortgage on such residential property made in
exchange or substitution therefor and/or in connection with a modification,
conversion or refinancing of such Mortgage Loan.

“Mortgage Note” shall mean the original, executed promissory note or other
evidence of indebtedness of a Mortgagor under a Mortgage Loan, together with any
rider, amendment, addendums, modification agreements, extension or renewal
thereof and any original promissory note taken in exchange or substitution
therefor and/or in connection with a modification, conversion or refinancing of
such Mortgage Loan from a construction loan to a permanent mortgage loan or
otherwise.

“Mortgaged Property” shall mean the underlying real property subject to a
Mortgage (including, without limitation, all buildings, improvements and
fixtures thereon and all additions, alterations and replacements made at any
time with respect to the foregoing) securing a Mortgage Loan.

“Mortgagor” shall mean the obligor on a Mortgage Note.

“Mortgagor Advance” shall mean, with respect to any Mortgage Loan, a loan or
advance made to the Mortgagor under the related Mortgage Contract and evidenced
by the related Mortgage Note.

“Net Collateral Value” shall mean, as of any date of determination, an amount
equal to (A) the sum of the Loan Collateral Values for all Purchased Mortgage
Loans which are Eligible Mortgage Loans as of such date, minus (B) the Excess
Concentration Amount as of such date minus (C) the Required Reserve Amount as of
such date.

“OTC Loan” shall mean a Mortgage Loan which the Sellers refer to as a
“one-time-close loan”, in which the Mortgage Note and Mortgage related to such
Mortgage Loan both include construction loan addendums or riders, as applicable,
to the permanent mortgage loan documentation.

“Other Mortgage Documents” shall have the meaning assigned to such term in the
Custodial Agreement.

“Outstanding Principal Balance” shall mean, as of any date of determination with
respect to any Mortgage Loan, the unpaid outstanding principal balance of such
Mortgage Loan as of such date.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

“Performance Guarantors” shall mean AHMIC and AHMH, and their successors and
assigns.

 

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“Performance Guaranty” shall mean the Performance Guaranty dated the date hereof
among the Performance Guarantors and Buyer, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

“Person” shall mean an individual, partnership, corporation (including a
business trust), joint-stock company, limited liability company, trust,
unincorporated association, joint venture, government (or any agency or
political subdivision thereof) or other entity.

“Price Differential” shall mean, with respect to any Transaction hereunder as of
any date, the aggregate amount obtained by daily application of the Pricing Rate
(or weighted average of the Pricing Rates, in the event that portions of the
Purchase Price are being funded at different Pricing Rates) for such Transaction
to the amount equal to the Purchase Price for such Transaction on a 360 day per
year basis for the actual number of days during the period commencing on (and
including) the Purchase Date for such Transaction and ending on (but excluding)
the date of determination (reduced by any amount of such Price Differential
previously paid by the applicable Seller to Buyer with respect to such
Transaction).

“Pricing Rate” shall mean the per annum percentage rate for determination of the
Price Differential, which rate shall be determined in accordance with the Letter
Agreement.

“Principal Mortgage Documents” shall have the meaning assigned to such term in
the Custodial Agreement.

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

“Purchase Date” shall mean, with respect to each Transaction, the date on which
the Mortgage Loans subject to such Transaction are to be transferred or were
transferred, as the case may be, by the applicable Sellers to Buyer hereunder.

“Purchase Price” shall mean, with respect to any Transaction, (i) on the
Purchase Date in respect thereof, the price at which Purchased Mortgage Loans
subject to such Transaction are sold by the applicable Sellers to Buyer
hereunder, and (ii) thereafter, except where Buyer and such Sellers agree
otherwise, such price decreased by the amount of any cash transferred by such
Sellers to Buyer and applied to reduce the Purchase Price pursuant to Paragraph
4(a) hereof.

“Purchased Assets” shall have the meaning specified in Paragraph 6 hereof.

“Purchased Mortgage Loans” shall mean, with respect to any Transaction, the
Mortgage Loans sold by the applicable Sellers to Buyer in such Transaction
hereunder, as adjusted to give effect to include Additional Purchased Mortgage
Loans delivered pursuant to Paragraph 4(a) hereof and any Purchased Mortgage
Loans repurchased by such Sellers or transferred to such Sellers. Unless the
context shall otherwise require, the term “Purchased Mortgage Loans” shall refer
to all Purchased Mortgage Loans under all Transactions. “Purchased Mortgage
Loan” shall include (i) the entire Outstanding Principal Balance of each
Mortgage Loan, regardless of whether Buyer has advanced against all Mortgagor
Advances with respect to such Mortgage Loan, and (ii) all rights (but not the
obligations unless Buyer has

 

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exercised its rights under Section 11 to sell such Mortgage Loan after the
occurrence of an Event of Default) to make future Mortgagor Advances under the
Mortgage Contract related to such Mortgage Loan.

“Purchasers” shall mean the commercial paper conduits, financial institutions
and other entities party to the Letter Agreement from time to time as
“Purchasers” thereunder.

“Related Security” shall mean, with respect to any Purchased Mortgage Loan, all
of the applicable Seller’s right, title and interest in and to: (i) the
Mortgaged Property; (ii) all other security interests or liens securing the
repayment of such Purchased Mortgage Loan, together with the related Mortgages,
assignments and financing statements; (iii) all insurance contracts, guaranties,
contracts, supporting obligations and other contracts supporting the repayment
of such Purchased Mortgage Loan; (iv) all Loan Documents relating to such
Purchased Mortgage Loans; (v) Collections with respect thereto; (vi) all
servicing and custodial rights with respect thereto; (vii) all recourse rights
against the originators or sellers thereof, (viii) the Buyer’s Account; (ix) all
Takeout Commitments, to the extent that there are such commitments; and (x) all
proceeds of such Purchased Mortgage Loan or of the foregoing property described
in clauses (i) through (ix) above.

“Repurchase Conditions” shall mean, with respect to any repurchase by any Seller
of any Purchased Mortgage Loans or any request that Buyer transfer to such
Seller Purchased Mortgage Loans on account of a Margin Excess:

(i) such Seller shall have delivered to Buyer a notice, by no later than 11:00
a.m. (New York City time) one (1) Business Day prior to the proposed repurchase
or transfer together with a Repurchase Loan Schedule identifying the Purchased
Mortgage Loans to be repurchased or transferred on such date;

(ii) the Servicer shall have delivered to Buyer a Supplemental Loan Schedule and
a Daily Market Value Report (after giving effect to the conveyance of any
Additional Purchased Mortgage Loans by such Seller occurring on or before the
day the proposed repurchase or transfer is to take place) which shows that,
after giving effect to the repurchase of the repurchased or transferred Mortgage
Loans and to any payment of the Repurchase Price to occur simultaneously with
such repurchase, there will be no Margin Deficit;

(iii) the Agent shall have received payment with respect to such repurchase or
transfer in an amount sufficient to prevent the occurrence of a Margin Deficit
by no later than 2:30 p.m. (New York City time) on the date of the proposed
release; and

(iv) no Incipient Event of Default or Event of Default shall have occurred and
be continuing or would occur as a result of the Agent’s release of its security
interest in the Mortgage Loans to be so repurchased or transferred.

Delivery of a Repurchase Loan Schedule referred to in clause (i) above shall be
a representation and warranty by such Seller that (i) the Repurchase Conditions
described above (other than the condition set forth in clause (iii)) have been
satisfied and (ii) no adverse selection was used in selecting the Mortgage Loans
to be so repurchased.

 

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“Repurchase Date” shall mean, with respect to each Transaction, the date on
which the Sellers are to repurchase the Purchased Mortgage Loans subject to such
Transaction from Buyer, which date shall be the earliest of the following:
(i) (a) for Mortgage Loans which were purchased by a Seller from Waterfield, the
180th day after the date hereof or if not a Business Day, the immediately
preceding Business Day or such earlier Business Day set forth in the applicable
Confirmation, or, subject to the notice requirements set forth in the Repurchase
Conditions, such earlier Business Day selected by the applicable Sellers and
(b) for all other Mortgage Loans, on the 364th day after the Purchase Date or if
not a Business Day, the immediately preceding Business Day with respect to such
Mortgage Loan or such earlier Business Day set forth in the applicable
Confirmation, or, subject to the notice requirements set forth in the Repurchase
Conditions, such earlier Business Day selected by the applicable Sellers,
(ii) within one (1) Business Day after the date such Purchased Mortgage Loan is
no longer an Eligible Mortgage Loan, (iii) the date declared by the Buyer to be
the Repurchase Date with respect to such Transaction pursuant to Paragraph 11(b)
and (iv) on the Termination Date, including a Termination Date declared by the
Agent after the occurrence of an Event of Default.

“Repurchase Loan Schedule” shall mean a schedule of Purchased Mortgage Loans
being repurchased on a Repurchase Date substantially in the form of Exhibit E.

“Repurchase Price” shall mean, with respect to each Transaction, the price at
which Purchased Mortgage Loans subject to such Transaction are to be resold by
Buyer to the applicable Sellers upon termination of such Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of (i) the Purchase Price as of the date of such determination, plus
(ii) if any accrued and unpaid Price Differential is then due and owing, such
accrued and unpaid Price Differential, plus (iii) any other accrued and unpaid
fees, expenses, indemnities and other amounts then due and owing to the Agent,
any Group Agent or any Purchaser, including, without limitation, under Paragraph
4(d) or Paragraph 7 of the Letter Agreement or under Paragraph 15 hereof.

“Required Group Agents” shall have the meaning specified in the Letter
Agreement.

“Required Reserve Amount” shall mean as of any date of determination an amount
equal to 6.00% of the positive difference between (i) the aggregate Loan
Collateral Values of all Eligible Mortgage Loans as of such date and (ii) the
Excess Concentration Amount as of such date.

“Servicer” shall mean American Home Mortgage Servicing, Inc. in its capacity as
servicer of the Purchased Mortgage Loans, or any successor thereto mutually
agreeable to Buyer and Sellers.

“Subsidiary” shall mean, with respect to any Person, any corporation or other
entity of which securities having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person, or one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries.

 

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“Supplemental Loan Schedule” shall mean a schedule of Purchased Mortgage Loans
after giving effect to each Transaction and each repurchase of Mortgage Loans,
substantially in the form of Exhibit F.

“Takeout Agreement” shall mean an agreement between a Takeout Investor and a
Seller, pursuant to which such Takeout Investor has committed to purchase from
such Seller certain of the Purchased Mortgage Loans, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.

“Takeout Commitment” shall mean, with respect to each Takeout Investor, an
amount equal to the aggregate Takeout Value for all Purchased Mortgage Loans
that such Takeout Investor has committed to purchase from any Seller pursuant to
one or more Takeout Agreements.

“Takeout Investor” shall mean any entity which purchases Mortgage Loans from a
Seller.

“Takeout Value” shall mean, with respect to any Purchased Mortgage Loan, the
price that a Takeout Investor has agreed to pay to a Seller for such Purchased
Mortgage Loan.

“Tangible Net Worth” shall mean, with respect to any Person, the excess of total
assets of such Person over the total liabilities of such Person determined in
accordance with GAAP, but excluding from the determination of total assets:
(a) all assets which would be classified as intangible assets under GAAP,
including, without limitation, goodwill (whether representing the excess cost
over book value of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs and
research and product development costs), (b) loans or other extensions of credit
to officers, employees, shareholders or Affiliates of such Person (other than
the Servicer, Sellers, and the Performance Guarantors) and (c) investments in
Subsidiaries of such Person (other than the Servicer, Sellers, and the
Performance Guarantors).

“Termination Date” shall mean the earliest of (i) that Business Day which
Sellers designate as the Termination Date by written notice to Buyer at least
thirty (30) days prior to such date, (ii) the date of declaration of the
Termination Date by Buyer following an Event of Default, and (iii) the
Commitment Termination Date.

“Transaction” has the meaning set forth in Paragraph 1 hereof but shall include,
as the context may require, (i) each transfer of Mortgage Loans to Buyer against
the transfer of funds by Buyer or on account of a Margin Deficit, (ii) each
transfer of Mortgage Loans to Buyer in connection with any repurchase,
withdrawal or substitution of Mortgage Loans, and (iii) any portion of any
Transaction remaining outstanding after giving effect to any repurchase,
withdrawal or substitution of Mortgage Loans under this Agreement.

“Transaction Documents” shall mean this Agreement, the Letter Agreement, the
Custodial Agreement, the Electronic Tracking Agreement, the Performance
Guaranty, the Agency Agreement, the Fee Letter, the Agent Fee Letter and the
Account Control Agreement, in each case as amended, restated, supplemented or
otherwise modified from time to time.

 

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“TTC Loan” shall mean a Mortgage Loan which the Sellers refer to as a
“two-time-close loan”, which matures at the end of the construction term, and is
expected to be refinanced by a Seller from a construction loan to a permanent
mortgage loan at maturity.

“UCC” shall mean the Uniform Commercial Code, as amended from time to time, as
in effect in the relevant jurisdiction.

“Unapproved Mortgage Loan” shall mean a Mortgage Loan which was originated by an
entity other than a Seller, which entity was either merged into or consolidated
with or into a Seller subsequent to such origination and which has not been
approved by the Required Group Agents.

“VA” shall mean the Department of Veterans Affairs, or any successor thereto.

“Waterfield” shall mean Waterfield Financial Corporation, an Indiana
corporation.

“Wet Loan” shall mean a wet-funded Mortgage Loan for which, as of the related
Purchase Date, the Loan Documents required to be delivered to the Custodian
under the Custodial Agreement have not yet been delivered and which shall have
the following additional characteristics:

(i) the initial Mortgagor Advance has been funded by the applicable Seller prior
to such Purchase Date;

(ii) the initial Mortgagor Advance has not been returned to such Seller by the
escrow or closing agent for such Wet Loan; and

(iii) upon recordation of the related Mortgage, such Mortgage Loan will
constitute a first priority lien on the premises described therein.

Capitalized terms used and not otherwise defined in this Agreement shall have
the meanings set forth in the Letter Agreement.

 

3. Initiation; Confirmation; Termination

(a) Subject to the terms of the Letter Agreement and the satisfaction of the
conditions precedent set forth therein and in this Paragraph 3, on the Purchase
Date for each Transaction, the applicable Purchased Mortgage Loans shall be
transferred to Buyer for the account of the Purchasers against the transfer of
the Purchase Price therefor to the account specified pursuant to Paragraph
17(a). Notwithstanding anything to the contrary herein, (i) Buyer is not
providing a commitment to enter into any Transactions hereunder, (ii) Buyer
shall not be obligated to consummate any Transaction hereunder unless the
applicable Sellers has received the full amount of the Purchase Price for such
Transaction directly from the Purchasers and (iii) Buyer shall not be obligated
to fund any amount of the Purchase Price for any Transaction hereunder if any
Purchaser fails to fund such amount.

 

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(b) In the event that one or more of the Sellers desire to enter into a
Transaction hereunder, such Sellers shall deliver to Buyer prior to 12:00 noon,
New York City time, one (1) Business Day prior to the proposed Purchase Date, a
signed Confirmation. The Confirmation, together with this Agreement and the
Letter Agreement, shall constitute conclusive evidence of the terms agreed to
between Buyer and the applicable Sellers with respect to the Transaction to
which the Confirmation relates. In the event of any conflict between the terms
of such Confirmation and this Agreement or between the terms of such
Confirmation and the Letter Agreement, the terms of this Agreement or, if
applicable, of the Letter Agreement, shall prevail. Not later than 12:00 noon
(New York City time) on the applicable Purchase Date, the Agent shall have
received the Trust Receipt from the Custodian in accordance with Paragraph
9(b)(i) of the Letter Agreement. The Purchase Price with respect to such
Purchased Mortgage Loans shall be transferred to the applicable Sellers to the
account specified pursuant to Paragraph 17(a) not later than 4:00 p.m. (New York
City time) on such Purchase Date subject to the satisfaction of the conditions
precedent set forth herein and in the Letter Agreement.

(c) The termination of each Transaction will be effected on the Repurchase Date
set forth in the related Confirmation. Termination of each Transaction will be
effected by transfer to the applicable Sellers or their agents of the Purchased
Mortgage Loans against the transfer of the applicable Repurchase Price to the
Group Agents in accordance with the Letter Agreement.

(d) Each Confirmation shall include a calculation of the Market Value of the
Purchased Mortgage Loans and a Daily Market Value Report, in each case, after
giving effect to such Confirmation. On the Initial Purchase Date, the applicable
Sellers shall include with their Confirmation the Initial Loan Schedule. On each
subsequent Purchase Date, the applicable Sellers shall include with each
Confirmation a Supplemental Loan Schedule with respect to all of the Purchased
Mortgage Loans after giving effect to the subject Transaction. Each Seller shall
determine, in accordance with its standard policies and procedures, the Market
Value of each Purchased Mortgage Loan transferred by it and included (or to be
included) in such calculations and the related Loan Schedule, which Market
Values shall be determined as of the Business Day immediately preceding the date
on which such Confirmation is delivered and will provide promptly upon request
the data and assumptions for each such Purchased Mortgage Loan based on which
such Market Value was determined. Within three (3) Business Days after the date
on which Buyer receives a Confirmation or Daily Market Value Report, Buyer may
dispute a Seller’s or Servicer’s determination of Market Value by notifying such
Seller or Servicer of the discrepancy in writing. Each Seller or Servicer and
Buyer will make a good faith effort to resolve the discrepancy in the
calculation of Market Value. If the discrepancy is not resolved within five
(5) days in a manner reasonably satisfactory to Buyer, such Seller or Servicer,
as applicable, will be required to re-calculate the Market Value of the
Purchased Mortgage Loans using the market values proposed by a mutually
reasonably agreeable third party, or if such third party cannot be determined
within in such five (5) day period, using the market values proposed by Buyer.
Such recalculated Market Value shall be used in any reports delivered to the
Buyer, the Purchasers or the Custodian until the calculation of Market Value
dispute is resolved to the satisfaction of Buyer in a good faith, commercially
reasonable manner. Following the resolution of the dispute, such Seller or
Servicer, as applicable, will incorporate adjustments, if any, agreed to with
Buyer in future calculations of the Market Value.

 

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(e) The Sellers are jointly and severally obligated to pay the applicable
Repurchase Price and repurchase the related Purchased Mortgage Loans from Buyer
on the applicable Repurchase Date. The Sellers shall satisfy the Repurchase
Conditions with respect to each repurchase hereunder on or prior to the
Repurchase Date; provided that the failure to so satisfy any Repurchase
Condition shall not relieve the Sellers of their joint and several obligations
to pay the Repurchase Price on the applicable Repurchase Date with respect to
any Transaction hereunder. Each obligation to repurchase exists without regard
to any prior or intervening liquidation or foreclosure with respect to any
Purchased Mortgage Loan. The applicable Sellers may accelerate the Repurchase
Date with respect to any Transaction by written notice to the Agent and the
Group Agents, provided that the Repurchase Conditions have been satisfied as of
such accelerated Repurchase Date. Notwithstanding the satisfaction of the
Repurchase Conditions with respect to any repurchase, each Seller agrees that
(i) if the portion of any Repurchase Price received by any Group for such
repurchase is less than $500,000, the applicable Group Agent may elect to hold
all or a portion of such amount until it elects, in a commercially reasonable
manner, to apply such amounts to the repayment of the Promissory Notes or other
funds raised to fund the applicable Tranche (provided, however, that in the
event that the aggregate amount so held under this clause (i) is greater than or
equal to $500,000, such Group Agent shall be required to immediately apply such
amount) and (ii) the Sellers shall be jointly and severally liable to pay the
amounts required to be paid pursuant to Paragraph 7 of the Letter Agreement with
respect to any such amounts so held pursuant to clause (i).

(f) With respect to any Transaction, Buyer may conclusively rely upon, and shall
incur no liability to any Seller in acting upon, any request or other
communication that Buyer reasonably believes to have been given or made by any
Authorized Representative.

 

4. Margin Maintenance

(a) If on any Business Day the Net Collateral Value is less than the aggregate
Purchase Price for all outstanding Transactions at such time (a “Margin
Deficit”), then Sellers shall jointly and severally be required, to transfer to
Buyer no later than 2:30 p.m. (New York City time) on the following Business
Day, cash or additional Mortgage Loans (such additional Mortgage Loans being
referred to as “Additional Purchased Mortgage Loans”) so that the cash and Net
Collateral Value, including any such Additional Purchased Mortgage Loans, will
thereupon equal or exceed the aggregate Purchase Price for all outstanding
Transactions at such time (after re-calculating the Required Reserve Amount on
such additional Mortgage Loans or remaining Mortgage Loans). Any cash received
on such day shall be applied to reduce the Purchase Price in respect of the
Purchased Mortgage Loans on the next Business Day.

(b) If on any Business Day the Net Collateral Value exceeds the aggregate
Purchase Price for all outstanding Transactions at such time (a “Margin
Excess”), then Sellers may by notice to Buyer request that Buyer transfer cash
or Purchased Mortgage Loans to Sellers, so that the Net Collateral Value, after
deduction of any such cash or any Purchased Mortgage Loans so transferred, will
thereupon not exceed such aggregate Purchase Price. Any such request for Buyer
to transfer cash must be made in a minimum amount of $2,000,000 or an integral
multiple of $500,000 in excess thereof. Buyer’s obligation to transfer cash in
connection with any such request shall be subject to the satisfaction of the
applicable conditions precedent set forth in Section 9(b) of the Letter
Agreement, and Buyer’s obligation to transfer Purchased

 

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Mortgage Loans to Sellers in connection with any such request shall be subject
to satisfaction of the Repurchase Conditions. If Purchased Mortgage Loans are to
be transferred to one or more of the Sellers in connection with a Margin Excess,
then such Sellers may direct the Custodian to release such Purchased Mortgage
Loans in an amount not to exceed the applicable Margin Excess; provided, that,
all terms and conditions (including the Repurchase Conditions) set forth herein
and in the Letter Agreement with respect to such Transaction have been complied
with.

(c) To the extent there are funds on deposit in the Buyer’s Account on any day
after the application to and payment of all amounts then due and payable to the
Agent, the Group Agents and the Purchasers, then the Sellers may (or if Buyer
has exercised exclusive control of the Buyer’s Account, at the request of the
Sellers, Buyer shall) direct the Custodian to release such funds to the Sellers;
provided, that no funds shall be released unless after giving effect to such
release, all of the conditions set forth in clauses (ii) through (x) of
Paragraph 9(b) of the Letter Agreement shall be satisfied. Notwithstanding the
foregoing, in the event that amounts received into the Buyer’s Account cannot be
applied to or transferred for the payment of any amounts then due and payable to
the Agent, any Group Agent or any Purchaser because of the failure to satisfy
the Repurchase Conditions or for any other reason, then no funds on deposit in
the Buyer’s Account shall be released to any Seller until after such amounts can
be applied to or transferred for the payment of such amounts then due and
payable; provided that such funds shall be applied to or transferred for the
payment of such amounts on the earlier of: (i) the date on which the Repurchase
Conditions are satisfied, in the case of a repurchase of Purchased Mortgage
Loans and (ii) two (2) Business Days after such funds are received in the
Buyer’s Account.

(d) Any cash transferred pursuant to this Paragraph 4 shall be allocated pro
rata among the Purchase Prices for all of the outstanding Transactions.

(e) Each Seller agrees to calculate (or cause Servicer to calculate) the Market
Value of each Mortgage Loan to be transferred by it on the requested Purchase
Date and on each Business Day thereafter.

 

5. Collections

The Sellers shall cause the Collections to be managed and administered in
accordance with the provisions of the Letter Agreement. The Buyer may deliver a
“Notice of Exclusive Control” under, and as such term is defined in, the Account
Control Agreement at any time in its sole discretion.

 

6. Security Interest

Although the parties intend that all Transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to be
loans, each Seller shall be deemed to have pledged, and hereby does pledge, to
Buyer as security for the performance by all Sellers of their obligations under
each such Transaction, and all of their payment and performance obligations
under the Transaction Documents and shall be deemed to have granted, and hereby
does grant, to Buyer a security interest in, all of such Seller’s now existing
or hereafter acquired or arising right, title and interest in, to and under
(i) all of the Purchased

 

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Mortgage Loans with respect to all Transactions to which such Seller is a party
hereunder, (ii) all Mortgage Notes, Mortgages and Related Security related to
such Purchased Mortgage Loans, and (iii) all proceeds of the foregoing
(collectively, the “Purchased Assets”). Each Seller hereby authorizes Buyer to
file such financing statements relating to such Seller’s rights in the Purchased
Assets as Buyer may deem appropriate, and appoints Buyer as such Seller’s
attorney-in-fact in accordance with Paragraph 16 to (i) authenticate any such
financing statement or statements in such Seller’s name and (ii) take such other
actions as Buyer deems necessary or appropriate to perfect and continue the lien
and security interest granted hereby and to protect, preserve and realize upon
the Purchased Assets. Sellers shall pay all fees and expenses associated with
perfecting such security interest including, without limitation, the cost of
filing financing statements under the Uniform Commercial Code and recording
assignments of mortgage as and when required by Buyer in its sole discretion.
This Agreement shall constitute a security agreement, and Buyer shall have all
of the rights of a secured party under applicable law and each of Sellers and
Buyer represents and warrants as to itself that each remittance of amounts by a
Seller to Buyer or a Purchaser under this Agreement or the Letter Agreement will
have been (x) in payment of a debt incurred by such Seller in the ordinary
course of business or financial affairs of such Seller and the Purchasers and
(y) made in the ordinary course of business or financial affairs of such Seller
and the Purchasers.

 

7. Payment and Transfer

Unless otherwise mutually agreed, all transfers of funds hereunder shall be in
immediately available funds.

 

8. Segregation of Documents Relating to Purchased Mortgage Loans

All documents relating to Purchased Mortgage Loans in the possession of a Seller
shall be segregated from other documents and securities in its possession and
shall be identified as being subject to this Agreement. Segregation may be
accomplished by appropriate identification on the books and records of the
holder, including a financial or securities intermediary or a clearing
corporation. Each Seller shall mark its master data processing records to
indicate which of the Mortgage Loans constitute Purchased Mortgage Loans. The
parties acknowledge that the Loan Documents will be held by the Custodian in
accordance with the Custodial Agreement, and that certain other documents
relating to the Purchased Mortgage Loans will be held by the Servicer in
accordance with Sellers’ practices and procedures, and that none of such
documents shall be deemed “in the possession of Seller” for purposes of this
Paragraph 8. All of the applicable Seller’s interest in the applicable Purchased
Mortgage Loans shall pass to Buyer on the related Purchase Date and nothing in
this Agreement shall preclude Buyer from engaging in repurchase transactions
with the Purchased Mortgage Loans or otherwise selling, transferring, pledging
or hypothecating the Purchased Mortgage Loans, but no such transaction shall
relieve Buyer of its obligations to transfer the Purchased Mortgage Loans to the
applicable Seller pursuant to Paragraph 3 or 4 hereof.

 

9. Substitution

Each Seller may substitute other Mortgage Loans for Purchased Mortgage Loans
transferred by it hereunder. Each such substitution shall be deemed a Repurchase
of the

 

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Purchased Mortgage Loans to be transferred to such Seller in connection with
such substitution and subject to satisfaction of the Repurchase Conditions. Each
such substitution shall be made by transfer to Buyer of such other Mortgage
Loans and transfer to such Seller of such Purchased Mortgage Loans. After
substitution, the substituted Mortgage Loans shall be deemed to be Purchased
Mortgage Loans.

 

10. Representations and Warranties

On the date hereof, each Seller makes each of the representations and warranties
set forth in the Letter Agreement and on the Purchase Date for any Transaction,
each Seller shall be deemed to repeat all of the representations and warranties
made by it in the Letter Agreement.

 

11. Events of Default

(a) Each of the following events shall, upon the occurrence and continuance
thereof, be an “Event of Default”:

(i)(a) any Seller shall fail to repurchase any Mortgage Loan that is required to
be repurchased under the Transaction Documents and such failure shall remain
unremedied for one (1) Business Day; (b) any Seller shall fail to make any
payment of Price Differential or Fees owed to any Purchaser, Group Agent or the
Agent on the date such payment is due and such failure shall remain unremedied
for one (1) Business Day; (c) any Seller shall fail to make any other payment
when due, of any fee, expense or other amount due hereunder, or under any other
Transaction Document if such failure is not cured within five (5) calendar days
of the due date of such payment or if such fee, expense or other amount due does
not have a due date, within five (5) calendar days after the written request by
any Purchaser, Group Agent or the Agent of such payment; or (d) the Servicer
shall fail to make any payment or deposit to be made by it under any Transaction
Document when due if such failure is not cured within five (5) calendar days of
the due date of such payment or deposit, or if such amount due under such
Transaction Document does not have a due date, within five (5) calendar days
after the written request by any Purchaser, Group Agent or the Agent of such
payment or deposit; or

(ii) any Seller fails to keep or perform any covenant or material obligations
contained in this Agreement (other than as referred to in Paragraph 11(a)(i))
and such failure continues unremedied beyond the expiration of any applicable
grace or notice period that may be expressly provided for in such covenant or
material obligations; or

(iii) any Seller, the Servicer or either Performance Guarantor defaults in the
due observance or performance of any of the covenants or agreements contained in
any Transaction Document other than this Agreement, and (unless such default
otherwise constitutes an Incipient Event of Default or an Event of Default
pursuant to other provisions of this Paragraph 11(a)) such default continues
unremedied beyond the expiration of any applicable grace or notice period that
may be expressly provided for in such Transaction Document; or

 

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(iv) any warranty or representation by or on behalf of any Seller, the Servicer
or either Performance Guarantor contained in this Agreement or any other
Transaction Document or any statement, warranty or representation in any Daily
Market Value Report, Monthly Report, officer’s certificate or other writing
furnished in connection with this Agreement, proves to have been incorrect or
misleading in any material respect as of the date made or deemed made; provided,
that, this shall not include representations or warranties with respect to
specific Mortgage Loans, including but not limited to Mortgage Loan-level
representations or warranties unless such incorrect statements are made
knowingly or intentionally; or

(v)(a) any Seller, the Servicer or either Performance Guarantor fails to make
when due or within any applicable grace period any payment on any Indebtedness
with an unpaid principal balance of over $1,500,000; or (b) any event or
condition occurs under any provision contained in any such obligation or any
agreement securing or relating to such obligation (or any other breach or
default under such obligation or agreement occurs) if the effect thereof is to
cause or permit with the giving of notice or lapse of time or both the holder or
trustee of such obligation to cause such obligation to become due prior to its
stated maturity; or (c) any such obligation becomes due (other than by regularly
scheduled payments) prior to its stated maturity; or (d) regarding each of the
Sellers, the Performance Guarantors or the Servicer any of the foregoing occurs
with respect to any one or more items of Indebtedness with unpaid principal
balances exceeding, in the aggregate, $1,500,000 with respect to each of the
Sellers, either Performance Guarantor and the Servicer; or

(vi) any Seller, the Servicer or either Performance Guarantor generally shall
not pay its debts as they become due or shall admit in writing its inability to
pay its debts, or shall make a general assignment for the benefit of creditors;
or

(vii) any Seller, the Servicer or either Performance Guarantor shall (a) apply
for or consent to the appointment of a receiver, trustee, custodian, intervenor
or liquidator of it or of all or a substantial part of its assets, (b) file a
voluntary petition in bankruptcy, (c) file a petition or answer seeking
reorganization or an arrangement with creditors or to take advantage of any
Debtor Laws, (d) file an answer admitting the allegations of, or consent to, or
default in answering, a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding, or (e) take action for the purpose of
effecting any of the foregoing; or

(viii) an involuntary petition or complaint shall be filed against any Seller,
the Servicer or either Performance Guarantor seeking bankruptcy or
reorganization of any of the Sellers, the Servicer, or the Performance
Guarantors or the appointment of a receiver, custodian, trustee, intervenor or
liquidator of any Seller, the Servicer or either Performance Guarantor, all or
substantially all of the assets of any of the Sellers, the Servicer, or the
Performance Guarantors; or an order, order for relief, judgment or decree shall
be entered by any court of competent jurisdiction or other competent authority
approving a petition or complaint seeking reorganization of any Seller, the
Servicer or either Performance Guarantor or appointing a receiver, custodian,
trustee, intervenor or liquidator of any Seller, the Servicer or either
Performance Guarantor, or of all or substantially all of the assets of any
Seller, the Servicer or either Performance Guarantor; or

 

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(ix) any Seller, the Servicer or either Performance Guarantor shall fail within
thirty (30) days to pay, bond or otherwise discharge any final judgment or order
(or judgments or orders) for payment of money in excess of $5,000,000 (singly or
in the aggregate); or

(x) any Person shall levy on, seize or attach all or any material portion of the
assets of any Seller, the Servicer or either Performance Guarantor and within
thirty (30) days thereafter such Seller, the Servicer or either Performance
Guarantor shall not have dissolved such levy or attachment, as the case may be,
and, if applicable, regained possession of such seized assets; or

(xi) an event or condition specified in Paragraph 10(w) of the Letter Agreement
shall occur or exist; or

(xii) any of the applicable Sellers or the Servicer becomes ineligible to
originate, sell or service Mortgage Loans to FNMA, FHLMC or GNMA, or FNMA, FHLMC
or GNMA shall impose any sanctions upon or terminate or revoke any rights of the
Servicer or any of the applicable Sellers; or

(xiii)(x) any Governmental Authority cancels any Seller’s or the Servicer’s
right to be either a seller or servicer of such Governmental Authority’s insured
or guaranteed Mortgage Loans or mortgage-backed securities, or (y) any Seller or
the Servicer receives notice from a Governmental Authority that such
Governmental Authority intends to revoke such Seller’s or Servicer’s right to be
a seller or servicer of such Governmental Authority’s insured or guaranteed
Mortgage Loans or mortgaged-backed securities and such notice is not withdrawn
within ten (10) days of the receipt thereof; or

(xiv) failure of any Seller or the Servicer to correct an imbalance in any
escrow account established with such Seller or Servicer as either an originator,
purchaser or servicer of Mortgage Loans, which imbalance may have a Material
Adverse Effect, within two (2) Business Days after demand by any beneficiary of
such account or by Buyer; or

(xv) failure of any of the Sellers or the Servicer, to meet, at all times, the
minimum net worth requirements of FNMA, FHLMC, or GNMA as an originator, seller
or servicer, as applicable to the extent such Person is required to satisfy such
requirements; or

(xvi) any material provision of this Agreement or any other Transaction Document
shall for any reason cease to be in full force and effect, or be declared null
and void or unenforceable in whole or in part; or the validity or enforceability
of any such document shall be challenged or denied; or

 

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(xvii) a “change in control,” with respect to the ownership of AHMIC shall have
occurred after the date hereof (and as used in this subparagraph, the term
“change in control” shall mean an acquisition by any Person, partnership or
group, as defined under the Securities Exchange Act of 1934, as amended, of a
direct or indirect beneficial ownership of 10% or more of the then-outstanding
voting stock of either Performance Guarantor); or AHMIC shall cease at any time
to own directly or indirectly 100% of the stock of each Seller (other than
itself) and the Servicer; or

(xviii) there shall have occurred any event that could be reasonably expected to
have a Material Adverse Effect on the enforceability or collectability of any
significant portion of the Purchased Mortgage Loans (provided that to the extent
such event gives rise to an obligation by the Sellers to repurchase any Mortgage
Loans pursuant to this Agreement and the Sellers do so repurchase in accordance
with the provisions of the this Agreement, no Event of Default shall occur under
this Paragraph 11(a)(xviii)) or there shall have occurred any other event that
could be reasonably expected to have a Material Adverse Effect on the ability of
any Seller or the Servicer to collect a significant portion of Mortgage Loans or
the ability of the Sellers or the Servicer to perform hereunder or a Material
Adverse Effect has occurred in the financial condition or business of the
Sellers since inception or the Servicer since September 30, 2006; or

(xix)(a) any litigation (including, without limitation, derivative actions),
arbitration proceedings or governmental proceedings not disclosed in writing by
any Seller to the Purchasers, Buyer and the Group Agents prior to the date of
execution and delivery of this Agreement is pending against any Seller or the
Servicer or any Affiliate thereof, or (b) any development not so disclosed has
occurred in any litigation (including, without limitation, derivative actions),
arbitration proceedings or governmental proceedings so disclosed, which, in the
case of either clause (a) and/or (b), in the reasonable, good faith opinion of
the Required Group Agents, could reasonably be expected to have a Material
Adverse Effect on any Seller, the Servicer or either Performance Guarantor; or

(xx) the Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the IRC with regard to any of the assets of any Seller or the
Servicer and such lien shall not have been released within 30 days, or the PBGC
shall, or shall indicate its intention to, file notice of a lien pursuant to
Section 4068 of ERISA with regard to any of the assets of any Seller or the
Servicer; or

(xxi) there shall exist a Margin Deficit that has not been cured within the time
period set forth in Paragraph 4; or

(xxii) a successor Custodian shall not have been appointed and accepted such
appointment within 180 days after the retiring Custodian shall have given
written notice of resignation pursuant to Section 4.4 of the Custodial
Agreement; or

 

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(xxiii) Buyer shall cease to have a valid and perfected first priority security
interest in the Mortgage Loans and the other Purchased Assets for the benefit of
the Purchasers; or

(xxiv) either (i) AHMS’s Tangible Net Worth shall be less than $30,000,000 or
(ii) AHMS’s Tangible Net Worth, combined with the Tangible Net Worth of AHM and
AHMA shall be less than $147,000,000; or

(xxv) any Seller or Servicer shall fail to deliver to Buyer a Daily Market Value
Report, a Loan Schedule or a Monthly Report on the day on which the same shall
be required to be delivered and such failure shall continue for two (2) Business
Days for a Daily Market Value Report or a Loan Schedule or five (5) Business
Days for a Monthly Report; or

(xxvi) any Seller shall become subject to registration as an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended.

(b) If any Event of Default occurs, all Sellers shall be deemed the defaulting
party with respect to any Event of Default. If an Event of Default shall have
occurred and be continuing then, Buyer may, at its option by written notice to
the Sellers, (i) declare the Repurchase Date for each Transaction hereunder, if
it has not already occurred, to be deemed immediately to occur (except that, in
the event that the Purchase Date for any Transaction has not yet occurred as of
the date of such exercise, such Transaction shall be deemed immediately
canceled), (ii) replace the Servicer in accordance with the Letter Agreement and
(iii) direct or cause the Servicer or Sellers to direct, all Mortgagors to remit
all Collections to an account specified by Buyer.

(c) If Buyer exercises the option referred to in subparagraph (b)(i) of this
Paragraph 11, (i) the Sellers’ joint and several obligations hereunder to
repurchase all Purchased Mortgage Loans in such Transactions at the Repurchase
Price therefor on the Repurchase Date determined in accordance with subparagraph
(b)(i) of this Paragraph, shall thereupon become immediately due and payable,
(ii) all Collections paid or collected after such exercise shall be payable to
and retained by Buyer and shall be applied to the aggregate unpaid Repurchase
Price, Price Differential and any other amounts owing by Sellers hereunder and
under the other Transaction Documents, (iii) Sellers shall, if directed by Buyer
in writing, immediately deliver or cause the Custodian or the Servicer to
deliver to Buyer any documents then in any Seller’s, Servicer’s or the
Custodian’s possession relating to Purchased Mortgage Loans subject to such
Transactions, including all Loan Documents and Mortgage Notes (if and to the
extent not repurchased pursuant to (i) above) and (iv) Buyer may, by notice to
Sellers, declare the Termination Date to have occurred.

(d) If Buyer exercises the option referred to in subparagraph (b)(i) of this
Paragraph 11, then, Buyer may, without prior notice to Sellers, (i) immediately
sell on a servicing released or servicing retained basis as Buyer deems
desirable, in a recognized market at such price or prices as Buyer may in its
sole commercially reasonable discretion deem satisfactory, any or all Purchased
Mortgage Loans subject to such Transactions and apply the

 

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proceeds thereof to the aggregate unpaid Repurchase Prices, Price Differential
and any other amounts owing by Sellers hereunder or under any other Transaction
Document or (ii) in its sole commercially reasonable discretion elect, in lieu
of selling all or a portion of such Purchased Mortgage Loans, to give Sellers
credit for such Purchased Mortgage Loans in an amount equal to the price
therefor on such date, obtained from a generally recognized source or the most
recent closing bid quotation from such a source, against the aggregate unpaid
Repurchase Prices and any other amounts owing by Sellers hereunder. The proceeds
of any such disposition shall be applied first to the reasonable costs and
expenses incurred by Buyer in connection with or as a result of an Event of
Default; second to all Breakage Costs, costs of cover and/or related hedging
transactions; third, to the aggregate and accrued Price Differential owed
hereunder, fourth to the remaining aggregate Repurchase Prices owed hereunder
and fifth, to any other accrued and unpaid obligations of Sellers hereunder and
under the other Transaction Documents, and any remaining funds shall be promptly
returned to Sellers. Additionally, the parties hereto agree that (i) Buyer may,
at its option, by notice to the defaulting party, terminate the applicable
Seller’s obligation to provide future Mortgagor Advances pursuant to the related
Mortgage Contracts with respect to each Mortgage Loan, (ii) at its option, Buyer
shall have the right (but not the obligation) to make any future Mortgagor
Advances under the related Mortgage Contracts with respect to the Mortgage Loans
and (iii) in connection with any sale of any Mortgage Loan, all rights and
obligations of the related Seller with respect to such Mortgage Loan shall be
sold with such Mortgage Loan (including, without limitation, the right to fund
Mortgagor Advances and all rights and obligations under the Mortgage Contracts).

(e) The parties acknowledge and agree that (1) the Purchased Mortgage Loans
subject to any Transaction hereunder are instruments traded in a recognized
market, (2) in the absence of a generally recognized source for prices or bid or
offer quotations for any Purchased Mortgage Loans, Buyer may establish the
source therefor in its sole commercially reasonable discretion and (3) all
prices, bids and offers shall be determined together with accrued interest
(except to the extent contrary to market practice with respect to the relevant
Purchased Mortgage Loans). The parties further recognize that it may not be
possible to purchase or sell all of the Purchased Mortgage Loans on a particular
Business Day, or in a transaction with the same purchaser, or in the same manner
because the market for such Purchased Mortgage Loans may not be liquid at such
time. In view of the nature of the Purchased Mortgage Loans, the parties agree
that liquidation of a Transaction or the underlying Purchased Mortgage Loans
does not require a public purchase or sale and that a good faith private
purchase or sale shall not be deemed to have been made in a commercially
unreasonable manner solely as a result of there not being a public sale.
Accordingly, Buyer may elect the time and manner of liquidating any Purchased
Mortgage Loan and nothing contained herein shall obligate Buyer to liquidate any
Purchased Mortgage Loan on the occurrence of an Event of Default or to liquidate
all Purchased Mortgage Loans in the same manner or on the same Business Day and
no such exercise of any right or remedy shall constitute a waiver of any other
right or remedy of Buyer.

(f) In addition to the foregoing, the Sellers shall be jointly and severally
liable to Buyer for (i) the amount of all reasonable legal or other expenses
incurred by Buyer in connection with or as a result of an Event of Default,
(ii) damages in an amount equal to the cost (including all fees, expenses and
commissions determined in good faith) of entering into replacement transactions
and entering into or terminating hedge transactions in connection with or as a
result of an Event of Default and (iii) any other loss, damage, cost or expense
directly arising or resulting from the occurrence of an Event of Default in
respect of a Transaction.

 

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(g) To the extent permitted by applicable law, the Sellers shall be jointly and
severally liable to Buyer for interest on any amounts owing by the Sellers
hereunder, from the date any Seller becomes liable for such amounts hereunder
until such amounts are (i) paid in full by or on behalf of such Seller or
(ii) satisfied in full by the exercise of Buyer’s rights hereunder. Interest on
any sum payable by the Sellers to Buyer under this Paragraph 11 shall be at a
rate equal to the greater of the Pricing Rate for the relevant Transaction and
the Default Rate.

(h) If an Event of Default occurs, Buyer shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other agreement
entered into in connection with the Transactions contemplated by this Agreement
or applicable law.

(i) The exercise by Buyer of remedies and the application of all of the
provisions of this Paragraph 11 after the occurrence of an Event of Default
shall be conducted in good faith and in a commercially reasonable manner.

 

12. Servicing of the Purchased Mortgage Loans

(a) The parties hereto agree and acknowledge that, notwithstanding the purchase
and sale of the Purchased Mortgage Loans contemplated hereby, Sellers shall
cause the Purchased Mortgage Loans to be serviced by the Servicer in accordance
with Accepted Servicing Practices for the benefit of each Seller and its
assigns; provided, however, that the obligation of each Seller to cause the
servicing of any Purchased Mortgage Loans for the benefit of Buyer as aforesaid
shall cease upon the payment to Buyer of the Repurchase Price therefor.

(b) Sellers shall cause the Purchased Mortgage Loans to be serviced and
administered and shall have full power and authority, acting alone, to cause the
Servicer to do any and all things in connection with such servicing which
Sellers may deem necessary or desirable and consistent with the terms of this
Agreement and Paragraph 13 of the Letter Agreement, and may, subject to the
other terms hereof, retain all principal prepayments and other Collections
received by Sellers with respect to such Purchased Mortgage Loans pursuant to
the terms hereof. Sellers, in performing the aforementioned duties, shall employ
procedures (including collection procedures) and shall cause the Servicer to
exercise the same care it customarily employs and exercises in servicing and
administering construction mortgage loans for its own account, in accordance
with Accepted Servicing Practices.

(c) Buyer may, in its sole discretion if an Event of Default shall have occurred
and be continuing, (i) direct the Custodian to deliver all Loan Documents to
Buyer or Buyer’s designee and (ii) terminate the Servicer as servicer with
respect to any Purchased Assets, in each case at the cost and expense of
Sellers.

 

13. Single Agreement

Buyer and each Seller acknowledge that, and have entered hereinto and will enter
into each Transaction hereunder in consideration of and in reliance upon the
fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been

 

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made in consideration of each other. Accordingly, Buyer and each Seller agrees
(i) to perform all of its obligations in respect of each Transaction hereunder,
and that a default in the performance of any such obligations by any Seller
shall constitute a default in respect of all Transactions hereunder, (ii) that
each of Buyer (together with the Purchasers), on the one hand, and the Sellers,
on the other hand, shall be entitled to set off claims and apply property held
by them in respect of any Transaction against obligations owing to them in
respect of any other Transactions hereunder (including, with respect to Buyer’s
such right, to set off or net claims against the property of any Seller
regardless of which Seller’s obligations are outstanding) and (iii) that
payments, deliveries and other transfers made by Buyer or any Purchaser, on the
one hand, and any Seller, on the other hand, in respect of any Transaction shall
be deemed to have been made in consideration of payments, deliveries and other
transfers in respect of any other Transactions hereunder, and the obligations to
make any such payments, deliveries and other transfers may be applied against
each other and netted (including, with respect to Buyer’s such right, to set off
or net claims against the property of any Seller regardless of which Seller’s
obligations are outstanding).

 

14. Notices and Other Communications

Except as otherwise expressly provided herein, all notices, statements, demands
or other communications required or permitted under this Agreement shall be in
writing (including, without limitation, overnight courier, electronic mail or
facsimile communication). Such notices shall be effective upon receipt, or in
the case of overnight courier, two (2) days after being deposited with such
courier, or, in the case of notice by facsimile, when electronic confirmation of
receipt is obtained, in each case if addressed to the applicable party at the
address specified below (or as to any party to such other address as shall be
subsequently designated by such party in a written notice to the other party
hereto):

if to AHMA:

American Home Mortgage Acceptance, Inc.

538 Broadhollow Road

Melville, New York, 11747

Attention: General Counsel

Facsimile: (800) 209-7276

Telephone Confirmation: (516) 396-7703

if to AHM:

American Home Mortgage Corp.

538 Broadhollow Road

Melville, New York 11747

Attention: General Counsel

Facsimile: (800) 209-7276

Telephone Confirmation: (516) 396-7703

 

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if to AHMIC:

American Home Mortgage Investment Corp.

538 Broadhollow Road

Melville, New York, 11747

Attention: General Counsel

Facsimile: (800) 209-7276

Telephone Confirmation: (516) 396-7703

if to AHMS:

American Home Mortgage Servicing, Inc.

538 Broadhollow Road

Melville, New York, 11747

Attention: General Counsel

Facsimile: (800) 209-7276

Telephone Confirmation: (516) 396-7703

if to Buyer:

ABN AMRO Bank N.V.

540 West Madison Street

Chicago, Illinois 60661 Attention: Therese Gremley

Facsimile: (312) 992-1527

E-mail Address: therese.gremley@abnamro.com

Telephone Confirmation: (312) 904-6263

 

15. Payment of Expenses; Indemnity

(a) The Sellers agree jointly and severally to pay reasonably promptly following
demand all reasonable out-of-pocket costs and expenses of Buyer, the Group
Agents and the Purchasers in connection with the preparation, execution,
delivery, modification, administration, amendment and enforcement of the
Transaction Documents (including, without limitation, (i) all collateral review
and UCC search and filing expenses; (ii) the reasonable fees and expenses of
counsel, in connection with the preparation, execution and delivery of this
Agreement and the other Transaction Documents; (iii) all initial and periodic
audit costs (subject to the limitations set forth in Paragraph 11(h) of the
Letter Agreement), (iv) all rating agency fees, and (v) the reasonable fees and
expenses of counsel for Buyer, the Group Agents and the Purchasers with respect
to advising it in connection with (A) the post-closing administration of this
Agreement or of the other Transaction Documents; (B) any amendment, modification
or waiver hereof or thereof; and (C) enforcement of any rights or remedies of
Buyer, the Group Agents or the Purchasers hereunder or thereunder, whether in
any action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding, including presenting claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding and any
proceeds ancillary thereto. The obligation of Sellers jointly and severally to
pay such fees and expenses incurred prior to or in connection with the
termination of this Agreement shall survive the termination of this Agreement.

 

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(b) In addition to the foregoing, the Sellers hereby agree, jointly and
severally, to indemnify and hold harmless each of the Buyer, the Group Agents,
the Purchasers, any Affected Party, their respective successors, transferees,
participants and assigns and all affiliates, officers, directors, shareholders,
controlling persons, employees and agents of any of the foregoing (collectively,
the “Indemnified Parties”) forthwith on demand, from and against any and all
damages, losses, claims, liabilities and related reasonable costs and expenses,
including attorneys’ fees and disbursements (all of the foregoing being
collectively referred to as “Indemnified Amounts”) awarded against or incurred
by any of them arising out of or relating to this Agreement or the exercise or
performance of any of its or their powers or duties, in respect of any Mortgage
Loan, or related to its or their possession of, or dealings with, the Purchased
Assets, excluding, however, any Indemnified Amounts resulting from gross
negligence, willful misconduct, or unlawful collection activity directed against
a Seller under a mortgage loan included in the Purchased Assets on the part of
such Indemnified Party.

(c) If for any reason the indemnification provided in Paragraph 15(b) above is
unavailable to an Indemnified Party or is insufficient to hold an Indemnified
Party harmless, then the Sellers shall jointly and severally contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by such Indemnified Party on the one hand
and Sellers on the other hand but also the relative fault of such Indemnified
Party as well as any other relevant equitable considerations. Each party hereto
agrees that it shall not assert any claim against any Indemnified Party for, and
no Indemnified Party will have any liability for, special, indirect,
consequential or punitive damages in connection with the Transaction Documents,
or the Transactions contemplated hereby.

 

16. Buyer as Attorney-in-Fact

Buyer is hereby appointed on the date hereof the attorney-in-fact of each Seller
for the purpose, following and during the continuance of an Event of Default, of
carrying out the provisions of this Agreement and taking any action and
executing any instruments that Buyer may, in good faith, deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, each Seller authorizes the Buyer to take any
and all steps in such Seller’s name and on behalf of such Seller that are
necessary or desirable, in the determination of the Buyer, to collect amounts
due under the Purchased Assets, including, without limitation, to have the right
and power, as of the date hereof, to be exercised only following and during the
continuance of an Event of Default (i) to endorse notes, checks, or instruments
and complete blanks in documents, (ii) to execute any financing statements and
assignments of mortgages on behalf of such Seller, (iii) to receive, endorse and
collect all checks made payable to the order of such Seller representing any
payment on account of the principal of or interest on any of the Purchased
Mortgage Loans and to give full discharge for the same, and (iv) to enforce the
Purchased Assets and the other related rights.

 

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17. Wire Instructions

(a) Any amounts to be transferred by Buyer to any Seller hereunder shall be sent
by wire transfer in immediately available funds to the account of Sellers set
forth below, or at such other account as directed in writing to Buyer by the
Sellers.

Bank: Deutsche Bank Trust Company Americas

Account Name: American Home Mortgage

Acct. No.: 00-380-082

ABA No. 021-001-033

(b) Any amounts to be transferred by any Seller to Buyer hereunder shall be sent
by wire transfer in immediately available funds to the account of Buyer set
forth below, or at such other account as directed in writing to Sellers by
Buyer.

Bank: ABN AMRO Bank

New York, New York

Account Name: Amsterdam Funding Corp.

Acct. No.: 671042302550

ABA No. 026 0095 80

(c) Amounts received after 2:30 p.m., New York City time, on any Business Day
shall be deemed to have been paid and received on the next succeeding Business
Day.

 

18. Entire Agreement; Severability

This Agreement, as supplemented by the Letter Agreement, shall supersede any
existing agreements between the parties containing general terms and conditions
for repurchase transactions. Each provision and agreement herein shall be
treated as separate and independent from any other provision or agreement herein
and shall be enforceable notwithstanding the unenforceability of any such other
provision or agreement.

 

19. Non assignability; Termination

(a) No Seller’s rights and obligations under this Agreement or under any
Transaction shall be assigned by such Seller without the prior written consent
of Buyer and any such assignment without the prior written consent of Buyer
shall be null and void. Buyer and the Purchasers may assign their rights and
obligations hereunder as set forth in the Letter Agreement. Subject to the
foregoing, this Agreement and any Transactions shall be binding upon and shall
inure to the benefit of the parties and their respective successors and assigns.

(b) Subparagraph (a) of this Paragraph 19 shall not preclude a party from
assigning, charging or otherwise dealing with all or any part of its interest in
any sum payable to it under Paragraph 11 hereof.

 

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20. Counterparts

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

 

21. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW
YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN
THIS PARAGRAPH 21 SHALL AFFECT THE RIGHT OF BUYER TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY SELLER OR ITS PROPERTY IN THE COURTS OF OTHER
JURISDICTIONS. EACH PARTY HERETO CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO IT
AT ITS ADDRESS FOR NOTICES HEREUNDER SPECIFIED IN PARAGRAPH 14.

(b) EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE AMONG ANY
OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE
RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS.

 

22. No Waivers, Etc.

No express or implied waiver of any Event of Default by Buyer shall constitute a
waiver of any other Event of Default and no exercise of any remedy hereunder by
Buyer shall constitute a waiver of its right to exercise any other remedy
hereunder. No modification or waiver of any provision of this Agreement and no
consent by any party to a departure herefrom shall be effective unless and until
such shall be in writing and duly executed by both of the parties hereto.

 

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23. Use of Employee Plan Assets

(a) If assets of an employee benefit plan subject to any provision of ERISA are
intended to be used by either party hereto (the “Plan Party”) in a Transaction,
the Plan Party shall so notify the other party prior to the Transaction. The
Plan Party shall represent in writing to the other party that the Transaction
does not constitute a prohibited transaction under ERISA or is otherwise exempt
therefrom, and the other party may proceed in reliance thereon but shall not be
required so to proceed.

(b) Subject to the last sentence of subparagraph (a) of this Paragraph, any such
Transaction shall proceed only if the Plan Party furnishes or has furnished to
the other party its most recent available audited statement of its financial
condition and its most recent subsequent unaudited statement of its financial
condition.

(c) By entering into a Transaction pursuant to this Paragraph, any Plan Party
shall be deemed (i) to represent to the other party that, since the date of such
Plan Party’s latest such financial statements, there has been no material
adverse change in such Plan Party’s financial condition which such Plan Party
has not disclosed to the other party, and (ii) to agree to provide with respect
to any outstanding Transaction the other party with future audited and unaudited
statements of its financial condition as they are issued, so long as it is a
Plan Party.

 

24. Intent

(a) The parties hereto intend and acknowledge that each Transaction is a
“repurchase agreement” as that term is defined in Section 101 of the Bankruptcy
Code (except insofar as the term of such Transaction would render such
definition inapplicable), and a “securities contract” as that term is defined in
Section 741 the Bankruptcy Code.

(b) The parties hereto understand that their right to accelerate or terminate
this Agreement or to liquidate Mortgage Loans delivered to it in connection with
Transactions hereunder or to exercise any other remedies pursuant to Paragraph
11 hereof, is a contractual right to accelerate, terminate or liquidate this
Agreement or such Transaction as described in Sections 555 and 559 of the
Bankruptcy Code.

(c) The parties hereto agree and acknowledge that if a party hereto is an
“insured depository institution,” as such term is defined in the FDIA, then each
Transaction hereunder is a “qualified financial contract,” as that term is
defined in the FDIA and any rules, orders or policy statements thereunder
(except insofar as the type of assets subject to such Transaction would render
such definition inapplicable).

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

 

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(e) It is understood and agreed that this Agreement constitutes a “master
netting agreement “ as that term is defined in Section 101 of the Bankruptcy
Code, and that any party’s right to cause the termination, liquidation, or
acceleration of, or to offset net termination values, payment amounts or other
transfer obligations arising under or in connection with, this Agreement or any
Transaction is a contractual right to cause the termination, liquidation, or
acceleration of, or to offset net termination values, payment amounts or other
transfer obligations arising under or in connection with, this Agreement, any
Transaction Document or any Transaction as described in Section 561 of the
Bankruptcy Code.

(f) It is understood and agreed that any cash, securities or other property held
by, pledged to, under the control of, or due from Buyer to any Seller pursuant
to this Agreement or the Letter Agreement (including, without limitation,
proceeds from the liquidation of Purchased Mortgage Loans in connection with the
exercise of Buyer’s remedies hereunder upon an Event of Default) and any other
transfers of cash or other property to Buyer pursuant to this Agreement or any
other Transaction Document, in each case when so transferred, applied, setoff or
paid, shall constitute “settlement payments” (as defined in Bankruptcy Code
Section 741(8)) or “margin payments” (as defined in Bankruptcy Code
Section 101(38)).

 

25. Disclosure Relating to Certain Federal Protections

The parties hereto acknowledge that they have been advised that:

(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission (“SEC”) under
Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to any Transaction hereunder;

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

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

 

26. Contribution with Respect to Seller Obligations.

(a) To the extent that any Seller shall make a payment under this Agreement, the
Letter Agreement or any other Transaction Document (a “Seller Payment”) which,
taking into account all other Seller Payments then previously or concurrently
made by any other Seller, exceeds the amount which otherwise would have been
paid by or attributable to such Seller if each Seller had paid the aggregate
obligations of the Sellers hereunder and under the other Transaction Documents
(collectively, the “Seller Obligations”) satisfied by such Seller Payment in the
same proportion as such Seller’s “Allocable Amount” (as defined below) (as
determined immediately prior to such Seller Payment) bore to the aggregate
Allocable Amounts of each of

 

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the Sellers as determined immediately prior to the making of such Seller
Payment, then, following payment in full in cash of the Seller Payment and the
Seller Obligations, and the termination or expiration of all Commitments under
the Letter Agreement, such Seller shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Seller for the
amount of such excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Seller Payment.

(b) As of any date of determination, the “Allocable Amount” of any Seller shall
be equal to the maximum amount of the claim which could then be recovered from
such Seller under this Agreement and the other Transaction Documents without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

(c) This Paragraph 26 is intended only to define the relative rights of the
Sellers, and nothing set forth in this Paragraph 26 is intended to or shall
impair the obligations of the Sellers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement and the other Transaction Documents. The parties hereto
acknowledge that the rights of contribution and indemnification hereunder shall
constitute assets of the Seller or Sellers to which such contribution and
indemnification is owing. The rights of the indemnifying Sellers against other
Sellers under this Paragraph 26 shall be exercisable upon the full and
indefeasible payment of the Seller Obligations in cash and the termination or
expiry of the Commitments under the Letter Agreement.

[signature pages follow]

 

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AMERICAN HOME MORTGAGEACCEPTANCE, INC.,

as a Seller

By:  

/s/ Alan B. Horn

Name:   Alan B. Horn Title:   Executive Vice President General Counsel &
Secretary AMERICAN HOME MORTGAGE CORP., as a Seller By:  

/s/ Alan B. Horn

Name:   Alan B. Horn Title:   Executive Vice President General Counsel &
Secretary

 

AMERICAN HOME MORTGAGE INVESTMENT CORP., as a Seller By:  

/s/ Alan B. Horn

Name:   Alan B. Horn Title:   Executive Vice President General Counsel &
Secretary AMERICAN HOME MORTGAGE SERVICING, INC., as a Seller By:  

/s/ Alan B. Horn

Name:   Alan B. Horn Title:   Executive Vice President General Counsel &
Secretary

Signature Page to

Master Repurchase Agreement

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ABN AMRO BANK N.V. in its capacity as Agent, as Buyer By:  

/s/ Kevin J. Hayes

Name:   Kevin J. Hayes Title:   Director By:  

/s/ Therese Gremley

Name:   Therese Gremley Title:   Vice President

Signature Page to

Master Repurchase Agreement

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ANNEX I

BUYER ACTING AS AGENT

This Annex I forms a part of the Master Repurchase Agreement dated as of
February 28, 2007 (the “Agreement”) among American Home Mortgage Acceptance,
Inc., American Home Mortgage Corp., American Home Mortgage Investment Corp.,
American Home Mortgage Servicing, Inc. and ABN AMRO Bank N.V. (“ABN AMRO”). The
parties acknowledge that ABN AMRO is entering into the Agreement as Buyer solely
in its capacity as Agent for the Purchasers, who will be acting as principals
thereunder, and this Annex I therefore sets forth certain terms and conditions
governing all Transactions. Capitalized terms used but not defined in this Annex
I shall have the meanings ascribed to them in the Agreement.

 

1. Additional Representations.

Agent hereby represents, which representation shall continue during the term of
any Transaction that each Purchaser has duly authorized Agent to execute and
deliver the Agreement and enter into Transactions on its behalf.

 

2. Identification of Purchasers.

The Purchasers for whom Agent is acting as Buyer under the Agreement may change
from time to time as set forth in the Letter Agreement. Each Seller acknowledges
that Agent shall not have any obligation to provide it with confidential
information regarding the financial status of the Purchasers.

 

3. Multiple Principals.

In the event that Agent at any time is acting for more than one Purchaser in
respect of Transactions under the Agreement, Agent and each Seller hereby agrees
to aggregate such Transactions as if they were transactions by a single
Purchaser, except to the extent that the Letter Agreement expressly requires
otherwise. The parties agree that (i) the margin maintenance obligations of each
Seller under Paragraph 4(a) of the Agreement shall, subject to any greater
requirement imposed by applicable law, be determined on an aggregate basis for
all Transactions entered into by Buyer; and (ii) Buyer’s remedies upon the
occurrence of an Event of Default shall be determined as if all Purchasers were
a single Buyer.

 

4. Interpretation of Terms.

All references to “Buyer” in the Agreement shall, subject to the provisions of
this Annex I, be construed to reflect that (i) each Purchaser shall have, in
connection with any Transaction or Transactions entered into by Agent on its
behalf, the rights, responsibilities, privileges and obligations of a “Buyer”,
directly entering into such Transaction or Transactions with the other party
under the Agreement, and (ii) the Purchasers have designated Agent as their sole
agent for performance of Buyer’s obligations to Sellers, and for receipt of
performance by each Seller of its obligations to Buyer, in connection with any
Transaction or Transactions under the Agreement (including, among other things,
as Agent for each Purchaser in connection with transfers of securities, cash or
other property and (except as otherwise provided in the Letter

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Agreement) as agent for giving and receiving all notices under the Agreement).
Both Agent and the Purchasers shall be deemed “parties” to the Agreement and all
references to a “party” or “either party” in the Agreement shall be deemed
revised accordingly.

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EXHIBIT A

ELIGIBLE MORTGAGE LOAN CRITERIA

“Eligible Mortgage Loan” shall mean, at any time, a Mortgage Loan:

(a) which is either an OTC Loan or a TTC Loan and under which the initial
Mortgagor Advance has been funded by the applicable Seller prior to the related
Purchase Date;

(b) which is not an Unapproved Mortgage Loan;

(c) which is secured by a first priority Mortgage in the related Mortgaged
Property;

(d) which is not a Delinquent Loan or Defaulted Loan;

(e) which (i) has been directly originated by the applicable Seller or (ii) has
been purchased by the applicable Seller from Waterfield and re-underwritten by
the Servicer using such Seller’s complete underwriting standards for directly
originated Mortgage Loans and satisfies and complies with all applicable
requirements of the Credit and Collection Policy;

(f) for which the Mortgagor is required to make monthly payments of principal
and/or interest;

(g) for which the Mortgagor has been directed to make all Monthly Payments and
all repayments of principal thereon to a Lock-Box or a Collection Account;

(h)(i) which has been originated in accordance with, and complies with all
applicable requirements of the Credit and Collection Policy in effect at the
time of such origination, which was designed to provide guidelines in
underwriting the creditworthiness of the Mortgagors and to determine the
Mortgagors’ ability to repay the debt, (ii) with respect to which, in accordance
with the Credit and Collection Policy, the applicable Seller considered, among
other things, the credit history of the Mortgagor and other credit indicators
such as income verification and/or debt-to-income ratios of the Mortgagor, and
(iii) which was originated in compliance with local, state and federal law
applicable thereto at the time of origination, including without limitation,
required disclosures of points, charges and fees;

(i) which was not originated based solely on an estimation of the value of the
Mortgaged Property without any consideration of the potential ability of the
Mortgagor to repay the amount owed under the Mortgage Loan;

(j) with respect to which Buyer has a valid and perfected first priority
security interest, free and clear of any other Lien;

(k) which, if a Wet Loan, such Mortgage Loan was not originated more than 10
days prior to such date of determination;

(l) that is denominated and payable only in United States dollars within the
United States and with respect to which the related Mortgagor is a natural
person who is a United States citizen or resident alien of the United States;

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(m) which is serviced in accordance with the Accepted Servicing Practices and
the Credit and Collection Policy;

(n) with respect to which the related Mortgagor is not a government or a
governmental subdivision or agency;

(o) with respect to which (i) the related Mortgaged Property is a single family
detached home and is not a Manufactured Home or a mobile home and (ii) the
related Mortgagor is not a developer and, to the knowledge of the applicable
Seller, the residence to be constructed on the related Mortgaged Property is not
being constructed for speculative purposes;

(p)(i) the Mortgage Note, Mortgage and, if applicable, the Mortgage Contract
with respect to which contain customary and enforceable provisions adequate for
realization of the benefits of the collateral, (ii) the Mortgage Note for which
is considered a “promissory note” within the meaning of the UCC of all
applicable jurisdictions, (iii) has not been assigned or pledged, the applicable
Seller has good title thereto and such Seller is the sole owner free and clear
of any and all liens, encumbrances, pledges, security interests of any nature,
except for utility easements, rights-of-way and similar customarily permitted
encumbrances, and (iv) with respect to which the related Mortgaged Property is
not subject to any delinquent tax or assessment lien;

(q) which, together with the related Mortgage, is not subject to any dispute,
claim, right of rescission, set-off, counterclaim or other defense or right of
an obligor or guarantor;

(r) which, together with the related Mortgage, Mortgage Note and Mortgage
Contract, does not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collections practices, usury,
abusive and predatory lending and privacy) and with respect to which, no party
to the related Mortgage, Mortgage Note and Mortgage Contract is in violation of
any such law, rule or regulation in any material respect;

(s) with respect to which the Mortgage Note (properly signed by the related
Mortgagor, in full financial effect and endorsed in blank) together with the
other Loan Documents required to be delivered to the Custodian pursuant to the
Custodial Agreement shall have been delivered to the Custodian to hold for the
benefit of the Purchasers unless such Mortgage Loan is a Wet Loan which was
originated not more than 10 days prior to such date of determination;

(t) with respect to which the related Mortgaged Property is insured by an ALTA
or equivalent lender’s title policy, insuring the originator of such Mortgage
Loan as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan, the insurer of which is qualified to do business in
the state in which the related Mortgaged Property is located;

(u) with respect to which, if the Mortgaged Property relating to such Mortgage
Loan is in an area designated as a flood area by the Federal Emergency
Management

 

Exhibit A-2

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Agency, a flood insurance policy is in effect that meets the requirements of the
current guidelines of the Federal Insurance Administration, is with a generally
acceptable insurance carrier and is in an amount not less than the Outstanding
Principal Balance of such Mortgage Loan and the related Mortgaged Property is
covered by fire, hazard, homeowner’s and other appropriate insurance, which name
the applicable Seller or Servicer as loss payee;

(v) with respect to which (i) the related Mortgagor was not required to purchase
any credit life, disability, accident or health insurance product as a condition
of obtaining the Mortgage Loan and (ii) the related Mortgagor was not required
to obtain a prepaid single-premium credit life, disability, accident or health
policy in connection with the origination of the Mortgage Loan;

(w) with respect to which the related Mortgage and Mortgage Note contain
provisions that permit foreclosure for nonpayment of such Mortgage Loan;

(x) with respect to which the related Mortgaged Property is free and clear of
any damage that would materially and adversely affect its value;

(y) with respect to which no material defaults, breaches, violations or events
of acceleration have occurred or been waived under the related Mortgage,
Mortgage Note or Mortgage Contract;

(z) with respect to which the applicable Seller has full right to sell, assign
and transfer the Mortgage Loan, including the Mortgage, the Mortgage Note and
the Mortgage Contract, without the consent of the related Mortgagor or any other
Person;

(aa) such Mortgage Loan and the underlying Mortgage, Mortgage Note and Mortgage
Contract are legal, valid and binding obligations of the related Mortgagor, duly
and properly executed by the parties thereto, enforceable against such Mortgagor
in accordance with their terms;

(bb) such Mortgage Loan is a whole loan and not a participation interest;

(cc) with respect to which there is only one original executed Mortgage Note;

(dd) which constitutes a “mortgage loan” within the meaning of the Bankruptcy
Code;

(ee) which does not contain any shared appreciation or other contingent interest
feature;

(ff) with respect to which the related Mortgage Note contains provisions for the
acceleration of the payment of the Outstanding Principal Balance of such
Mortgage Loan if, without complying with the requirements of such Mortgage Note,
the related Mortgaged Property, or any controlling interest therein, is directly
or indirectly transferred or sold;

(gg) which, if an OTC Loan, has an original maximum construction completion term
of 18 months;

 

Exhibit A-3

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(hh) which, if a TTC Loan, has an original maximum construction completion term
of 20 months;

(ii) with respect to which the original construction completion term set forth
at the time of origination has not been extended more than 2 times or for a
period greater than 6 months in the aggregate;

(jj) with respect to which the conversion date or permanent loan commencement
date has not occurred and such Mortgage Loan has not otherwise been converted
to, substituted with or replaced by, a permanent mortgage loan or otherwise
repaid;

(kk) with respect to which (i) the underlying Mortgaged Property and all
buildings, fixtures, other improvements and all building materials located on
the Mortgaged Property are covered by hazard and builder’s general liability and
risk insurance equal to at least 100% of the insurance value of any improvements
on the property and which names either the related Seller or Servicer as loss
payee and (ii) to the extent required by the underlying Mortgage Contract, the
related builder and/or Mortgaged Property shall be covered by performance bonds,
workmen’s compensation and other insurance related thereto;

(ll) with respect to which the related Seller is not in default in any material
respect under the terms of the related Mortgage Contract;

(mm) with respect to which all conditions precedent set forth in the related
Mortgage Contract with respect to each related Mortgagor Advance have been
satisfied or waived by the Servicer in accordance with the Credit and Collection
Policy;

(nn) which either (i) automatically converts at the end of the construction term
to a permanent loan having no more than a 30-year fixed rate or adjustable rate
amortization schedule without the execution of any other agreement, instrument,
mortgage, or modification or (ii) will be refinanced by a permanent loan at the
end of the construction term having no more than a 30-year fixed rate or
adjustable rate amortization schedule and which has been pre-arranged,
underwritten, approved and committed to by the applicable Seller and will be
secured by a mortgage on the same Mortgaged Property; and

(oo) with respect to which, at the time such Mortgage Loan was originated or
purchased, no improvement located thereon or being a part of the applicable
Mortgaged Property was in violation of any applicable zoning law or regulation
or lay outside the boundaries of the related Mortgaged Property;

(pp) with respect to which, the Mortgagor is not a debtor in any state or
federal bankruptcy or insolvency proceeding;

(qq) with respect to which all points and fees related were disclosed in writing
to the applicable Mortgagor in accordance with applicable state and federal law
and regulation;

(rr) in connection with the origination of which, an appraisal of the related
Mortgaged Property was obtained from a qualified appraiser, satisfactory to the
applicable originator, who had no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of such Mortgage Loan, such
appraisal was in a form acceptable to FNMA (if applicable);

 

Exhibit A-4

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(ss) with respect to which the related Mortgage Note or Mortgage does not
require the holder thereof to release all or any portion of the Mortgaged
Property from the lien of the related Mortgage except upon payment in full of
all amounts due under such Mortgage Loan;

(tt) with respect to which the applicable Repurchase Date has not yet occurred;

(uu) with respect to which the related Seller has no actual notice of the
commencement of a proceeding for the condemnation of all or any material portion
of the Mortgaged Property;

(vv) which is not and is not subject to being cross-collateralized with any
other Mortgage Loan;

(ww) with respect to which the terms of the related Mortgage, Mortgage Note and
Mortgage Contract have not been impaired, waived, altered, or modified in any
material respect;

(xx) with respect to which all escrow deposits relating to such Mortgage Loan
that are as of the related closing date, required to be deposited with the
Mortgagee or its agent have been so deposited;

(yy) with respect to which, if the related Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as such, is properly
designated and serving under such Mortgage;

(zz) with respect to which the related Seller has not received actual notice of
any event (other than payments due but not yet delinquent) that, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a material default, breach or event of acceleration;

(aaa) with respect to which no holder of the Mortgage Loan has advanced funds or
induced, solicited or knowingly received any advance of funds from a party other
than the owner of the related Mortgaged Property, directly or indirectly for the
payment of any amount required by the Mortgage Loan;

(bbb) with respect to which the related Mortgage provides that any insurance
proceeds or condemnation proceeds will be applied either to restore or repair
the Mortgaged Property or to repay the principal of the Mortgaged Loan.

(ccc) with respect to which the related Mortgaged Property is located within the
United States and the Mortgaged Property consists of land and a single family
detached residence under construction;

 

Exhibit A-5

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(ddd) which is not (a) a Mortgage Loan subject to 12 CFR Part 226.31, 12 CFR
Part 226.32 or 226.34 of Regulation Z, the regulation implementing the
Truth-in-Lending Act, which implements the Home Ownership and Equity Protection
Act of 1994, as amended, or (b) classified and/or defined, as a “high cost”,
“threshold”, “predatory” or “covered” loan (or a similarly classified loan using
different terminology under a law imposing additional legal liability for
Mortgage Loans having high interest rates, points and/or fees) under any other
applicable state, federal or local law;

(eee) with respect to which all filings required by all applicable laws in order
to preserve the applicable Seller’s first priority Mortgage and preserve the
applicable Seller’s rights as against the applicable Mortgagor and the
applicable builder throughout the construction period have been duly and timely
filed, including without limitation any required filings of the Mortgage and all
modifications, riders and addendums thereto, the Mortgage Contract, the
construction contract, notices of commencement, UCC financing statements, and
affidavits.

(fff) which, if the Loan-to-Value Ratio for such Mortgage Loan is in excess of
80%, the applicable Mortgagor under such Mortgage Loan has primary mortgage
insurance;

(ggg) with respect to which neither the related Seller nor Servicer has received
notice of any relief requested or granted to the applicable Mortgagor under such
Mortgage Loan pursuant to the Service Members Civil Relief Act of 2003;

(hhh) with respect to which the construction of the related Mortgaged Property
shall be performed by a builder (i) acceptable to the applicable Seller, in
accordance with the Credit and Collection Policy (ii) which is not an Affiliate
of any Seller;

(iii) which, (i) if the related Mortgage Contract contains a commitment of
$1,000,000 or less, has a FICO Score of at least 600, (ii) if the related
Mortgage Contract contains a commitment of greater than $1,000,000, has a FICO
Score of at least 700, and (iii) if the related Mortgage Contract contains a
commitment of greater than $1,000,000 and such Mortgage Loan has a Loan-to-Value
Ratio of more than 70%, has a FICO Score of at least 740;

(jjj) the FICO Score of which, when included in the weighted average of the FICO
Scores for all Purchased Mortgage Loans on any date of determination, does not
cause such weighted average FICO Score to be less than 680;

(kkk) which, (i) if the related Mortgage Contract contains a commitment of
$1,000,000 or less, has a Loan-to-Value Ratio of not more than 90% and (ii) if
the related Mortgage Contract contains a commitment of greater than $1,000,000,
has a Loan-to-Value Ratio of not more than 70%;

(lll) the Loan-to-Value Ratio of which, when included in the weighted average of
the Loan-to-Value Ratios for all Purchased Mortgage Loans on any date of
determination, does not cause such weighted average Loan-to-Value Ratio to be
more than 75%; and

(mmm) the Mortgage Contract related to which does not contain a commitment of
greater than $3,000,000;

 

Exhibit A-6

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provided however, that no Mortgage Loan originated by Waterfield and purchased
by a Seller shall be an Eligible Mortgage Loan after the date which is 180 days
after the date hereof.

 

Exhibit A-7

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EXHIBIT B

CONCENTRATION PERCENTAGES

Mortgage Loans. The Concentration Limit with respect to Mortgage Loans for any
Concentration Category shall mean, as of any date of determination, the product
of (a) the Concentration Percentage for such Concentration Category as of such
date, and (b) the aggregate Outstanding Principal Balance of all Purchased
Mortgage Loans as of such date.

 

Concentration Category

 

Concentration Percentage

Maximum Single Builder/Developer Concentration Limit

  2%

Maximum Single State Concentration Limit

  15% (New York, California, Florida and Texas) 7.5% (all other states)

Mortgage Loans with commitments greater than $1,000,000

  35%

Mortgage Loans with commitments greater than $2,000,000

  10%

Mortgage Loans with FICO Scores less than 660

  15%

Mortgage Loans with original construction period term greater than 12 months

  35%

Mortgage Loans purchased from Waterfield

  2%

Maximum Wet Loan Funding

  5%