Exhibit 10.10

MASTER REPURCHASE AGREEMENT

Dated as of February 28, 2006

Between:

BEAR STEARNS MORTGAGE CAPITAL CORPORATION

and

ALESCO LOAN HOLDINGS TRUST

 

1. Applicability

From time to time the parties hereto may enter into transactions in which Alesco
Loan Holdings Trust (“Seller”) agrees to transfer to Bear Stearns Mortgage
Capital Corporation (“Buyer”) Mortgage Loans against the transfer of funds by
Buyer, with a simultaneous agreement by Buyer to transfer to Seller such
Mortgage Loans at a date certain or on demand, against the transfer of funds by
Seller. Each such transaction shall be referred to herein as a “Transaction” and
shall be governed by this Agreement, as the same shall be amended from time to
time.

 

2. Definitions

(a) “Act of Insolvency”, with respect to either Buyer, Seller or Guarantor,
(i) the commencement by such party as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law,
or such party seeking the appointment of a receiver, trustee, custodian or
similar official for such party or any substantial part of its property, or
(ii) the commencement of any such case or proceeding against such party, or
another seeking such an appointment, or the filing against a party of an
application for a protective decree under the provisions of the Securities
Investor Protection Act of 1970, which (A) is consented to or not timely
contested by such party, (B) results in the entry of an order for relief, such
an appointment, the issuance of such a protective decree or the entry of an
order having a similar effect, or (C) is not dismissed within 15 days, (iii) the
making by a party of a general assignment for the benefit of creditors, or
(iv) the admission in writing by a party of such party’s inability to pay such
party’s debts as they become due;

(b) “Additional Purchased Mortgage Loans”, Mortgage Loans provided by Seller to
Buyer pursuant to Paragraph 4(a) hereof;

 

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(c) “Business Day”, any day other than a Saturday, Sunday and any day on which
banks located in the State of New York are authorized or required to close for
business;

(d) “Buyer’s Margin Amount”, with respect to any Transaction as of any date, the
amount obtained by application of a percentage, agreed to by Buyer and Seller
prior to entering into the Transaction and specified in the related
Request/Confirmation, to the Repurchase Price for such Transaction as of such
date;

(e) “Custodian”, the custodian named in the Custodial Agreement and any
permitted successor thereto;

(f) “Custodial Agreement”, the Custodial Agreement among Buyer, Seller and the
Custodian providing for the custody of records relating to the Purchased
Mortgage Loans;

(g) “FNMA”, the Federal National Mortgage Association;

(h) “FICO Score”, the credit risk scoring model assessing likelihood of default
developed by Fair, Isaac & Co., and used by major credit bureaus such Equifax,
Experion and Trans Union;

(i) “Freddie Mac”, the entity formerly known as the Federal Home Loan Mortgage
Corporation or any successor thereto.

(j) “Guarantor”, Alesco Financial Trust.

(k) “Guarantee”, the guarantee of Guarantor in the form attached hereto as
Exhibit C.

(l) “Income”, with respect to any Mortgage Loan at any time, any principal
thereof and all interest and other distributions thereon or proceeds thereof;

(m) “Loan Schedule”, a schedule of Mortgage Loans identifying each Mortgage
Loan: (1) in the case of all Mortgage Loans, by Seller’s loan number,
Mortgagor’s name and address (including the state and zip code) of the mortgaged
property, whether such Mortgage Loan bears a fixed or adjustable interest rate,
the loan-to-value ratio, the outstanding principal amount as of a specified
date, the initial interest rate borne by such Mortgage Loan, the original
principal balance thereof, the current scheduled monthly payment of principal
and interest, the maturity of the related Note, the property type, the occupancy
status, the appraised value, the original term to maturity and whether or not
the Mortgage Loan (including the related Note) has been modified; and (2) in the
case of adjustable rate Mortgage Loans, the interest rate borne by such Mortgage
Loan on the Purchase Date, the index and applicable determination date for each
adjustment period, the gross margin, the payment adjustment period (in months),
months to next payment adjustment, periodic payment adjustment cap, lifetime
payment adjustment cap, lifetime payment cap, interest rate adjustment, periodic
interest adjustment cap and lifetime interest rate adjustment cap;

 

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(n) “Margin Deficit”, the meaning specified in Paragraph 4(a) hereof;

(o) “Market Value”, with respect to any Mortgage Loans as of any date, the fair
market value of such Mortgage Loans on such date as determined by Buyer in its
reasonable business judgment from time to time and at such times as it may elect
in its sole discretion; provided, however, that a Market Value of zero shall be
assigned to (i) any Mortgage Loan that has been delinquent for at least sixty
(60) days, (ii) any Mortgage Loan that has been subject to this Agreement for
more than one hundred and eighty (180) days in aggregate, (iii) any Mortgage
Loan with respect to which there is a breach of a representation or warranty
made by Seller in this Agreement or the Custodial Agreement that materially and
adversely affects Buyer’s interests hereunder or (iv) any Mortgage Loan with
respect to which the related Mortgagor, by virtue of service in the United
States Armed Forces (including, without limitation, the United States Military
Reserve and National Guard) by such Mortgagor or by a Person on whom such
Mortgagor is dependent, is entitled by any statute, administrative ruling or
court order to delay, defer or reduce any payment of principal or interest that
would otherwise be due;

(p) “Mortgage”, the mortgage, deed of trust or other instrument creating a first
lien on an estate in fee simple interest in real property securing a Note;

(q) “Mortgage Loan”, a first lien mortgage, adjustable rate loan on one-to-four
family residential property consisting of a Note secured by a Mortgage;

(r) “Mortgaged Property”, The Mortgagor’s real property securing repayment of a
related Mortgage Note, consisting of a fee simple interest in a single parcel of
real property improved by a residential dwelling.

(s) “Mortgagor”, the obligor on a Note;

(t) “Note”, the Note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan;

(u) “Price Differential”, with respect to any Transaction hereunder as of any
date, the aggregate amount obtained by daily application of the Pricing Rate for
such Transaction 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 Seller to Buyer with respect to such Transaction);

(v) “Pricing Rate”, the per annum percentage rate for determination of the Price
Differential, which rate shall be specified in the related Request/Confirmation;

 

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(w) “Prime Rate”, the prime rate of U.S. money center commercial banks as
published in The Wall Street Journal;

(x) “Purchase Date”, the date with respect to each Transaction on which
Purchased Mortgage Loans are sold by Seller to Buyer hereunder;

(y) “Purchase Price”, (i) on the Purchase Date, the price at which Purchased
Mortgage Loans are sold by Seller to Buyer hereunder, and (ii) thereafter, such
price decreased by the amount of any cash transferred by Seller to Buyer
pursuant to Paragraph 4(a) hereof;

(z) “Purchased Mortgage Loans”, the Mortgage Loans sold by Seller to Buyer in a
Transaction hereunder, and any Mortgage Loans substituted therefor in accordance
with Paragraph 9 hereof. The term “Purchased Mortgage Loans” with respect to any
Transaction at any time also shall include Additional Purchased Mortgage Loans
delivered pursuant to Paragraph 4(a);

(aa) “Replacement Mortgage Loans”, the meaning specified in Paragraph 11(e)(ii)
hereof;

(bb) “Repurchase Date”, the date on which Seller is to repurchase the Purchased
Mortgage Loans from Buyer, including any date determined by application of the
provisions of Paragraphs 3(e) or 11 hereof;

(cc) “Repurchase Price”, the price at which Purchased Mortgage Loans are to be
resold by Buyer to Seller upon termination of a Transaction, which will be
determined in each case (including Transactions terminable upon demand) as the
sum of the Purchase Price and the Price Differential as of the date of such
determination, increased by any amount determined by the application of the
provisions of Paragraph 11 hereof;

(dd) “Request/Confirmation”, the request and confirmation substantially in the
form of Exhibit A hereto delivered pursuant to Paragraph 3 hereof.

 

3. Initiation; Request/Confirmation; Termination; Transactions Optional

(a) Any agreement to enter into a Transaction shall be made in writing at the
initiation of Seller. In the event that Seller desires to enter into a
Transaction hereunder, Seller shall deliver to Buyer prior to 5:00 p.m., New
York City time, on the Business Day prior to the proposed Purchase Date, a
Request/Confirmation signed by Seller and complete in every respect except for
the signature of an authorized representative of Buyer. Buyer shall, upon its
receipt and approval thereof, promptly execute and return the signed
Request/Confirmation to Seller.

(b) The Request/Confirmation shall describe the Purchased Mortgage Loans in a
manner satisfactory to Buyer (which may be by attaching a Loan Schedule
thereto), identify Buyer and Seller and set forth (i) the Purchase Date,
(ii) the Purchase Price,

 

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(iii) the Repurchase Date, unless the Transaction is to be terminable on demand,
(iv) the Pricing Rate or Repurchase Price applicable to the Transaction, (v) the
representations and warranties contemplated by Paragraph 10(c) hereof, and
(vi) any additional terms or conditions of the Transaction mutually agreeable to
Buyer and Seller.

(c) Each Request/Confirmation shall be binding upon the parties hereto unless
written notice of objection is given by the objecting party to the other party
within one (1) Business Day after Buyer has delivered the completed
Request/Confirmation to Seller.

(d) In the event of any conflict between the terms of a Request/Confirmation and
this Agreement, such Request/Confirmation shall prevail.

(e) In the case of Transactions terminable upon demand, such demand shall be
made by Buyer or Seller, no later than such time as is customary in accordance
with market practice, by telephone or otherwise on or prior to the Business Day
on which such termination will be effective. On the date specified in such
demand, or on the date fixed for termination in the case of Transactions having
a fixed term, termination of the Transaction will be effected by resale by Buyer
to Seller or its agent of the Purchased Mortgage Loans and any Income in respect
thereof received by Buyer (and not previously credited or transferred to, or
applied to the obligations of, Seller hereunder) against the transfer of the
Repurchase Price to an account of Buyer.

(f) The adjustment mechanism and the index for any adjustable rate Mortgage Loan
must be satisfactory to Buyer in its sole discretion.

(g) Notwithstanding any provision of this Agreement or the Custodial Agreement
to the contrary, the initiation of each Transaction is subject to the approval
of Buyer in its sole discretion. Buyer may, in its sole discretion, reject any
Mortgage Loan from inclusion in a Transaction hereunder for any reason.

(h) The representations and warranties provided by Seller to Buyer pursuant to
Paragraph 3(b)(v) must be satisfactory to Buyer in its sole discretion.

 

4. Margin Maintenance

(a) If at any time the aggregate Market Value of all Purchased Mortgage Loans
subject to all Transactions hereunder is less than the aggregate Buyer’s Margin
Amount for all such Transactions (a “Margin Deficit”), then Buyer may by notice
to Seller require Seller in such Transactions, at Buyer’s option, to transfer to
Buyer cash or additional Mortgage Loans reasonably acceptable to Buyer
(“Additional Purchased Mortgage Loans”), so that the cash and aggregate Market
Value of the Purchased Mortgage Loans, including any such Additional Purchased
Mortgage Loans, will thereupon equal or exceed such aggregate Buyer’s Margin
Amount.

(b) If the notice to be given by Buyer to Seller under subparagraph (a) above is
given at or prior to 10:00 a.m. New York city time on a Business Day, Seller
shall

 

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transfer cash or Additional Purchased Mortgage Loans to Buyer prior to the close
of business in New York City on the date of such notice, and if such notice is
given after 10:00 a.m. New York City time, Seller shall transfer cash or
Additional Purchased Mortgage Loans prior to the close of business in New York
City on the Business Day following the date of such notice.

(c) Any cash transferred pursuant to this Paragraph shall be held by Buyer as
though it were Additional Purchased Mortgage Loans and, unless Buyer shall
otherwise consent, shall not reduce the Repurchase Price of the related
Transaction.

 

5. Income Payments

Where a particular Transaction’s term extends over an Income payment date on the
Mortgage Loans subject to that Transaction, all payments and distributions,
whether in cash or in kind, made on or with respect to the Purchased Mortgage
Loans shall, unless otherwise mutually agreed by Buyer and Seller and so long as
an Event of Default on the part of Seller shall not have occurred and be
continuing, be paid directly to Seller or its designee by the related Mortgagor.
Buyer shall not be obligated to take any action pursuant to the preceding
sentence to the extent that such action would result in the creation of a Margin
Deficit, unless prior thereto or simultaneously therewith Seller transfers to
Buyer, at Buyer’s option, cash or Additional Purchased Mortgage Loans sufficient
to eliminate such Margin Deficit.

 

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, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Mortgage Loans with respect to all Transactions hereunder and all proceeds
thereof. Seller 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.

 

7. Payment and Transfer

Unless otherwise mutually agreed, all transfers of funds hereunder shall be in
immediately available funds. All Mortgage Loans transferred by one party hereto
to the other party shall be transferred in accordance with and subject to the
Custodial Agreement by notice to the Custodian to the effect that the Custodian
is now holding for the benefit of the transferee the related documents and
assignment forms delivered to it under the Custodial Agreement.

 

8. Segregation of Documents Relating to Purchased Mortgage Loans

All documents relating to Purchased Mortgage Loans in the possession of 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

 

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the books and records of the holder, including a financial or securities
intermediary or a clearing corporation. All of Seller’s interest in the
Purchased Mortgage Loans shall pass to Buyer on the 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 Purchased Mortgage Loans to Seller
pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer’s obligation to credit or
pay Income to, or apply Income to the obligations of, Seller pursuant to
Paragraph 5 hereof.

 

9. Substitution

Seller may, subject to agreement with, acceptance by and upon notice to Buyer,
substitute Loans substantially similar to the Purchased Loans for any Purchased
Loans. If Seller gives notice to the Buyer at or prior to 10:00 a.m. New York
City time on a Business Day, Buyer may elect, by the close of business on the
Business Day notice is received or by the close of the next Business Day if
notice is given after 10:00 a.m. New York City time on such day, not to accept
such substitution. In the event such substitution is accepted by Buyer, such
substitution shall be made by Seller’s transfer to Buyer of such other Loans and
Buyer’s transfer to Seller of such Purchased Loans , and after such
substitution, the substituted Loans shall be deemed to be Purchased Loans. In
the event Buyer elects not to accept such substitution, Buyer shall offer Seller
the right to terminate the Transaction.

In the event Seller exercises its right to substitute or terminate under this
Section 9, Seller shall be obligated to pay to Buyer, by the close of the
Business Day of such substitution or termination, as the case may be, an amount
equal to (A) Buyer’s actual cost (including all fees, expenses and commissions)
of (i) entering into replacement transactions; (ii) entering into or terminating
hedge transactions; and/or (iii) terminating transactions or substituting
securities in like transactions with third parties in connection with or as a
result of such substitution or termination, and (B) to the extent Buyer
determines not to enter into replacement transactions, the loss incurred by
Buyer directly arising or resulting from such substitution or termination. The
foregoing amounts shall be solely determined and calculated by Buyer in good
faith.

 

10. Representations, Warranties and Covenants

(a) Buyer and Seller each represents and warrants, and shall on and as of the
Purchase Date of any Transaction be deemed to represent and warrant, to the
other that:

(i) it is duly authorized to execute and deliver this Agreement, to enter into
the Transactions contemplated hereunder and to perform its obligations hereunder
and has taken all necessary action to authorize such execution, delivery and
performance;

(ii) it will engage in such Transactions as principal (or, if agreed in writing
in advance of any Transaction by the other party hereto, as agent for a
disclosed principal);

(iii) the person signing this Agreement on its behalf is duly authorized to do
so on its behalf (or on behalf of any such disclosed principal);

 

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(iv) it has obtained all authorizations of any governmental body required in
connection with this Agreement and the Transactions hereunder and such
authorizations are in full force and effect; and

(v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, by-law or
rule applicable to it or any agreement by which it is bound or by which any of
its assets are affected.

(b) Seller represents and warrants to Buyer, and shall on and as of the Purchase
Date of any Transaction be deemed to represent and warrant, as follows:

(i) The documents disclosed by Seller to Buyer pursuant to this Agreement are
either original documents or genuine and true copies thereof;

(ii) Seller is a separate and independent corporate entity from the Custodian,
Seller does not own a controlling interest in the Custodian either directly or
through affiliates and no director or officer of Seller is also a director or
officer of the Custodian;

(iii) None of the Purchase Price for any Mortgage Loan will be used either
directly or indirectly to acquire any security, as that term is defined in
Regulation T of the Regulations of the Board of Governors of the Federal Reserve
System, and Seller has not taken any action that might cause any Transaction to
violate any regulation of the Federal Reserve Board;

(iv) Seller is a wholly owned subsidiary of Guarantor;

(v) Seller shall be at the time it transfers to Buyer any Mortgage Loans for any
Transaction the legal and beneficial owner of such Mortgage Loans, free of any
lien, security interest, option or encumbrance;

(vi) Seller used no selection procedures that identified the Mortgage Loans
relating to a Transaction as being less desirable or valuable than other
comparable assets in Seller’s portfolio on the related Purchase Date;

(vii) Within thirty (30) days following the issuance of applicable regulations
pursuant to the USA Patriot Act of 2001, or any similar federal, state or local
anti-money laundering laws and regulations (collectively, the “Anti-Money
Laundering Laws”), Seller shall have implemented and shall thereafter maintain a
compliance program that meets the requirements of such Anti-Money Laundering
Laws;

(viii) There is no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any arbitrator involving
Seller or relating to the transaction contemplated by this Agreement or the
Custodial Agreement which, if adversely determined, would have a material
adverse effect on Buyer; and

 

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(ix) The Guarantee has been duly authorized, executed and delivered by Guarantor
and is in full force and effect.

(c) Seller makes the representations and warranties with respect to the Mortgage
Loans for each Transaction as are attached to the related Request/Confirmation.

(d) Seller covenants with Buyer, from and after the date hereof, as follows:

(i) Seller shall immediately notify Buyer if an Event of Default shall have
occurred;

(ii) Seller shall deliver to Buyer a current Loan Schedule with respect to all
Mortgage Loans subject to this Agreement with such frequency as Buyer may
require but in no event less frequently than weekly;

(iii) No Mortgage Loan shall be subject to this Agreement for more than one
hundred and eighty (180) days in aggregate;

(iv) No more than five (5) percent of the Mortgage Loans at any time subject to
this Agreement shall have FICO Scores of less than 660; and

(v) Seller will not directly or indirectly use any of the proceeds from the sale
of the Mortgage Loans, or lend, contribute or otherwise make available any such
proceeds to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person or entity that is subject
to sanctions under any program administered by the Office of Foreign Assets
Control of the United States Department of the Treasury, including without
limitation those implemented by regulations codified in Subtitle B, Chapter V,
of Title 31, Code of Federal Regulations.

 

11. Events of Default; Event of Termination

(a) The following events shall constitute events of default (each an “Event of
Default”) hereunder with respect to Buyer or Seller, as applicable:

(i) Seller fails to repurchase or Buyer fails to transfer Purchased Mortgage
Loans upon the applicable Repurchase Date pursuant to the terms hereof;

(ii) Seller or Buyer fails to comply with Paragraph 4 hereof;

(iii) An Act of Insolvency occurs with respect to Seller, Buyer or Guarantor or
any controlling entity thereof;

(iv) Any representation or warranty made by Seller or Buyer shall have been
incorrect or untrue in any material respect when made or repeated or deemed to
have been made or repeated; provided, however, that in the case of
representations and warranties made with respect to the Purchased Mortgage
Loans, such circumstance shall not constitute an Event of Default if, after
determining the Market Value of the Purchased

 

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Mortgage Loans without taking into account those Purchased Mortgage Loans with
respect to which such circumstance has occurred, no other Event of Default shall
have occurred and be continuing;

(v) Any covenant shall have been breached in any material respect; provided,
however, that in the case of covenants made with respect to the Purchased
Mortgage Loans, such circumstance shall not constitute an Event of Default if,
after determining the Market Value of the Purchased Mortgage Loans without
taking into account the Purchased Mortgage Loans with respect to which such
circumstance has occurred, no other Event of Default shall have occurred and be
continuing;

(vi) Buyer shall have determined in good faith and on a commercially reasonable
basis that Seller is or will be unable to meet its commitments under this
Agreement, shall have notified Seller of such determination and Seller shall not
have responded with reasonably appropriate information to the contrary to the
reasonable satisfaction of Buyer within five (5) Business Days;

(vii) This Agreement shall for any reason cease to create a valid, first
priority security interest in any of the Purchased Mortgage Loans purported to
be covered hereby;

(viii) A final, non-appealable judgment by any competent court in the United
States of America for the payment of money in an amount of at least $100,000 is
rendered against Seller or Guarantor, and the same remains undischarged for a
period of sixty (60) days during which execution of such judgment is not
effectively stayed;

(ix) Any event of default or any event which with notice, the passage of time or
both shall constitute an event of default shall occur and be continuing under
any repurchase or other financing agreement for borrowed funds or indenture for
borrowed funds by which Seller is bound or affected shall occur and be
continuing;

(x) In the commercially reasonable judgment of Buyer, a material adverse change
shall have occurred with respect to Seller or Guarantor; for purposes of this
Agreement, a “material adverse change” shall be defined as a reduction in
shareholders equity of twenty five percent or more in a twelve month period;

(xi) Seller or Guarantor shall be in default of any payment obligation with
respect to any normal and customary covenants under any debt contract or
agreement, any servicing agreement or any lease to which it is a party, in
excess of $5,000,000, which default results in a material adverse effect on the
financial condition of Seller or Guarantor (which covenants include, but are not
limited to, an Act of Insolvency of Seller or Guarantor or the failure of Seller
or Guarantor to make required payments under such contract or agreement as they
become due);

(xii) Seller or Guarantor shall fail to promptly notify Buyer of (i) the
acceleration of any debt obligation or the termination of any credit facility of
Seller or Guarantor; (ii) the amount and maturity of any such debt assumed after
the date hereof;

 

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(iii) any adverse developments with respect to pending or future litigation
involving Seller or Guarantor; and (iv) any other developments which might
materially and adversely affect the financial condition of Seller or Guarantor;

(xiii) Seller shall have failed to comply in any material respect with its
obligations under the Custodial Agreement;

(xiv) Guarantor shall have failed to comply in any material respect with its
obligations under the Guarantee;

(xv) The Guarantee shall have been determined by Buyer in its good faith
judgment to be unenforceable; or

(xvi) Guarantor shall have terminated the Guarantee in accordance with its
provisions and a replacement guarantor satisfactory to Buyer, in its good faith
judgment, has not been appointed.

(b) If an Event of Default shall have occurred and be continuing, then, at the
option of the nondefaulting party (which shall be deemed to be Buyer in the
event of an Event of Default contemplated by clauses (xiv), (xv) or (xvi)),
exercised by written notice to the defaulting party (which option shall be
deemed to have been exercised, even if no notice is given, immediately upon the
occurrence of an Act of Insolvency), the Repurchase Date for each Transaction
hereunder shall be deemed immediately to occur.

(c) In all Transactions in which the defaulting party is Seller, if Buyer is
deemed to have exercised the option referred to in subparagraph (b) of this
Paragraph, (i) Seller’s obligations hereunder to repurchase all Purchased
Mortgage Loans in such Transactions shall thereupon become immediately due and
payable, (ii) to the extent permitted by applicable law, the Repurchase Price
with respect to each such Transaction shall be increased by the aggregate amount
obtained by daily application of (x) the greater of the Pricing Rate for such
Transaction and the Prime Rate to (y) the Repurchase Price for such Transaction
as of the Repurchase Date as determined pursuant to subparagraph (b) of this
Paragraph (decreased as of any day by (A) any amounts retained by Buyer with
respect to such Repurchase Price pursuant to clause (iii) of this subparagraph,
(B) any proceeds from the sale of Purchased Mortgage Loans pursuant to
subparagraph (e)(i) of this Paragraph, and (C) any amounts credited to the
account of Seller pursuant to subparagraph (f) of this Paragraph) on a 360 day
per year basis for the actual number of days during the period from and
including the date of the Event of Default giving rise to such option to but
excluding the date of payment of the Repurchase Price as so increased, (iii) all
Income paid after such exercise or deemed exercise shall be payable to and
retained by Buyer applied to the aggregate unpaid Repurchase Prices owed by
Seller, and (iv) Seller shall immediately deliver or cause the Custodian to
deliver to Buyer any documents relating to Purchased Mortgage Loans subject to
such Transactions then in Seller’s possession.

(d) In all Transactions in which the defaulting party is Buyer, upon tender by
Seller of payment of the aggregate Repurchase Prices for all such Transactions,
Buyer’s

 

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right, title and interest in all Purchased Mortgage Loans subject to such
Transactions shall be deemed transferred to Seller, and Buyer shall deliver or
cause the Custodian to deliver all documents relating to such Purchased Mortgage
Loans to Seller or its designee.

(e) Upon the occurrence of an Event of Default, the nondefaulting party, without
prior notice to the defaulting party may:

(i) as to Transactions in which the defaulting party is Seller, (A) 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 discretion deem satisfactory, any or all Purchased Mortgage Loans subject
to such Transactions and apply the proceeds thereof to the aggregate unpaid
Repurchase Prices and any other amounts owing by Seller hereunder or (B) in its
sole discretion elect, in lieu of selling all or a portion of such Purchased
Mortgage Loans, to give Seller credit for such Purchased Mortgage Loans in an
amount equal to the Market Value therefor on such date against the aggregate
unpaid Repurchase Prices and any other amounts owing by Seller hereunder; and

(ii) as to Transactions in which the defaulting party is Buyer, (A) purchase
mortgage loans (“Replacement Mortgage Loans”) having substantially the same
outstanding principal amount, maturity and interest rate as any Purchased
Mortgage Loans that are not transferred by Buyer to Seller as required hereunder
or (B) in its sole discretion elect, in lieu of purchasing Replacement Mortgage
Loans, to be deemed to have purchased Replacement Mortgage Loans at the price
therefor on such date, calculated as the average of the prices obtained from
three (3) nationally recognized registered broker/dealers that buy and sell
comparable mortgage loans in the secondary market.

(f) As to Transactions in which the defaulting party is Buyer, Buyer shall be
liable to Seller (i) with respect to Purchased Mortgage Loans (other than
Additional Purchased Mortgage Loans), for any excess of the price paid (or
deemed paid) by Seller for Replacement Mortgage Loans therefor over the
Repurchase Price for such Purchased Mortgage Loans and (ii) with respect to
Additional Purchased Mortgage Loans, for the price paid (or deemed paid) by
Seller for the Replacement Mortgage Loans therefor. In addition, Buyer shall be
liable to Seller for interest on such remaining liability with respect to each
such purchase (or deemed purchase) of Replacement Mortgage Loans from the date
of such purchase (or deemed purchase) until paid in full by Buyer. Such interest
shall be at a rate equal to the greater of the Pricing Rate for such Transaction
or the Prime Rate.

(g) For purposes of this Paragraph 11, the Repurchase Price for each Transaction
hereunder in respect of which the defaulting party is Buyer shall not increase
above the amount of such Repurchase Price for such Transaction determined as of
the date of the exercise or deemed exercise by Seller of its option under
subparagraph (b) of this Paragraph.

 

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(h) The defaulting party shall be liable to the nondefaulting party for the
amount of all reasonable legal or other expenses incurred by the nondefaulting
party in connection with or as a consequence of an Event of Default, together
with interest thereon at a rate equal to the greater of the Pricing Rate for the
relevant Transaction or the Prime Rate. Expenses incurred in connection with an
Event of Default shall include without limitation those costs and expenses
incurred by the nondefaulting party as a result of the early termination of any
repurchase agreement or reverse repurchase agreement entered into by the
nondefaulting party in connection with the Transaction then in default.

(i) The nondefaulting party shall have, in addition to its rights hereunder, any
rights otherwise available to it under any other agreement or applicable law.

(j) At the option of Buyer, exercised by written notice to Seller, the
Repurchase Date for any or all Transactions shall be deemed to immediately occur
in the event that the senior debt obligations or short-term debt obligations of
Bear Stearns & Co. Inc. shall be rated below the four highest generic grades
(without regard to any pluses or minuses reflecting gradations within such
generic grades) by any nationally recognized statistical rating organization.

(k) The exercise by any party of remedies after the occurrence of an Event of
Default shall be conducted 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, Seller shall
service or cause to be serviced the Purchased Mortgage Loans for the benefit of
Buyer and, if Buyer shall exercise its rights to sell the Purchased Mortgage
Loans pursuant to this Agreement prior to the related Repurchase Date, Buyer’s
assigns; provided, however, that the obligation of Seller to service or cause to
be serviced Purchased Mortgage Loans for the benefit of Buyer as aforesaid shall
cease upon the payment to Buyer of the Repurchase Price therefor.

(b) Seller shall service (or cause to be serviced) and administer the Purchased
Mortgage Loans and shall have full power and authority, acting alone, to do any
and all things in connection with such servicing which Seller may deem necessary
or desirable and consistent with the terms of this Agreement, and shall retain
all principal prepayments and Income received by Seller with respect to such
Purchased Mortgage Loans pursuant to the terms hereof. Seller, in administering
and servicing the Purchased Mortgage Loans, shall employ procedures (including
collection procedures) and exercise the same care it customarily employs and
exercises in servicing and administering mortgage loans for its own account, in
accordance with accepted mortgage loan servicing practices of prudent lending
institutions and giving due consideration to Buyer’s reliance on Seller. Seller
will provide Buyer with monthly reports, substantially identical in form to
FNMA’s standard form of remittance report with respect to all Purchased Mortgage
Loans then involved in any Transaction hereunder. Seller may contract with
another entity to service the

 

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Purchased Mortgage Loans so long as such entity is reasonably acceptable to
Buyer. If Seller causes another entity to service the Purchased Mortgage Loans
as aforesaid, Seller shall nonetheless remain liable to Buyer for such servicing
as though the Purchased Mortgage Loans were serviced by Seller directly.

(c) Buyer may, in its sole discretion if an Event of Default shall have occurred
and be continuing, without payment of any termination fee or any other amount to
Seller, (i) sell the Mortgage Loans on a servicing released basis or
(ii) terminate Seller as the servicer of the Purchased Mortgage Loans with or
without cause.

 

13. Single Agreement

Buyer and 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 made in consideration of each other. Accordingly,
each of Buyer and 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 shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them 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 and (iii) that payments,
deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.

 

14. Notices and Other Communications

Except as otherwise expressly provided herein, all such notices or
communications shall be in writing (including, without limitation, telegraphic,
facsimile or telex communication) or confirmed in writing and such notices and
other communications shall, when mailed, telegraphed, communicated by facsimile
transmission or telexed, be effective when received at the address for notices
for the party to whom such notice or communications is to be given as follows:

if to Seller:

Alesco Loan Holdings Trust

1818 Market Street, 28th Floor

Philadelphia, Pennsylvania 19103

Attention: John Longino

Telephone: (215) 861-7717

Telecopy: (215) 861-7878

 

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if to Buyer:

Bear Stearns Mortgage Capital Corporation

383 Madison Avenue

New York, New York 10179

Attention: Eileen Albus

Telephone: (212) 272-7502

Telecopy: (212) 272-2053

Notwithstanding the foregoing, however, that a facsimile transmission shall be
deemed to be received when transmitted so long as the transmitting machine has
provided an electronic confirmation of such transmission, and provided further,
however, that all financial statements delivered shall be hand-delivered or sent
by first-class mail. Either party may revise any information relating to it by
notice in writing to the other party, which notice shall be effective on the
third business day following receipt thereof.

 

15. Payment of Expenses

Seller shall pay on demand all fees and expenses (including, without limitation,
the fees and expenses for legal services of any kind whatsoever) incurred by
Buyer or the Custodian in connection with this Agreement and the Custodial
Agreement and the transactions contemplated hereby and thereby, whether or not
any Transactions are entered into hereunder, including, by way of illustration
and not by way of limitation, the fees and expenses incurred in connection with
(i) the preparation, reproduction and distribution of this Agreement and the
Custodial Agreement and any opinions of counsel, certificates of officers or
other documents contemplated by the aforementioned agreements and (ii) any
Transaction under this Agreement; provided, however, that Seller shall not be
required to pay the fees and expenses of Buyer incurred as a result of Buyer’s
default under this Agreement. The obligation of Seller 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.

 

16. Opinions of Counsel

Seller shall, no later than ten (10) Business Days after the Purchase Date of
the first Transaction hereunder and, upon the request of Buyer, on the Purchase
Date of any subsequent Transaction, cause to be delivered to Buyer, with
reliance thereon permitted as to any person or entity that purchases the
Mortgage Loans from Buyer in a repurchase transaction, a favorable opinion of
counsel with respect to the matters set forth in Exhibit B hereto, in form and
substance acceptable to Buyer and its counsel.

 

17. Further Assurances; Additional Information

(a) Seller shall promptly provide such further assurances or agreements as Buyer
may request in order to effect the purposes of this Agreement.

 

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(b) At any reasonable time, Seller shall permit Buyer, its agents or attorneys,
to inspect and copy any and all documents and data in its possession pertaining
to each Purchased Mortgage Loan that is the subject of such Transaction. Such
inspection shall occur upon the request of Buyer at a mutually agreeable
location during regular business hours and on a date not more than two
(2) Business Days after the date of such request.

(c) Seller agrees to provide Buyer or its agents, from time to time, with such
information concerning Seller of a financial or operational nature as Buyer may
reasonably request.

(d) Seller shall provide Buyer or its agents, with copies of all filings made by
or on behalf of Seller or any entity that controls Seller, with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended, promptly upon making such filings.

 

18. Buyer as Attorney-in-Fact

Buyer is hereby appointed the attorney-in-fact of Seller for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing any instruments that Buyer may 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, Buyer shall have the right and power during the occurrence and
continuation of any Event of Default to receive, endorse and collect all checks
made payable to the order of 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.

 

19. Wire Instructions

(a) Any amounts to be transferred by Buyer to Seller hereunder shall be sent by
wire transfer in immediately available funds to the account of Seller at:

Bank: Commerce Bank, N.A.

Account Name: Alesco Financial Trust

Acct. No.: 367 564 390

ABA No.: 036 001 808

(b) Any amounts to be transferred by Seller to Buyer hereunder shall be sent by
wire transfer in immediately available funds to the account of Buyer at:

Bank: Bank One

Acct.: Bear Stearns MBS

Acct. No.: 5801230

ABA No.: 071-000-013

Attn.: Eileen Albus

Reference: Alesco

 

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(c) Amounts received after 3:00 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.

 

20. Entire Agreement; Severability

This 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.

 

21. Non-assignability; Termination

(a) The rights and obligations of the parties under this Agreement and under any
Transaction shall not be assigned by either party without the prior written
consent of the other party. 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) This Agreement and all Transactions outstanding hereunder shall terminate
automatically without any requirement for notice on the date occurring three
hundred and sixty (360) days after the date as of which this Agreement is
entered into; provided, however, that this Agreement and any Transaction
outstanding hereunder may be extended by mutual agreement of Buyer and Seller;
and provided further, however, that no such party shall be obligated to agree to
such an extension.

 

22. 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.

 

23. Governing Law

This Agreement shall be governed by the laws of the State of New York.

 

24. No Waivers, Etc.

No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder. 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. Without limitation on any of the foregoing, the failure to give
a notice pursuant to subparagraph 4(a) hereof will not constitute a waiver of
any right to do so at a later date.

 

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25. Use of Employee Plan Assets

(a) If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974 (“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 Seller furnishes or has furnished to Buyer 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, Seller shall be
deemed (i) to represent to Buyer that since the date of Seller’s latest such
financial statements, there has been no material adverse change in Seller’s
financial condition which Seller has not disclosed to Buyer, and (ii) to agree
to provide Buyer with future audited and unaudited statements of its financial
condition as they are issued, so long as it is a Seller in any outstanding
Transaction involving a Plan Party.

 

26. Intent

(a) The parties intend and acknowledge that each Transaction is a “repurchase
agreement” as that term is defined in Section 101 of Title 11 of the United
States Code, as amended (except insofar as the type of Mortgage Loans subject to
such Transaction or the term of such Transaction would render such definition
inapplicable), and a “securities contract” as that term is defined in
Section 741 of Title 11 of the United States Code, as amended.

(b) It is understood that either party’s right 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
liquidate such Transaction as described in Sections 555 and 559 of Title 11 of
the United States Code, as amended.

 

27. Disclosure Relating to Certain Federal Protections

The parties 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;

 

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(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, the Federal Savings and Loan Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable.

 

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BEAR STEARNS MORTGAGE CAPITAL CORPORATION   ALESCO LOAN HOLDINGS TRUST By:  

/s/ Paul M. Friedman

  By:  

/s/ John J. Longino

Title:   SENIOR VICE PRESIDENT   Title:   CFO AND TREASURER Date:   February 28,
2006   Date:   February 28, 2006

 

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