Exhibit 10.1

Deal CUSIP 23337DAA5

Facility CUSIP 23337DAB3

Execution Version

AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

(for DHI Mortgage Company, Ltd.)

dated as of March 1, 2013

among

U.S. BANK NATIONAL ASSOCIATION,

as Administrative Agent, Sole Book Runner, Lead Arranger, and a Buyer,

the other Buyers party hereto

and

DHI MORTGAGE COMPANY, LTD., as Seller

 

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TABLE OF CONTENTS

 

1    

  APPLICABILITY AND DEFINED TERMS      1      1.1.   Applicability      1     
1.2.   Defined Terms      2      1.3.   Other Definitional Provisions      31   

2

  THE BUYERS’ COMMITMENTS      31      2.1.   The Buyers’ Commitments to
Purchase      31      2.2.   Expiration or Termination of the Commitments     
32      2.3.   Request for Increase in Maximum Aggregate Commitment      32     
2.4.   Swing Line Commitment      32      2.5.   Swing Line Transactions      33
     2.6.   Optional Reduction or Termination of Buyers’ Commitments      34   

3

  INITIATION; REQUEST/CONFIRMATION; TERMINATION      34      3.1.   Seller
Request; Administrative Agent Confirmation      34      3.2.   Syndication of
Purchases      35      3.3.   Request/Confirmation      37      3.4.  
Transaction Termination; Purchase Price Decrease      37      3.5.   Place for
Payments of Purchase Prices      38      3.6.   If Repurchase Price Not Paid   
  38      3.7.   [Reserved.]      38      3.8.   [Reserved.]      38      3.9.  
Delivery of Additional Mortgage Loans      38      3.10.   Application of
Repurchase Price Payments      38   

4

  TRANSACTION LIMITS AND SUBLIMITS      39      4.1.   Transaction Limits     
39      4.2.   Transaction Sublimits      39   

5

  PRICE DIFFERENTIAL      40      5.1.   Pricing Rate      40      5.2.  
[Reserved.]      40      5.3.   [Reserved.]      40      5.4.   [Reserved.]     
40      5.5.   Pricing Rate for Past Due Purchased Loans      40      5.6.  
Price Differential Payment Due Dates      40   

6

  MARGIN MAINTENANCE      41      6.1.   Margin Deficit      41      6.2.  
Margin Call Deadline      42      6.3.   Application of Cash      42      6.4.  
Increased Cost      42      6.5.   Capital Adequacy      42      6.6.  
Administrative Agent’s Report      42      6.7.   Provisions Relating to LIBOR
Rate Tranches      43   

 

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7

  TAXES      44      7.1.   Payments to be Free of Taxes; Withholding      44   
  7.2.   Other Taxes      44      7.3.   Taxes Indemnity      44      7.4.  
Receipt      45      7.5.   Buyer      45      7.6.   Treatment of Certain
Refunds      47      7.7.   Survival      47   

8

  INCOME AND ESCROW PAYMENTS; CONTROL      48      8.1.   Income and Escrow
Payments      48      8.2.   Income and Escrow Accounts      48      8.3.  
Income and Escrow Accounts after Default      49   

9

  FACILITY FEE; ADMINISTRATIVE AGENT’S FEE      49      9.1.   Facility Fee     
49      9.2.   Administrative Agent’s Fee      49   

10

  SECURITY INTEREST      50      10.1.   Intent of the Parties      50   

11

  SUBSTITUTION      52      11.1.   Seller May Substitute Other Mortgage Loans
with Notice to and Approval of Administrative Agent      52      11.2.   Payment
to Accompany Substitution      53   

12

  PAYMENT AND TRANSFER      53      12.1.   Immediately Available Funds; Notice
to Custodian      53      12.2.   Payments to the Administrative Agent      53
     12.3.   If Payment Not Made When Due      54      12.4.   Payments Valid
and Effective      54      12.5.   Pro Rata Distribution of Payments      54   

13

  SEGREGATION OF DOCUMENTS RELATING TO PURCHASED LOANS      55   

14

  CONDITIONS PRECEDENT      55      14.1.   Initial Purchase      55      14.2.
  Each Purchase      57   

15

  REPRESENTATIONS, WARRANTIES AND COVENANTS      59      15.1.   Buyers,
Administrative Agent and Seller Representations      59      15.2.   Additional
Seller Representations      60      15.3.   Special Representations Relating to
the Purchased Loans      65      15.4.   Survival      65   

16    

  AFFIRMATIVE COVENANTS      65      16.1.   Market Analysis Report      65     
16.2.   Office of Foreign Assets Control and USA Patriot Act      65   

 

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  16.3.   Financial Statements      66      16.4.   Financial Statements Will Be
Accurate      67      16.5.   Other Reports      67      16.6.   Maintain
Existence and Statuses; Conduct of Business      68      16.7.   Compliance with
Applicable Laws      68      16.8.   Inspection of Properties and Books;
Protection of Seller’s Proprietary Information; Buyers’ Due Diligence of Seller
     69      16.9.   Privacy of Customer Information      70      16.10.  
Notice of Suits, Etc. and Notice      71      16.11.   Payment of Taxes, Etc.   
  72      16.12.   Insurance; fidelity bond      73      16.13.   Maintain Lien
on Mortgaged Premises      73      16.14.   Subordination of Certain
Indebtedness      73      16.15.   Certain Debt to Remain Unsecured      74     
16.16.   Promptly Correct Escrow Imbalances      74      16.17.   MERS Covenants
     74      16.18.   Special Affirmative Covenants Concerning Purchased Loans
     75      16.19.   Coordination with Other Lenders/Repo Purchasers and Their
Custodians      76      16.20.   Hedge Investments in Mortgage Loans      76   

17

  NEGATIVE COVENANTS      76      17.1.   No Merger      77      17.2.  
Limitation on GAAP Indebtedness and Contingent Indebtedness      77      17.3.  
Business      78      17.4.   Liquidations, Dispositions of Substantial Assets
     78      17.5.   Loans, Advances, and Investments      78      17.6.   Use
of Proceeds      79      17.7.   Transactions with Affiliates      79      17.8.
  Liens      79      17.9.   ERISA Plans      80      17.10.   Change of
Principal Office; Fiscal Year      80      17.11.   Distributions      80     
17.12.   Tangible Net Worth      80      17.13.   Tangible Net Worth Ratio     
80      17.14.   [Reserved.]      80      17.15.   Liquidity      80      17.16.
  Special Negative Covenants Concerning Purchased Loans      80      17.17.   No
Changes in Accounting Practices      81      17.18.   Most Favored Buyer Status
     81   

18    

  EVENTS OF DEFAULT; EVENT OF TERMINATION      81      18.1.   Events of Default
     81      18.2.   Transaction Termination      83      18.3.   Termination by
the Administrative Agent      83      18.4.   Remedies      83      18.5.  
Liability for Expenses and Damages      84      18.6.   Liability for Interest
     84   

 

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  18.7.   Other Rights      84      18.8.   Exercise of Remedies      84     
18.9.   Seller’s Repurchase Rights      85      18.10.   Sale of Purchased Loans
     85   

19

  SERVICING OF THE PURCHASED LOANS      85      19.1.   Servicing Released Basis
     85      19.2.   Servicing and Subservicing      86      19.3.   Escrow
Payments      86      19.4.   Escrow and Income after Event of Default      86
     19.5.   Servicing Records      86      19.6.   Subservicer Instruction
Letter      87      19.7.   Termination of Servicing      87      19.8.   Notice
from Seller      88      19.9.   Seller Remains Liable      88      19.10.  
Backup Servicer      88      19.11.   Successor Servicer      89   

20

  PAYMENT OF EXPENSES; INDEMNITY      89      20.1.   Expenses      89     
20.2.   Indemnity      90   

21

  SINGLE AGREEMENT      90   

22    

  RELATIONSHIPS AMONG THE ADMINISTRATIVE AGENT AND THE BUYERS      91      22.1.
  Administrative Agent’s Duties      91      22.2.   Limitation on Duty to
Disclose      92      22.3.   Actions Requiring All Buyers’ Consent      92     
22.4.   Actions Requiring Required Buyers’ Consent      93      22.5.  
Administrative Agent’s Discretionary Actions      93      22.6.   Buyers’
Cooperation      94      22.7.   Buyers’ Sharing Arrangement      94      22.8.
  Buyers’ Acknowledgment      94      22.9.   Administrative Agent Market Value
Determinations      95      22.10.   Administrative Agent’s Representations to
Buyers      95      22.11.   Administrative Agent’s Duty of Care, Express
Negligence Waiver and Release      95      22.12.   [Reserved.]      96     
22.13.   Calculations of Shares of Principal and Other Sums      96      22.14.
  Resignation or Removal of the Administrative Agent      96      22.15.  
Effective Date of Resignation of the Administrative Agent      97      22.16.  
Successor Administrative Agent      97      22.17.   Merger of the
Administrative Agent      97      22.18.   Participation; Assignment      98   
  22.19.   The Administrative Agent and the Buyers are the only Beneficiaries of
this Section 22      100   

 

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23

  NOTICES AND OTHER COMMUNICATIONS      100   

24

  MISCELLANEOUS      102      24.1.   Further Assurances      102      24.2.  
Administrative Agent as Attorney in Fact      102      24.3.   Wires to Seller
     102      24.4.   Wires to Administrative Agent      103      24.5.  
Receipt; Available Funds      103   

25

  ENTIRE AGREEMENT; SEVERABILITY      103   

26

  NON-ASSIGNABILITY; TERMINATION      103      26.1.   Limited Assignment     
103      26.2.   Remedies Exception      104      26.3.   Agreement Termination
     104   

27    

  COUNTERPARTS      104   

28

  GOVERNING LAW, JURISDICTION AND VENUE      104   

29

  WAIVER OF JURY TRIAL      105   

30

  RELATIONSHIP OF THE PARTIES      105   

31

  NO WAIVERS, ETC      106   

32

  USE OF EMPLOYEE PLAN ASSETS      106      32.1.   Prohibited Transactions     
106      32.2.   Audited Financial Statements Required      106      32.3.  
Representations      106   

33

  INTENT      107      33.1.   Transactions are Repurchase Agreements and
Securities Contracts      107      33.2.   Contractual Rights, Etc.      107   
  33.3.   FDIA      107      33.4.   Master Netting Agreement      107   

34

  DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS      108      34.1.  
Parties not Protected by SIPA or Insured by FDIC or NCUSIF      108      34.2.  
SIPA Does Not Protect Government Securities Broker or Dealer Counterparty     
108      34.3.   Transaction Funds Are Not Insured Deposits      108   

35

  USA PATRIOT ACT NOTIFICATION      108   

36

  EFFECT OF EXISTING AGREEMENT      108   

 

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EXHIBITS AND SCHEDULES

 

Exhibit A    Form of Request/Confirmation Exhibit B    Opinions Required for
Opinion of Counsel to Seller Exhibit C    Form of Officer’s Certificate with
Computations to Show Compliance or    Non-Compliance with Certain Financial
Covenants Exhibit D    List of Restricted Subsidiaries of the Seller as of the
Effective Date Exhibit E    Assignment and Assumption Exhibit F    ROF Term
Sheet Schedule AI    Approved Investors Schedule BC    The Buyers’ Committed
Sums Schedule BP    List of Basic Papers Schedule DQ    Disqualifiers Schedule
EL    Eligible Loans Schedule 15.2(f)    Material Adverse Changes and Contingent
Liabilities Schedule 15.2(g)    Pending Litigation Schedule 15.2(o)    Existing
Liens Schedule 15.2(q)    Seller’s Plans Schedule 15.3    Special
Representations and Warranties with Respect to each Purchased Loan Schedule 16.1
   Market Analysis Report Schedule 23    Buyers’ Addresses for Notice as of
March 1, 2013

 

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AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

THIS AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT is made and entered into
as of March 1, 2013 by and between DHI Mortgage Company, Ltd., a Texas limited
partnership (the “Seller”), the Buyers (as defined in Section 1.2) party hereto
and U.S. Bank National Association, a national banking association, as a Buyer
(in such capacity “U.S. Bank”), as lead arranger and sole book runner, as
administrative agent for itself as a Buyer and the other Buyers (in such
capacity, the “Administrative Agent”).

RECITALS

1. The Seller, certain of the Buyers, and the Administrative Agent are parties
to a Master Repurchase Agreement dated as of March 27, 2008 (as amended,
restated, supplemented, or otherwise modified before the date hereof, the
“Existing Agreement”).

2. The Seller, the Buyers, and the Administrative Agent have agreed to amend and
restate the Existing Agreement subject to the terms and conditions of this
Agreement.

AGREEMENT

1 Applicability and Defined Terms.

1.1. Applicability. From time to time the parties hereto may enter into
transactions in which the Seller agrees to transfer to Administrative Agent on
behalf of the Buyers, Eligible Loans on a service released basis against the
transfer of funds by Buyers, with a simultaneous agreement by the Buyers to
transfer to Seller such Eligible Loans at a date certain or on demand in the
event of termination pursuant to Section 18.2, or if no demand is sooner made,
on the Termination Date, 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 hereinafter defined.

U.S. Bank has also agreed to provide a separate revolving swing line repurchase
facility to initially and temporarily purchase Eligible Loans pending their
purchase by all of the Buyers pursuant to this Agreement.

The parties hereby specifically declare that it is their intention that this
Amended and Restated Master Repurchase Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the “Agreement,” which
term includes the preamble above) and the purchases of Eligible Loans made
pursuant to it (under both its regular and swing line provisions) are to be
treated as repurchase transactions under the Title 11 of the United States Code,
as amended (the “Bankruptcy Code”), including all rights that accrue to Buyers
by virtue of Sections 559, 561 and 562 of the Bankruptcy Code. This Agreement
also contains lien provisions with respect to the Purchased Loans so that if,
contrary to the intent of the parties, any court of competent jurisdiction
characterizes any Transaction as a financing, rather than a

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purchase, under applicable law, including the applicable provisions of the
Bankruptcy Code, the Administrative Agent is deemed to have a first priority
perfected security interest in and to the Purchased Loans to secure the payment
and performance of all of the Seller’s Obligations under this Agreement.

The Buyers’ agreement to establish and continue the revolving repurchase
facilities, and U.S. Bank’s agreement to establish and continue such revolving
swing line repurchase facility, are each made upon and subject to the terms and
conditions of this Agreement. If there is any conflict or inconsistency between
any of the terms or provisions of this Agreement and any of the other Repurchase
Documents, this Agreement shall govern and control. If there is any conflict
between any provision of this Agreement and any later supplement, amendment,
restatement or replacement of it, then the latter shall govern and control.

1.2. Defined Terms. Except where otherwise specifically stated, capitalized
terms used in this Agreement and the other Repurchase Documents have the
meanings assigned to them below or elsewhere in this Agreement.

“Accepted Servicing Practices” means, with respect to any Mortgage Loan,
(i) those mortgage loan servicing standards and procedures in accordance with
all applicable state, local and federal laws, rules and regulations and (ii)(y)
the mortgage loan servicing standards and procedures prescribed by Fannie Mae
and Freddie Mac, in each case as set forth in the Fannie Mae Servicing Guide or
Freddie Mac Servicing Guide, as applicable, and in the directives or applicable
publications of such agency, as such may be amended or supplemented from time to
time, or (z) with respect to any Mortgage Loans and any matters or circumstances
as to which no such standard or procedure applies, the servicing standards,
procedures and practices Seller uses with respect to its own assets as of the
date of this Agreement, subject to reasonable changes.

“Additional Covenant” means any financial covenant contained in any mortgage
loan repurchase or warehouse loan transaction to which any of the Buyers is not
a party and which is more restrictive on the Seller or such Subsidiary or more
beneficial to the lender or buyer, as the case may be, under such agreement than
the covenants relating to the Seller and its Subsidiaries contained in this
Agreement.

“Additional Purchased Loans” means Eligible Loans transferred by Seller to
Buyers pursuant to, and as defined in, Section 6.1.

“Affiliate” means and includes, with respect to a specified Person, any other
Person:

(a) that directly or indirectly through one or more intermediaries Controls, is
Controlled by or is under common Control with the specified Person (in this
definition only, the term “Control” means having the power to set or direct
management policies, directly or indirectly);

(b) that is a director, trustee, partner, member or executive officer of the
specified Person or serves in a similar capacity in respect of the specified
Person;

 

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(c) of which the specified Person is a director, trustee, partner, member or
executive officer or with respect to which the specified Person serves in a
similar capacity and over whom the specified Person, either alone or together
with one or more other Persons similarly situated, has Control;

(d) that, directly or indirectly through one or more intermediaries, is the
beneficial owner of 10% or more of any class of equity securities — which does
not include any MBS — of the specified Person; or

(e) of which the specified Person is directly or indirectly the owner of 10% or
more of any class of equity securities of the specified Person.

“Agency” means Ginnie Mae, Fannie Mae or Freddie Mac.

“Agency MBS” means MBS issued or guaranteed as to timely payment of principal
and interest by Ginnie Mae, Fannie Mae or Freddie Mac.

“Administrative Agent” is defined above.

“Administrative Agent’s Fee” is defined in Section 9.2.

“Aggregate Outstanding Purchase Price” means as of any Determination Date, an
amount equal to the sum of the Purchase Prices for all Purchased Loans included
in all Open Transactions.

“Agreement” is defined in Section 1.1.

“Appraisal” means an appraisal by a licensed appraiser selected in accordance
with Agency guidelines and not identified to the Seller as an unacceptable
appraiser by an Agency, and who is recognized and experienced in estimating the
value of property of that same type in the community where it is located, and
who, unless approved by the Administrative Agent on a case-by-case basis, is not
a member, manager, director, officer or employee of the Seller or any Affiliate
of the Seller, or related as a parent, sibling, child or first cousin to any of
the Seller’s or any such Affiliate’s respective directors or officers or any of
their spouses, a signed copy of the written report of which appraisal is in the
possession of the Seller or the applicable Servicer.

“Approved Investor” means Ginnie Mae, Fannie Mae, Freddie Mac and any of the
Persons listed on Schedule AI, as it may be supplemented or amended from time to
time by agreement of the Seller and the Administrative Agent provided that, the
Administrative Agent must approve any Person to be added to Schedule AI as an
Approved Investor for Mortgage Loans that are not Conforming Mortgage Loans and
which Person does not have a rating of at least A-1 or the equivalent thereof by
Standard & Poor’s Ratings Group and P-1 or the equivalent thereof by Moody’s
Investors Services, Inc.; provided further, that if the Administrative Agent
shall give written notice to the Seller of the Administrative Agent’s reasonable
disapproval of any Approved Investor(s) named in the notice, the Approved
Investor(s) so named shall no longer be (an) Approved Investor(s) from and after
the time when the Administrative Agent sends that notice to the Seller.

 

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“Authorized Seller Representative” means a representative of the Seller duly
designated by all requisite corporate action to execute any certificate,
schedule or other document contemplated or required by this Agreement or the
Custody Agreement on behalf of the Seller and as its act and deed. A list of
Authorized Seller Representatives current as of the Effective Date has been
provided to the Administrative Agent. The Seller will provide an updated list of
Authorized Seller Representatives to the Administrative Agent and the Custodian
promptly following each addition to or subtraction from such list, and the
Administrative Agent, the Buyers and the Custodian shall be entitled to rely on
each such list until such an updated list is received by the Administrative
Agent and the Custodian.

“Backup Servicer” means U.S. Bank Home Mortgage or any other Person designated
by Administrative Agent, in its sole discretion, to act as a backup servicer of
the Purchased Loans in accordance with Section 19.10.

“Bankruptcy Code” is defined in Section 1.1.

“Basic Papers” means all of the Loan Papers that must be delivered to the
Custodian (in the case of Dry Loans, prior to the related Purchase Date and, in
the case of Wet Loans, on or before the seventh Business Day after the related
Purchase Date) in order for any particular Purchased Loan to continue to have
Market Value. Schedule BP lists the Basic Papers.

“Broker’s Price Opinion” means the written opinion of the value of a tract or
parcel of Single-family residential real property securing a Mortgage Loan,
issued by a real estate broker duly licensed as such by the jurisdiction in
which the subject property is located that is reasonably acceptable to the
Administrative Agent and that is not an Affiliate of the Seller or a director,
member, manager, officer or employee of the Seller or any of its Affiliates,
selected reasonably and in good faith by the Seller.

“Business Day” means any day when both (1) the Administrative Agent’s main
branch in Minneapolis, Minnesota is open for regular commercial banking business
and (2) federal funds wire transfers can be made.

“Buyer” means each of U.S. Bank and such other Persons, if any, as from time to
time with the consent of the other parties to this Agreement shall be a party to
this Agreement as a buyer. Persons who are currently Buyers on any day shall be
listed as Buyers in Schedule BC in effect for that day.

“Buyer Affiliate” means (a) with respect to any Buyer, (i) an Affiliate of such
Buyer or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in securities and mortgage reverse repurchase agreements, bank loans and similar
financial arrangements in the ordinary course of its business and is
administered or managed by such Buyer or an Affiliate of such Buyer and (b) with
respect to any Buyer that is a fund which invests in securities and mortgage
reverse repurchase agreements, bank loans and similar financial arrangements,
any other fund that invests in securities and mortgage reverse repurchase
agreements, bank loans and similar financial arrangements and is managed by the
same investment advisor as such Buyer or by an Affiliate of such investment
advisor.

 

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“Buyers’ Margin Percentage” means:

(i) for all Purchased Loans except Super Jumbo Mortgage Loans, MIP Mortgage
Loans, Streamline Refinance Loans, and Redwood Trust Jumbo Mortgage Loans, 95%;

(ii) for Super Jumbo Mortgage Loans and Redwood Trust Jumbo Mortgage Loans, 93%
(provided that, to the extent the unpaid principal balance of any Super Jumbo
Loan exceeds $1,500,000, the Buyers Margin Percentage for such excess shall be
0%);

(iii) for MIP Mortgage Loans, 90%; and

(iv) for Streamline Refinance Loans, 90%.

Notwithstanding the foregoing, but subject to the next sentence, with respect to
FHA Loans, the Buyers’ Margin Percentage will, as of any date of determination,
be calculated as set forth in the table below, in each case determined based on
the HUD Compare Ratio as calculated in the most recent certificate that the
Seller has furnished pursuant to Section 16.3(c) (adjustment to the Buyers’
Margin Percentage for FHA Loans to become effective on the first day following
the delivery by the Seller of the certificate under Section 16.3(c) for the
relevant month):

 

HUD Compare Ratio

   Buyers’ Margin Percentage  

Less than or equal to 180%

     95 % 

Greater than 180% but less than or equal to 190%

     75 % 

Greater than 190% but less than or equal to 200%

     50 % 

Greater than 200%

     0 % 

Notwithstanding the foregoing, (a) any reduction to the Buyers’ Margin
Percentage for FHA Loans that is contemplated to be made by the preceding
sentence shall only be made at the option of the Administrative Agent
exercisable on or after the date on which such reduction would otherwise be
required by such sentence, and (b) if the Seller has not timely furnished the
certificate required by Section 16.3(c) for any month, then, at the option of
the Administrative Agent, the Buyers’ Margin Percentage for FHA Loans shall be
calculated as if the HUD Compare Ratio was greater than 200%, which percentage
shall remain in effect until the first day following the delivery of such
certificate for such month.

“Capitalized Servicing Rights” means for any Person, all rights to service
Mortgage Loans which would be capitalized under GAAP (regardless of whether such
rights result from asset securitizations, whole loan sales or originations of
Mortgage Loans).

 

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“Cash Equivalents” means and includes, on any day:

(i) any evidence of debt issued by the United States government or any agency
thereof, or guaranteed as to the timely payment of principal and interest by the
United States government, and maturing 90 days or less after that day; and

(ii) any certificate of deposit or banker’s acceptance issued by a commercial
bank that is a member of the Federal Reserve System and has a combined
unimpaired capital and surplus and unimpaired undivided profits of not less than
$200,000,000, and maturing not more than 90 days after that day.

“Central Elements” means and includes the value of a substantial part of the
Purchased Loans; the prospects for payment of each portion of the Repurchase
Price, both Purchase Price and Price Differential, when due; the validity or
enforceability of this Agreement and the other Repurchase Documents and, as to
any Person referred to in any reference to the Central Elements, such Person’s
and its consolidated Subsidiaries’ property, business operations, financial
condition and ability to fulfill and perform its obligations under this
Agreement and the other Repurchase Documents to which it is a party, each taken
as a whole, and such Person’s prospects of continuing in business as a going
concern.

“Certified Copy” means a copy of an original Basic Paper or Supplemental Paper
accompanied by (or on which there is stamped) a certification by an officer of
either a title insurer or an agent of a title insurer (whether a title agency or
a closing attorney) or, except where otherwise specified below, by an Authorized
Seller Representative or an officer of the Servicer (if other than the Seller)
or subservicer of the relevant Mortgage Loan, that such copy is a true copy of
the original and (if applicable) that the original has been sent to the
appropriate governmental filing office for recording in the jurisdiction where
the related Mortgaged Premises are located. Each such certification shall be
conclusively deemed to be a representation and warranty by the certifying
officer, agent, Authorized Seller Representative or officer of the relevant
Servicer or subservicer, as applicable, to the Administrative Agent, the Buyers
and the Custodian upon which each may rely.

“Change in Law” means (a) the adoption of any applicable Legal Requirement after
the Effective Date, (b) any change in any applicable Legal Requirement or in the
interpretation or application thereof by any Governmental Authority after the
Effective Date or (c) reasonable compliance by any Buyer (or by any applicable
office of any Buyer) with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the
Effective Date. Without limiting the foregoing, for purposes of Sections 6.4,
6.5 and 6.7, the term “Change in Law” shall include (i) all requests, rules,
guidelines or directives in connection with Dodd-Frank Wall Street Reform and
Consumer Protection Act and (ii) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
financial regulatory authorities, regardless of the date adopted, issued,
promulgated or implemented.

 

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“Change of Control” in respect of the Seller means the occurrence of the Parent
not owning, directly or indirectly a majority of the issued and outstanding
ownership interests of the Seller.

“Committed Sum” means, for any day, the maximum total amount a Buyer is
committed on that day to fund for the purchase from the Seller of Eligible Loans
on a revolving basis pursuant to this Agreement without giving effect to any
Transaction, on its terms and subject to its conditions. From the Effective Date
of this Agreement through and including the Termination Date or such other date
(if any) when all or any of them is changed by operation of the provisions of
any agreement or Legal Requirement, the Committed Sums for the Buyers are as set
forth on Schedule BC, as it may be amended and restated from time to time.

“Commitment” means, for each Buyer, its commitment under Section 2.1, subject to
reduction as described in Section 2.6, to fund its Funding Share of
Transactions, limited to such Buyer’s Committed Sum. Such term also includes
U.S. Bank’s commitment under Section 2.4 to fund Swing Line Transactions,
limited to the Swing Line Limit, upon and subject to the terms of this
Agreement.

“Conforming Mortgage Loan” means a conventional first priority Single-family
residential Mortgage Loan that is either (i) FHA insured, (ii) VA guaranteed,
(iii) guaranteed or provided under the USDA Rural Development program,
(iv) eligible for sale to an Approved Investor in conjunction with a state or
municipal housing bond program, or (v) a conventional mortgage loan that fully
conforms to all Agency underwriting and other requirements and excluding
expanded criteria loans as defined under any Agency program.

“Consolidated” refers to the consolidation of any Person, in accordance with
GAAP, with its properly consolidated subsidiaries excluding all Unrestricted
Subsidiaries. References herein to a Person’s Consolidated financial statements
refer to the consolidated financial statements of such Person and its properly
consolidated subsidiaries excluding all Unrestricted Subsidiaries.

“Contingent Indebtedness” of any Person at a particular date means the sum
(without duplication) at such date of (a) all obligations of such Person in
respect of letters of credit, acceptances, or similar obligations issued or
created for the account of such Person, (b) all obligations of such Person under
any contract, agreement or understanding of such Person pursuant to which such
Person guarantees, or in effect guarantees, any indebtedness or other
obligations of any other Person in any matter, whether directly or indirectly,
contingently or absolutely, in whole or in part, (c) all liabilities secured by
any Lien on any property owned by such Person, whether or not such Person has
assumed or otherwise become liable for the payment thereof and (d) any liability
of such Person or any Affiliate thereof in respect of unfunded vested benefits
under in ERISA Plan, excluding any GAAP Indebtedness.

“Corporation Tax Treatment Certificate” is defined in Section 7.5(a).

“Cumulative Loan-to-Value Ratio” means, as to any Single-family Loan, the ratio
of:

(x) the sum of (i) the original principal amount of the Mortgage Note evidencing
the subject Single-Family Loan and (ii) the original principal amounts of all
other Mortgage Notes (if any) secured by a mortgage Lien on the same Mortgaged
Premises that secure such Single-Family Loan;

 

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to (y) the fair market value of such Mortgaged Premises, as such value is shown
in the most recent Current Appraisal or the most recent Current Broker’s Price
Opinion (whichever is less.)

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement for the purpose of hedging the currency risk associated
with the Seller’s and its Subsidiaries’ operations and not for speculative
purposes.

“Current Appraisal” means an Appraisal dated no earlier than 90 days (or such
longer period, if any, as the Administrative Agent shall approve) before the
relevant Determination Date.

“Current Broker’s Price Opinion” means a Broker’s Price Opinion dated no earlier
than 90 days (or such longer period, if any, as the Administrative Agent shall
approve) before the relevant Determination Date.

“Custodian” means U.S. Bank, as Custodian under the Custody Agreement, or any
successor custodian under the Custody Agreement acceptable to the Administrative
Agent.

“Custodian’s Fees” are the fees to be paid by the Seller to the Custodian for
its services under the Custody Agreement, as provided for in the Custody
Agreement or by a separate agreement. Such fees are separate from and in
addition to other fees to be paid to the Buyers and the Administrative Agent
provided for in this Agreement.

“Custody Agreement” means the Amended and Restated Custody Agreement dated
concurrently herewith among the Administrative Agent, the Seller and U.S. Bank,
as Custodian, as it may be supplemented, amended or restated from time to time.

“Customer” means and includes each maker of a Mortgage Note and each cosigner,
guarantor, endorser, surety and assumptor thereof, and each mortgagor or grantor
under a Mortgage, whether or not such Person has personal liability for its
payment of the Mortgage Loan evidenced or secured thereby, in whole or in part.

“Debt” means, with respect to any Person, on any day, the sum of the following
(without duplication):

(1) all of that Person’s debt or other obligations which, in accordance with
GAAP, should be included in determining total liabilities as shown on the
liabilities side of that Person’s balance sheet for that day;

(2) all of that Person’s debt or other obligations for borrowed money or for the
deferred purchase price of property or services, except that non-recourse MBS
Debt arising out of transactions structured to qualify for GAAP sale treatment
shall be excluded;

 

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(3) all of any other Person’s debt or other obligations for borrowed money or
for the deferred purchase price of property or services in respect of which such
Person is liable, contingently or otherwise, to pay or advance money or property
as guarantor, surety, endorser or otherwise (excluding such Person’s contingent
liability as endorser of negotiable instruments for collection in the ordinary
course of business), or which such Person has agreed to purchase or otherwise
acquire;

(4) obligations of that Person under repurchase agreements, reverse repurchase
agreements, mortgage warehouse lines of credit, sale/buy-back agreements or like
arrangements;

(5) all debt for borrowed money or for the deferred purchase price of property
or services secured by a Lien on any property owned or being purchased by that
Person (even though that Person has not assumed or otherwise become liable for
the payment of such debt) to the extent that such debt would not be otherwise
counted as a liability for purposes of determining that Person’s net worth and
to the extent that such debt is less than or equal to the net book value of such
property; and

(6) obligations of that Person in respect of any exchange traded or over the
counter derivative transaction, including any Hedge Agreement whether entered
into for hedging or speculative purposes;

provided that, for purposes of this Agreement, there shall be excluded from the
calculation of Debt for that day both (i) such Person’s obligations to pay to
another Person any sums collected and held by the subject Person (as loan
servicer, escrow Administrative Agent or collection Administrative Agent or in a
similar capacity) for the account of such other Person, and (ii) Qualified
Subordinated Debt.

“Default” means the occurrence of any event or existence of any condition that,
but for the giving of notice, the lapse of time or both, would constitute an
Event of Default.

“Determination Date” means the date as of, or for, which a specified
characteristic of a Mortgage Loan or other subject matter is being determined
for purposes of a provision of this Agreement or another Repurchase Document.

“Disqualifier” means any of the circumstances or events affecting Purchased
Loans that are described on Schedule DQ.

“Dry Loan” means an Eligible Loan originated by the Seller that has been closed,
funded and qualifies without exception as an Eligible Loan, including satisfying
the requirement that all of its Basic Papers have been delivered to the
Custodian.

“Effective Date” means March 1, 2013.

“Electronic Administrative Agent” means MERSCORP, Inc. or its successor in
interest or assigns.

 

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“Electronic Tracking Agreement” means a written Electronic Tracking Agreement
among the Seller, the Administrative Agent, MERS and the Electronic Agent, in
form and substance acceptable to the Seller and the Administrative Agent, as it
may be supplemented, amended, restated or replaced from time to time.

“Eligible Loans” is defined on Schedule EL.

“ERISA” means the Employee Retirement Income Security Act of 1974 and any
successor statute, as amended from time to time, and all rules and regulations
promulgated under it.

“ERISA Affiliates” means all members of the group of corporations and trades or
businesses (whether or not incorporated) which, together with the Seller, are
treated as a single employer under Section 414 of the Code.

“ERISA Plan” means any pension benefit plan subject to Title IV of ERISA or
Section 412 of the Code maintained or contributed to by the Seller or any ERISA
Affiliate with respect to which the Seller has a fixed or contingent liability.

“Escrow Account” shall mean the Escrow Account established by the Seller with a
bank satisfactory to the Administrative Agent under Section 8, and subject to
the control of the Administrative Agent into which amounts paid for escrow
accumulation under Purchased Loans are paid for purposes of paying taxes,
insurance and other appropriate escrow charges.

“Event of Default” is defined in Section 18.1.

“Event of Insolvency” means:

(i) the Seller, the Parent or a Material Subsidiary has commenced as debtor any
case or proceeding under any bankruptcy, insolvency, reorganization, moratorium,
delinquency, arrangement, readjustment of debt, liquidation, dissolution, or
similar Law of any jurisdiction whether now or hereafter in effect, or consents
to the filing of any petition against it under such Law, or petitions for,
causes or consents to the appointment or election of a receiver, conservator,
liquidator, trustee, sequestrator, custodian or similar official for the Seller,
the Parent or a Material Subsidiary or any substantial part of its property, or
an order for relief is entered under the Bankruptcy Code; or any of Seller’s,
the Parent’s or a Material Subsidiary’s property is sequestered by court or
administrative order; or the convening by the Seller, the Parent or a Material
Subsidiary of any meeting of creditors for purposes of commencing any such case
or proceeding or seeking such an appointment or election;

(ii) the commencement of any such case or proceeding against the Seller, the
Parent or any Material Subsidiary, or another Person’s seeking an appointment or
election of a receiver, conservator, liquidator, trustee, sequestrator,
custodian or similar official for the Seller, the Parent or a Material
Subsidiary or any substantial part of its property, or the filing against the
Seller, the Parent or a Material Subsidiary of an application for a protective
decree under the provisions of SIPA which (1) is consented to or not timely
contested by Seller, the Parent or such Material Subsidiary, (2) results in the
entry of an order for relief, such an appointment or election, the issuance of
such a protective decree or the entry of an order having a similar effect or
(3) is not dismissed within 60 days;

 

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(iii) the making by the Seller, the Parent or a Material Subsidiary of a general
assignment for the benefit of creditors; or

(iv) the admission by the Seller, the Parent or a Material Subsidiary of its
inability, or intention not, or the inability of the Seller, the Parent or a
Material Subsidiary, to pay its debts as they become due.

“Excluded Taxes” means, in the case of each Buyer and the Administrative Agent,
(i) Taxes imposed on its overall net income, franchise Taxes, and branch profits
Taxes imposed on it, by the respective jurisdiction under the laws of which such
Buyer or the Administrative Agent is incorporated or is organized or in which
its principal executive office is located, (ii) in the case of a Non-U.S. Buyer,
any withholding tax that either (x) is imposed on amounts payable to such
Non-U.S. Buyer pursuant to the laws in effect at the time such Non-U.S. Buyer
becomes a party to this Agreement (except in each case to the extent that,
pursuant to Section 7.1, amounts with respect to such Taxes were payable to such
Buyer’s assignor immediately before such Buyer became a party hereto) or (y) is
attributable to the Non-U.S. Buyer’s failure to comply with Section 7, and
(iii) any U.S. federal withholding taxes imposed by FATCA.

“Facility Fee” is defined in Section 9.1.

“Fannie Mae” means the Federal National Mortgage Association and any successor.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), and any current or future
regulations or official interpretations thereof.

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100th of one percent) equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published by
the Federal Reserve Bank of Minneapolis on the Business Day next succeeding such
day, provided that (i) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate quoted to
Administrative Agent on such day on such transactions as determined by
Administrative Agent.

“FHA” means the Federal Housing Administration and any successor.

“FHA Loans” means Mortgage Loans originated under the FHA single family mortgage
insurance program.

“FICA” means the Federal Insurance Contributions Act.

 

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“FICO” means Fair Isaac Corporation and, where used in this Agreement, refers to
the credit scoring system developed by that company or to any other Customer
credit scoring system whose use by the Seller (for purposes of this Agreement
and the Transactions) has been specifically approved in writing by the
Administrative Agent.

“File” means a file in the possession of the Custodian or its designee (other
than the Seller or an Affiliate of the Seller) containing all of the Loan Papers
for the relevant type of Mortgage Loan.

“Financial Statements” is defined in Section 15.2(f).

“Freddie Mac” means the Federal Home Loan Mortgage Corporation and any
successor.

“Funding Account” means the Seller’s non-interest bearing demand deposit account
number 104756234340 maintained with U.S. Bank, into which the Administrative
Agent may transfer funds (funds paid by the Buyers as Purchase Price) and from
which the Administrative Agent is authorized to disburse funds to the Seller or
its designee (such as its closing agents) for the funding of Transactions. The
Funding Account shall be subject to setoff by the Administrative Agent for Pro
Rata distribution to the Buyers and shall be subject to the control of the
Administrative Agent.

“Funding Share” means, for each Buyer, that proportion of the sum of the
original Purchase Prices for the Eligible Loans to be purchased in a Transaction
that bears the same ratio to the total amount of such sum as that Buyer’s
Committed Sum bears to the Maximum Aggregate Commitment.

“GAAP” means, for any day, generally accepted accounting principles, applied on
a consistent basis, stated in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants, or
in statements and pronouncements of the Financial Accounting Standards Board or
in such other statements by another entity or entities as may be approved by a
significant segment of the accounting profession, that are applicable to the
circumstances for that day. The requirement that such principles be applied on a
consistent basis means that the accounting principles observed in a current
period shall be comparable in all material respects to those applied in an
earlier period, with the exception of changes in application to which the
Seller’s independent certified public accountants have agreed and which changes
and their effects are summarized in the subject company’s financial statements
following such changes. If (a) during the term of this Agreement any change(s)
in such principles occur(s) which materially changes the meaning or effect of
any provision of this Agreement and (b) the Seller or the Required Buyers regard
such change(s) as adverse to their respective interests, then upon written
notice by the Seller to the Administrative Agent, or by the Administrative Agent
or the Required Buyers to the Seller, the parties to this Agreement shall
negotiate promptly and in good faith a supplement or amendment to this Agreement
to achieve as nearly as possible preservation and continuity of the business
substance of this Agreement in light of such change; provided that neither the
Administrative Agent nor any of the Buyers shall be obligated to commence,
continue or conclude any such negotiation or to execute any such supplement or
amendment after any Default has occurred (other than a Default caused by such
change) and before it has been cured or after any Event of Default has occurred
(other than an Event of Default caused by such change) that the Administrative
Agent has not declared in writing to have been cured or waived.

 

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“GAAP Indebtedness” of any Person at a particular date means the sum (without
duplication) at such date of (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services or which is
evidenced by a note, bond, debenture, or similar instrument, and (b) all
obligations of such Person under any lease required by GAAP to be capitalized on
the balance sheet of such Person.

“General Partner” means the general partner of the Seller which on the date
hereof is DHI Mortgage Company GP, Inc., a Delaware corporation.

“Ginnie Mae” means the Government National Mortgage Association and any
successor.

“Governmental Authority” means any foreign governmental authority, the United
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, department, commission, board, bureau,
court or other tribunal.

“Hazard Insurance Policy” is defined in paragraph (bb) of Schedule 15.3.

“Hedge Agreement” means an Interest Rate Protection Agreement, a Currency
Agreement or a forward sales agreement entered into in the ordinary course of
the Seller’s or any of its Subsidiaries’ businesses to protect the Seller
against changes in interest rates or the market value of assets.

“HUD” means the U.S. Department of Housing and Urban Development and any
successor.

“HUD Compare Ratio” means, as of any date of determination, the ratio (expressed
as a percentage) of (a) the percentage of the Seller’s FHA Loans that defaulted
in the first two years after origination of such loans to (b) the percentage of
all FHA Loans that defaulted in the first two years after origination of such
loans nationally for all types of loans and periods of default, as determined as
set forth on HUD’s Neighborhood Watch/Early Warning System website
(https://entp.hud.gov/sfnw/public).

“In Default” means that, as to any Mortgage Loan, any Mortgage Note payment or
escrow payment is unpaid for 30 days or more after its due date (whether or not
the Seller has allowed any grace period or extended the due date thereof by any
means) or another material default has occurred and is continuing, including the
commencement of foreclosure proceedings or the commencement of a case in
bankruptcy for any Customer in respect of such Mortgage Loan.

“Income” means, with respect to any Eligible Loan on any day, all payments of
principal, interest and other distributions thereon or proceeds thereof paid to
the relevant party.

“Income Account” means a demand deposit account established by the Seller with a
bank satisfactory to the Administrative Agent under the provisions of Section 8,
which shall be subject to the control of the Administrative Agent.

 

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“Indemnified Liabilities” is defined in Section 20.2.

“Indemnified Parties” is defined in Section 20.2.

“Indemnified Taxes” means Taxes imposed on or with respect to any payment made
by or on account of any obligation of the Seller under any Repurchase Document,
other than Excluded Taxes and Other Taxes.

“Interest Rate Protection Agreement” means, with respect to any or all of the
Purchased Loans, any short sale of any U.S. Treasury securities, futures
contract, mortgage related security, Eurodollar futures contract, options
related contract, interest rate swap, cap or collar agreement or similar
arrangement providing for protection against fluctuations in interest rates or
the exchange of nominal interest obligations, either generally or under specific
contingencies, that is entered into by the Seller and a financial institution
and is reasonably acceptable to the Administrative Agent.

“Internal Revenue Code” means the Internal Revenue Code of 1986 or any
subsequent federal income tax law or laws, as amended from time to time.

“Investor Commitment” means an unexpired written commitment held by the Seller
from an Approved Investor to buy Purchased Loans, and that specifies (a) the
type or item(s) of Purchased Loan, (b) a purchase date or purchase deadline date
and (c) a purchase price or the criteria by which the purchase price will be
determined.

“Jumbo Mortgage Loan” means a Mortgage Loan that would otherwise be a Conforming
Mortgage Loan secured by a first Lien Mortgage except that the original
principal amount is more than the maximum Agency loan amount but not more than
$1,000,000.

“JV” means a joint venture (whether structured as a corporation, partnership,
limited liability company, or other entity or arrangement) between the Seller
and one or more builders, developers, title companies, or other service
providers in the residential real estate industry for the purpose of making
Mortgage Loans.

“Law” means any law, statute, code, ordinance, order, rule, regulation,
judgment, decree, injunction, franchise, permit, certificate, license,
authorization or other determination, direction or requirement (including any of
the foregoing which relate to environmental standards or controls, energy
regulations and occupational safety and health standards or controls) of any
(domestic or foreign) arbitrator, court or other Governmental Authority.

“Legal Requirement” means any law, statute, ordinance, decree, ruling,
requirement, order, judgment, rule or regulation (or interpretation of any of
them) of any Governmental Authority, and the terms of any license, permit,
consent or approval issued by any Governmental Authority.

“LIBOR Business Day” a Business Day which is also a day for trading by and
between banks in United States dollar deposits in the interbank LIBOR market and
a day on which banks are open for business in New York City.

 

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“LIBOR Margin” means 2.50%.

“LIBOR Rate” means, on any date of determination, the average offered rate for
deposits in United States dollars having a maturity of one month (rounded
upward, if necessary, to the nearest 1/16 of 1%) for delivery of such deposits
on such date which appears on the Reuters Screen, LIBOR01 Page, or any successor
thereto as of 11:00 a.m., London time (or such other time as of which such rate
appears) on such date of determination, reset each LIBOR Business Day, adjusted
for any reserve requirement and any subsequent costs arising from a change in
government regulation, or the rate for such deposits determined by the
Administrative Agent at such time based on such other published service of
general application as shall be selected by the Administrative Agent for such
purpose; provided, that in lieu of determining the rate in the foregoing manner,
the Administrative Agent may determine the rate based on rates at which United
States dollar deposits having a maturity of one month are offered to the
Administrative Agent in the interbank LIBOR market at such time for delivery in
immediately available funds on such date of determination in an amount equal to
$1,000,000 (rounded upward, if necessary, to the nearest 1/16 of 1%).

“LIBOR Rate Tranche” means a portion of the outstanding Purchase Price on Open
Transactions on which the Pricing Rate is determined by reference to the LIBOR
Rate plus the applicable LIBOR Margin.

“Lien” means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest.)

“Liquidity” means as of any date of determination, (a) the Seller’s unencumbered
and unrestricted cash and Cash Equivalents plus, (b) the sum of the unused
revolving availability under this Agreement. For purposes of this definition and
as of any date of determination, the unused revolving availability shall be
calculated as the amount by which the aggregate Purchase Value of all Purchased
Mortgage Loans at the relevant date of determination exceeds the Aggregate
Outstanding Purchase Price.

“Loan Papers” means the Mortgage Note and all of the other papers related to the
establishment of a Purchased Loan and the creation, perfection and maintenance
of its lien and lien priority for such Purchased Loan, including its Basic
Papers and its Supplemental Papers and including any papers securing,
guaranteeing or otherwise related to or delivered in connection with any
Purchased Loan, in a form acceptable to the Administrative Agent (including any
guaranties, lien priority agreements, security agreements, mortgages, deeds of
trust, collateral assignments of the Seller’s interest in underlying obligations
or security, subordination agreements, negative pledge agreements, loan
agreements and title, mortgage, pool and casualty insurance policies), as any
such Loan Paper may be supplemented, amended, restated or replaced from time to
time.

“Loan Records” means books, records, ledger cards, files, papers, documents,
instruments, certificates, appraisal reports, journals, reports, correspondence,
customer lists, information and data that describes, catalogs or lists such
information or data, computer printouts, media (tapes, discs, cards, drives,
flash memory or any other kind of physical,

 

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electronic or virtual data or information storage media or systems) and related
data processing software (subject to any licensing restrictions) and similar
items that at any time evidence or contain information relating to any of the
Purchased Loans, and other information and data that is used or useful for
managing and administering the Purchased Loans, together with the nonexclusive
right to use (in common with the Seller and any repurchase agreement
counterparty or secured party that has a valid and enforceable interest therein
and that agrees that its interest is similarly nonexclusive) the Seller’s
operating systems to manage and administer any of the Purchased Loans and any of
the related data and information described above, or that otherwise relates to
the Purchased Loans, together with the media on which the same are stored to the
extent stored with material information or data that relates to property other
than the Purchased Loans (tapes, discs, cards, drives, flash memory or any other
kind of physical or virtual data or information storage media or systems), and
the Seller’s rights to access the same, whether exclusive or nonexclusive, to
the extent that such access rights may lawfully be transferred or used by the
Seller’s permittees, and any computer programs that are owned by the Seller (or
licensed to the Seller under licenses that may lawfully be transferred or used
by the Seller’s permittees) and that are used or useful to access, organize,
input, read, print or otherwise output and otherwise handle or use such
information and data.

“Margin Call” is defined in Section 6.1(a).

“Margin Deficit” is defined in Section 6.1(a).

“Margin Excess” is defined in Section 6.1(b).

“Margin Stock” has the meaning assigned to that term in Regulation U as in
effect from time to time.

“Market Value” means what the Administrative Agent determines as the market
value of any Purchased Loan, using a commercially reasonable methodology that
is, in its sole discretion, in accordance with standards customarily applicable
in the financial industry to third party service providers providing values on
comparable assets to be used in connection with the financing of such assets
without reference to Hedge Agreements or takeout commitments. The Market Value
of any Purchased Loan shall be value determined by the Administrative Agent as
of any date. The Administrative Agent may determine the Market Value of any
Purchased Loan at any time and as many times as it deems necessary in its sole
discretion. The Administrative Agent’s determination of Market Value hereunder
shall be conclusive and binding upon the parties, absent manifest error.

“Material Subsidiary” means any Subsidiary of the Seller whose contributed
income constituted at least 5% of the Seller’s gross income in the Seller’s most
recent fiscal year. Each Material Subsidiary must be a Restricted Subsidiary.

“Maximum Aggregate Commitment” means, as of any day, the maximum Aggregate
Outstanding Purchase Price that is allowed to be outstanding under this
Agreement on such day, being the amount set forth in Schedule BC in effect for
that day. If and when some or all of the Buyers then party to this Agreement
agree in writing to increase their Committed Sums, or if a new Buyer or Buyers
joins the syndicate of Buyers, or if there is both such an increase and a new

 

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Buyer’s joinder, the Administrative Agent shall execute an updated Schedule BC
reflecting the new Maximum Aggregate Commitment and deliver it to the Seller and
the Buyers, and that updated Schedule BC shall thereupon be substituted for and
supersede the prior Schedule BC.

“MBS” means a mortgage pass-through security, collateralized mortgage
obligation, REMIC or other security that (i) is based on and backed by an
underlying pool of Mortgage Loans and (ii) provides for payment by its issuer to
its holder of specified principal installments and/or a fixed or floating rate
of interest on the unpaid balance and for all prepayments to be passed through
to the holder, whether issued in certificated or book-entry form and whether or
not issued, guaranteed, insured or bonded by Ginnie Mae, Fannie Mae, Freddie
Mac, an insurance company, a private issuer or any other investor.

“MERS” means Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or its successors or assigns.

“MERS Designated Loan” means a Purchased Loan registered to the Seller on the
MERS® System.

“MERS Procedures Manual” means the MERS Procedures Manual, as it may be amended
from time to time.

“MERS® System” means the Electronic Agent’s mortgage electronic registry system,
as more particularly described in the MERS Procedures Manual.

“MIP Mortgage Loan” means a first priority Single-family residential Mortgage
Loan (i) that is (a) FHA insured, (b) VA guaranteed, (c) guaranteed or provided
under the USDA Rural Development program or (d) is eligible for sale to an
Approved Investor in conjunction with a state or municipal housing bond program,
and (ii) the principal amount of which includes a prepaid mortgage insurance
premium or other similar mortgage insurance obligations.

“Mortgage” means a mortgage, deed of trust, deed to secure debt, security deed
or other mortgage instrument or similar evidence of lien legally effective in
the U.S. jurisdiction where the relevant real property is located to create and
constitute a valid and enforceable Lien, subject only to Permitted Encumbrances,
on the fee simple or long term ground leasehold estate in improved real
property.

“Mortgage Assignment” means an assignment of a Mortgage, in form sufficient
under the Laws of the U.S. jurisdiction where the real property covered by such
Mortgage is located to give record notice of the assignment of such Mortgage,
perfect the assignment and establish its priority relative to other transactions
in respect of the Mortgage assigned (no Mortgage Assignment is required for any
Mortgage that has been originated in the name of MERS and registered under the
MERS® System).

“Mortgage Loan” means any loan evidenced by a Mortgage Note and includes all
right, title and interest of the lender or mortgagee of such loan as a holder of
both the beneficial and legal title to such loan, including (i) all Loan Papers
or other loan documents, files and records of the lender or mortgagee for such
loan, (ii) the monthly payments, any prepayments, insurance and other proceeds,
(iii) all Servicing Rights related to such loan and (iv) all other rights,
interests, benefits, security, proceeds, remedies and claims (including, without
limitation, REO) in favor or for the benefit of the lender or mortgagee arising
out of or in connection with such loan.

 

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“Mortgage Loan Transmission File” means a file containing all information
concerning each Mortgage Loan required by the “Record Layout,” as defined and
provided for in (and attached as an exhibit to) the Custody Agreement, one of
which shall be delivered by the Seller to each of the Custodian and the
Administrative Agent for each Purchased Loan on its Purchase Date, both by
electronic, computer readable transmission in accordance with such Record Layout
and, in the event such electronic transmission is not possible, by faxing a hard
copy thereof to each of the Custodian and the Administrative Agent.

“Mortgage Note” means a promissory note secured by a Mortgage.

“Mortgaged Premises” means the Property securing a Mortgage Loan.

“Multiemployer Plan” means any “multiemployer plan,” as defined in
Section 4001(a)(3) of ERISA, that is maintained for employees of the Seller or
any of the Seller’s Subsidiaries.

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

“Nonfunding Buyer” is defined in the definition of “Pro Rata.”

“Notices” is defined in Section 23.

“Obligations” means all of the Seller’s present and future obligations and
liabilities under this Agreement or any of the other Repurchase Documents,
whether for Repurchase Price, Price Differential, Margin Call, premium, fees,
costs, attorneys’ fees or other obligation or liability, and whether absolute or
contingent, and all renewals, extensions, modifications and increases of any of
them.

“Officer’s Certificate” means a certificate executed on behalf of the Seller or
another relevant Person by its (or if it is a partnership, its general
partner’s) Board of Directors’ Chairman (or if it is a limited liability
company, one of its managers), president, chief financial officer, treasurer,
any of its executive vice presidents or senior vice presidents, its company
secretary, its controller or such other officer as shall be acceptable to the
Administrative Agent.

“Open Transaction” means a Transaction in which the Buyers have purchased and
paid for the related Purchased Loans but the Seller has not repurchased all of
them, such that the remaining Purchased Loans not repurchased by the Seller of
the subject Transaction would be an Open Transaction.

“Operating Account” means the Seller’s non-interest bearing demand deposit
account no. 104790245344 maintained with U.S. Bank, subject to a control
agreement in favor of the Administrative Agent and from which the Administrative
Agent is authorized pursuant to Section 3.6 to withdraw funds on any day in an
amount equal to the aggregate Repurchase Prices of all Purchased Loans that are
Past Due on that day. The Operating Account shall be subject to

 

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setoff by the Administrative Agent for Pro Rata distribution to the Buyers and,
upon the occurrence and during the continuance of a Default or Event of Default
described in Section 18.1(a), (b), (c), (d), or (g), the Administrative Agent
may also terminate the Seller’s right to withdraw, or direct the payment of,
funds except funds in excess of those necessary to pay the Obligations in full.

“Operating Subsidiaries” means all Subsidiaries of the Seller other than
Single-purpose Finance Subsidiaries.

“Organizational Documents” means as to any Person other than a natural Person,
its articles or certificate of incorporation, organization, limited partnership
or other document filed with a Governmental Authority evidencing the
organization of such entity and any bylaws, operating agreement or other
governance document governing the rights of the holders of the ownership
interests in such Person.

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Repurchase Document.

“Parent” means D.R. Horton, Inc., a Delaware corporation, which owns indirectly
through one or more of its wholly-owned Subsidiaries, 100% of the general and
limited partnership interests in the Seller.

“Participant” is defined in Section 22.18(a).

“Past Due” means that the Seller has not repurchased the subject Purchased Loan
on or before its Repurchase Date.

“Past Due Rate” means, for any day after the Repurchase Date for the relevant
Purchased Loan, the Prime Rate for that day plus 2.0% per annum.

“Permitted Encumbrances” means, in respect of the Mortgaged Premises securing a
Purchased Loan, (i) tax Liens for real property taxes and government-improvement
assessments that are not delinquent; (ii) easements and restrictions that do not
materially and adversely affect the title to or marketability of such Mortgaged
Premises or prohibit or interfere with the use of such Mortgaged Premises as a
one-to-four family residential dwelling; (iii) reservations as to oil, gas or
mineral rights, provided such rights do not include the right to remove
buildings or other material improvements on or near the surface of such
Mortgaged Premises or to mine or drill on the surface thereof or otherwise enter
the surface for purposes of mining, drilling or exploring for, or producing,
transporting or otherwise handling oil, gas or other minerals of any kind;
(iv) agreements for the installation, maintenance or repair of public utilities,
provided such agreements do not create or evidence Liens on such Mortgaged
Premises or authorize or permit any Person to file or acquire claims of Liens
against such Mortgaged Premises; and (v) such other exceptions (if any) as are
acceptable under relevant Agency guidelines; provided that any encumbrance that
is not permitted pursuant to the standards of any relevant Investor Commitment
by which the subject Purchased Loan is covered shall not be a Permitted
Encumbrance.

 

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“Person” means and includes natural persons, corporations, limited liability
companies, limited partnerships, registered limited liability partnerships,
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions of them.

“Plan” means an employee pension benefit plan of a type described in
Section 3(2) of ERISA and which is subject to Title IV of ERISA in respect of
which the Seller is an “employer” as defined in Section 3(5) of ERISA.

“Plan Party” is defined in Section 32.1.

“Price Differential” means, with respect to each Tranche under any Transaction
hereunder for any day, the aggregate amount obtained by daily multiplication of
the Pricing Rate for such Tranche for that day by the Purchase Price for such
Tranche 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 Tranche under
such Transaction and ending on (but excluding) the Determination Date, reduced
by any such amount previously paid by the Seller to the Administrative Agent
(for Pro Rata distribution to the Buyers) with respect to such Tranche for such
Transaction.

“Pricing Rate” means the per annum percentage rate for determination of Price
Differential. The Pricing Rate for any Tranche may be determined by reference to
the LIBOR Rate plus the LIBOR Margin, or the Past Due Rate, as determined under
this Agreement.

“Prime Rate” means at any time of any determination thereof, the rate per annum
which is most recently publicly announced by U.S. Bank as its “Prime Rate,”
which may be a rate at, above or below the rate at which U.S. Bank lends to
other Persons. The Prime Rate is a reference rate and is not necessarily the
lowest rate. Any Pricing Rate based on the Prime Rate shall be adjusted as of
the effective date of each change in the Prime Rate.

“Principal Balance” means, for any day, the advanced and unpaid principal
balance of a Purchased Loan on that day. If a Purchased Loan is listed in the
most current Purchased Loans Curtailment Report, then for purposes of this
Agreement, the Principal Balance for that Purchased Loan (absent manifest error)
shall be its principal balance as shown in that Purchased Loans Curtailment
Report.

“Privacy Requirements” means (a) Title V of the Gramm-Leach-Bliley Act, 15
U.S.C. § 6801 et seq., (b) federal regulations implementing such act codified at
12 C.F.R. Parts 40, 216, 332 and 573, (c) the Interagency Guidelines
Establishing Standards For Safeguarding Customer Information and codified at 12
C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568 and 570 and (d) any other
applicable federal, state and local laws, rules, regulations and orders relating
to the privacy and security of Seller’s Customer Information, as such statutes,
regulations, guidelines, laws, rules and orders may be amended from time to
time.

 

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“Pro Rata” means in accordance with the Buyers’ respective ownership interests
in the Purchased Loans. On any day, the Buyers will each own an undivided
fractional ownership interest in and to each Purchased Loan:

(i) if the Commitments of the Buyers are outstanding on that day, (x) whose
numerator is that Buyer’s Committed Sum for that day and (y) whose denominator
is the Maximum Aggregate Commitment for that day; or

(ii) if the Commitments have expired or have been terminated and have not been
reinstated, (x) whose numerator is the aggregate sum of the portions of the
Purchase Prices paid by that Buyer in all Transactions outstanding on that day
and (y) whose denominator is the aggregate sum of the Purchase Prices paid by
all Buyers in all such Transactions outstanding on the day;

subject to the following adjustment:

if at any time or times when the Commitments are outstanding, any Buyer fails to
fund any of its Funding Share(s) of any Transaction which satisfies the
conditions precedent set forth herein (a “Nonfunding Buyer”) and one or more of
the other Buyers funds it (electively in accordance with the provisions of
Section 2.1), then:

(a) the respective ownership interests of both (i) the Nonfunding Buyer and
(ii) the Buyer (or Buyers) that funded such Funding Share(s), shall be
proportionately decreased and increased, respectively, to the same extent as if
their respective Committed Sums were changed in direct proportion to the
unreimbursed balance outstanding from time to time thereafter of the amount so
funded;

(b) the Nonfunding Buyer’s share of all future distributions of Repurchase
Prices or other realizations on the Purchased Loans received, pro rata among
them in accordance with their respective unrecovered balances of such Nonfunding
Buyer’s Funding Share(s), shall be distributed to the Buyer(s) that so funded
such Nonfunding Buyer’s Funding Share(s) until all such funding Buyer(s) have
been fully repaid the amount so funded; and

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

If no other Buyer funds any of the Nonfunding Buyer’s Funding Share, then the
Pro Rata ownership interests of the Buyers in the Purchased Loans shall be
changed, in that case so that each Buyer’s Pro Rata ownership interest in the
Purchased Loans is equal to the ratio of (x) the sum of the portions of the
Purchase Prices paid by that Buyer in all Open Transactions on that day to
(y) the total of the Purchase Prices paid by all Buyers in all Open Transactions
on that day, but the Nonfunding Buyer’s share of all subsequent distributions of
any Repurchase and Margin payments and Facility Fees shall be paid to the other
Buyers, pro rata among them in the ratio that the Pro Rata ownership interest in
the Purchased Loans owned by each bears to the aggregate Pro Rata ownership
interests in the Purchased Loans of all such other Buyers, and the Buyers’
respective Pro Rata ownership interests in the Purchased Loans shall be
readjusted after each such payment,

 

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until their Pro Rata ownership interests are restored to what they were before
any Nonfunding Buyer failed to fund. Notwithstanding any such changes in the
Buyers’ Pro Rata ownership interests in any Purchased Loan due to any Buyer’s
failure to fund its Funding Share(s) of any Transaction, such failure to fund
shall not diminish any Buyer’s Funding Share(s) for subsequent Transactions.

“Property” means any interest of a Person in any kind of property, whether real,
personal or mixed, tangible or intangible, including the Mortgage Loans.

“Purchase Date” means the date for each Transaction when the Seller is to convey
the subject Purchased Loans to the Buyers.

“Purchase Price” means (i) on the relevant Purchase Date, the price at which the
Purchased Loans in a Transaction are sold by the Seller to the Buyers, such
price being the Purchased Loans’ initial Purchase Value, and (ii) thereafter,
except where the Administrative Agent and the Seller agree otherwise, such
Purchased Loans’ Purchase Value decreased by the amount of any cash transferred
in respect of such Purchased Loans (as determined by the Administrative Agent)
by the Seller to the Administrative Agent pursuant to Sections 3.4 and 6.1
(absent manifest error, the Administrative Agent’s determination of for which
Transaction(s) cash was transferred by the Seller to the Administrative Agent
shall be conclusive and binding).

“Purchase Price Decrease” means a reduction in the outstanding Purchase Price
for Purchased Loans without a termination of a Transaction or portion thereof as
described in Section 3.4(c).

“Purchase Value” means (x) the Buyers’ Margin Percentage for a Purchased Loan
multiplied by (y) the least of:

(i) the face principal amount of the related Mortgage Note;

(ii) the unpaid Principal Balance of such Purchased Loan;

(iii) the price to be paid for such Purchased Loan under an Investor Commitment
or the weighted average price under unused Investor Commitments;

(iv) the weighted average purchase price payable pursuant to Hedge Agreements;
and

(v) at the discretion of the Administrative Agent, the Market Value of such
Purchased Loan;

provided, that (i) the Purchase Value for Purchased Loans in excess of the
sublimits set forth in Section 4.2 shall be zero and, (ii) the Purchase Value
for any Purchased Loan which is not an Eligible Loan shall be zero.

“Purchased Loan Report” means a report provided by the Administrative Agent
detailing the current Aggregate Outstanding Purchase Price for Purchased Loans
by the type of Purchased Loan as described in the table in Section 4.2(c).

 

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“Purchased Loans” means the eligible Loans sold by the Seller to the Buyers in
Transactions, and any Eligible Loans substituted therefor in accordance with
Section 11. The term “Purchased Loans” with respect to any Transaction at any
time shall also include Additional Purchased Loans delivered pursuant to
Section 6.1. For clarity, “Purchased Loans” shall not mean or include loans
repurchased by Seller pursuant to Section 6.1 or otherwise.

“Purchased Loans Curtailment Report” means a written report from the Seller to
the Administrative Agent, attached to the compliance certificate in the form of
Exhibit C, listing Purchased Loans on which an unscheduled principal payment,
prepayment or reduction of more than an amount equal to one regularly scheduled
principal and interest installment payment was made in the preceding month, and
their resulting new Principal Balances.

“Purchased Loans Support” means all property (real or personal) assigned,
hypothecated or otherwise securing any Purchased Loans and includes any security
agreement or other agreement granting a lien or security interest in such real
or personal property, including:

(1) all Loan Papers, whether now owned or hereafter acquired, related to, and
all private mortgage insurance on, any Purchased Loans, and all renewals,
extensions, modifications and replacements of any of them;

(2) all rights, liens, security interests, guarantees, insurance agreements and
assignments accruing or to accrue to the benefit of the Seller in respect of any
Purchased Loan;

(3) all of the Seller’s rights, powers, privileges, benefits and remedies under
each and every paper now or hereafter securing, insuring, guaranteeing or
otherwise relating to or delivered in connection with any Purchased Loan,
including all guarantees, lien priority agreements, security agreements, deeds
of trust, Purchased Loans assignments, subordination agreements, intercreditor
agreements, negative pledge agreements, loan agreements, management agreements,
development agreements, design professional agreements, payment, performance or
completion bonds, title and casualty insurance policies and mortgage guaranty or
insurance contracts;

(4) all of the Seller’s rights, to the extent assignable, in, to and under any
and all commitments issued by (i) Ginnie Mae, Fannie Mae, Freddie Mac, another
mortgage company or any other investor or any Buyer or securities issuer to
guarantee, purchase or invest in any of the Purchased Loans or any MBS based on
or backed by any of them or (ii) any broker or investor to purchase any MBS,
whether evidenced by book entry or certificate, representing or secured by any
interest in any of the Purchased Loans, together with the proceeds arising from
or pursuant to any and all such commitments;

(5) all rights under every Hazard Insurance Policy relating to real estate
securing a Purchased Loan for the benefit of the creditor of such Purchased
Loan, the proceeds of all errors and omissions insurance policies and all rights
under any blanket hazard insurance policies to the extent they relate to any
Purchased Loan or its security and all hazard insurance or condemnation proceeds
paid or payable with respect to any of the Purchased Loans and/or any of the
property securing payment of any of the Purchased Loans or covered by any
related instrument;

 

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(6) all present and future claims and rights of the Seller to have, demand,
receive, recover, obtain and retain payments from, and all proceeds of any
nature paid or payable by, any governmental, quasi-governmental or private
mortgage guarantor or insurer (including VA, FHA or any other Person) with
respect to any of the Purchased Loans; and

(7) all tax, insurance, maintenance fee and other escrow deposits or payments
made by the Customers under such Purchased Loans (the Buyers’ Administrative
Agent and the Buyers acknowledge that the Seller’s rights in such deposits are
limited to the rights of an escrow agent and such other rights, if any, in and
to such deposits as are accorded by the Purchased Loans and related papers) and
all monies, accounts, deposit accounts, payment intangibles and general
intangibles, however designated or maintained, constituting or representing
so-called “completion escrow” funds or “holdbacks,” and being Purchased Loans’
proceeds recorded as disbursed but that have not been paid over to the seller of
the subject Mortgaged Premises (the purchase of which is financed by such
Purchased Loan), but that are instead being held by the Seller or by a third
party escrow agent pending completion of specified improvements or landscaping
requirements for such Mortgaged Premises.

“Qualified Subordinated Debt” means Debt of the Seller to any Person which has
been approved by the Administrative Agent (i) the papers evidencing, securing,
governing or otherwise related to which Debt impose covenants and conditions on
the debtor under them that are no more restrictive or onerous than the covenants
and conditions imposed on the Seller by this Agreement, (ii) that is
subordinated to the Obligations pursuant to a currently effective and
irrevocable Subordination Agreement, including standstill and blockage
provisions, approved by the Administrative Agent and (iii) the principal of
which is not due and payable before 180 days after the date specified in
clause (i) of the definition of “Termination Date.”

“Recourse Servicing” means Servicing Rights under a Servicing Agreement with
respect to which the Servicer is obligated to repurchase or indemnify the holder
of the related Mortgage Loans in respect of defaults on such Mortgage Loans at
any time during the term of such Mortgage Loans.

“Redwood Trust Jumbo Mortgage Loans” means a Jumbo Mortgage Loan or Super Jumbo
Mortgage Loan that is a Purchased Loan and originated pursuant to an Investor
Commitment from Redwood Trust.

“Register” is defined in Section 22.18(c).

“Regular Transaction” means a Transaction funded by all Buyers, rather than by
U.S. Bank under the Swing Line.

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

 

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“Regulation Q” means Regulation Q promulgated by the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 217, or any other regulation when
promulgated to replace the prior Regulation Q and having substantially the same
function.

“Regulation T” means Regulation T promulgated by the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 220, or any other regulation when
promulgated to replace the prior Regulation T and having substantially the same
function.

“Regulation U” means Regulation U promulgated by the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 221, or any other regulation when
promulgated to replace the prior Regulation U and having substantially the same
function.

“REO” means Single-family real property owned following judicial or nonjudicial
foreclosure (or conveyance by deed in lieu of foreclosure) of a Mortgage
securing a Single-family Loan.

“Repurchase Date” means the date on which Seller is to repurchase Purchased
Loans from the Buyers, being the earlier of (i) the date when the Approved
Investor is to purchase such Purchased Loans, and (ii) any date determined by
application of the provisions of Section 3.4 or 18.

“Repurchase Documents” means and includes this Agreement, the Custody Agreement,
any financing statements or other papers now or hereafter authorized, executed
or issued pursuant to this Agreement, and any renewal, extension, rearrangement,
increase, supplement, modification or restatement of any of them.

“Repurchase Price” means the price at which Purchased Loans are to be resold by
the Buyers to the Seller upon termination of a Transaction (including
Transactions terminable upon demand), which will be determined in each case as
the sum of (x) the Purchase Price and (y) the Price Differential as of the date
of such determination.

“Request/Confirmation” means a request and confirmation, substantially in the
form of Exhibit A, delivered pursuant to Section 3.

“Required Buyers” means, for any day, Buyers (a) whose Commitments comprise at
least 66 2/3% of the Maximum Aggregate Commitment under this Agreement, or
(b) who own at least 66 2/3% of the Purchased Loans owned by the Buyers on that
day if on or before that day the Commitments have expired or have been
terminated and have not been reinstated; provided that at any time there is more
than one Buyer (excluding Nonfunding Buyers), “Required Buyers” shall include at
least two Buyers. The Commitments and Purchased Loans of any Nonfunding Buyer
shall be disregarded in determining Required Buyers at any time.

“Restricted Subsidiary” means any subsidiary of the Seller in existence on the
date hereof and any Subsidiary hereafter acquired or formed by the Seller which
the Seller does not designate as an Unrestricted Subsidiary.

 

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“Securities Custody Agreement” means the Custody and Control Agreement dated as
of January 7, 2013, among the Agent, the Seller, and U.S. Bank, as custodian, as
amended, restated, supplemented, or otherwise modified from time to time.

“Seller’s Consolidated Tangible Net Worth” means, as of any date, the remainder
of (a) all assets of the Seller and the Restricted Subsidiaries on a
Consolidated basis minus (b) the sum of (i) all GAAP Indebtedness and all
Contingent Indebtedness of the Seller and the Restricted Subsidiaries, (ii) all
assets of the Seller and the Restricted Subsidiaries which would be classified
as intangible assets under GAAP, including, but not limited to, Capitalized
Servicing Rights, goodwill (whether representing the excess of cost over book
value of assets acquired or otherwise), patents, trademarks, trade names,
copyrights, franchises, deferred charges and intercompany receivables,
(iii) investments in and advances to Unrestricted Subsidiaries and Affiliates,
and (iv) investments in and advances to JVs.

“Seller’s Customer” means any natural person who has applied to the Seller for a
financial product or service, has obtained any financial product or service from
the Seller or has a Mortgage Loan that is serviced or subserviced by the Seller.

“Seller’s Customer Information” means any information or records in any form
(written, electronic or otherwise) containing a Seller’s Customer’s personal
information or identity, including such Seller’s Customer’s name, address,
telephone number, loan number, loan payment history, delinquency status,
insurance carrier or payment information, tax amount or payment information and
the fact that such Seller’s Customer has a relationship with the Seller.

“Seller’s Underwriting Guidelines” means the Seller’s Mortgage Loan underwriting
guidelines for Single-family Loans, which will be made available to the
Administrative Agent in a form reasonably acceptable to the Administrative Agent
upon request and material changes to which, with respect to Mortgage Loans that
are not Conforming Mortgage Loans, will be made only upon prior notice by the
Seller to, and with approval of, the Administrative Agent. If the Administrative
Agent does not approve of such changes, Mortgage Loans subject to such changes
shall not be Eligible Loans.

“Serviced Loans” means all Mortgage Loans serviced or required to be serviced by
the Seller under any Servicing Agreement, irrespective of whether the actual
servicing is done by another Person (a subservicer) retained by the Seller for
that purpose.

“Servicer” means, initially, the Seller, and upon termination of the Seller’s
right to be Servicer pursuant to the provisions of Section 19.7, any Person
designated by the Administrative Agent (including the Administrative Agent).

“Servicing Agreement” means, with respect to any Person, the arrangement,
whether or not in writing, pursuant to which that Person acts as servicer of
Mortgage Loans, whether owned by that Person or by others.

“Servicing Functions” means, with respect to the servicing of Mortgage Loans,
the collection of payments for the reduction of principal and application of
interest, collection of amounts held or to be held in escrow for payment of
taxes, insurance and other escrow items and payment of such taxes and insurance
from amounts so collected, foreclosure services, and all other actions required
to conform with Accepted Servicing Practices.

 

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“Servicing Rights” means the rights and obligations to administer and service a
Mortgage Loan, including, without limitation, the rights and obligations to:
ensure the taxes and insurance are paid, provide foreclosure services, provide
full escrow administration and perform any other obligations required by any
owner of a Mortgage Loan, collect the payments for the reduction of principal
and application of interest, and manage and remit collected payments.

“Settlement Account” means the Seller’s non-interest bearing demand deposit
account number 104756234365 maintained with U.S. Bank, to be used for (a) any
principal payments received by the Administrative Agent or the Custodian (other
than regular principal and interest payments) on any Purchased Loans; (b) the
Administrative Agent’s deposit of Repurchase Price payments received from the
Seller or from an Approved Investor for the Seller’s account for distribution to
the Buyers, (c) proceeds of the sale of any MBS deposited pursuant to the
Securities Custody Agreement, and (d) only if and when (i) no Default has
occurred unless it has been either cured by the Seller or waived in writing by
the Administrative Agent (acting with the requisite consent of the Buyers as
provided in this Agreement) and (ii) no Event of Default has occurred unless the
Administrative Agent has declared in writing that it has been cured or waived,
transfer to the Operating Account of proceeds of sales or other dispositions of
Purchased Loans to an Approved Investor in excess (if any) of the Repurchase
Price of such Purchased Loan. The Settlement Account is (and shall continuously)
constitute collateral for the Obligations. The Settlement Account shall be
subject to setoff by the Administrative Agent for Pro Rata distribution to the
Buyers. The Settlement Account shall be a blocked account from which the Seller
shall have no right to directly withdraw funds, but instead such funds may be
withdrawn or paid out only against the order of an authorized officer of the
Administrative Agent (acting with the requisite consent of the Buyers as
provided herein), although under the circumstances described in clause (d) of
the preceding sentence and subject to the conditions specified in that clause,
the Administrative Agent shall use diligent and reasonable efforts to cause
amounts in excess of the applicable Repurchase Prices that are deposited to the
Settlement Account before 3:00 PM on a Business Day to be transferred to the
Operating Account on that same Business Day or on the Business Day thereafter
when the Administrative Agent next determines the Buyers’ Pro Rata shares of
such Purchase Price payment amounts or Repurchase Prices received.

“Single-family Loan” means a Mortgage Loan that is secured by a Mortgage
covering real property improved by a one-, two-, three- or four-family
residence.

“Single-purpose Finance Subsidiary” means a wholly-owned Subsidiary of the
Seller whose only authorized business is to issue MBS or hold passive
investments.

“SIPA” means the Securities Investors Protection Act of 1970, 15 U.S.C. §78a et.
seq., as amended.

“Solvent” means, for any Person, that (a) the fair market value of its assets
exceeds its liabilities, (b) it has sufficient cash flow to enable it to pay its
debts as they mature, and (c) it does not have unreasonably small capital to
conduct its business.

 

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“Statement Date” means September 30, 2012.

“Statement Date Financial Statements” is defined in Section 15.2(f).

“Streamline Refinance Loan” means a first-priority single-family residential
Mortgage Loan that is originated in compliance with, and fully conforms to all
underwriting criteria under, the Fannie Mae or Freddie Mac streamline refinance
programs.

“Sublimit” means one or more (as the context requires) of the sublimits
described in Section 4.2.

“Subordination Agreement” means a written subordination agreement in form and
substance satisfactory to and approved by the Administrative Agent that
subordinates (x) all present and future debts and obligations owing by the
Seller to the Person signing such subordination agreement to (y) the
Obligations, in both right of payment and lien priority, including standstill
and blockage provisions approved by the Administrative Agent.

“Subservicer” means any entity permitted by Administrative Agent to act as a
subservicer of the Servicer who shall perform Servicing Functions under a
Subservicer Instruction Letter.

“Subservicer Instruction Letter” means an instruction letter to a Subservicer in
form and substance agreed to by Seller and Administrative Agent.

“Subsidiary” means any corporation, association or other business entity
(including a trust) in which any Person (directly or through one or more other
Subsidiaries or other types of intermediaries), owns or controls:

(a) more than 50% of the total voting power or shares of stock entitled to vote
in the election of its directors, managers or trustees; or

(b) more than 90% of the total assets and more than 90% of the total equity
through the ownership of capital stock (which may be non-voting) or a similar
device or indicia of equity ownership.

“Super Jumbo Mortgage Loan” means a Mortgage Loan that would otherwise be a
Jumbo Mortgage Loan except that the original principal amount is more than
$1,000,000.

“Supplemental Papers” means the Loan Papers for a particular Loan other than its
Basic Papers.

“Swing Line” means the short term revolving Eligible Loans purchase facility
provided for in Section 2.4 under which U.S. Bank will fund (as “Swing Line
Transactions”) purchases of Eligible Loans to bridge the Seller’s daily
Transactions.

“Swing Line Limit” means, for any day, the lesser of (x) $100,000,000, and
(y) the Maximum Aggregate Commitment minus the Aggregate Outstanding Purchase
Price outstanding on that day, being the maximum amount that may be funded and
outstanding on that day under the Swing Line.

 

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“Swing Line Refunding Due Date” for each Transaction funded under the Swing Line
means the Business Day on which U.S. Bank shall elect to have such Swing Line
Transaction funded by the Buyers pursuant to Section 2.5 (provided that U.S.
Bank shall elect to have such Swing Line Transactions so funded no less than one
time per week) following the Business Day when U.S. Bank funds such Transaction
under the Swing Line; provided that U.S. Bank agrees not to exercise such
discretion to choose a due date in a manner that would materially affect the
Seller’s ability to complete a Transaction under this Agreement unless a Default
has occurred that has not been cured by the Seller or declared in writing by the
Administrative Agent to have been waived or any Event of Default has occurred
that the Administrative Agent has not declared in writing to have been cured or
waived, in each case, as provided in Section 22.

“Swing Line Transaction” means a Transaction funded by U.S. Bank under the Swing
Line.

“Taxes” is defined in Section 7.1.

“Termination Date” means the earlier of (i) March 1, 2014, and (ii) the date
when the Buyers’ Commitments are terminated pursuant to this Agreement, by order
of any Governmental Authority or by operation of law.

“Total Liabilities” means all liabilities of the Seller and its Subsidiaries,
including nonrecourse debt as, in accordance with GAAP, are reflected on the
Seller’s consolidated balance sheet, and also including all contingent
liabilities and obligations (including Recourse Servicing, recourse sale and
other recourse obligations, and guarantee, indemnity and mortgage loan
repurchase obligations).

“Trade Settlement Account” means the Account, as defined in the Securities
Custody Agreement.

“Tranche” means a portion of the Open Transactions.

“Transaction” is defined in Section 1.1.

“UCC” means the Uniform Commercial Code or similar Laws of the applicable
jurisdiction, as amended from time to time.

“Unrestricted Subsidiary” means (i) any Subsidiary of the Seller that at the
time of acquisition or formation of such Subsidiary by the Seller shall be
designated as an Unrestricted Subsidiary by the Board of Directors of the
General Partner in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors of the General Partner may
designate any newly acquired or formed Subsidiary to be an Unrestricted
Subsidiary, provided that no Default or Event of Default shall have occurred and
be continuing at the time of or, after giving effect to such designation. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary by delivering written notice of such designation to Administrative
Agent together with a compliance certificate signed by the President, Accounting
Director or Chief Financial Officer of General Partner which shall certify to
Administrative Agent and Buyers that at the date of and, after giving effect to
such designation, the Seller shall be in compliance with all covenants set forth
in the Repurchase Documents and no Default or Event of Default shall have
occurred and be continuing.

 

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“VA” means the Department of Veterans Affairs and any successor.

“Wet Loan” means a Purchased Loan originated and owned by the Seller immediately
prior to being purchased by the Buyers:

(a) that has been closed on or prior to the Business Day on which the Purchase
Price is paid therefore, by a title agency or closing attorney, is fully funded
and would qualify as an Eligible Loan except that some or all of its Basic
Papers are in transit to, but have not yet been received by, the Custodian so as
to satisfy all requirements to permit the Seller to sell it pursuant to this
Agreement without restriction;

(b) that the Seller reasonably expects to fully qualify as an Eligible Loan when
the original Basic Papers have been received by the Custodian;

(c) as to which the Seller actually and reasonably expects that such full
qualification can and will be achieved on or before seven Business Days after
the relevant Purchase Date;

(d) for which the Seller has delivered to the Custodian a Mortgage Loan
Transmission File on or before the Purchase Date, submission of which to the
Custodian shall constitute the Seller’s certification to the Custodian, the
Buyers and the Administrative Agent that a complete File as to such Purchased
Loan, including the Basic Papers, exists and that such File is in the possession
of either the title agent or closing attorney that closed such Purchased Loan,
the Seller or that such File has been or will be shipped to the Custodian; and

(e) as to which no portion of the principal amount has been or will be funded by
any person other than the Seller and the Buyers.

Each Wet Loan that satisfies the foregoing requirements shall be an Eligible
Loan subject to the condition subsequent of physical delivery of its Mortgage
Note, Mortgage and all other Basic Papers, to the Custodian on or before seven
Business Days after the relevant Purchase Date. Each Wet Loan sold by the Seller
shall be irrevocably deemed purchased by the Buyers and shall automatically
become a Purchased Loan effective on the date of the related
Request/Confirmation, and the Seller shall take all steps necessary or
appropriate to cause the sale to the Buyers and delivery to the Custodian of
such Wet Loan and its Basic Papers to be completed, perfected and continued in
all respects, including causing the original promissory note evidencing such
Purchased Loan to be physically delivered to the Custodian within seven Business
Days after the relevant Purchase Date, and, if requested by the Administrative
Agent, to give written notice to any title agent, closing attorney or other
Person in possession of the Basic Papers for such Purchased Loan of the Buyers’
purchase of such Purchased Loan. Upon the Custodian’s receipt of the Basic
Papers relative to a Wet Loan such Purchased Loan shall no longer be considered
a Wet Loan.

“Wet Loans Sublimit” is defined in Section 4.2.

 

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1.3. Other Definitional Provisions.

(a) Accounting terms not otherwise defined shall have the meanings given them
under GAAP.

(b) Defined terms may be used in the singular or the plural, as the context
requires.

(c) Except where otherwise specified, all times of day used in the Repurchase
Documents are local (U.S. Central Time Zone) times in Minneapolis, Minnesota.

(d) Unless the context plainly otherwise requires (e.g., if preceded by the word
“not”), wherever the word “including” or a similar word is used in the
Repurchase Documents, it shall be read as if it were written, “including by way
of example but without in any way limiting the generality of the foregoing
concept or description.”

(e) Unless the context plainly otherwise requires, wherever the term
“Administrative Agent” is used in this Agreement (excluding Section 22), it
shall be read as if it were written “the Administrative Agent (as agent and
representative of the Buyers).”

2 The Buyers’ Commitments.

2.1. The Buyers’ Commitments to Purchase. Subject to the terms and conditions of
this Agreement and provided no Default or Event of Default has occurred that the
Administrative Agent has not declared in writing to have been cured or waived
(or, if one has occurred and not been so declared cured or waived, if all of the
Buyers, in their sole discretion and with or without waiving such Default or
Event of Default, have elected in writing that Transactions under this Agreement
shall continue nonetheless), the Buyers agree to make revolving purchases of
Eligible Loans on a servicing released basis through and including the
Termination Date, so long as the Aggregate Outstanding Purchase Price does not
exceed the Maximum Aggregate Commitment and so long as each Buyer’s Committed
Sum is not exceeded. The Buyers’ respective Committed Sums and the Maximum
Aggregate Commitment are set forth on Schedule BC in effect at the relevant
time, as it may have been amended or restated pursuant to this Agreement. Upon
the joinder of additional Buyer(s), if any, the parties agree to approve in
writing revised and updated versions of Schedule BC. The fractions to be applied
to determine the respective Funding Shares of the Buyers for any day are their
respective Committed Sums divided by the Maximum Aggregate Commitment for that
day. Each Buyer shall be obligated to fund only that Buyer’s own Funding Share
of any Transaction requested, and no Buyer shall be obligated to the Seller or
any other Buyer to fund a greater share of any Transaction. No Buyer shall be
excused from funding its applicable Funding Share of any Transaction merely
because any other Buyer has failed or refused to fund its relevant Funding Share
of that or any other Transaction. If any Buyer fails to

 

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fund its Funding Share of any Transaction, the Administrative Agent (in its sole
and absolute discretion) may choose to fund the amount that such Nonfunding
Buyer failed or refused to fund, or the Administrative Agent as a Buyer and the
other Buyers who are willing to do so shall have the right (but no obligation)
to do so in the proportion that the Committed Sum of each bears to the total
Committed Sums of all Buyers that have funded (or are funding) their own Funding
Shares of that Transaction and that are willing to fund part of the Funding
Share of such Nonfunding Buyer. Should the Administrative Agent and/or any other
Buyer(s) fund any or all of the Nonfunding Buyer’s Funding Share of any
Transaction, then the Nonfunding Buyer shall have the obligation to deliver such
amount to the Administrative Agent (for distribution to the Buyer(s) who funded
it) in immediately available funds on the next Business Day. Regardless of
whether the other Buyers fund the Funding Share of the Nonfunding Buyer, the
respective ownership interests of the Buyers in the Transaction shall be
adjusted as provided in the definition of “Pro Rata.” The obligations of Buyers
hereunder are several and not joint.

2.2. Expiration or Termination of the Commitments. Unless extended in writing or
terminated earlier in accordance with this Agreement, the Buyers’ Commitments
(including U.S. Bank’s Swing Line Commitment) shall automatically expire at the
close of business on the Termination Date, without any requirement for notice or
any other action by the Administrative Agent, any of the Buyers or any other
Person.

2.3. Request for Increase in Maximum Aggregate Commitment. The Seller may from
time to time request to the Administrative Agent for an increase in the Maximum
Aggregate Commitment to a specified amount up to $400,000,000; provided that no
Default has occurred that has not been cured before it has become an Event of
Default, and no Event of Default has occurred that the Administrative Agent has
not declared in writing to have been waived or cured. Upon receipt of such
request, the Administrative Agent may request that one or more existing Buyers
or new Buyers (which new Buyers are acceptable to the Seller) to provide
increased Commitments to finance all or a portion of the requested increase. The
Administrative Agent shall notify the Seller of such new and existing Buyers’
responses to requests for increased or new Commitments. Following such notice,
to achieve the full amount of a requested increase, with the prior consent of
the Administrative Agent, the Seller may invite additional new Buyers to provide
such increase. No Buyer will have any obligation to increase its Committed Sum.
If an increase in the Maximum Aggregate Commitment is achieved, then (a) the Pro
Rata ownership interest in the Purchased Loans of each Buyer shall, following
funding by the Buyers increasing their Commitment Sums or by the new Buyers,
automatically be adjusted proportionately and (b) Schedule BC shall be updated
and the update executed and delivered by the Administrative Agent to the Seller
and each of the Buyers and, effective as of the date specified on such update,
shall each automatically supersede and replace the then-existing corresponding
schedule for all purposes.

2.4. Swing Line Commitment. In addition to its Commitment under Section 2.1,
U.S. Bank agrees to fund revolving Swing Line Transactions for aggregate
Purchase Prices which do not on any day exceed the Swing Line Limit for the
purpose of initially funding requested Transactions.

 

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2.5. Swing Line Transactions.

(a) The Seller shall have the right to a Swing Line Transaction:

(1) only if such Swing Line Transaction fully qualifies in all respects for
funding as Regular Transaction under this Agreement except that it may have been
requested later in the day;

(2) provided that no Default has occurred that has not been cured before it has
become an Event of Default, and no Event of Default has occurred that the
Administrative Agent has not declared in writing to have been waived or cured
and all conditions precedent in Article 14 have been satisfied;

(3) so long as the Swing Line Limit is not exceeded;

(4) provided that the Mortgage Loan Transmission File for the proposed
Transaction is received by U.S. Bank by no later than 3:00 p.m. on the Business
Day such Transaction is to be funded; and

(5) provided that neither the Seller nor U.S. Bank is aware of any reason why
the requested Transaction cannot or will not be fully funded by the Buyers on
the first Swing Line Refunding Due Date following the Business Day on which the
Swing Line Transaction is to be funded.

(b) All Swing Line Transactions shall have a Price Differential from the date
funded until the date repaid and the Repurchase Price therefor shall be due and
payable to U.S. Bank at the same rate(s) as would be applicable if such Swing
Line Transactions had been funded as Regular Transactions by all Buyers, instead
of having been funded by U.S. Bank alone as Swing Line Transactions.

(c) Each Swing Line Transaction shall be re-funded on its Swing Line Refunding
Due Date by the Administrative Agent’s paying over to U.S. Bank, and U.S. Bank’s
applying against such Swing Line Transaction, an amount equal to the Purchase
Price of the Transaction funded by all of the Buyers in their Funding Shares of
such Purchase Price on that day against the same Mortgage Loan Transmission File
that was initially funded as a Swing Line Transaction at which time such
Transaction shall be deemed to be a Regular Transaction, provided that if the
Seller shall not have delivered a new Mortgage Loan Transmission File to the
Administrative Agent and the Custodian for such Regular Transaction, then the
initial Pricing Rate applicable thereto shall be the LIBOR Rate plus the LIBOR
Margin as determined by the Administrative Agent.

(d) Accrued Price Differential Due. All accrued Price Differential on Swing Line
Transactions shall be due and payable by the Seller to the Administrative Agent
(for distribution to U.S. Bank) on the Price Differential payment due date
(determined under Section 5.6) next following the date of the Swing Line
Transaction.

 

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2.6. Optional Reduction or Termination of Buyers’ Commitments. The Seller may,
at any time, without premium or penalty, upon not less than 10 Business Days’
prior written notice to the Administrative Agent, reduce or terminate the
Maximum Aggregate Commitment, subject to the following conditions: (i) any such
reduction in the Maximum Aggregate Commitment shall be in a minimum aggregate
amount for all the Buyers of $25,000,000, or, if more, in an integral multiple
of $25,000,000; (ii) the Seller may reduce the Maximum Aggregate Commitment no
more than once each calendar quarter, (iii) at no time may the Aggregate
Outstanding Purchase Price exceed the Maximum Aggregate Commitment after giving
effect to any reduction in the Maximum Aggregate Commitment; and (iv) unless
terminated in full, the Maximum Aggregate Commitment shall not be reduced to
less than $100,000,000. Upon termination of the Buyers’ Commitments pursuant to
this Section 2.6, the Seller shall pay to the Administrative Agent for the
ratable benefit of the Buyers the full amount of all outstanding Obligations
under the Repurchase Documents.

3 Initiation; Request/Confirmation; Termination.

3.1. Seller Request; Administrative Agent Confirmation.

(a) Any agreement to enter into a Transaction shall be made by notice to the
Administrative Agent at the initiation of the Seller. To request a Transaction,
the Seller shall provide the Administrative Agent and Custodian with a Mortgage
Loan Transmission File for each of the Eligible Loans subject to the Transaction
by electronic transmission.

(b) If the Seller submits a Mortgage Loan Transmission File to the
Administrative Agent and the Custodian and:

(1) they are all received by 1:00 p.m., on the proposed Purchase Date, the
Transaction may be funded as a Regular Transaction;

(2) they are not all received until after 1:00 p.m. but before 3:00 p.m. on the
proposed Purchase Date (or they are all received by 1:00 p.m. on the proposed
Purchase Date and the Administrative Agent elects not to fund such Transaction
as a Regular Transaction), the Transaction shall be funded as a Swing Line
Transaction;

(3) they are not all received until after 3:00 p.m. on the proposed Purchase
Date, U.S. Bank shall either, at its election, (i) fund the requested
Transaction as a Swing Line Transaction on that same day, or (ii) arrange for
its funding on the next Business Day.

 

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U.S. Bank shall have no obligation to fund any such late-requested Transaction
as is described in Section 3.1(b)(2) or (3) as a Swing Line Transaction if all
of the requirements of Section 2.5 and this Section 3 are not satisfied,
although U.S. Bank may elect to do so. If U.S. Bank does not elect to do so,
then the Buyers shall fund such requested Transaction as a Regular Transaction
on the next succeeding Business Day after the Mortgage Loan Transmission Files
are received by the Administrative Agent, provided that all conditions to its
funding (including the requirements of Section 2.5, this Section 3 and
Section 14) are then satisfied.

Notwithstanding anything to the contrary in this Agreement, the Custody
Agreement or any of the exhibits and schedules hereto or thereto, in no event
shall funds for the purchase of any Mortgage Loan be disbursed directly to the
Sellers; rather, (i) funds for the purchase of Mortgage Loans originated by any
Seller shall be disbursed to the applicable title agent or attorney through
which such Mortgage Loans are closed and (ii) funds for the purchase of Mortgage
Loans that have been originated by a correspondent lender or any other third
party shall be disbursed only to such originator and only if the Basic Papers
delivered to the Custodian were accompanied by a bailee letter from the
originator that included wire transfer instructions; provided, however, that
Margin Excess may be remitted directly to Sellers in accordance with
Section 6.1(b).

3.2. Syndication of Purchases.

(a) Regular Transactions. When a Mortgage Loan Transmission File is received by
the Administrative Agent for a Transaction to be funded initially as a Regular
Transaction, the Administrative Agent shall give notice electronically to each
Buyer of the requested Transaction and that Buyer’s Funding Share thereof, by
2:00 p.m. on the Business Day when the requested Transaction is to be funded by
the Buyers, and each Buyer shall cause its Funding Share to be transferred to
the Administrative Agent in accordance with the Administrative Agent’s
instructions, so that the Administrative Agent receives such Funding Share in
immediately available funds within two hours after receiving such notice and in
any case by 3:45 p.m. on such Business Day. Provided that the conditions set
forth in Section 14 have been satisfied or waived with the requisite consent of
the Buyers as provided herein, the Administrative Agent shall transfer the sum
of the Purchase Prices for the Transaction to the Funding Account and disburse
the sum of the Purchase Prices for the Transaction to the Seller or to its
designee(s) for their account.

(b) Swing Line Transactions. U.S. Bank shall notify each Buyer no later than
2:00 p.m. on each Swing Line Refunding Due Date of such Buyer’s Funding Share of
the Swing Line Transactions that are to be converted to Regular Transactions on
such date. If at the time each such Swing Line Transaction was funded, U.S. Bank
reasonably believed that all of the conditions set forth in Section 2.5 were
satisfied in all material respects, then the other Buyers shall be (subject to
the provisions of this Agreement and the other Repurchase Documents)
unconditionally and irrevocably obligated to timely fund their respective
Funding Shares of such Transactions, irrespective of whether in the meantime any
Default or Event of Default has occurred or been discovered, and irrespective of
whether in the meantime some or all of the Buyers’ Commitments have lapsed,
expired or been canceled, rescinded or terminated with or without cause, or have
been waived, released or excused for any reason whatsoever, so that (a) the
Swing Line is

 

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paid down by the required amount on each Swing Line Refunding Due Date and
(b) all Swing Line Transactions are converted to Regular Transactions with each
Buyer having funded its Funding Share thereof. All Price Differential accrued on
Swing Line Transactions to the applicable Swing Line Refunding Due Date shall be
due and payable by the Seller to the Administrative Agent (for distribution to
U.S. Bank) within two Business Days after the Administrative Agent bills the
Seller for such Price Differential (which billing shall occur monthly) but in no
event later than the Termination Date. All amounts due from the Buyers under
this Section 3.2 shall be transmitted by federal funds wire transfer in
accordance with the Administrative Agent’s instructions. The Administrative
Agent shall disburse to U.S. Bank an amount equal to the sum of the Funding
Shares received from the Buyers on any day against each Transaction that was
initially funded as a Swing Line Transaction (excluding U.S. Bank’s own Funding
Share thereof); provided that if a Buyer other than U.S. Bank advises the
Administrative Agent by telephone and confirms the advice by fax that such Buyer
has placed all of its Funding Share on the federal funds wire to the account
designated by the Administrative Agent, the Administrative Agent shall continue
to keep the Swing Line Transaction outstanding to the extent of that Buyer’s
Funding Share so wired until such Buyer’s Funding Share is received, and the
Administrative Agent shall then repay U.S. Bank that still-outstanding portion
of the Swing Line Transaction from such funds, and the Price Differential
accrued at the Pricing Rate(s) applicable to the Transaction on that Funding
Share for the period from (and including) the relevant Swing Line Refunding Due
Date to (but excluding) the date such Buyer’s Funding Share is received by the
Administrative Agent shall belong to U.S. Bank; provided, further that in no
event shall U.S. Bank have any obligation to continue such portion of any Swing
Line Transaction outstanding if and to the extent, if any, that doing so would
cause the total amount funded by U.S. Bank and outstanding to exceed the Swing
Line Limit. If any Buyer fails to transmit any funds required under this
Section 3.2 so that such funds are received in accordance with the
Administrative Agent’s instructions by 3:00 p.m. on the Swing Line Refunding Due
Date (i.e., excluding any such failure caused by a federal funds wire delay),
then that Buyer shall also be obligated to pay to U.S. Bank Price Differential
on the Funding Share so due from such Buyer to U.S. Bank at the Federal Funds
Rate from (and including) such Swing Line Refunding Due Date to (but excluding)
the date of payment of such Funding Share.

 

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3.3. Request/Confirmation. Each Request/Confirmation shall identify the
Administrative Agent and the Seller and set forth the Purchase Date and the
Pricing Rate that is to be applicable to the relevant Transaction or each
Tranche thereof. Each Request/Confirmation shall be binding on the parties,
unless written notice of objection is given by the objecting party to the other
party within one Business Day after the Administrative Agent has received the
completed Request/Confirmation from the Seller. In the event of any conflict
between the terms of a Request/Confirmation and this Agreement, this Agreement
shall prevail.

3.4. Transaction Termination; Purchase Price Decrease.

(a) Automatic Termination. Each Transaction, or applicable portion thereof, will
automatically terminate on the earlier of (x) the date or dates when the subject
Purchased Loans are purchased by Approved Investor(s) and (y) the Termination
Date.

(b) Termination Upon Occurrence of Disqualifier. If any Disqualifier occurs in
respect of a Purchased Loan, the Seller shall immediately repurchase such
Purchased Loan in accordance with this Section 3.

(1) How Terminations Will Be Effected. Termination of every Transaction will be
effected by (x) the Buyers’ reconveyance to the Seller or its designee of the
Purchased Loans and payment of any Income in respect thereof received by the
Administrative Agent and not previously either paid to the Seller or applied as
a credit to the Seller’s Obligations, against (y) payment of the Repurchase
Price in immediately available funds to the account referred to in Section 3.5
by 2:00 p.m. on the Repurchase Date, so that the Administrative Agent receives
the Repurchase Price (for Pro Rata distribution to the Buyers) in immediately
available funds on that same Business Day; provided that the portion of the
Repurchase Price attributable to accrued and unpaid Price Differential for the
Repurchased Loan shall be not be due until two Business Days after the
Administrative Agent bills the Seller therefor; provided further that all
accrued and unpaid Price Differential shall be due and payable on the
Termination Date.

(c) Purchase Price Decrease. The Seller may at any time and from time to time,
request a Purchase Price Decrease by notice to the Administrative Agent no less
than one Business Day prior to the date that the Seller intends to effectuate
such Purchase Price Decrease, specifying the date of the Purchase Price Decrease
(the “Purchase Price Decrease Date”). The Purchase Price Decrease amount shall
be due and payable in immediately available funds on the Purchase Price Decrease
date specified therein. Each Purchase Price Decrease must be in an amount not
less than $1,000,000. No Purchased Loans shall be, or be deemed to be,
repurchased in connection with a Purchase Price Decrease, unless requested in
writing pursuant to Section 6.1(b).

 

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3.5. Place for Payments of Purchase Prices. All Purchase Price payments shall be
paid to:

U.S. Bank National Association

800 Nicollet Mall

Minneapolis, MN 55402

ABA number 091000022

For Credit Account No. 104756234365

For credit to: DHI Mortgage Company, Ltd. Settlement Account

3.6. If Repurchase Price Not Paid. If the Seller fails for any reason to
repurchase any one or more Purchased Loans on the relevant Repurchase Date in
the manner and by the time specified in Sections 3.4 and 3.5, the Administrative
Agent is hereby specifically and irrevocably authorized to withdraw funds from
the Operating Account in an amount equal to the sum of the Repurchase Prices of
all Purchased Loans that are Past Due on that day and cause application of such
funds withdrawn to the payment of the Repurchase Prices of such Purchased Loans
in such order and manner as the Administrative Agent may elect and if funds in
the Operating Account are insufficient to pay the Repurchase Prices of all such
Purchased Loans, the Seller shall pay the amount due hereunder on demand by wire
to the address in Section 3.5. If the Repurchase Price is paid by the
Administrative Agent’s authorized withdrawal from sufficient funds in the
Operating Account on the day due, the Seller shall not be deemed to have
defaulted in the performance of its obligation to pay such Repurchase Price.

3.7. [Reserved.]

3.8. [Reserved.]

3.9. Delivery of Additional Mortgage Loans. Seller may from time to time deliver
to the Administrative Agent Mortgage Loans that are also Eligible Loans without
entering into a new Transaction by providing to the Administrative Agent the
documents required under Section 3.1 with respect to such Mortgage Loans. The
Seller and Buyers agree that such Mortgage Loans delivered pursuant to this
Section 3.9 shall be treated as Purchased Loans subject to the existing
Transactions hereunder from the date of such delivery.

3.10. Application of Repurchase Price Payments. Upon receipt by the
Administrative Agent of amounts paid or prepaid as Purchase Price Decreases or
Repurchase Price (except upon the exercise of remedies provided in Section 18)
the Administrative Agent shall apply amounts so received to the payment of all
Obligations which

 

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are then due, and if the amount so received is insufficient to pay all such
Obligations, (i) first to any reimbursement due under Section 20.1, (ii) second
to payment of all Swingline Transactions that have not been syndicated, and
(iii) third to partial payment of Obligations then due or as otherwise agreed by
the Buyers.

4 Transaction Limits and Sublimits.

4.1. Transaction Limits. Each Transaction shall be subject to the limitation
that no purchase will be made if at the time of or after such purchase, the
Aggregate Outstanding Purchase Price exceeds or would exceed the Maximum
Aggregate Commitment.

4.2. Transaction Sublimits. The following sublimits shall also be applicable to
the Transactions hereunder such that after giving effect to any proposed
Transaction and after giving effect to any repurchase, addition or substitution
of any Mortgage Loan hereunder, the following shall be true:

(a) The Aggregate Outstanding Purchase Price of Conforming Mortgage Loans may be
as much as 100% of the Maximum Aggregate Commitment.

(b) The Aggregate Outstanding Purchase Price of all Purchased Loans that are Wet
Loans shall not exceed (x) 55% of the Maximum Aggregate Commitment on any of the
first five and last five Business Days of any month or (y) 35% of the Maximum
Aggregate Commitment on any other day (the “Wet Loans Sublimit”).

(c) The Aggregate Outstanding Purchase Price of all Purchased Loans that are of
the type listed in the first column of the following table shall not exceed the
percentage of the Maximum Aggregate Commitment listed in the second column of
the table:

 

Type of Purchased Loan

   Maximum percentage of
Maximum Aggregate
Commitment  

Jumbo Mortgage Loans and Super Jumbo Mortgage Loans, taken in the aggregate

     15 % 

Super Jumbo Mortgage Loans

     5 % 

MIP Mortgage Loans

     15 % 

Streamline Refinance Loans

     5 % 

Sales to Penny Mac Mortgage Investment Trust

     25 % 

Redwood Trust Jumbo Mortgage Loans

     10 % 

 

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5 Price Differential.

5.1. Pricing Rate. Subject to the following rules, and as contemplated in the
definition of “Pricing Rate,” the Pricing Rate to be applied to the Purchase
Prices of Purchased Loans to determine the Price Differential in all Open
Transactions or Tranches as to which the Price Differential is to be determined
by reference to the LIBOR Rate, on any day when no Event of Default has occurred
and is continuing, shall be the LIBOR Rate plus the LIBOR Margin applicable from
time to time (in each case computed annually); provided that, notwithstanding
the foregoing, the Pricing Rate will not in any event be less than 2.75%.

5.2. [Reserved.]

5.3. [Reserved.]

5.4. [Reserved.]

5.5. Pricing Rate for Past Due Purchased Loans. Notwithstanding any contrary or
inconsistent provision of this Section 5, the Pricing Rate to be multiplied by
the Purchase Prices of all Past Due Purchased Loans shall be the Past Due Rate
from (and including) (a) the day immediately following the Repurchase Date for
each such Past Due Purchased Loan and until (but excluding) the date on which
such Past Due Purchased Loan is repurchased by transfer to the Administrative
Agent (for Pro Rata distribution to the Buyers) of its full Repurchase Price in
immediately available funds; and (b) the occurrence of an Event of Default under
Section 18.1.

5.6. Price Differential Payment Due Dates. Price Differential on each Open
Transaction and each Tranche thereunder accrued and unpaid to (or through) the
last calendar day of each month before the Termination Date is due and payable
within two Business Days after the Administrative Agent bills the Seller
therefor, whether or not such Transaction is still an Open Transaction on such
payment due date; provided that all accrued and unpaid Price Differential on all
Transactions shall be due on the Termination Date. The Administrative Agent is
hereby specifically and irrevocably authorized to withdraw funds from the
Operating Account in an amount equal to the sum of the Price Differential due on
that day and cause application of such funds to such Price Differential, and if
funds in the Operating Account are insufficient to pay the Price Differential
then due, the Seller shall pay the amount of such deficiency by wire to the
address in Section 3.5.

 

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6 Margin Maintenance.

6.1. Margin Deficit.

(a) The Administrative Agent will recalculate the Purchase Value of all
Purchased Loans on any date that the Market Value of Purchased Loans is
calculated by the Administrative Agent as described in Section 6.6 and at any
other time the Administrative Agent elects to do so. If at any time the
aggregate Purchase Value of all Purchased Loans subject to all Transactions
hereunder is more than $100,000 less than the aggregate Repurchase Price
(excluding Price Differential minus cash transfers previously made from Seller
to the Administrative Agent in response to previous Margin Calls, if any) for
all such Transactions (a “Margin Deficit”), then by notice to the Seller (a
“Margin Call”), the Administrative Agent shall, require the Seller to transfer
(for the account of the Buyers) to the Administrative Agent or the Custodian, as
appropriate either (at the Seller’s option) cash or additional Eligible Loans
reasonably acceptable to the Administrative Agent (“Additional Purchased
Loans”), or a combination of cash and Additional Purchased Loans, so that the
cash and the aggregate Purchase Value of the Purchased Loans, including any such
Additional Purchased Loans, will thereupon at least equal the then aggregate
Repurchase Price (excluding Price Differential).

(b) On any Business Day on which the Purchase Value of the Purchased Loans
subject to Transactions exceeds the then outstanding aggregate Repurchase Price
of all Transactions (a “Margin Excess”), so long as no Default or Event of
Default has occurred and is continuing or will result therefrom, the
Administrative Agent shall, upon receipt of written request from the Seller
either remit cash or Release Purchased Loans as may be designated in a request
by Seller, in either case, in an amount equal to the lesser of (i) the amount
requested by the Seller and (ii) such Margin Excess, subject always to the other
limitations of this Agreement. If cash is to be remitted, then the
Administrative Agent shall treat the receipt of the written request of Seller
under this Section 6.1(b) as if it were a request for a Transaction. To the
extent the Administrative Agent remits cash to the Seller, such cash shall be
(y) additional Purchase Price with respect to the Transactions, and (z) subject
in all respect to the provisions and limitations of this Agreement. Each Buyer
shall fund its Pro Rata share of such additional Purchase Price as if the
remission of such Margin Excess were the initiation of a Transaction hereunder.
For clarity, the term “Release,” as used in this Section 6.1(b), shall mean
Buyers’ re-sale to Seller of one or more designated Purchased Loans and Buyers’
delivery to Seller of the File for each such Purchased Loan.

6.2. Margin Call Deadline. If the Administrative Agent delivers a Margin Call to
the Seller at or before 11:00 a.m. on any Business Day, then the Seller shall
transfer cash and/or Additional Purchased Loans as provided in Section 6.1 on
the same Business Day. If the Administrative Agent delivers a Margin Call to the
Seller after 11:00 a.m. on any Business Day, then the Seller shall transfer cash
and/or Additional Purchased Loans by no later than 11:00 a.m. on the next
following Business Day.

 

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6.3. Application of Cash. Any cash transferred to the Administrative Agent (for
Pro Rata distribution to the Buyers) pursuant to this Section 6 shall be applied
by the Buyers on receipt from the Administrative Agent which shall occur on the
date received from the Seller or the next Business Day if received after 3:00
p.m.

6.4. Increased Cost. If any Change in Law subsequent to the Effective Date:

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

(b) shall impose on a Buyer any other condition;

and the result of any of the foregoing is to increase the cost to such Buyer, by
an amount which such Buyer deems to be material, of entering, continuing or
maintaining any Transaction or to reduce any amount due or owing hereunder in
respect thereof, then, in any such case, the Seller shall promptly pay the
Administrative Agent (for distribution to such Buyer) such additional amount or
amounts as calculated by the Buyer in good faith as will compensate the Buyer
for such increased cost or reduced amount receivable.

6.5. Capital Adequacy. If any Buyer shall have determined that any Change in Law
applicable to the Buyer or any corporation controlling the Buyer subsequent to
the Effective Date shall have the effect of reducing the rate of return on the
Buyer’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which the Buyer or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
the Buyer’s or such corporation’s policies with respect to capital adequacy) by
an amount deemed by the Buyer to be material, then from time to time, the Seller
shall promptly pay to the Administrative Agent (for distribution to such Buyer)
such additional amount or amounts as will compensate the Buyer or such
corporation for such reduction.

6.6. Administrative Agent’s Report. In the discretion of the Administrative
Agent if it reasonably determines that market conditions warrant (except that
the Administrative Agent shall have no obligation to make such determination
more frequently than once per day), the Administrative Agent may: (1) determine
the aggregate Market Values for the Purchased Loans (which may include the
Purchase Value of

 

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any Mortgage Loans purchased on that day) by summing the values of the
individual Purchased Loans as reported on (and recorded by the Administrative
Agent from) the Mortgage Loan Transmission Files and Purchased Loans Curtailment
Reports, valuing at zero Purchased Loans for which the Administrative Agent has
current actual knowledge that a Disqualifier exists; (2) issue a statement of
the value of the Purchased Loans as so determined; and (3) provide a copy of
such statement to the Seller and each Buyer, provided that, if the
Administrative Agent has not provided such a statement to the Seller and each
Buyer at least one time in a calendar month, the Administrative Agent shall
provide to the Seller and each Buyer a Purchased Loan Report no later than the
last Business Day of each month.

6.7. Provisions Relating to LIBOR Rate Tranches.

If, on the date for determining the LIBOR Rate in respect of any LIBOR Rate
Tranche, any Buyer determines (which determination shall be conclusive and
binding, absent error) that the LIBOR Rate will not adequately and fairly
reflect the cost to such Buyer of funding such LIBOR Rate Tranche, then such
Buyer shall notify the Administrative Agent, and the Administrative Agent shall
notify the Seller, of such determination, whereupon the obligation of such Buyer
to make, or to convert any Tranche to, LIBOR Rate Tranches shall be suspended
until such Buyer notifies the Administrative Agent, and the Administrative Agent
notifies the Seller, that the circumstances giving rise to such suspension no
longer exist. Outstanding LIBOR Rate Tranches held by such Buyer shall thereupon
automatically be converted to bear interest at a rate equal to the Federal Funds
Rate plus 0.50% plus the LIBOR Margin, and in such event, the Seller will
thereafter be entitled to designate subsequent Tranches to bear interest at the
Federal Funds Rate plus 0.50% plus the LIBOR Margin.

If, after the date of this Agreement, any Change in Law shall make it unlawful
or impossible for such Buyer to make, maintain or fund LIBOR Rate Tranches, such
Buyer shall notify the Seller and the Administrative Agent, whereupon the
obligation of such Buyer to make or convert Tranches into LIBOR Rate Tranches,
shall be suspended until such Buyer notifies the Seller and the Administrative
Agent that the circumstances giving rise to such suspension no longer exist. If
any Buyer determines that it may not lawfully continue to maintain any LIBOR
Rate Tranches, all of the affected Tranches shall be automatically converted as
of the date of such Buyer’s notice to bear interest at a rate equal to the
Federal Funds Rate plus 0.50% plus the LIBOR Margin and, in such event, the
Seller will thereafter be entitled to designate subsequent Tranches to bear
interest at the Federal Funds Rate plus 0.50% plus the LIBOR Margin.

 

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7 Taxes.

7.1. Payments to be Free of Taxes; Withholding. Any and all payments by or on
account of any obligation of the Seller under any Repurchase Document shall be
made without deduction or withholding for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities
(including penalties, interest and additions to tax) with respect thereto,
whether now or hereafter imposed, levied, collected, withheld or assessed by any
taxation authority or other Governmental Authority (collectively, “Taxes”),
except as required by applicable Law. If any applicable Law requires the
deduction or withholding of any Tax from any such payment, then the Seller shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax or Other Tax, then
the sum payable by the Seller shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 7) the
applicable Buyer or the Administrative Agent receives an amount equal to the sum
it would have received had no such deduction or withholding been made.

7.2. Other Taxes. In addition, the Seller shall timely pay to the relevant
Governmental Authority in accordance with applicable law, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other
Taxes.

7.3. Taxes Indemnity.

(a) The Seller shall indemnify each Buyer or the Administrative Agent, within 15
days after demand therefor, for the full amount of any Indemnified Taxes and
Other Taxes (including Indemnified Taxes and Other Taxes imposed or asserted on
or attributable to amounts payable under this Section 7) payable or paid by such
Buyer or the Administrative Agent or required to be withheld or deducted from a
payment to such Buyer or the Administrative Agent and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
and Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Seller by a Buyer (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a
Buyer, shall be conclusive absent manifest error.

(b) Each Buyer shall severally indemnify the Administrative Agent, within 15
days after demand therefor, for (i) any Indemnified Taxes and Other Taxes
attributable to such Buyer (but only to the extent that the Seller has not
already indemnified the Administrative Agent for such Indemnified Taxes and
Other Taxes and without limiting the obligation of the Seller to do so),
(ii) any Taxes attributable to such Buyer’s failure to maintain a register of
participations pursuant to Section 22.18, and (iii) any Excluded Taxes
attributable to such Buyer, in each case, that are payable or paid by the
Administrative Agent in connection with any Repurchase Document, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to any Buyer by the Administrative Agent shall be conclusive
absent manifest error. Each Buyer hereby

 

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authorizes the Administrative Agent to set off and apply any and all amounts at
any time owing to such Buyer under any Repurchase Document or otherwise payable
by the Administrative Agent to the Buyer from any other source against any
amount due to the Administrative Agent under this Section 7.3.

7.4. Receipt. As soon as practicable after any payment of Taxes by the Seller to
a Governmental Authority pursuant to this Section 7, the Seller shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

7.5. Buyers’ Obligations.

(a) Any Buyer that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Repurchase Document shall deliver to
the Seller and the Administrative Agent, at the time or times reasonably
requested by the Seller or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Seller or the Administrative
Agent as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Buyer, if reasonably requested by
the Seller or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Seller or the
Administrative Agent as will enable the Seller or the Administrative Agent to
determine whether or not such Buyer is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 7.5(b)(1),
(2), and (4)) shall not be required if in the Buyer’s reasonable judgment such
completion, execution or submission would subject such Buyer to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Buyer.

(b) Without limiting the generality of the foregoing,

(1) any Buyer that is a United States Person for U.S. federal income Tax
purposes shall deliver to the Seller and the Administrative Agent on or prior to
the date on which such Buyer becomes a Buyer under this Agreement (and from time
to time thereafter upon the reasonable request of the Seller or the
Administrative Agent), executed originals of IRS Form W-9 certifying that such
Buyer is exempt from U.S. federal backup withholding Tax;

(2) any Non-U.S. Buyer, to the extent it is legally entitled to do so, shall
deliver to the Seller and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Non-U.S. Buyer becomes a Buyer under this Agreement (and from time to time
thereafter upon the reasonable request of the Seller or the Administrative
Agent), whichever of the following is applicable:

 

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  (A) in the case of a Non-U.S. Buyer claiming the benefits of an income Tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Repurchase Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such Tax treaty and (y) with respect to
any other applicable payments under any Repurchase Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such Tax treaty;

 

  (B) executed originals of IRS Form W-8ECI;

 

  (C) in the case of a Non-U.S. Buyer claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Non-U.S. Buyer is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Seller
within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code and (y) executed
originals of IRS Form W-8BEN; or

 

  (D) to the extent a Non-U.S. Buyer is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN,
or IRS Form W-9, and/or other certification documents from each beneficial
owner, as applicable.

(3) any Non-U.S. Buyer shall, to the extent it is legally entitled to do so,
deliver to the Seller and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Non-U.S. Buyer becomes a Buyer under this Agreement (and from time to time
thereafter upon the reasonable request of the Seller or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Seller or the Administrative Agent to
determine the withholding or deduction required to be made; and

 

46

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(4) if a payment made to a Buyer under any Repurchase Document would be subject
to U.S. federal withholding Tax imposed by FATCA if such Buyer were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Buyer
shall deliver to the Seller and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Seller
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Seller or the
Administrative Agent as may be necessary for the Seller and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Buyer has complied with such Buyer’s obligations under FATCA or to determine the
amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

(c) Each Buyer agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Seller and the Administrative Agent
in writing of its legal inability to do so.

7.6. Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 7 (including by the
payment of additional amounts pursuant to this Section 7), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section 7 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this Section 7.6 (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this Section 7.6, in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this Section 7.6 the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid.
This Section 7.6 shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.
Notwithstanding the foregoing, if it is determined by a final non-appealable
judgment of a court of competent jurisdiction that the indemnified party
obtained the refund as a result of its willful misconduct or gross negligence,
the indemnifying party shall not be obligated to pay penalties, interest, or
other charges imposed by the relevant Governmental Authority with respect to
such refund.

7.7. Survival. Each party’s obligations under this Section 7 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Buyer, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any
Repurchase Document.

 

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8 Income and Escrow Payments; Control.

8.1. Income and Escrow Payments. Notwithstanding that the Buyers, the
Administrative Agent and the Seller intend that the Transactions be sales to the
Buyers of the Purchased Loans, where a particular Transaction’s term extends
over an Income payment date on the Eligible Loans subject to that Transaction,
all payments and distributions, whether in cash or in kind, made on or with
respect to the Purchased Loans shall be paid directly to the Seller or its
designee by the relevant Customer, and the Administrative Agent (and the Buyers)
shall have no obligation to collect or apply any Income to prevent or reduce any
Margin Deficit, unless the Seller (i) arranges for such Income to be paid to the
Administrative Agent (for Pro Rata distribution to the Buyers), (ii) requests
that the Administrative Agent apply such Income when received against the
Seller’s Margin Deficit(s) and (iii) concurrently transfers to the
Administrative Agent either (x) cash or (y) at the Administrative Agent’s option
and with the Administrative Agent’s written approval, Additional Purchased
Loans, sufficient to eliminate such Margin Deficit. Amounts paid to the Seller
by the relevant Customer shall be deposited by the Seller into the Income
Account within two Business Days of receipt by Seller and, as to amounts so paid
to the Seller for escrow payments, into the Escrow Account. The Income Account
and the Escrow Account shall be maintained by the Seller with a bank
satisfactory to the Administrative Agent and shall be subject to the control of
the Administrative Agent. The Income Account and Escrow Account may be interest
bearing accounts if allowed or required by applicable law. At all times prior to
a Default or Event of Default, the Seller may have full use of all Income and
amounts on deposit in the Income Account, subject to the provisions of
Section 8.2.

8.2. Income and Escrow Accounts. Prior to the initial Transaction hereunder the
Seller shall establish the Income Account and the Escrow Account and shall cause
the bank holding such accounts to enter into a control agreement with the
Administrative Agent providing that upon notice from the Administrative Agent no
further withdrawals or payment orders from the Seller shall be honored and only
payment and withdrawal orders from the Administrative Agent or its designee
shall be honored. Prior to the occurrence of a Default or Event of Default and
so long as Seller is also the Servicer, Seller shall make payments from the
Escrow Account of all appropriate amounts payable with respect to each Purchased
Loan for taxes, insurance and other purposes for which the funds are paid into
the Escrow Account. Subject to Section 8.3, amounts on deposit in the Income
Account shall be used by the Seller to pay its fees as Servicer while it serves
in such capacity, and may be used to pay to the Administrative Agent amounts due
under this Agreement for Margin Deficit or Price Differential and for any other
lawful purpose.

 

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8.3. Income and Escrow Accounts after Default. Upon the occurrence and during
the continuation of a Default or Event of Default, the Seller shall have no
right to direct withdrawal or application of funds in the Income Account and the
Escrow Account unless authorized to do so in writing by the Administrative
Agent. The Administrative Agent may cause all amounts on deposit in the Income
Account to be paid to it or its designee for application in the following order
to pay (i) accrued and unpaid Price Differential, (ii) costs, fees or other
amounts due to the Administrative Agent and Buyers under this Agreement,
(iii) reduction of the Repurchase Price of for Purchased Loans under Open
Transactions, (iv) any other Obligations, and (v) any excess over the
Obligations, to the Seller. The Administrative Agent or its designee shall
direct payments from the Escrow Account for the purposes for which such funds
are deposited into the Escrow Account.

9 Facility Fee; Administrative Agent’s Fee.

9.1. Facility Fee. The Seller agrees to pay to the Administrative Agent (for Pro
Rata distribution to the Buyers) a facility fee (the “Facility Fee”) in an
amount equal to 0.125% per annum of the Maximum Aggregate Commitment, for each
period from the first calendar day of each month (or, for the month containing
the Effective Date, the Effective Date) to (or through) the last calendar day of
such month (or, for the month containing the Termination Date, the Termination
Date). The Facility Fee shall be due and payable within two Business Days after
the Administrative Agent bills the Seller therefor. If the Maximum Aggregate
Commitment shall be increased or decreased from time to time either pursuant to
a provision of this Agreement or by separate agreement between the Buyers and
the Seller (excluding, however, any change occurring as a result of or following
the occurrence of a Default or an Event of Default, in respect of which no
adjustment of the Facility Fee shall be required), the amount of the Facility
Fee shall be adjusted as of the date of such change. The Facility Fee is
compensation to the Buyers for committing to make funds available for revolving
purchases of Eligible Loans on the terms and subject to the conditions of this
Agreement, and is not compensation for the use or forbearance or detention of
money. Each calculation by the Administrative Agent of the amount of the
Facility Fee shall be conclusive and binding absent manifest error.

9.2. Administrative Agent’s Fee. The Seller agrees to pay to U.S. Bank in its
capacity as Administrative Agent and lead arranger, such administrative fee,
arrangement fee, and syndication fee (collectively, the “Administrative Agent’s
Fee”) in such amounts and on the dates as are provided for in separate
agreements between the Seller and U.S. Bank.

 

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10 Security Interest.

10.1. Intent of the Parties. The parties intend that all Transactions hereunder
be sales and purchases (other than for accounting and tax purposes) and not
loans; nonetheless, as a security agreement under the UCC and as a security
agreement or other arrangement or other credit enhancement related to this
Agreement and transactions hereunder as provided for in Section 101(47)(A)(v) of
the Bankruptcy Code, the Seller hereby pledges to the Administrative Agent for
the benefit of the Buyers as security for the performance by the Seller of the
Obligations and hereby grants, assigns and pledges to the Administrative Agent
for the benefit of the Buyers a fully perfected first priority security interest
in all of the Purchased Loans and all Income and proceeds from the Purchased
Loans, including all of the property, rights and other items described in the
definition of “Mortgage Loan” in Section 1.2 for each such Purchased Loan and
all rights to have, receive and retain the return or refund of funds transferred
from any account with the Administrative Agent to any title company, title
agent, escrow agent or other Person for the purpose of originating or funding a
Mortgage Loan that did not close (for any reason) and that would have been a
Purchased Loan if it had closed (all funds so transferred continuously remain
the property of the Administrative Agent and the Buyers until disbursed by such
agent to or for the account of the related Customer upon the closing of his or
her Mortgage Loan), and in all of the following property:

(a) With respect to the Purchased Loans.

(1) all Purchased Loans Support;

(2) all Mortgage Premises related to the Purchased Loans

(3) all rights to deliver Purchased Loans to investors and other purchasers and
all proceeds resulting from the disposition of Purchased Loans pursuant thereto,
including the Seller’s right and entitlement to receive the entire purchase
price paid for Purchased Loans sold;

(4) all Hedge Agreements relating to or constituting any and all of the
foregoing or relating to the Obligations, including all rights to payment
arising under such Hedge Agreements;

(5) all Servicing Rights in respect of any of the Purchased Loans; and

(6) all of the Seller’s rights now or hereafter existing in, to or under any MBS
secured by, created from or representing any interest in any of the Purchased
Loans, whether now owned or hereafter acquired by the Seller, and whether such
MBS are evidenced by book entry or certificate (Buyers’ Administrative Agent’s
ownership interest and security interest in each MBS created from, based on or
backed by Purchased Loans shall automatically exist in, attach to, cover and
affect all of the Seller’s right, title and interest in that MBS when issued and
its proceeds and the Buyers’ Administrative Agent’s ownership interest and
security interest in the Purchased Loans from which such MBS was so created
shall automatically terminate and be released when such MBS is issued, subject
to automatic reinstatement if such issuance is voided or set aside by any court
of competent jurisdiction), all right to the payment of monies and non-cash
distributions on account of any of such MBS and all new, substituted and
additional securities at any time issued with respect thereto;

 

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(b) Related Accounts, Payment Intangibles, General Intangibles

(1) all accounts, payment intangibles, general intangibles, instruments,
documents (including documents of title), chattel paper, contract rights
(including without limitation rights under any contracts with Subservicers), and
proceeds, whether now or hereafter existing (including all of the Seller’s
present and future rights to have and receive interest and other compensation,
whether or not yet accrued, earned, due or payable), under or arising out of or
relating to the Purchased Loans;

(2) all instruments, documents or writings evidencing any such accounts, payment
intangibles, general intangibles or proceeds or evidencing any monetary
obligation under, or security interest in, any of the Purchased Loans, all other
papers delivered to the Administrative Agent or the Custodian, and all other
rights transferred to the Administrative Agent, in respect of any of the
Purchased Loans, including, without limitation, the right to collect, have and
receive all insurance proceeds (including, but not limited to, casualty
insurance, mortgage insurance, pool insurance and title insurance proceeds) and
condemnation awards or payments in lieu of condemnation which may be or become
payable in respect of the Mortgaged Premises securing or intended to secure any
Purchased Loan, and other personal property of whatever kind relating to any of
the Purchased Loans, in each case whether now existing or hereafter arising,
accruing or acquired;

(3) all security for or claims against others in respect of the Purchased Loans;

(4) all proceeds and rights to proceeds of any sale or other disposition of any
or all of the Purchased Loans; and

(5) the nonexclusive right to use (in common with the Seller and any other
secured party that has a valid and enforceable security interest therein and
that agrees that its security interest is similarly nonexclusive) the Seller’s
operating systems to manage and administer the Purchased Loans and any of the
related data and information described above, or that otherwise relates to the
Purchased Loans, together with the media on which the same are stored to the
extent stored with material information or data that relates to property other
than the Purchased Loans (tapes, discs, cards, drives, flash memory or any other
kind of physical or virtual data or information storage media or systems, and
the Seller’s rights to access the same, whether exclusive or nonexclusive, to
the extent that such access rights may lawfully be transferred or used by the
Seller’s permittees), and any computer programs that are owned by the Seller (or
licensed to the Seller under licenses that may lawfully be transferred or used
by the Seller’s permittees) and that are used or useful to access, organize,
input, read, print or otherwise output and otherwise handle or use such
information and data;

 

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(c) Settlement Account, Operating Account and Other Accounts. the Settlement
Account, the Operating Account, the Income Account, the Funding Account, the
Escrow Account, the Trade Settlement Account, and all cash and all securities
and other property from time to time on deposit in each such account;

(d) Loan Records. all Loan Records;

(e) Other Rights. all rights to have and receive any of the Purchased Loans
described above, all accessions or additions to and substitutions for any of
such Purchased Loans, together with all renewals and replacements of any of such
Purchased Loans, all other rights and interests now owned or hereafter acquired
by the Debtor/Seller in, under or relating to any of such Purchased Loans or
referred to above and all proceeds of any of such Purchased Loans; and

(f) Proceeds. all proceeds of all the foregoing.

The Seller agrees to do such things as applicable Law requires to maintain the
security interest of the Administrative Agent in all of the Purchased Loans with
respect to all such Transactions and all Income and proceeds from the Purchased
Loans that are the subject matter of such Transactions and all of the other
collateral described above in this Section 10.1 as a perfected first-priority
Lien at all times. The Seller hereby authorizes the Administrative Agent to file
any financing or continuation statements under the applicable Uniform Commercial
Code to perfect or continue such security interest in any and all applicable
filing offices. The Seller shall pay all customary fees and expenses associated
with perfecting such security interest including the costs of filing financing
and continuation statements under the Uniform Commercial Code and recording
assignments of Mortgages as and when required by the Administrative Agent in its
reasonable discretion.

11 Substitution.

11.1. Seller May Substitute Other Mortgage Loans with Notice to and Approval of
Administrative Agent. So long as no Event of Default has occurred and is
continuing and no Margin Deficit exists or occurs as a consequence thereof,
subject to agreement with and acceptance by, and upon notice to, the
Administrative Agent, the Seller may substitute Mortgage Loans substantially
similar to the Purchased Loans for any Purchased Loans. If the Seller gives
notice to the Administrative Agent at or before 12:00 noon on a Business Day,
the Administrative Agent 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 12:00 noon on such day, not to accept such substitution. If such
substitution is accepted by the Administrative Agent, such substitution shall be
made by the Seller’s transfer to Administrative Agent of such other Mortgage
Loans on a servicing released basis and the Administrative Agent’s transfer to
the Seller of such Purchased Loans, and after such substitution, the substituted
Mortgage Loans shall be deemed to be Purchased Loans. If the Administrative
Agent elects not to accept such substitution, the Seller shall offer the
Administrative Agent and the Buyers the right to terminate the related
Transaction.

 

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11.2. Payment to Accompany Substitution. If the Seller exercises its right to
substitute or terminate under this Section 11, the Seller shall be obligated to
pay to the Administrative Agent (for Pro Rata distribution to the Buyers) by the
close of the Business Day of such substitution or termination, as the case may
be, an amount equal to the sum of (x) actual cost (including all customary fees,
expenses and commissions) to the Administrative Agent and the Buyers 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 (y) to the extent the
Administrative Agent determines not to enter into replacement Transactions, the
loss incurred by the Administrative Agent and the Buyers directly arising or
resulting from such substitution or termination. The foregoing amounts shall be
solely determined and calculated by the Administrative Agent and the applicable
Buyers in good faith.

12 Payment and Transfer.

12.1. Immediately Available Funds; Notice to Custodian. All transfers of funds
hereunder shall be in immediately available funds. All Eligible Loans
transferred by one party hereto to any other party shall be transferred by
notice to the Custodian to the effect that the Custodian is then holding for the
benefit of the transferee the related documents and assignment forms delivered
to it under the Custody Agreement.

12.2. Payments to the Administrative Agent. Except as otherwise specifically
provided in this Agreement, all payments required by this Agreement or the other
Repurchase Documents to be made to the Administrative Agent shall be paid to the
Administrative Agent for deposit in the Settlement Account by no later than 1:00
p.m. on the day when due (funds received after the applicable deadline shall be
conclusively deemed received on the next following Business Day unless the
Administrative Agent, shall agree otherwise) and without set-off, counterclaim
or deduction, in lawful money of the United States of America in immediately
available funds at the principal Minneapolis branch of the Administrative Agent,
at 800 Nicollet Mall, Minneapolis, MN 55402, or by fed funds wire transfer to:

 

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U.S. Bank National Association

800 Nicollet Mall

Minneapolis, MN 55402

ABA number 091000022

Attention: Mortgage Banking Services

Account number. 104756234365

For Credit — DHI Mortgage Company, Ltd. Settlement Account

or at such other place as the Administrative Agent shall designate from time to
time. Whenever any payment to be made under this Agreement or any of the other
Repurchase Documents shall be stated to be due on a day that is not a Business
Day, the due date for that payment shall be automatically extended to the next
day that is a Business Day, and (if applicable) Price Differential at the
applicable rate (determined in accordance with this Agreement) shall continue to
accrue during the period of such extension. Unless the Administrative Agent
shall agree otherwise, funds received by the Administrative Agent after 1:00
p.m. on a Business Day shall be deemed for all purposes to have been paid by the
Seller on the next succeeding Business Day.

12.3. If Payment Not Made When Due. If and to the extent any payment is not made
when due under this Agreement or any of the other Repurchase Documents, the
Seller authorizes the Administrative Agent and each Buyer (for the Pro Rata
account and benefit of all of the Buyers) then or at any time thereafter to
charge any amounts so due and unpaid against any or all of the Seller’s accounts
with the Administrative Agent or any of the Buyers; provided that such right to
charge the Seller’s accounts shall not apply to any escrow, trust or other
deposit accounts designated as being held by the Seller on behalf of third party
owners of the escrowed funds other than Affiliates of the Seller. The
Administrative Agent agrees to use reasonable efforts to promptly advise the
Seller of any charge made pursuant to this Section 12.3, but its failure to do
so will not affect the validity or collectability of such charge. Neither the
Administrative Agent nor any Buyer shall have any obligation to charge any
Seller account, merely the right to do so.

12.4. Payments Valid and Effective. Each payment received by the Administrative
Agent in accordance with this Agreement is valid and effective to satisfy and
discharge the Seller’s liability under the Repurchase Documents to the extent of
the payment.

12.5. Pro Rata Distribution of Payments. The Administrative Agent shall
distribute all payments of Repurchase Price (whether voluntary or involuntary
and from whatever source) received to the Buyers Pro Rata with their respective
ownership interests in the Purchased Loans as of the Swing Line Refunding Due
Date (and in any event within one week) following the date the payment is
credited in accordance with this Agreement, in each case net of all amounts owed
by the respective Buyer to the Administrative Agent in its capacity as a Buyer
or an Approved Investor under this Agreement. The distribution from the
Administrative Agent to each Buyer shall be made by the Administrative Agent’s
initiating a federal funds wire transfer by 3:30 p.m. on the Business Day

 

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when such funds were received, in immediately available funds directly to such
Buyer or to such account at another financial institution as is designated from
time to time by such Buyer in writing. If the Administrative Agent shall fail or
refuse to so make the distribution on the same Business Day as the payment was
received, then, as agreed full and adequate compensation therefor, the
Administrative Agent shall pay the affected Buyer(s) interest on the
undistributed funds at the Federal Funds Rate.

13 Segregation of Documents Relating to Purchased Loans.

All documents relating to Purchased Loans in the possession of the Seller or its
designee (including its agent, or any subservicer) shall be segregated from
other documents and securities in its or its designee’s possession and shall be
identified as being owned by the Buyers and held by the Administrative Agent on
behalf of the Buyers (which shall be referenced in the relevant books and
records as “U.S. Bank National Association, Administrative Agent”) and subject
to this Agreement. Segregation may be accomplished by appropriate identification
of ownership on the books and records of the holder of such documents, including
MERS, a documents custodian, a financial or securities intermediary or a
clearing corporation. All of Seller’s interest in the Purchased Loans shall pass
to the Buyers on the Purchase Date and nothing in this Agreement shall preclude
the Administrative Agent and the Buyers, in each case with the Buyers’ consent,
from engaging with others in repurchase transactions with the Purchased Loans or
otherwise selling, transferring, or pledging or hypothecating, the Purchased
Loans, but no such transaction shall relieve the Buyers of their obligations to
transfer Purchased Loans to the Seller pursuant to Section 3 or 18, or of the
Administrative Agent’s obligation to credit or pay Income to, or apply Income to
the obligations of, the Seller pursuant to Section 8.

14 Conditions Precedent.

14.1. Initial Purchase. The obligations of the Buyers (and the Administrative
Agent on the Buyers’ behalf) to make the initial purchase under this Agreement
are subject to the Seller’s fulfillment of the following conditions precedent:

(a) the Administrative Agent shall have received (or be satisfied that it will
receive by such deadline as the Administrative Agent shall specify) the
following, all of which must be satisfactory in form and content to the
Administrative Agent:

(1) this Agreement duly executed by the parties;

(2) a fee letter in form and substance satisfactory to U.S. Bank duly executed
by the Seller;

(3) a current UCC search report of a UCC filings search in the office of the
Secretary of State of the State of Texas;

 

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(4) an Amended and Restated Custody Agreement duly executed by the
Administrative Agent, the Seller and the Custodian;

(5) copies of the Seller’s (i) limited partnership agreement, (ii) certificate
of limited partnership issued by the state of Texas, (iii) articles
of incorporation certified by the Secretary of State of the State of the
Seller’s General Partner and (iv) bylaws or regulations and all amendments
certified by its corporate secretary or assistant secretary, as well as any
other information required by Section 326 of the USA Patriot Act or necessary
for the Administrative Agent and the Buyers to verify the identity of the Seller
as required by Section 326 of the USA Patriot Act in accordance with the
requirements summarized in the notice given in Section 35;

(6) the Electronic Tracking Agreement duly executed by the Seller, MERS,
MERSCorp., Inc. and the Administrative Agent;

(7) evidence reasonably satisfactory to the Administrative Agent (i) as to the
due filing and recording in all appropriate offices of all financing statements,
(ii) if there are any Purchased Loans that require the Buyers’ interest to be
noted by book entry, that such book entry has been duly made and (iii) if there
is any “investment property” under the UCC of the State of New York or other
applicable Law, that such instruments as are necessary to give the
Administrative Agent “control” of such investment property have been duly
executed by the Seller and the relevant securities intermediary;

(8) a certificate of existence or authority and good standing for the Seller
issued by the Secretary of State of Texas;

(9) original resolutions of the Seller’s general partner’s board of directors,
certified as of the initial Purchase Date by the Seller’s general partner’s
corporate secretary or assistant secretary or other authorized officer,
authorizing the execution, delivery and performance by the Seller of this
Agreement, the Custody Agreement and all other Repurchase Documents to be
delivered by the Seller pursuant to this Agreement;

(10) a certificate of the Seller’s general partner’s corporate secretary or
assistant secretary or other authorized officer as to (i) the incumbency of the
officers of the Seller executing this Agreement, the Custody Agreement, each
applicable Request/Confirmation and all other Repurchase Documents executed or
to be executed by or on behalf of the Seller and (ii) the authenticity of their
signatures, and specimens of their signatures shall be included in such
certificate or set forth on an exhibit attached to it, (the Administrative
Agent, the Buyers and the Custodian shall be entitled to rely on that
certificate until the Seller has furnished a new certificate to the
Administrative Agent);

 

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(11) an Officer’s Certificate for the Seller dated the initial Purchase Date and
certifying truthfully that, (i) after giving effect to the Transaction to occur
on that Purchase Date, no Default or Event of Default will exist, (ii) all of
the representations and warranties made by the Seller in the Repurchase
Documents are true and correct as of the Effective Date and (iii) there has been
no material adverse change since the Statement Date in any of the Central
Elements in respect of the Seller or any of its Subsidiaries;

(12) copies of an errors and omissions insurance policy or mortgage impairment
insurance policy and blanket bond coverage policy, or certificates in lieu of
policies, providing such insurance coverage as is customary for members of the
Seller’s industry;

(13) a favorable written opinion of counsel to the Seller dated on or before the
initial Purchase Date, addressed to the Administrative Agent and the Buyers and
in form and substance reasonably satisfactory to the Administrative Agent and
its legal counsel (a form containing opinions required to be included therein
are set forth in Exhibit B), specifically stating that the Administrative Agent,
the Buyers and any person or entity that purchases the Eligible Loans from the
Buyers can rely on it; and

(14) payment to the Administrative Agent or the Custodian, as applicable, of the
Facility Fee, the Administrative Agent’s Fee, the Custodian’s Fee and all other
fees and expenses (including the disbursements and reasonable fees of the
Administrative Agent’s attorneys) of the Administrative Agent and the Buyers
payable by Seller pursuant to Section 9 accrued and billed for to the date of
the Seller’s execution and delivery of this Agreement.

(b) All directors and officers of the Seller’s general partner, all partners of
the Seller and all Affiliates of the Seller or any of its Subsidiaries, to whom
or which the Seller shall be indebted either for borrowed money or for any other
obligation of $50,000 or more as of the date of this Agreement,
excluding salary, bonus or other compensation obligations, shall have caused
such Debt to be Qualified Subordinated Debt, by executing and causing to be
delivered to the Administrative Agent a Subordination Agreement and taking all
other steps, if any, required to cause such Debt to be Qualified Subordinated
Debt, and the corporate secretary of the Seller shall have certified each such
Subordination Agreement executed to satisfy the requirements of this
Section 14.1(b) to be true, complete and in full force and effect as of the date
of the initial purchase.

14.2. Each Purchase. The obligations of the Buyers (and the Administrative Agent
on the Buyers’ behalf) to make any purchase under this Agreement are also
subject to the satisfaction, as of each Purchase Date, of the following
additional conditions precedent:

(a) The Seller shall have delivered (i) to the Administrative Agent a
Request/Confirmation and its related Mortgage Loan Transmission File and (ii) to
the Custodian, such Mortgage Loan Transmission Files for the new Loans to be
purchased.

 

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(b) Unless the requested Transaction is for the purchase of only Wet Loans, the
Custodian shall have issued its Custodian’s Exception Report (as defined in the
Custody Agreement) relating to the Purchased Loans then owned by the Buyers —
the Administrative Agent agrees that, for so long as it is the Custodian, it
will not unreasonably withhold or delay issuing any such Custodian’s Exception
Report.

(c) The representations and warranties of the Seller contained in this Agreement
and the other Repurchase Documents shall be true and correct in all material
respects as if made on and as of each Purchase Date unless specifically stated
to relate to an earlier date.

(d) The Seller shall have performed all agreements to be performed by it under
this Agreement, the Custody Agreement and all other Repurchase Documents, as
well as under all Investor Commitments that the Seller has represented to the
Administrative Agent and the Buyers cover any of the Purchased Loans, and after
the requested Transaction shall have been executed, no Default or Event of
Default will exist that the Administrative Agent has not declared in writing to
have been waived or cured, nor will any default exist under any such Investor
Commitments.

(e) The Seller shall not have incurred any material liabilities, direct or
contingent, other than in the ordinary course of its business, and no
liabilities (whether or not in the ordinary course of business) that adversely
and materially affect any of the Central Elements in respect of the Seller or
any of its Subsidiaries since the dates of the Seller’s Financial Statements
most recently theretofore delivered to the Buyers.

(f) The Administrative Agent shall have received from counsel for the Seller, if
requested by the Administrative Agent, an updated favorable opinion or opinions,
in form and substance satisfactory to the Administrative Agent addressed to the
Buyers and the Administrative Agent and dated as of the relevant Purchase Date,
covering and updating such matters that were originally addressed in the opinion
issued pursuant to Section 14.1(a)(13) as the Administrative Agent may
reasonably request.

(g) The Seller shall have paid the Facility Fee and the Administrative Agent’s
Fee then due and payable in accordance with Sections 9.1 and 9.2 and the
Custodian’s Fee pursuant to the Custody Agreement.

(h) Prior to the execution of the requested Transaction, no Default or Event of
Default shall have occurred or will occur after giving effect to such
Transaction, that the Administrative Agent has not declared in writing to have
been waived or cured.

(i) The requested Transaction will not result in the violation of any applicable
Law.

(j) The Administrative Agent and each Buyer shall have received such other
documents, if any, as shall be specified by the Administrative Agent or any
Buyer.

(k) No Margin Deficit exists or will exist after giving effect to such
Transaction.

 

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(l) The Termination Date shall not have occurred.

(m) After giving effect to such Transaction, none of the sublimits set forth in
Section 4.2 shall be exceeded.

(n) For any Transaction involving a Wet Loan, (i) unless the closing title
agency or attorney has previously signed an agreement with the Administrative
Agent acknowledging funds received from the Administrative Agent for the
purchase of such Wet Loan are held by such title agency or attorney in trust for
and as the property of the Administrative Agent until such Wet Loan is closed
and Purchased by the Administrative Agent for the benefit of the Buyers and that
any such funds so received shall be returned to the Administrative Agent for the
benefit of the Buyers if the Mortgage Loan that is proposed to be so purchased
as a Wet Loan does not close on the proposed Purchase Date, (ii) the Seller
shall have delivered to such closing title agency or attorney an instruction
letter stating that funds received from the Administrative Agent for the
purchase of such Wet Loan are held by such title agency or attorney in trust for
and as the property of the Administrative Agent until such Wet Loan is closed
and Purchased by the Administrative Agent for the benefit of the Buyers and that
any such funds so received shall be returned to the Administrative Agent for the
benefit of the Buyers if the Mortgage Loan that is proposed to be so purchased
as a Wet Loan does not close on the proposed Purchase Date.

15 Representations, Warranties and Covenants.

15.1. Buyers, Administrative Agent and Seller Representations. The Buyers, the
Administrative Agent 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:

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

(b) it will engage in such Transactions as principal (or, in the case of the
Administrative Agent, and in respect of any other party if agreed in writing in
advance of any Transaction by the other parties hereto, as Administrative Agent
for a disclosed principal);

(c) 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);

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

 

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(e) 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.

15.2. Additional Seller Representations. With regard to:

(i) Purchased Loans, on and as of the Purchase Date of any Transaction;

(ii) Eligible Loans substituted pursuant to Section 11, on and as of the date of
their substitution; and

(iii) Additional Purchased Loans submitted pursuant to Section 6.1, on and as of
the date of their transfer to the Custodian

the Seller hereby represents and warrants to the Buyers and the Administrative
Agent, as follows:

(a) Documents Genuine. The documents delivered or disclosed by the Seller to the
Administrative Agent or the Buyers pursuant to this Agreement or the Custody
Agreement are either original documents or genuine and true copies thereof.

(b) No Securities to be Acquired with Purchased Loan Sale Proceeds. None of the
Purchase Price for any Eligible Loan will be used either directly or indirectly
to acquire any security, as that term is defined in Regulation T, and the Seller
has not taken any action that might cause any Transaction to violate any
regulation of the Federal Reserve Board.

(c) Organization; Good Standing; Subsidiaries. The Seller is a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Texas, and each of the Seller’s Subsidiaries is a corporation,
partnership or limited liability company duly formed, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, formation
or organization. The Seller has furnished to the Administrative Agent a true and
complete copy of its Organizational Documents and those of the General Partner
as in effect as of the date of this Agreement, including all amendments thereto,
and agrees to furnish to the Administrative Agent a true and complete copy of
any amendment adopted after the Effective Date promptly after it is adopted. The
Seller and its Subsidiaries each has the full legal power and authority to own
its properties and to carry on its business as currently conducted and each is
duly qualified to do business as a limited partnership or foreign corporation or
(in the case of any limited liability company Subsidiaries) limited liability
company and in good standing in each jurisdiction in which the ownership of its
property or the transaction of its business makes such qualification necessary,
except in jurisdictions, if any, where a failure to be qualified, licensed or in
good standing could not reasonably be expected to have a material adverse effect
on any of the Central Elements in respect of the Seller or any of its
Subsidiaries. The Seller does not have any Subsidiaries except as set forth on

 

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Exhibit D or as have been disclosed by the Seller to the Administrative Agent in
writing after the Effective Date. Exhibit D states the name of each such
Subsidiary as of the Effective Date, place of organization, each state in which
it is qualified as a foreign entity and the percentage ownership of the capital
stock or other indicia of equity of each such Subsidiary by the Seller.

(d) Authorization and Enforceability. The Seller has the power and authority to
execute, deliver and perform this Agreement, the Custody Agreement and all other
Repurchase Documents to which it is a party or in which it joins or has joined.
The execution, delivery and performance by the Seller of this Agreement, the
Custody Agreement and all other Repurchase Documents to which it is a party have
each been duly and validly authorized by all necessary corporate action on the
part of the Seller (none of which has been modified or rescinded, and all of
which are in full force and effect) and do not and will not (i) conflict with or
violate any Legal Requirement, (ii) conflict with or violate the Organizational
Documents of the Seller, (iii) conflict with or result in a breach of or
constitute a default under any agreement, instrument or indenture binding on the
Seller or (iv) require any consent under any such agreement, instrument or
indenture, where the conflict, violation, breach, default or nonconsent could
reasonably be expected to have a material adverse effect on any of the Central
Elements in respect of the Seller or any of its Subsidiaries, or result in the
creation of any Lien upon any property or assets of the Seller, or result in or
permit the acceleration of any debt of the Seller pursuant to any agreement,
instrument or indenture to which the Seller is a party or by which the Seller or
its property may be bound or affected. This Agreement, the Custody Agreement and
all other Repurchase Documents constitute the legal, valid, and binding
obligations of the Seller enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or other such laws affecting the
enforcement of creditors’ rights generally.

(e) Approvals. Neither the execution and delivery of this Agreement, the Custody
Agreement and all other Repurchase Documents nor the performance of the Seller’s
obligations under such Repurchase Documents requires any license, consent,
approval or other action of any state or federal agency or governmental or
regulatory authority other than (i) those that have been obtained or will be
obtained by the time required and which remain in full force and effect,
(ii) those for which the Seller’s failure to obtain them could not reasonably be
expected to have a material adverse effect on any of the Central Elements in
respect of the Seller or any of its Subsidiaries and (iii) the filing of any
financing statements.

(f) Financial Condition. The consolidated balance sheet of the Seller (and, to
the extent applicable, the Seller’s consolidated Subsidiaries) and the related
statements of income, changes in stockholders’ equity and cash flows (“Financial
Statements”) for the fiscal year ended on the Statement Date (the “Statement
Date Financial Statements”) heretofore furnished to the Administrative Agent and
the Buyers, fairly present the financial condition of the Seller (and Seller’s
consolidated Subsidiaries) as of the Statement Date and the results of their
operations for the fiscal period ended on the Statement Date. On the Statement
Date, the Seller did not have either any known material liabilities, direct or
indirect, fixed or contingent, matured or unmatured, other

 

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than the contingent liabilities (if any) set forth on Schedule 15.2(f) and
contingent liability on endorsements of negotiable instruments for deposit or
collection in the ordinary course of business, or any known material liabilities
for sales, long-term leases or unusual forward or long-term commitments, which
are not disclosed by the Statement Date Financial Statements or reserved against
in them or that have not been otherwise disclosed to the Buyer in writing. Each
of the Seller and each of its Subsidiaries is Solvent, and since the Statement
Date, (i) there has been no material adverse change in any of the Central
Elements in respect of the Seller or any of its Subsidiaries, nor is the Seller
aware of any state of facts which (with or without notice, the lapse of time or
both) would or could reasonably be expected to result in any such material
adverse change, and (ii) there have been no unrealized or anticipated losses
from any loans, advances or other commitments of the Seller which have resulted
in a material adverse change in the Central Elements in respect of the Seller or
any of its Subsidiaries, except for the material adverse changes and losses (if
any) that are summarized in Schedule 15.2(f).

(g) Litigation. Except as disclosed on Schedule 15.2(g) or except as disclosed
in the Statement Date Financial Statements or the most recent Financial
Statements furnished to the Administrative Agent and the Buyers (whichever is
more current), there are no actions, claims, suits or proceedings pending, or to
the knowledge of the Seller, threatened or reasonably anticipated against or
affecting the Seller or any of its Subsidiaries in any court, before any other
Governmental Authority or before any arbitrator or in any other dispute
resolution forum which, if adversely determined, could reasonably be expected to
result in a material adverse effect on any of the Central Elements in respect of
the Seller or any of its Subsidiaries.

(h) Licensing. The Seller, and any subservicer of its Mortgage Loans are duly
registered as mortgage lenders and servicers in each state in which Mortgage
Loans have been or are from time to time originated, to the extent such
registration is required by any applicable Legal Requirement, except where the
failure to register could not reasonably be expected to result in a material
adverse effect on any of the Central Elements in respect of the Seller or any of
its Subsidiaries.

(i) Compliance with Applicable Laws. Neither the Seller nor any of its
Subsidiaries is in violation of any provision of any law, or any judgment,
award, rule, regulation, order, decree, writ or injunction of any court, other
Governmental Authority or public regulatory body that could reasonably be
expected to have a material adverse effect on any of the Central Elements in
respect of the Seller or any of its Subsidiaries.

(j) Regulation U. The Seller is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and no part of the proceeds of any
Transactions directly or indirectly made available to or received by the Seller
or for its account will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock or for the purpose of
reducing or retiring any debt which was originally incurred to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock or which would constitute this transaction a “purpose
credit” within the meaning of Regulation U, as now or hereafter in effect.

 

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(k) Investment Company Act. The Seller is not subject to the rules governing an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.

(l) Payment of Taxes. All tax returns required to be filed by the Seller and
each Subsidiary in any jurisdiction have been filed or extended and all taxes,
assessments, fees and other governmental charges upon the Seller and each
Subsidiary or upon any of its properties, income or franchises have been paid
prior to the time that such taxes could give rise to a Lien thereon, unless
protested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been established on the books of the
Seller or such Subsidiary. Neither the Seller nor any Subsidiary has any
knowledge of any proposed tax assessment against the Seller or any Subsidiary.

(m) Custody Agreement. The Custody Agreement is or when executed will be
currently in full force and effect and the Seller is or when executed will be in
compliance with all of its obligations, covenants or conditions contained in the
Custody Agreement.

(n) Agreements. Neither the Seller nor any of its Subsidiaries is a party to any
agreement, instrument or indenture or subject to any restriction, in each case
materially and adversely affecting any of the Central Elements in respect of the
Seller or any of its Subsidiaries except as disclosed in (i) the Statement Date
Financial Statements, or (ii) Schedule 15.2(f). Neither the Seller nor any
Subsidiary is in default in the performance, observance or fulfillment of any of
its obligations, covenants or conditions contained in any agreement, instrument
or indenture that could reasonably be expected to have a material adverse effect
on any of the Central Elements in respect of the Seller or any of its
Subsidiaries. No holder of the Seller’s or any such Subsidiary’s debt or other
obligations has given notice of any asserted default that could reasonably be
expected to have a material adverse effect on any of the Central Elements in
respect of the Seller or any of its Subsidiaries. No liquidation or dissolution
of the Seller is pending or, to the Seller’s knowledge, threatened and no
liquidation or dissolution of any Subsidiary is pending or threatened that could
reasonably be expected to have a material adverse effect on any of the Central
Elements in respect of the Seller or any of its Subsidiaries. No receivership,
insolvency, bankruptcy, reorganization or other similar proceedings relative to
the Seller or any of its properties is pending, or to the Seller’s knowledge,
threatened. No receivership, insolvency, bankruptcy, reorganization or other
similar proceedings relative to any Subsidiary of the Seller or any of its
properties is pending, or to the Seller’s knowledge, threatened that could
reasonably be expected to have a material adverse effect on any of the Central
Elements in respect of the Seller or any of its Subsidiaries.

 

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(o) Title to Properties. The Seller and each of its Subsidiaries has good,
valid, insurable (in the case of real property) and marketable title to all of
its material Properties and assets (whether real or personal, tangible or
intangible) that are reflected on or referred to in the Statement Date Financial
Statements or in the more current Financial Statements (if any) most recently
furnished to the Buyer after the Effective Date, except for such properties and
assets as have been disposed of since the date of such current Financial
Statements either in the ordinary course of business or because they were no
longer used or useful in the conduct of its business, and all such Properties
and assets are free and clear of all Liens except for (i) the lien of current
(nondelinquent) real and personal property taxes and assessments,
(ii) covenants, conditions and restrictions, rights of way, easements and other
matters to which like properties are commonly subject that do not materially
interfere with the use of the property as it is currently being used and
(iii) such other Liens, if any, as are disclosed in such Financial Statements or
on Schedule 15.2 (o)and Permitted Encumbrances.

(p) The Seller’s Address. The Seller’s chief executive office and principal
place of business are at 10700 Pecan Park Blvd., Suite 450, Austin, TX 78750 or
at such other address as shall have been set forth in a written notice to the
Administrative Agent given subsequent to the Effective Date and at least 10
Business Days before such notice’s effective date.

(q) ERISA. The Seller does not maintain any ERISA Plans and shall not adopt or
agree to maintain or contribute to an ERISA Plan. The Seller shall promptly
notify Administrative Agent and each Buyer in writing in the event an ERISA
Affiliate adopts an ERISA Plan. The Seller is not an employer under any
Multiemployer Plan or any other Plan subject to Title IV of ERISA.

(r) Commissions. Neither Seller nor any of its Affiliates have dealt with any
broker, investment banker, Administrative Agent or other person, except for the
Administrative Agent and the Buyers, who may be entitled to any commissions or
compensation in connection with the sale of Purchased Loans pursuant to this
Agreement.

(s) Full Disclosure. Each material fact or condition relating to the Repurchase
Documents and the Central Elements has been disclosed in writing to the
Administrative Agent. All information previously furnished by the Seller and its
Restricted Subsidiaries to the Administrative Agent in connection with the
Repurchase Documents was and all information furnished in the future by the
Seller and its Restricted Subsidiaries to the Administrative Agent or Buyers
will be true and accurate in all material respects or based on reasonable
estimates on the date the information is stated or certified. To the best
knowledge of the Seller, neither the financial statements referred to in
Section 15.2(f), nor any Request/Confirmation, market analysis report, officer’s
certificate or any other report or statement delivered by the Seller and its
Restricted Subsidiaries to the Administrative Agent in connection with this
Agreement, contains any untrue statement of material fact.

(t) Financial Institution. The Seller is a “financial institution” as defined in
the FDICIA.

 

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15.3. Special Representations Relating to the Purchased Loans. The
representations and warranties concerning each Purchased Loan, as set forth on
Schedule 15.3 hereto, are incorporated herein.

15.4. Survival. All representations and warranties by the Seller shall survive
delivery of the Repurchase Documents and the sales of the Purchased Loans, and
any investigation at any time made by or on behalf of the Buyers or the
Administrative Agent shall not diminish any Buyer’s or the Administrative
Agent’s right to rely on them.

16 Affirmative Covenants.

The Seller agrees that, for so long as the Commitments are outstanding or either
(i) there are any Purchased Loans that have not been repurchased by the Seller
or (ii) any of the Seller’s Obligations remain to be paid or performed under
this Agreement or any of the other Repurchase Documents:

16.1. Market Analysis Report. It will provide, upon request by the
Administrative Agent, a market analysis report in the form of a loan tape
submitted electronically providing the information set forth on, and
substantially in the format of, Schedule 16.1.

16.2. Office of Foreign Assets Control and USA Patriot Act.

(a) The Seller will not knowingly directly or indirectly use any of the proceeds
from the sale of the Purchased 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 those implemented by regulations codified in Subtitle B, Chapter V, of
Title 31, Code of Federal Regulations.

(b) The Seller will not (i) be or become subject at any time to any law,
regulation or list of any government agency (including the U.S. Office of
Foreign Asset Control list) that prohibits or limits the Buyers or the
Administrative Agent from entering into any Transaction with Seller or from
otherwise conducting business with Seller, or (ii) fail to provide documentary
and other evidence of the Seller’s identity as may be requested by the
Administrative Agent or any Buyer at any time to enable the Administrative Agent
and Buyers to verify the Seller’s identity or to comply with any applicable law
or regulation, including Section 326 of the USA Patriot Act of 2001, 31 U.S.C. §
5318.

 

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16.3. Financial Statements. The Seller will deliver to the Administrative Agent
for distribution to the Buyers:

(a) As soon as available and in any event within 30 days after the end of each
month (including each quarter end and year end month), Financial Statements for
the Seller and its consolidated Subsidiaries for the month just ended, all in
reasonable detail, and certified by its chief financial officer or other
authorized officer with knowledge of the subject matter of such Financial
Statements, that such Financial Statements were prepared in accordance with GAAP
and present fairly in all material respects the Seller’s and its consolidated
Subsidiaries’ financial condition as of the date thereof and the results of
their operations for the period covered, subject, however, to adjustments
required by FAS-91 and normal year-end audit adjustments and the omission of
notes to the Financial Statements.

(b) As soon as available and in any event within 90 days after the close of each
of its fiscal years, audited consolidated and consolidating Financial Statements
for the Seller and its consolidated Subsidiaries for such year, and the related
balance sheet as at the end of such year (setting forth in comparative form the
corresponding figures as of the end of and for the preceding fiscal year), all
in reasonable detail, prepared in accordance with GAAP and with all notes, and
accompanied by:

(1) a report and clean and unqualified opinion of a firm of independent
certified public accountants of recognized standing selected by the Seller and
acceptable to the Administrative Agent (as of the Effective Date,
PricewaterhouseCoopers LLP is acceptable to the Administrative Agent), stating
that such accountants have audited such Financial Statements in accordance with
generally accepted auditing standards and that, in their opinion, such Financial
Statements present fairly, in all material respects, the consolidated financial
condition of the Seller and its consolidated Subsidiaries as of the date thereof
and the consolidated results of its operations and cash flows for the periods
covered thereby in conformity with GAAP;

(2) any management letters, management reports or other supplementary comments
or reports delivered in conjunction with the report and opinion in
Section 16.3(b)(1) by such accountants to management or the board of directors
of the Seller; and

(3) a certificate signed by the chief financial officer or other authorized
officer of the Seller with knowledge of the subject matter of such certificate
stating that said Financial Statements fairly present the consolidated financial
condition and results of operations (for Seller and its consolidated
Subsidiaries) as at the end of, and for, such year.

The Seller also agrees to provide to the Administrative Agent and the Buyers
such other information related to such annual reports or concerning the Seller’s
finances or operations as the Administrative Agent or any Buyer may from time to
time reasonably request.

 

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(c) Officer’s Certificate. Together with each of the monthly and annual
Financial Statements required by Section 16.3(a) and (b), a certificate of the
Seller’s chief financial officer or other authorized officer with knowledge of
the subject matter of such certificate in the form of Exhibit C, among other
things, (i) setting forth in reasonable detail all calculations necessary to
show whether the Seller is in compliance with the requirements of Sections
17.12, 17.13, and 17.15 or, if the Seller is not in compliance, showing the
extent of noncompliance and specifying the period of noncompliance and what
actions the Seller proposes to take with respect thereto, (ii) setting forth the
HUD Compare Ratio as at the end of the period covered by such Financial
Statements (or the latest available HUD Compare Ratio as of three Business Days
before such certificate is due), and (iii) stating that the terms of this
Agreement have been reviewed by such officer or under his or her supervision,
that he or she has made or caused to be made under his or her supervision a
review in reasonable detail of the transactions and the condition of the Seller
during the accounting period covered by such Financial Statements, and that such
review does not disclose the existence during or at the end of such accounting
period and that such chief financial officer or other authorized officer does
not have knowledge of the existence as of the date of such certificate of any
Event of Default or Default or, if any Event of Default or Default existed or
exists, specifying the nature and period of its existence and what action the
Seller has taken, is taking, and proposes to take with respect to it.

16.4. Financial Statements Will Be Accurate. The Seller agrees that all
Financial Statements and reports of auditors furnished to the Administrative
Agent and the Buyers will be prepared in accordance with GAAP, applied on a
basis consistent with that applied in preparing the Statement Date Financial
Statements as at the date thereof and for the period then ended, subject,
however for Financial Statements other than year-end statements to year-end
audit adjustments and the omission of footnotes.

16.5. Other Reports. The Seller will promptly furnish to the Administrative
Agent from time to time information regarding the business and affairs of the
Seller (and, upon the written request of any Buyer, such information requested
by such Buyer), including the following and such other information as the
Administrative Agent may from time to time reasonably request (each report
required must be signed by a duly authorized officer of the Seller, and the
Administrative Agent and the Buyers will have no responsibility to verify or
track any of the items referenced or conclusions stated in such reports or to
verify the authority of its signer):

(a) A report of Purchased Loans prepaid in full, on or before one Business Day
after prepayment of any one or more Purchased Loans is reported to the Seller
internally or by any Servicer or the Seller’s subservicer (and the Seller, as
applicable, will require each such Servicer and subservicer to promptly make
such reports to the Seller, as applicable).

 

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(b) Monthly with the certificate required by Section 16.3(c), a report attached
to Exhibit C summarizing (i) notices received by the Seller requesting or
demanding that the Seller repurchase (or pay indemnity or other compensation in
respect of) Mortgage Loans previously sold or otherwise disposed of by the
Seller to any investor or other Person pursuant to any express or implied
repurchase or indemnity obligation (whether absolute or contingent and whether
or not the Seller is contesting or intends to contest such request or demand)
and (ii) actual repurchase and indemnity payments made by Seller to any Person.

(c) Monthly with the certificate required under Section 16.3(c), a Purchased
Loans Curtailment Report.

(d) Upon request, copies of any changes to the Seller’s Underwriting Guidelines.

(e) Upon request, a summary report of the Seller’s then-outstanding commitments
to sell Mortgage Loans to investors.

(f) If requested by the Administrative Agent, a summary of the Seller’s other
repurchase, reverse repurchase or asset warehousing facilities. Such report
shall be in form and format reasonably acceptable to the requesting party and
include the total amount available, amount outstanding and maturity date of each
of such facilities, the counterparties and whether such facilities are committed
or uncommitted.

(g) Such other reports by the Seller in respect of the Purchased Loans, in such
detail and at such times as the Administrative Agent or any Buyer in its
reasonable discretion may request at any time or from time to time.

(h) As soon as available and in any event within one day after filing or posting
on-line, notice of (i) all press releases issued by the Seller or any of its
Subsidiaries, (ii) all regular or periodic financial reports, and copies of all
extraordinary or non-routine filings, if any, that shall be filed with the U.S.
Securities and Exchange Commission or any successor agency by or on behalf of
the Seller or any of its Subsidiaries (including Single-purpose Finance
Subsidiaries) and (iii) all such filings relating to any securities that are or
are to be based on, backed by or created from any Purchased Loans and which
filings are made by or in respect of the Seller or any of its Subsidiaries.

16.6. Maintain Existence and Statuses; Conduct of Business. The Seller agrees to
preserve and maintain its existence in good standing and all of its rights,
privileges, licenses and franchises necessary or desirable in the normal conduct
of its business except where the failure to maintain such rights, privileges,
licenses or franchises could not reasonably be expected to have a material
adverse effect on any of the Central Elements in respect of the Seller or any of
its Subsidiaries, and the Seller will continue in the residential mortgage
lending business as its principal and core business.

16.7. Compliance with Applicable Laws. The Seller and its Subsidiaries will
comply with all applicable Legal Requirements, the breach of which could
reasonably be expected to materially adversely affect any of the Central
Elements with respect to the Seller and its Subsidiaries, taken as a whole,
except where contested in good faith.

 

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16.8. Inspection of Properties and Books; Protection of Seller’s Proprietary
Information; Buyers’ Due Diligence of Seller.

(a) The Seller agrees to permit the Administrative Agent and the Buyers, subject
to the provisions of Section 16.9, to perform continuing loan level due
diligence reviews with respect to the Purchased Loans, for purposes of verifying
compliance with the representations, warranties and specifications made in this
Agreement or otherwise, and the Seller agrees that upon reasonable prior notice
to the Seller, the Administrative Agent or its authorized representatives will
be permitted timely and reasonable access to examine, inspect, and make copies
and extracts of, the related mortgage loan files and any and all documents,
records, agreements, instruments or information relating to such Purchased Loans
in the possession or under the control of the Seller, any Servicer or the
Custodian. The Seller also shall make available to the Administrative Agent a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting the mortgage loan files and the Purchased Loans. Without
limiting the generality of the foregoing, the Seller acknowledges that the
Buyers may purchase Eligible Loans from the Seller based solely upon the
information provided by the Seller to the Administrative Agent in the Mortgage
Loan Transmission File and the representations, warranties and covenants
contained in this Agreement, and that the Administrative Agent, at its option,
has the right at any time with reasonable prior notice to conduct a partial or
complete due diligence review on some or all of the Purchased Loans prior to or
following their purchase in a Transaction, including ordering new credit reports
and new appraisals on any property securing any Purchased Loan and otherwise
re-generating the information used to originate such Purchased Loan.
Notwithstanding any provision to the contrary herein regarding reasonable prior
notice, if an Event of Default in respect of the Seller shall have occurred and
be continuing, then the Administrative Agent, upon notice to the Seller, shall
have the right to immediate access and review of the Seller and the loan
information contemplated in this Section 16.8(a), provided that to the extent
that the Seller does not have possession of such loan information, the Seller
shall cause the applicable Servicer or subservicer to provide the Administrative
Agent with access and review of such loan information within a reasonable period
of time, but not to exceed any prior notification time provided under the
related Servicing Agreement with such Servicer or subservicer. The
Administrative Agent may conduct the due diligence review of such Purchased
Loans itself or engage a third party underwriter selected by the Administrative
Agent to perform such review. The Seller agrees to, and to cause any relevant
Servicer and its subservicer to, cooperate with the Administrative Agent and any
third party underwriter in connection with such due diligence review, including
providing the Administrative Agent and any third party underwriter with access
to any and all documents, records, agreements, instruments or information
relating to such Purchased Loans in the possession, or under the control, of the
Seller, such Servicer and such subservicer. The Seller agrees to pay all costs
and expenses of the Administrative Agent and any Buyer incurred in the exercise
of their rights pursuant to this Section 16.8(a).

 

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(b) The Seller agrees to permit authorized representatives of the Administrative
Agent and each Buyer, at such Buyer’s expense except after the occurrence and
during the continuance of a Default or Event of Default, to discuss onsite the
business, operations, assets and financial condition of the Seller and its
Subsidiaries with their respective officers, employees and independent
accountants and to examine their books of account and make copies or extracts of
them, all at such reasonable times and upon such reasonable notice as the
Administrative Agent or any Buyer may request, for any or all of the purposes of
ordinary diligence, performing the Buyers’ duties (and any of the Seller’s
duties which the Seller has not performed) and enforcing the Buyers’ and the
Administrative Agent’s rights under this Agreement. To the extent that it is
commercially reasonable, any Buyer that desires to act under this
Section 16.8(b) shall do so either through the Administrative Agent, or with the
coordination of the Administrative Agent, and to the extent that it is not
commercially reasonable for a Buyer to do so, such Buyer may only act under this
Section 16.8(b) one time in any consecutive six-month period and, unless such
Buyer is the Person serving as the Administrative Agent, at such Buyer’s
expense. The Administrative Agent or the Buyer acting will notify the Seller
before contacting the Seller’s accountants and the Seller may have its
representatives in attendance at any meetings between the officers or other
representatives of the Administrative Agent or any Buyer and such accountants
held in accordance with this authorization. Each of the Administrative Agent and
each Buyer agrees that it will prevent disclosure by itself to third parties of
any proprietary information it has received pursuant to this Agreement and will
maintain the confidential nature of such material; provided that this
restriction shall not apply to information that (i) at the time in question has
already entered the public domain, (ii) is required to be disclosed by any Legal
Requirement (including pursuant to any examination, inspection or investigation
by any Governmental Authority having regulatory jurisdiction over any Buyer or
the Administrative Agent), (iii) is furnished by the Administrative Agent, or
any Buyer to purchasers or prospective purchasers of participations or interests
in the Purchased Loans so long as such purchasers and prospective purchasers
have agreed to be subject to restrictions substantially identical to those
contained in this sentence, (iv) the disclosure of which the Administrative
Agent, and the Buyers deem necessary to market or sell Purchased Mortgage Loans
or to enforce or exercise their rights under any Repurchase Document, or (v) is
disclosed by any Buyer to its attorneys, employees, agents and auditors during
the performance of their respective duties.

16.9. Privacy of Customer Information. The Seller’s Customer Information in the
possession of the Administrative Agent or the Buyers, other than information
independently obtained by the Administrative Agent or the Buyers and not derived
in any manner from or using information obtained under or in connection with
this Agreement, is and shall remain confidential and proprietary information of
the Seller. Except in accordance with this Section 16.9, the Administrative
Agent and the Buyers shall not use any Seller’s Customer Information for any
purpose, including the marketing of products or services to, or the solicitation
of business from, Customers, or disclose any Seller’s Customer Information to
any Person, including any of the Administrative Agent’s or the Buyers’
employees, agents or contractors or any third party not affiliated with the
Administrative Agent or a Buyer. The Administrative Agent and the Buyers may use
or disclose Seller’s Customer

 

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Information only to the extent necessary (i) for examination and audit of the
Administrative Agent’s or the Buyers’ respective activities, books and records
by their regulatory authorities, (ii) to market or sell Purchased Mortgage Loans
or to enforce or exercise their rights under any Repurchase Document, (iii) to
carry out the Administrative Agent’s, the Buyers’ and the Custodian’s express
rights and obligations under this Agreement and the other Repurchase Documents
(including providing Seller’s Customer Information to Approved Investors), or
(iv) in connection with an assignment or participation as authorized by
Section 22 or in connection with any hedging transaction related to the
Purchased Loans and for no other purpose; provided that the Administrative Agent
and the Buyers may also use and disclose the Seller’s Customer Information as
expressly permitted by the Seller in writing, to the extent that such express
permission is in accordance with the Privacy Requirements. The Administrative
Agent and the Buyers shall ensure that each Person to which the Administrative
Agent or a Buyer intends to disclose Seller’s Customer Information, before any
such disclosure of information, agrees to keep confidential any such Seller’s
Customer Information and to use or disclose such Seller’s Customer Information
only to the extent necessary to protect or exercise the Administrative Agents,
the Buyers’ or the Custodian’s rights and privileges, or to carry out the
Administrative Agent’s, the Buyers’ and the Custodian’s express obligations,
under this Agreement and the other Repurchase Documents (including providing
Seller’s Customer Information to Approved Investors). The Administrative Agent
agrees to maintain an Information Security Program and to assess, manage and
control risks relating to the security and confidentiality of Seller’s Customer
Information pursuant to such program in the same manner as the Administrative
Agent does in respect of its own customers’ information, and shall implement the
standards relating to such risks in the manner set forth in the Interagency
Guidelines Establishing Standards for Safeguarding Company Customer Information
set forth in 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568 and 570.
Without limiting the scope of the foregoing sentence, the Administrative Agent
and the Buyers shall use at least the same physical and other security measures
to protect all of the Seller’s Customer Information in their possession or
control as each of them uses for its own customers’ confidential and proprietary
information.

16.10. Notice of Suits, Etc. and Notice. The Seller will promptly, by no later
than the end of the Business Day next following the day when the Seller first
learns of it, give written notice to the Administrative Agent and the Buyers of:

(a) any material action, suit or proceeding instituted by or against the Seller
or any of its Subsidiaries in any federal or state court or before any
commission, regulatory body or Governmental Authority, or if any such
proceedings are threatened against the Seller or any of its Subsidiaries, in a
writing containing the applicable details;

(b) the filing, recording or assessment of any material federal, state or local
tax lien against the Seller or any of its Subsidiaries or any assets of any of
them;

(c) the occurrence of any Event of Default;

 

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(d) the occurrence of any Default;

(e) the termination of, or the occurrence of any event which, with or without
notice or lapse of time or both, would constitute a default under the Custody
Agreement;

(f) the occurrence of:

(1) any event which, with or without notice or lapse of time or both, would
constitute a default under, or permit the acceleration or termination of, any
other agreement, instrument or indenture to which the Seller or any of its
Subsidiaries is a party or to which any of them or any of their properties or
assets may be subject if either (x) the effect of any such default is or if
uncured and unwaived after notice, the lapse of time or both, would be to cause,
or to permit any other party to such agreement, instrument or indenture (or a
trustee on behalf of such a party) to cause, Debt of the Seller or any of its
Subsidiaries to become or be declared due before its stated maturity or (y) such
default, if uncured and unwaived after any relevant notice, the lapse of time or
both, could reasonably be expected to result in a material adverse effect on any
of the Central Elements in respect of the Seller or any of its Subsidiaries.

(2) the acceleration of any material Debt obligation of the Seller or the
termination of any credit facility of the Seller;

(3) any other action, event or condition of any nature (excluding general
economic conditions) which, if unremedied after any relevant notice, lapse of
time or both, could reasonably be expected to result in either (i) the Seller’s
being in breach of or out of compliance with any provision of Sections 17.12,
17.13, and 17.15 (Financial Covenants) or (ii) a material adverse effect on any
of the Central Elements in respect of the Seller or any of its Subsidiaries; or

(4) the curing by the Seller, or the waiver by the other party to the relevant
agreement, instrument or indenture, of any event described in
Section 16.10(f)(1) and, in the case of curing, whether the event was cured
before any applicable grace or notice and opportunity to cure period had
expired.

16.11. Payment of Taxes, Etc. The Seller will, and will cause each of its
Subsidiaries to, pay and discharge or cause to be paid and discharged promptly
all taxes, assessments and governmental charges or levies imposed upon it or its
Subsidiaries or upon their respective income, receipts or properties before they
become past due, as well as all lawful claims for labor, materials and supplies
or other things which, if unpaid, could reasonably be expected to become (or
result in the placement of) a Lien or charge upon any part of such properties;
provided that it and its affected Subsidiaries shall not be required to pay
taxes, assessments or governmental charges or levies or claims for labor,
materials or supplies that are being contested in good faith and by proper
proceedings being reasonably and diligently pursued, execution or enforcement of
which has been effectively stayed (by the posting of a bond or other security
sufficient to achieve that result, or by any other fully effective means), and
for which reserves determined to be adequate (in accordance with GAAP in all
material respects) have been set aside on its books.

 

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16.12. Insurance; fidelity bond. The Seller will, and will cause each of its
Subsidiaries to:

(a) maintain liability insurance protecting the Seller and its Subsidiaries
against fire and other hazard insurance on its respective properties from which
it conducts its business, with responsible insurance companies, in such amounts
and against such risks as is customarily carried by similar businesses operating
in the same vicinity. Copies of such policies shall be furnished to the
Administrative Agent without charge upon the Administrative Agent’s request made
from time to time; and

(b) obtain and maintain at its own expense and keep in full force and effect a
blanket fidelity bond and an errors and omissions insurance policy
covering Seller’s officers and employees and other persons acting on behalf
of Seller. The amount of coverage shall be at least equal to the coverage that
would be required by Fannie Mae or Freddie Mac, whichever is greater, with
respect to Seller if Seller were servicing and administering the Mortgage Loans
for Fannie Mae or Freddie Mac. In the event that any such bond or policy ceases
to be in effect, Seller shall obtain a comparable replacement bond or policy, as
the case may be, meeting the requirements of this Section 16.12(b). Coverage
of Seller under any policy or bond obtained by an Affiliate of Seller and
providing the coverage required by this Section 16.12(b) shall satisfy the
requirements of this Section 16.12(b). Upon the request of Buyer, Seller shall
cause to be delivered to Buyer evidence of such fidelity bond and insurance
policies.

16.13. Maintain Lien on Mortgaged Premises. The Seller will maintain the Lien on
the Mortgaged Premises securing each Purchased Loan as a first Lien, subject
only to the Permitted Encumbrances.

16.14. Subordination of Certain Indebtedness. The Seller will cause any and all
debt and obligations of the Seller to any Affiliate or any member, manager,
stockholder, director or officer of the Seller (excluding debt for directors’ or
officers’ salary, bonuses, directors’ fees or other compensation for service) of
any Affiliate to be Qualified Subordinated Debt by the execution and delivery by
such Affiliate or member, manager, stockholder, director or officer, as
applicable, to the Administrative Agent of a Subordination Agreement in form and
substance satisfactory to the Buyers and the taking of all other steps (if any)
required to cause such Debt to be Qualified Subordinated Debt and deliver to the
Administrative Agent an executed copy of that Subordination Agreement, certified
by the corporate secretary or assistant secretary of the Seller to be true and
complete and in full force and effect, as to all such present and future debts
and obligations of the Seller.

 

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16.15. Certain Debt to Remain Unsecured. The Seller will cause any and all debt
and obligations of the Seller advanced to the Seller by any member, manager or
officer of the Seller whether such debt exists as of the Effective Date or is
incurred in the future to remain at all times unsecured.

16.16. Promptly Correct Escrow Imbalances. By no later than seven Business Days
after learning (from any source) of any material imbalance in any escrow
account(s) maintained by the Seller (or any subservicer for it), the Seller will
fully and completely correct and eliminate such imbalance.

16.17. MERS Covenants. The Seller will:

(a) be a “Member” (as defined in the MERS Agreements) of MERSCORP;

(b) maintain the Electronic Tracking Agreement in full force and effect and
timely perform all of its obligations thereunder;

(c) provide the Administrative Agent with copies of any new MERS Agreement or
any amendment, supplement or other modification of any MERS Agreement (other
than the Electronic Tracking Agreement);

(d) not amend, terminate or revoke, or enter into any agreement that is
inconsistent with or contradicts any provision of the Electronic Tracking
Agreement;

(e) register each Purchased Loan in the MERS System and designate the
Administrative Agent as “interim funder” of such Purchased Loan no later than
three Business Days after it is purchased or deemed purchased hereunder;

(f) at the request of the Administrative Agent, take such actions as may be
requested by the Administrative Agent to:

(1) transfer beneficial ownership of any Purchased Loan to the Administrative
Agent on behalf of the Buyers on the MERS System; or

(2) de-register or re-register any Purchased Loan on, or withdraw any Purchased
Loan from, the MERS System;

(g) provide the Administrative Agent with copies of any or all of the following
reports with respect to the Purchased Loans registered on the MERS System at the
request of the Administrative Agent:

(1) Co-existing Security Interest (MERS form IA);

(2) Release of Security Interest by Interim Funder (MERS form IB);

 

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(3) Interim Funder Rejects (MERS form IC);

(4) Paid in Full Verification (MERS form DK); and

(5) such other reports as the Administrative Agent may reasonably request to
verify the status of any Purchased Loan on the MERS System;

(h) notify the Administrative Agent of any withdrawal or deemed withdrawal of
the Seller’s membership in the MERS System or any deregistration of any
Purchased Loan previously registered on the MERS System; and

(i) obtain the prior written consent of the Administrative Agent before entering
into an electronic tracking agreement (other than the Electronic Tracking
Agreement) with any other Person.

16.18. Special Affirmative Covenants Concerning Purchased Loans.

(a) Until both (i) all of the Purchased Loans shall have been repurchased by the
Seller and (ii) the Buyers have no obligation to purchase any additional Loans
hereunder or provide any other financial accommodations to the Seller under or
otherwise in respect of this Agreement, the Seller warrants and will defend the
right, title and interest of the Buyers and the Administrative Agent in and to
the Purchased Loans against the claims and demands of all persons whomsoever.

(b) Each Purchased Loan will be underwritten in material conformance with the
Seller’s Underwriting Guidelines in existence as of the date the Purchased Loan
is originated.

(c) As soon as they become available and in any event within seven days after
the Purchase Date for Wet Loans, the Seller will cause to be assembled and
delivered to the Custodian all Basic Papers relating to Wet Loans. Without
limitation of the foregoing, if original recordation receipts evidencing the
recordation of the Mortgage and Mortgage Assignment included in the Purchased
Loans have not previously been delivered to the Custodian, the Seller will
promptly deliver (or cause to be delivered) to the Custodian, either the
original recordation receipts or the original recorded Mortgage or Mortgage
Assignment showing the recordation data thereon.

(d) The Seller shall maintain, at its principal office or in a regional office
not disapproved by the Administrative Agent, or in the office of a computer
service bureau engaged by the Seller and not disapproved by the Administrative
Agent, and upon request shall make available to the Administrative Agent and the
Custodian the originals of all Loan Papers and related instruments, and all
files, surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records and other information and data relating
to the Purchased Loans that are held by or under the direction or control of the
Seller or any of its Affiliates and that have not already been provided to the
Administrative Agent or the Custodian.

 

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(e) The Seller shall ensure that, if a Mortgage Loan that is to be funded and
sold to the Buyers as a Wet Loan does not close on the proposed Purchase Date,
all amounts remitted by the Administrative Agent for the payment of the Purchase
Price shall be returned promptly within one Business Day to the Administrative
Agent for the benefit of the Buyers and if such funds are not so returned, the
Seller shall pay promptly within one Business Day a like amount to the
Administrative Agent for the benefit of the Buyers plus any accrued Price
Differential. Seller acknowledges that until such time as the Mortgage Loan is
deemed to have been sold to the Buyers, Seller has no interest in, nor any claim
to such amounts and shall, if it receives such amounts, hold such amounts in
trust for the Buyers and shall promptly remit such funds to the Administrative
Agent for disbursement to the Buyers.

16.19. Coordination with Other Lenders/Repo Purchasers and Their Custodians. The
Seller will provide to the Administrative Agent the current name, address and
contact information concerning each of the Seller’s other mortgage warehouse
credit and repurchase facilities, will update such information provided to the
Administrative Agent as changes to the facilities or such name, address or
contact information occurs, and will cooperate and assist the Administrative
Agent in exchanging information with such others (and their document custodians
or trustees) to prevent conflicting claims to and interests in Purchased Loans
between or among repurchase facilities counterparties or lenders, and promptly
correct such conflicting claims as may arise from time to time. The Seller will
execute and deliver to the Administrative Agent any intercreditor agreement the
Administrative Agent may require pursuant to Section 17.8.

16.20. Hedge Investments in Mortgage Loans. If at any time during the term of
this Agreement, the Seller is hedging its investments in Mortgage Loans sold to
the Administrative Agent and the Buyers, the Seller will prepare its weekly
periodic hedge position reports in form, substance and detail reasonably
satisfactory to the Administrative Agent, including a calculation of the
weighted average purchase price for Mortgage Loans so hedged, and provide a copy
of each to the Administrative Agent when issued, and upon the Administrative
Agent’s reasonable request, the Seller will deliver to the Administrative Agent
copies of the Hedge Agreements acquired by the Seller and held from time to time
to so hedge its investments in Mortgage Loans sold to the Buyers.

17 Negative Covenants.

The Seller agrees that, for so long as the Commitments are outstanding or until
all of the Purchased Loans have been repurchased by the Seller and none of the
Seller’s Obligations remain to be paid or performed under this Agreement or any
of the other Repurchase Documents, the Seller shall not, and shall not permit
any Restricted Subsidiary to, either directly or indirectly, without the prior
written consent of the Required Buyers:

 

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17.1. No Merger. The Seller shall not merge or consolidate with or into any
Person, if immediately prior to any such merger or consolidation a Default or
Event of Default exists or would occur as a result thereof, or if as a result of
any such merger or consolidation a Change of Control would occur or the Seller
is not the surviving entity.

17.2. Limitation on GAAP Indebtedness and Contingent Indebtedness. At no time
shall the Seller or any Restricted Subsidiary incur, create, contract, assume,
have outstanding, guarantee or otherwise be or become, directly or indirectly,
liable in respect of any GAAP Indebtedness or Contingent Indebtedness except:

(a) the Obligations;

(b) trade debt (including, without limitation, trade debt for services provided
by an Affiliate), equipment leases, loans for the purchase of equipment used in
the ordinary course of the Seller’s business and indebtedness for taxes and
assessments not yet due and payable owed in the ordinary course of business;

(c) unsecured GAAP Indebtedness or unsecured Contingent Indebtedness owing to
Parent or any Affiliate of Parent;

(d) [reserved];

(e) GAAP Indebtedness owing to Parent or an Affiliate of Parent under a mortgage
warehousing facility, mortgage repurchase facility, or off-balance sheet
indebtedness under another arrangement to finance residential mortgage loans, so
long as (i) such indebtedness is secured only by the mortgage loans financed
under such facility and (ii) U.S. Bank as custodian holds the mortgage loan
files for all mortgage loans pledged or sold under such facility; and

(f) With the prior written consent of the Required Buyers (which consent shall
not be unreasonably withheld, delayed or conditioned upon fees), GAAP
Indebtedness under a mortgage warehousing facility, mortgage repurchase
facility, or off-balance sheet indebtedness under another arrangement to finance
residential mortgage loans, other than those described in subsections (c),
(d) and (e) of this Section 17.2, provided that the Buyers are given a right of
first refusal regarding only similarly structured syndicated mortgage
warehousing facilities or mortgage repurchase facilities. Buyers shall have a
right of first refusal (“Buyers’ ROF”) regarding only new, similarly structured
mortgage warehousing facilities or mortgage repurchase facilities (each a
“Finance Facility”). In the event Seller elects to enter into Financing
Facility, Seller shall provide to Buyers the material terms of the proposed
Finance Facility by delivery to Buyers of a term sheet substantially in the form
of Term Sheet attached hereto as Exhibit F (“ROF Term Sheet”). Within 15 days
following Buyers’ receipt of the ROF Term Sheet, the Administrative Agent shall
notify Seller in writing whether the Required Buyers elect to exercise Buyers’
ROF. If within the 15-day period (i) the Administrative Agent fails to notify
the Sellers in writing of the Required Buyers’ election, or (ii) the
Administrative Agent or the Required Buyers notify the Seller in writing that
the Required Buyers decline to exercise Buyers’ ROF, then the Seller shall have
the right to

 

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enter into a Financing Facility substantially in accordance with the terms of
the ROF Term Sheet; provided that (i) the indebtedness under such Financing
Facility shall be secured only by the mortgage loans financed under such
facility and (ii) U.S. Bank as custodian shall hold the mortgage loan files for
all mortgage loans pledged or sold under such facility. If within the 15-day
period the Administrative Agent notifies the Seller in writing that the Required
Buyers elect to exercise Buyers’ ROF, then Buyers and Seller shall commence to
complete the Financing Facility in a prompt and reasonable manner; provided that
no Buyer shall be obligated to participate in the Financing Facility without its
consent.

17.3. Business. The Seller shall not, directly or indirectly, other than through
an Unrestricted Subsidiary, engage in any businesses which differ materially
from those currently engaged in by the Seller or any other businesses
customarily engaged in by other Persons in the mortgage banking business.

17.4. Liquidations, Dispositions of Substantial Assets. Except as expressly
provided below in this Section 17.4, neither the Seller nor any Restricted
Subsidiary shall dissolve or liquidate or sell, transfer, lease or otherwise
dispose of any material portion of its property or assets or business. Except as
provided herein for the Purchased Loans, the Seller and the Restricted
Subsidiaries may sell other Mortgage Loans and the right to service such other
Mortgage Loans in the ordinary course of their business pursuant to other
repurchase facilities or mortgage warehousing facilities allowed hereunder, any
Restricted Subsidiary may sell its property, assets or business to the Seller or
another Restricted Subsidiary, and any Restricted Subsidiary may liquidate or
dissolve if at the time thereof and immediately thereafter, the Seller and the
Restricted Subsidiaries are in compliance with all covenants set forth in the
Repurchase Documents and no Default or Event of Default shall have occurred and
be continuing.

17.5. Loans, Advances, and Investments. Neither the Seller nor any Restricted
Subsidiary shall make any loan (other than Mortgage Loans), advance, or capital
contribution to, or investment in (including any investment in any Restricted
Subsidiary, joint venture or partnership), or purchase or otherwise acquire any
of the capital stock, securities, ownership interests, or evidences of
indebtedness of, any Person (collectively, “Investment”), or otherwise acquire
any interest in, or control of, another Person, except for the following:

(a) Cash Equivalents;

(b) Any acquisition of securities or evidences of indebtedness of others when
acquired by the Seller in settlement of accounts receivable or other debts
arising in the ordinary course of its business, so long as the aggregate amount
of any such securities or evidences of indebtedness is not material to the
business or condition (financial or otherwise) of the Seller;

 

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(c) Mortgage Notes acquired in the ordinary course of the Seller’s business;

(d) Investment in any existing Affiliate or any Subsidiary (including
Investments by the Seller in CH Funding, LLC, a Delaware limited liability
company) or JV; provided that (i) at the time any such investment is made and
immediately thereafter, the Seller and the Restricted Subsidiaries are in
compliance with all covenants set forth in the Repurchase Documents and no
Default or Event of Default shall have occurred and be continuing and (ii) the
aggregate outstanding amount of all such Investments shall not exceed
$10,000,000 at any time;

(e) Loans to officers or employees in an aggregate amount not to exceed
$300,000; and

(f) Investments in companies in the business of originating and servicing
mortgage loans so long as such Investment is a direct equity investment and so
long as such Investment does not cause a breach of any other covenant
(affirmative or negative) hereunder.

17.6. Use of Proceeds. The Seller shall not, directly or indirectly, use any of
the proceeds of the Transactions for the purpose, whether immediate, incidental
or ultimate, of buying any “margin stock” or of maintaining, reducing or
retiring any GAAP Indebtedness and Contingent Indebtedness originally incurred
to purchase a stock that is currently any “margin stock,” or for any other
purpose which might constitute this transaction a “purpose credit,” in each case
within the meaning of Regulation U or otherwise take or permit to be taken any
action which would involve a violation of Regulation U or Regulation T or any
other regulation of the Board of Governors of the Federal Reserve System.

17.7. Transactions with Affiliates. The Seller shall not enter into any
transactions including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate other
than a Restricted Subsidiary unless such transactions are otherwise permitted
under this Agreement (including, without limitation, the transactions permitted
under Section 17.2) and are in the ordinary course of the Seller’s business.

17.8. Liens. The Seller shall not grant, create, incur, assume, permit or suffer
to exist any Lien upon any real estate owned (“REO”), any loans held for
investment, or any of its Mortgage Notes or any property related thereto,
including but not limited to the Mortgages securing such Mortgage Notes and the
proceeds of the Mortgage Notes, unless such Liens are the subject of an
intercreditor agreement in form and substance satisfactory to the Administrative
Agent, other than: (a) Liens under approved warehouse or repurchase facilities
under Section 17.2(e), (b) Liens granted to the Buyers under Section 10, and
(c) other Liens on assets other than REO and loans held for investment securing
not more than $2,000,000 in the aggregate.

 

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17.9. ERISA Plans. Neither the Seller nor any Restricted Subsidiary shall adopt
or agree to maintain or contribute to an ERISA Plan. The Seller shall promptly
notify Administrative Agent and each Buyer in writing in the event an ERISA
Affiliate adopts an ERISA Plan.

17.10. Change of Principal Office; Fiscal Year. The Seller shall not move its
principal office, executive office or principal place of business from the
address set forth in this Agreement or change its Fiscal Year, without prior
written notice to Administrative Agent and each Buyer.

17.11. Distributions. The Seller shall make no payment of dividends or
distributions to any of its partners if either before or after giving effect
thereto a Default or an Event of Default exists or shall be caused thereby. For
the avoidance of doubt, Seller’s exercise of its right under this Section 17.11
shall not be or be deemed to be a Default or an Event of Default under
Section 17.4 or 17.7.

17.12. Tangible Net Worth. At all times, the Seller’s Consolidated Tangible Net
Worth shall not be less than $75,000,000.

17.13. Tangible Net Worth Ratio. At all times, the ratio of (i) the sum of GAAP
Indebtedness and Contingent Indebtedness to (ii) the Seller’s Consolidated
Tangible Net Worth shall not be more than 8.0 to 1.0.

17.14. [Reserved.]

17.15. Liquidity. Seller’s Liquidity shall at all times be no less than
$40,000,000.

17.16. Special Negative Covenants Concerning Purchased Loans. Except to correct
errors or omissions in Loan Papers, without the written consent of the
Administrative Agent given on a case-by-case basis, amend or modify, or waive
any of the terms and conditions of any Purchased Loans, or settle or compromise
any claim in respect of them, or accept other than cash or the exchange of
comparable Purchased Loans (which is concurrently sold by the Seller to the
Buyers) in liquidation of any Purchased Loans.

 

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17.17. No Changes in Accounting Practices. Make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change its fiscal year.

17.18. Most Favored Buyer Status. The Seller will not enter into, amend or
assume any mortgage loan repurchase or warehouse loan transaction to which any
of the Buyers is not a party, if such agreement includes (or, in the case of an
amendment, will thereafter include) one or more Additional Covenants, unless,
concurrently with the consummation of such transaction, this Agreement shall
have been amended to include such Additional Covenants.

18 Events of Default; Event of Termination.

18.1. Events of Default. The following events shall constitute events of default
(each an “Event of Default”) hereunder:

(a) Seller shall default in the payment of (i) the Repurchase Price for any
Purchased Loans on the applicable Repurchase Date, (ii) any Price Differential,
Facility Fees or Administrative Agent’s Fees when due and fail to cure such
default within one Business Day, (iii) any amount required to be paid or
transferred or paid to eliminate any Margin Deficit within the time period
specified in Section 6.2 or (iv) any other Obligation, when the same shall
become due and payable, whether at the due date thereof, or by acceleration or
otherwise.

(b) An Event of Insolvency occurs with respect to the Seller, Parent, the
Seller’s general partner, or a Restricted Subsidiary.

(c) Any representation or warranty made by a Seller under any Repurchase
Document shall have been incorrect or untrue when made or repeated or deemed to
have been made or repeated; provided, that in the case of representations and
warranties made with respect to the Purchased Loans, such circumstance shall not
constitute an Event of Default if, after determining the Purchase Value of the
Purchased Loans without taking into account the Purchased Loans with respect to
which such circumstance has occurred, no other Event of Default shall have
occurred and be continuing.

(d) Any covenant contained in Section 16.3, 16.4, 16.10, 16.17, 17.1, 17.4,
17.12, 17.13, or 17.15 shall have been breached and such breach remains
unremedied for five calendar days.

(e) Except as provided elsewhere in this Section 18.1, any covenant contained in
(i) Section 17 shall have been breached, (ii) Section 16 shall have been
breached in any material respect, or (iii) any other covenant or agreement
contained in any Repurchase Document is breached in any material respect, and in
the case of (i), (ii) and (iii) above, such breach is not cured within 15
calendar days of the earlier of Seller’s knowledge of

 

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such breach or Seller’s receipt of notice of such breach from any source;
provided, that in the case of covenants made with respect to the Purchased
Loans, such circumstance shall not constitute an Event of Default if, after
determining the Purchase Value of the Purchased Loans without taking into
account the Purchased Loans with respect to which such circumstance has
occurred, no other Event of Default shall have occurred and be continuing.

(f) Failure of the Seller or any of its Restricted Subsidiaries to pay any other
Debt when due, or any default in the payment when due of any principal or
interest on any other Debt or in the payment when due of any contingent
obligation (other than nonrecourse MBS Debt of any Affiliate formed for the
purpose of issuing such Debt), or any breach or default with respect to any
other material term of any other debt or of any promissory note, bond, loan
agreement, reimbursement agreement, mortgage, indenture, repurchase agreement or
financing agreement or other agreement relating thereto, if the effect of any
such failure, default, breach or event referred to in this Section 18.1(f) is to
cause, or to permit, with or without the giving of notice or lapse of time or
both, the holder or holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, Debt of the Seller or any of its Restricted
Subsidiaries in the aggregate amount of $5,000,000 or more to become or be
declared due before its stated maturity.

(g) A Change of Control shall occur.

(h) A material adverse change shall occur in any of the Central Elements
relative to the Seller.

(i) The Seller shall repudiate or purport to disavow its obligations under any
of the Repurchase Documents or shall contest their validity or enforceability.

(j) This Agreement shall cease to be in full force and effect or its
enforceability is disputed or challenged by Seller.

(k) The Seller shall take or omit to take any act (i) that would result in the
suspension or loss of any of its statuses, once achieved or any of such statuses
of any of its subservicers, if any, of any Ginnie Mae, Fannie Mae or Freddie Mac
Mortgage Loans pools for which the Seller is Servicer as an FHA- and VA-approved
lender and mortgagee and a Ginnie Mae-, Fannie Mae- and Freddie Mac-approved
issuer and servicer, or (ii) after which the Seller or any such relevant
subservicer would no longer be in good standing as such, or (iii) after which
the Seller or any such relevant subservicer would no longer currently satisfy
all applicable Ginnie Mae, Fannie Mae and Freddie Mac net worth requirements, if
both (x) all of the material effects of such act or omission shall have not been
cured by the Seller or waived by the relevant Person (Ginnie Mae, Fannie Mae or
Freddie Mac) before termination of such status and (y) it could reasonably be
expected to have a material adverse effect on any of the Central Elements in
respect of the Seller.

 

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(l) Any money judgment, writ or warrant of attachment, or similar process
involving in any case an amount in excess of $1,000,000 (in excess of relevant
insurance coverage reasonably satisfactory to the Administrative Agent in its
discretion) shall be entered or filed against the Seller or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 30 days or in any event later
than five days before the date of any proposed sale thereunder (unless, in
respect of any such case the judgment debtor or the subject of the writ or
warrant of attachment or similar process is one of the Seller’s Subsidiaries or
such Subsidiary’s property, and such order, case commencement, consent,
assignment, inability or failure or admission could not reasonably be expected
to have a material adverse effect on any of the Central Elements in respect of
the Seller or any of its Restricted Subsidiaries).

(m) The Seller, as Servicer, shall fail to service the Purchased Loans in
conformance with Accepted Servicing Practices in all material respects.

18.2. Transaction Termination. If an Event of Default shall have occurred and be
continuing, then, at the option of the Administrative Agent, the Administrative
Agent may declare the Repurchase Date for any or all Transactions hereunder,
upon written notice to the Seller, to be deemed immediately to occur.

18.3. Termination by the Administrative Agent. If the Administrative Agent has
exercised the option to terminate any Transactions referred to in Section 18.2,
(i) Seller’s obligations hereunder to repurchase all Purchased 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
multiplication of (x) the greater of the Pricing Rate for such Transaction and
the Past Due Rate by (y) the Purchase Price for such Transaction as of the
Repurchase Date as determined pursuant to Section 18.2 (decreased as of any day
by (A) any amounts retained by Buyers with respect to such Purchase Price
pursuant to clause (iii) of this Section 18.3, (B) any proceeds from the sale of
Purchased Loans pursuant to clause (A) of Section 18.4, and (C) any amounts
credited to the account of the Seller pursuant to clause (B) of Section 18.4) 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 the Administrative Agent and applied to the aggregate unpaid
Repurchase Prices owed by the Seller and (iv) the Seller shall immediately
deliver or cause the Custodian to deliver to the Administrative Agent any
documents relating to Purchased Loans subject to such Transactions then in the
Seller’s, its Servicer’s or its subservicer’s possession.

18.4. Remedies. Upon the occurrence of an Event of Default, the Administrative
Agent, without prior notice to the Seller, may (A) immediately sell, in a
recognized market at such price or prices as Administrative Agent may deem
satisfactory, any or all Purchased Loans subject to such Transactions on a
servicing released or servicing retained basis and apply the proceeds thereof to

 

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the aggregate unpaid Repurchase Prices and any other amounts owing by the Seller
hereunder, (B) in lieu of selling all or a portion of such Purchased Loans, to
give the Seller credit for such Purchased 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 the Seller hereunder (C) terminate and replace the
Seller as Servicer (or any other Servicer or Subservicer) at the cost and
expense of Seller, (D) exercise its rights under Section 8 regarding the Income
Account and Escrow Account, and (E) by notice to the Seller, declare the
Termination Date to have occurred, except that in the case of any event
described in Section 18.1(b), the Termination Date shall be deemed to have
occurred automatically upon the occurrence of such event. The proceeds of any
disposition in clause (A) or (B) above shall be applied first to the reasonable
costs and expenses incurred by Buyers in connection with or as a result of an
Event of Default (including legal fees, consulting fees, accounting fees, file
transfer fees, inventory fees and costs and expenses incurred in respect of a
transfer of the servicing of the Purchased Loans and costs and expenses of
disposition of such Purchased Loans); second to costs of cover and/or related
Hedge Agreements; third to the aggregate Price Differential owed hereunder,
fourth to the remaining aggregate Repurchase Prices owed hereunder; fifth to any
other accrued and unpaid obligations of the Seller hereunder and under the other
Repurchase Documents, sixth to any Servicer or Subservicer (other than Seller)
for payment of any servicing fees due and payable as of such date and seventh
any remaining proceeds to the Seller.

18.5. Liability for Expenses and Damages. The Seller shall be liable to the
Buyers for (i) the amount of all reasonable legal or other expenses incurred by
the Buyers in connection with or as a result of an Event of Default,
(ii) damages in an amount equal to the reasonable cost (including all fees,
expenses and commissions) of entering into replacement transactions and entering
into or terminating hedge transactions in connection with or as a result of an
Event of Default and (iii) any other reasonable loss, damage, cost or expense
directly arising or resulting from the occurrence of an Event of Default in
respect of a defaulting party.

18.6. Liability for Interest. To the extent permitted by applicable law, the
Seller shall be liable to the Buyers for interest on any amounts owing by the
Seller hereunder, from the date the Seller becomes liable for such amounts
hereunder until such amounts are (i) paid in full by the Seller or
(ii) satisfied in full by the exercise of the Buyer’s rights hereunder. Interest
on any sum payable by the Seller under this Section 18.6 shall be at a rate
equal to the greater of the Pricing Rate for the relevant Transaction or the
Prime Rate.

18.7. Other Rights. In addition to its rights hereunder, the Buyers shall have
any rights otherwise available to them under any other agreement or applicable
law.

18.8. Exercise of Remedies. The exercise by any party of remedies after the
occurrence of an Event of Default shall be conducted in a commercially
reasonable manner.

 

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18.9. Seller’s Repurchase Rights. For avoidance of doubt, subject to the terms
and conditions of this Agreement, Seller may repurchase Purchased Loans and
resell such Purchased Loans; provided that upon the occurrence and during the
continuance of an Event of Default, Seller may repurchase Purchased Loans by
payment of the Repurchase Price therefor only upon approval of the
Administrative Agent in its discretion exercised in accordance with the
provisions of Section 22.

18.10. Sale of Purchased Loans. The parties acknowledge and agree that (1) the
Purchased 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 Loans, the Administrative
Agent may establish the source therefor, (3) all prices, bids and offers shall
be determined together with accrued Income (except to the extent contrary to
market practice with respect to the relevant Purchased Loans) and (4) in
soliciting price, bid and offer quotations for any Purchased Loan, it is
reasonable for the Administrative Agent to use only the information provided by
Seller pursuant to Section 16.1. The parties further recognize that it may not
be possible to purchase or sell all of the Purchased 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 Loans may not be liquid at such time. In
view of the nature of the Purchased Loans, the parties agree that liquidation of
a Transaction or the underlying Purchased Loans does not require a public
purchase or sale and that a good faith private purchase or sale shall be deemed
to have been made in a commercially reasonable manner. Accordingly, the
Administrative Agent may elect the time and manner of liquidating any Purchased
Loan and nothing contained herein shall obligate the Administrative Agent to
liquidate any Purchased Loan on the occurrence of an Event of Default or to
liquidate all Purchased 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 the Administrative Agent or the Buyers.

19 Servicing of the Purchased Loans.

19.1. Servicing Released Basis. Consistent with Buyers’ purchase of the
Purchased Loans on a servicing-released basis, Seller shall have no ownership
right whatsoever as to any of the Purchased Loans or the servicing rights
related thereto. Rather, Seller shall have only servicing responsibilities with
respect to the Purchased Loans that are subject to termination in accordance
with Section 19.7. Seller and Buyers hereby acknowledge and agree that the
provisions contained in this Section 19 are intended to be for the benefit of
Buyers and are an essential part of this Agreement, and that the nature and
purpose of the purchase and sale obligations and the servicing obligations
hereunder are interrelated. Seller acknowledges that if an Event of Default has
occurred and is continuing, Administrative Agent for the benefit of the Buyers
may, upon written notice to the Seller, without payment of any termination fee
or other amount to Seller, sell any or all of the Purchased Loans on a servicing
released basis at the cost and expense of Seller.

 

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19.2. Servicing and Subservicing. Seller hereby agrees, for the benefit of the
Buyers, to service or contract with Servicer and Subservicers to service the
Purchased Loans in accordance with Accepted Servicing Practices. Seller’s fees
for its duties as Servicer, until terminated under Section 19.7, shall be 25
basis points per annum on the unpaid principal balance of each Purchased Loan,
payable from Income in accordance with the provisions of Section 8.2. Servicer
shall (i) comply with all applicable federal, state and local laws and
regulations in all material respects, (ii) maintain all state and federal
licenses necessary for it to perform its servicing responsibilities hereunder
and (iii) not impair the rights of Buyers in any Purchased Loans or any payment
thereunder. Administrative Agent may terminate the servicing of any Purchased
Loan with the then existing Servicer in accordance with Section 19.7. Seller
shall not be entitled to any servicing fee or other compensation in connection
with its performance of the servicing responsibilities with respect to the
Purchased Loans except to the extent that Seller is Servicer; provided that
nothing in this Section 19.2 shall be deemed to impair the rights of any
Subservicer to fees and other compensation to which it is entitled under the
applicable Servicing Agreement.

19.3. Escrow Payments. Seller shall cause Servicer and any Subservicers to hold
or cause to be held all escrow payments collected by Seller with respect to any
Purchased Loans in trust accounts and shall apply the same for the purposes for
which such funds were collected.

19.4. Escrow and Income after Event of Default. After the occurrence and during
the continuance of an Event of Default, (i) Seller shall cause Servicer and any
Subservicers to deposit all Income, excluding escrow payments, into the Income
Account within two Business Days of receipt by Servicer or such Subservicer
(ii) all funds received on or in connection with a Purchased Loan shall be
received and held by Seller, Servicer and each Subservicer in trust for the
benefit of the Administrative Agent on behalf of the Buyers as owner of the
Purchased Loans and (iii) neither Seller nor Servicer shall be deemed to have
any rights or ownership interest in such funds prior to their being remitted to
the Administrative Agent on behalf of the Buyers.

19.5. Servicing Records. Seller agrees that Administrative Agent, on behalf of
the Buyers, is the owner of all servicing records, including but not limited to
any and all servicing agreements, files, documents, records, data bases,
computer tapes, copies of computer tapes, proof of insurance or guaranty
coverage, insurance or guaranty policies, appraisals, other closing
documentation, payment history records, and any other records relating to or
evidencing the servicing of Mortgage Loans (the “Servicing Records”). The
Servicing Records are and shall be held in trust by Seller, Servicer and each
Subservicer for the benefit of Administrative Agent as the owner thereof on
behalf of the Buyers. Upon notice from Administrative Agent after the occurrence
and during the continuance of an Event of Default, Seller will cause each
Servicer and Subservicer to (i) designate Buyers as the purchaser of each
Purchased Loan in its collateral tracking system, (ii) segregate such Servicing
Records from any and all servicing agreements, files, documents,

 

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records, data bases, computer tapes, copies of computer tapes, proof of
insurance coverage, insurance policies, appraisals, other closing documentation,
payment history records, and any other records relating to or evidencing the
servicing of assets that are not Purchased Loans, (iii) safeguard such Servicing
Records and (iv) deliver them promptly to Administrative Agent or its designee
(including Custodian) at Administrative Agent’s request.

19.6. Subservicer Instruction Letter. Seller shall, prior to the initial
Purchase Date of Mortgage Loans serviced by each Subservicer, provide to Buyers
a Subservicer Instruction Letter addressed to and agreed to by any Subservicer
of the related Purchased Loans.

19.7. Termination of Servicing. Upon the occurrence and during the continuance
of (i) a Default, other than a Default with regard to Section 16.3, 16.5, or
16.18(e), or (ii) any Event of Default hereunder Administrative Agent shall have
the right to (A) terminate Seller’s, Servicer’s and any Subservicer’s rights, if
any, and obligations with respect to servicing of the Purchased Loans without
payment of any penalty or termination fee (1) immediately with respect to Seller
and (2) with respect to any Servicer (other than Seller) or Subservicer, as
promptly as possible subject to the terms and conditions of the applicable
Servicing Agreement and Subservicer Instruction Letter; provided that any such
termination shall be deemed to have occurred automatically upon the occurrence
of an Event of Default set forth in Section 18.1(b), (B) require Seller to
enforce its rights and remedies, as agent for and for the benefit of Buyers in
accordance with Administrative Agent’s commercially reasonable instructions,
with respect to any Purchased Loans under any Servicing Agreement, and
(C) succeed to the rights and remedies of Seller with respect to any Purchased
Loans under any Servicing Agreement to the extent permitted by, and subject to,
the terms of such Servicing Agreement (but not the obligations or liabilities of
Seller incurred prior to the date of such succession) and related Subservicer
Instruction Letter. Upon any such termination, Seller shall, and shall cause
each Subservicer to, (i) perform the servicing responsibilities with respect to
the Purchased Loans in accordance with the terms of this Agreement until the
transfer of servicing responsibilities is effectuated and (ii) cooperate, at
Seller’s expense, in transferring such servicing responsibilities with respect
to the Purchased Loans to a successor Servicer appointed by Administrative Agent
in its sole discretion. Upon termination of Seller as Servicer and without
limiting the generality of the foregoing, Seller shall, in the manner and at
such times as the successor servicer or Administrative Agent shall request,
(i) promptly transfer all data in the Servicing Records relating to the Purchase
Loans to the successor servicer in such electronic format as the successor
servicer may reasonably request, (ii) promptly transfer to the successor
servicer, Administrative Agent or its designee, all other files, records
correspondence and documents relating to the Purchased Loans and (iii) use
commercially reasonable efforts to cooperate and coordinate with the successor
servicer and the Administrative Agent to comply with any applicable so-called
“goodbye” letter requirements or other applicable requirements of the Real
Estate Settlement Procedures Act or other applicable legal or regulatory
requirement associated with the transfer of the servicing of the Purchased
Loans. Servicer acknowledges and agrees that if it fails to cooperate with the
Administrative Agent or any successor servicer in effecting the termination of
Seller as Servicer of any Purchase Loan or the transfer of all authority to
service such Purchased Loan to such successor servicer in accordance with the
terms hereof, the Administrative Agent and Buyers will be irreparably harmed and
entitled to injunctive relief.

 

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19.8. Notice from Seller. If Seller should discover that, for any reason
whatsoever, any entity responsible to Seller by contract for managing or
servicing any Purchased Loan has failed to perform in any material respects
Seller’s obligations under the Repurchase Documents or any of the material
obligations of such entities with respect to the Purchased Loans, Seller shall
promptly notify Administrative Agent.

19.9. Seller Remains Liable. Notwithstanding any Servicing Agreement or the
provisions of this Repurchase Agreement relating to agreements or arrangements
between Seller and a Subservicer or reference to actions taken through a
Subservicer or otherwise, Seller shall remain obligated and primarily liable to
the Buyers for servicing and administering of the Purchased Loans in accordance
with the provisions hereof without diminution of such obligation or liability by
virtue of such Servicing Agreements or arrangements or by virtue of
indemnification from a Subservicer and to the same extent and under the same
terms and conditions as if Seller alone were servicing and administering the
Purchased Loans. All actions of each Subservicer performed pursuant to the
related Servicing Agreement shall be performed as an agent of Seller with the
same force and effect as if performed directly by Seller and the Buyers shall
have no obligations, duties or liabilities with respect to any Subservicer
including no obligation, duty or liability of the Buyers to pay any
Subservicer’s fees and expenses, provided, however, that each Subservicer may
retain any amounts collected by it that it is entitled to retain pursuant to the
applicable Servicing Agreement or Subservicer Instruction Letter. Seller shall
be entitled to enter into any agreement with each Subservicer for
indemnification of Seller by the Subservicer and nothing contained in this
Repurchase Agreement shall be deemed to limit or modify such indemnification.

19.10. Backup Servicer. The Administrative Agent shall have the right, in its
sole discretion, to appoint a Backup Servicer that will (i) serve as a backup
servicer of the Purchased Loans until such time as Administrative Agent shall
elect to appoint the Backup Servicer as successor servicer of the Purchased
Loans and (ii) become the successor servicer of the Purchased Loans at
Administrative Agent’s option. In connection with the appointment of a Backup
Servicer as provided in the preceding sentence, the Administrative Agent may
make such arrangements for the compensation of Backup Servicer out of Income on
the Mortgage Loans or otherwise as the Administrative Agent and such Backup
Servicer shall agree. Seller shall provide Backup Servicer with such data, files
and information, in form, format and content as Backup Servicer may request, in
order to permit Backup Servicer to service the Mortgage Loans in accordance with
Accepted Servicing Practices; all such data, files and information shall be
updated by Seller on a monthly basis as required by Backup Servicer.

 

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19.11. Successor Servicer. If Backup Servicer is appointed by the Administrative
Agent to act as a successor servicer of the Purchased Loans pursuant to
Section 19.10, the Seller (in its capacity as Servicer hereunder) shall, and
shall cause each Subservicer, subject to such Subservicer’s rights under any
applicable Servicing Agreement, and Subservicer Instruction Letter, to discharge
its servicing duties and responsibilities during the period from the date it
acquires knowledge of such transfer of servicing until the effective date
thereof with the same degree of diligence and prudence that it is obligated to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of Backup Servicer. Within
five Business Days of the appointment of Backup Servicer to act as successor
servicer of the Purchased Loans, Seller shall, and shall cause each Subservicer
to, prepare, execute and deliver to Backup Servicer any and all documents and
other instruments, place in such successor’s possession all Servicing Records,
and do or cause to be done all other acts or things necessary or appropriate to
effect the transfer of servicing to Backup Servicer, including but not limited
to the transfer and endorsement of the Mortgage Notes and related documents, and
the preparation and recordation of assignments of Mortgage. Seller shall (and
shall cause each Subservicer to) cooperate with Administrative Agent and Backup
Servicer in effecting the transfer of servicing responsibilities to Backup
Servicer, including execution and delivery of servicing transfer notices to
Mortgagors, MERS (if applicable), taxing authorities and insurance companies,
the transfer to Backup Servicer for administration by it of all Income with
respect to the Purchased Loans which shall at the time be held or received by
Seller or any Subservicer. Seller shall deliver immediately to Backup Servicer
all Purchased Loan documents and related documents and statements held by it or
any Subservicer hereunder and Seller shall account for all funds and shall
execute and deliver such instruments and do such other things as may reasonably
be required to more fully and definitively vest in Backup Servicer all such
rights, powers, duties, responsibilities, obligations and liabilities of Seller
as servicer of the Purchased Loans.

20 Payment of Expenses; Indemnity.

20.1. Expenses.

(a) The Seller shall pay on demand all of the Administrative Agent’s reasonable
out-of-pocket fees and expenses (including the fees and expenses for legal
services) incurred by the Administrative Agent and the Custodian in connection
with this Agreement and the Custody Agreement and the Transactions contemplated
hereby and thereby, whether or not any Transactions are entered into hereunder,
including the reasonable out-of-pocket fees and expenses incurred in connection
with (i) the preparation, reproduction and distribution of this Agreement and
the Custody Agreement and any opinions of counsel, certificates of officers or
other documents contemplated by the aforementioned agreements, (ii) any
Transaction under this Agreement, (iii) the administration and syndication of
this Agreement and of any Transaction and (iv) any amendments and waivers
regarding any of the foregoing. The obligation of the 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.

 

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(b) The Seller shall pay all of the Administrative Agent’s and each Buyer’s,
out-of-pocket costs and expenses, including reasonable attorneys’ fees, after
the occurrence of any Default or Event of Default in connection with the
enforcement of this Agreement, the Custody Agreement and the other Repurchase
Documents, including in connection with any (i) bankruptcy, (ii) other
insolvency proceeding, or (iii) any workout or consultation involving the
Buyers’ rights and remedies, the purchase and repurchase of the Purchased Loans
and the payment of Price Differential in connection therewith.

(c) The Seller shall pay, and hold the Administrative Agent, the Buyers and any
other owners or holders of any of the Obligations harmless from and against, any
and all present and future stamp, documentary and other similar taxes with
respect to the foregoing matters and save them each harmless from and against
any and all liabilities with respect to or resulting from any delay or omission
to pay such taxes.

(d) The Seller shall pay all of the Administrative Agent’s Fees and any other
fees under this Agreement and the other Repurchase Documents.

20.2. Indemnity. The Seller shall pay, and indemnify, defend and hold harmless
the Administrative Agent, the Buyers and any of their respective officers,
directors, employees, agents, advisors and Affiliates (the “Indemnified
Parties”) from and against, the “Indemnified Liabilities,” which means any and
all claims, liabilities, obligations, losses, damages, penalties, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys’ fees
and disbursements) of any kind whatsoever which may be imposed upon, incurred by
or asserted against any of the Indemnified Parties in any way relating to or
arising out of any of the Repurchase Documents or any of the transactions
contemplated thereby or the use of proceeds or proposed use of proceeds thereof,
provided that to the extent, if any, that any Indemnified Liabilities are caused
by any Indemnified Party’s gross negligence or willful misconduct, the indemnity
payable to that Indemnified Party shall be equitably and proportionately
reduced, although to the full extent permitted under applicable Law, such
indemnity shall not be reduced on account of such claims, liabilities, etc. to
any extent (i) owed, in whole or in part, under any claim or theory of strict
liability, or (ii) caused or contributed to by any Indemnified Party’s sole or
concurrent ordinary negligence that does not amount to gross negligence or
willful misconduct, it being the Seller’s intention to hereby indemnify the
Indemnified Parties against their own strict liability and their own sole or
concurrent ordinary negligence.

21 Single Agreement.

The Buyers, the Administrative Agent and Seller acknowledge that, and have
entered into this Agreement 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 the Administrative Agent, the
Buyers and the 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

 

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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.

22 Relationships among the Administrative Agent and the Buyers.

22.1. Administrative Agent’s Duties. In its capacity as Administrative Agent
until all Purchased Loans have all been repurchased by the Seller, all other
Obligations have been satisfied and the Buyers have no further Commitments or
other obligations under this Agreement and the other Repurchase Documents, the
Administrative Agent shall:

(a) hold the Repurchase Documents and (by the Custodian’s holding the Purchased
Loans as bailee for the Administrative Agent) the Purchased Loans for the
benefit of each Buyer, and each Buyer (including U.S. Bank) shall be deemed to
have an interest in the Repurchase Documents on any day in proportion to its Pro
Rata undivided ownership interest in the Purchased Loans on that day;

(b) send timely bills to the Seller for the Facility Fee and other sums due and
receive all sums on account of the Purchased Loans or with respect to them;

(c) use reasonable diligence to obtain from the Seller and promptly remit to
each Buyer such Buyer’s Pro Rata share of Repurchase Prices for Purchased Loans
and other sums received by the Administrative Agent on account of the Purchased
Loans or with respect to them, in accordance with this Agreement;

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

(e) enforce the terms of this Agreement, including, with the approval or at the
direction of the Required Buyers, the remedies afforded the Buyers pursuant to
Sections 18.2, 18.3, 18.4 and 18.10;

(f) hold the Purchased Loans and all security interests established hereby
ratably for itself as Administrative Agent and representative of the Buyers; and

(g) request from the Seller, and promptly forward to the Buyers, such
information as any of the Buyers may reasonably request Administrative Agent to
obtain from the Seller, consistent with the terms of this Agreement.

 

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22.2. Limitation on Duty to Disclose. Except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Seller or
any of its Subsidiaries or Affiliates that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.

22.3. Actions Requiring All Buyers’ Consent. No amendment or waiver of, or any
action with respect to, any provision of this Agreement or any of the Repurchase
Documents shall in any event be effective unless the same shall be in writing
signed by all Buyers with respect to any amendment or waiver or any action that:

(a) Increases the Maximum Aggregate Commitment other than as provided in
Section 2.3.

(b) Agrees to any reduction in any Pricing Rate, Repurchase Price or fee
provisions of this Agreement, excluding the provisions relating to the
Administrative Agent’s Fee.

(c) Acknowledges termination of the Buyers’ ownership interest in the Purchased
Loans or releases any Lien held under the Repurchase Documents other than in
accordance with the Repurchase Documents.

(d) Changes any Buyer’s Pro Rata share of ownership of the Purchased Loans other
than in accordance with the express provisions of the Repurchase Documents.

(e) Agrees to any change in the nature of the Buyers’ respective Commitments
from several to joint, in whole or in part.

(f) Agrees to any change to the definition of “Required Buyers” or to any
provisions of this Agreement or any of the other Repurchase Documents that
requires the consent, approval or satisfaction of all of the Buyers or each of
the Buyers.

(g) Extends the Termination Date or the due date of any required payment other
than in accordance with the express provisions of the Repurchase Documents.

(h) Agrees to any change in this Section 22.3.

(i) Agrees to any change in the definition of “Buyers’ Margin Percentage.”

(j) Releases the Seller from any of its obligations other than in accordance
with the express conditions of the Repurchase Documents or changes any amount
due under the terms of the Repurchase Documents, or replaces or adds any Seller.

(k) Modifies the sharing provisions of Section 22.7.

 

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In the event of any conflict between the provisions of this Section 22.3 and any
other provisions of this Agreement or the other Repurchase Documents, the
provisions of this Section 22.3 shall govern.

22.4. Actions Requiring Required Buyers’ Consent. All amendments hereto, waivers
or actions taken hereunder that are not described in Sections 22.3 and 22.5,
require the written consent or ratification of the Required Buyers except for
actions that are specifically reserved to the Administrative Agent under
Section 6; provided that no amendments, waivers or actions taken hereunder that
relate to the rights or obligations of the Administrative Agent shall be
effective without the prior written consent of the Administrative Agent. The
Administrative Agent will, at the direction of the Required Buyers, but may not,
without the consent of the Required Buyers, take any enforcement action or
exercise any remedies under this Agreement and the Repurchase Documents which
arise after the occurrence of an Event of Default.

22.5. Administrative Agent’s Discretionary Actions. Subject to the limitations
of Sections 22.3 and 22.4, in its capacity as Administrative Agent and without
seeking or obtaining the consent of any of the other Buyers (although it may
elect to obtain such consent before acting it if deems that desirable), the
Administrative Agent may:

(a) agree or consent to any change in the aggregate not involving more than
$1,500,000 of the Purchased Loans at any time in the handling of the Purchased
Loans and which in the Administrative Agent’s reasonable judgment is unlikely to
have a material adverse effect on any of the Central Elements in respect of the
Seller or any of its Restricted Subsidiaries (for purposes of clarity, this
allows the Administrative Agent to temporarily suspend the effects of one or
more Disqualifiers for Purchased Loans, if the Administrative Agent in its sole
and absolute discretion determines that such Disqualifier may be resolved or
corrected and to allow funding of a Wet Loan one Business Day after the advance
of funds for the purchase of such Wet Loan, in each case within the limitation
set forth in this Section 22.5(a));

(b) reconvey, exchange or otherwise change, in whole or in part, any Purchased
Loans which are required to be reconveyed, exchanged or changed in accordance
with the Repurchase Documents;

(c) exercise any options or approval rights expressly provided in this
Agreement, including without limitation pursuant to the definition of “Buyers
Margin Percentage”; and

(d) do or perform any act or thing which, in the Administrative Agent’s
reasonable judgment, is necessary or appropriate to enable the Administrative
Agent to properly discharge and perform its duties under this Agreement or the
Custody Agreement, or which in its reasonable judgment is necessary or
appropriate to preserve or protect the validity, integrity or enforceability of
the Purchased Loans and/or the Repurchase Documents, the Buyers’ Pro Rata
undivided ownership interests in and to the Purchased Loans, the Lien created by
this Agreement and its priority, or any of the Central Elements in respect of
the Seller or any of its Subsidiaries, or to preserve and protect the interest
of the Buyers in any of the foregoing.

 

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22.6. Buyers’ Cooperation. The Buyers agree to cooperate among themselves and
with the Administrative Agent and from time to time upon the Administrative
Agent’s request, to execute and deliver such papers as may be reasonably
necessary to enable the Administrative Agent, in its capacity as Administrative
Agent, to effectively administer this Agreement and the other Repurchase
Documents, the Purchased Loans and each Buyer’s Pro Rata undivided ownership
interest in the Purchased Loans in the manner contemplated by this Agreement.
The Administrative Agent and each of the Buyers agree to provide notice to the
other parties if they have actual knowledge of an Event of Default at any time.

22.7. Buyers’ Sharing Arrangement. Each of the Buyers agrees that if it should
receive any amount (whether by voluntary payment, realization upon security, the
exercise of the right of set-off, or otherwise) which is applicable to the
payment of Repurchase Price, Margin Deficit, Pricing Differential or any fees,
that with respect to the related sum or sums received (or receivable) by the
other Buyers is in greater proportion than that Buyer’s Pro Rata ownership of
the Purchased Loans, then such Buyer receiving such excess amount shall purchase
from the other Buyers an participation interest in the Purchased Loans in such
amount as shall result in Pro Rata participation and ownership by all of the
Buyers in such excess amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Buyer, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery; and provided
further that the provisions of this Section 22.7 shall not apply to the
Administrative Agent’s Fee under this Agreement or to any fees which the
Custodian or any successor custodian might be paid pursuant to the Custody
Agreement.

22.8. Buyers’ Acknowledgment. Each Buyer other than U.S. Bank hereby
acknowledges that U.S. Bank has made no representations or warranties with
respect to any Purchased Loan other than as expressly set forth in this
Agreement and that U.S. Bank shall have no responsibility (in its capacity as a
Buyer, the Administrative Agent, or any other capacity or role) for:

(a) the marketability or collectability of the Purchased Loans;

(b) the genuineness, validity, likelihood of performance as and when due or
enforceability of any Investor Commitment or the solvency or performance record
of any Approved Investor;

(c) the validity, enforceability or any legal effect of any of the Repurchase
Documents, any Loan Papers or any insurance, bond or similar device purportedly
protecting any obligation to the Buyers or any Purchased Loans; or

 

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(d) the financial condition of the Seller or any of its Subsidiaries or
Affiliates, the status, health or viability of any industry in which any of them
is involved, the prospects for repurchase of the Purchased Loans, the
genuineness, validity or enforceability of any warehousing facility or
repurchase agreement between the Seller and any other lender or repurchase
agreement counterparty, the value of any Purchased Loans, the effectiveness of
any of the provisions of the Repurchase Documents (including the financial
covenants, tests and hedging requirements) or any aspect of their implementation
or administration at any time to reduce or control risks of any type, to produce
returns, profits, yields or spreads or to reduce or control losses or the
accuracy of any information supplied by or to be supplied in connection with any
of the Seller or any of its Restricted Subsidiaries or Affiliates, or otherwise
with respect to this Agreement, any Purchased Loans or any source of equity or
other financing for any of the Seller, any of its Affiliates or any other
warehouse lender or repurchase agreement counterparty.

22.9. Administrative Agent Market Value Determinations. The parties hereto agree
and acknowledge that, in determining the Market Value of the Purchased Loans,
the Administrative Agent (i) shall determine Market Value as a third party
service provider, in accordance with standards customarily applicable in the
financial industry to third party service providers providing values on
comparable assets to be used in connection with the financing of such assets,
and (ii) shall not be obligated to do that same or similar amount of work or
analysis as if it were valuing its own assets, or as if it were valuing such
assets for the purchase or sale thereof by it or any other party. The parties
hereto agree and acknowledge that any asset valuation information produced by
the Administrative Agent is intended to be and should be used solely for the
limited uses specified in this Agreement and the other Repurchase Documents, and
is not intended to be and should not be used by any Person for any other
purpose. The parties hereto further agree and acknowledge that the
Administrative Agent may elect to determine the Market Value for any Purchased
Loan by determining the market bid price for a portfolio containing all
Purchased Loans and allocating such portfolio market bid price among each
individual Purchased Loan.

22.10. Administrative Agent’s Representations to Buyers. The Administrative
Agent hereby represents and warrants to the Buyers (other than U.S. Bank) that:

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

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

22.11. Administrative Agent’s Duty of Care, Express Negligence Waiver and
Release. At all times until all Purchased Loans have all been repurchased by the
Seller and the Buyers have no further commitments or other obligations under
this Agreement and the other Repurchase Documents, the Administrative Agent
shall exercise the same degree of care in

 

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handling the Purchased Loans as U.S. Bank exercises with respect to loans that
are held solely by U.S. Bank for its own account, and the Administrative Agent,
in its capacity as Administrative Agent shall have no responsibility to the
Buyers other than to exercise such standard of care and, in any event, U.S. Bank
shall have no liability with respect to any other Buyer’s Pro Rata interest in
the Purchased Loans except for U.S. Bank’s own fraud, gross negligence or
willful misconduct. Except in the case of its own fraud, gross negligence or
willful misconduct, neither the Administrative Agent, any Buyer, nor any of
their officers, directors, employees, attorneys or Administrative Agents shall
be liable for any action taken or omitted to be taken by it or them under this
Agreement, the Custody Agreement or any of the other Repurchase Documents
reasonably believed by it or them to be within the discretion or power conferred
upon it or them by the Repurchase Documents or be responsible for consequences
of any error of judgment, the Buyers expressly intending to hereby waive and
release all present and future claims and rights against the Administrative
Agent (i) owed, in whole or in part, under any claim or theory of strict
liability or (ii) for damages or injuries caused or contributed to by any
Indemnified Party’s sole or concurrent ordinary negligence that does not amount
to gross negligence or willful misconduct. Except as otherwise specifically and
expressly set forth in this Agreement, the Administrative Agent shall not be
responsible in any manner to anyone for the effectiveness, enforceability,
genuineness, validity or due execution of this Agreement, any supplement,
amendment or restatement of it or of any other Repurchase Documents or for any
representation, warranty, document, certificate, report or statement made or
furnished in, under or in connection with this Agreement or any of the other
Repurchase Documents or be under any obligation to anyone to ascertain or to
inquire as to the performance or observation of any of the terms, covenants or
conditions of this Agreement or of the other Repurchase Documents on the part of
the Seller or anyone else. Without limiting the generality of the foregoing
provisions of this Section 22.11, the Administrative Agent, in its capacity as
Administrative Agent, may seek and rely upon the advice of legal counsel in
taking or refraining to take any action under any of the Repurchase Documents or
otherwise in respect of any Purchased Loans, this Agreement and its parties, and
shall be fully protected in relying upon such advice.

22.12. [Reserved.]

22.13. Calculations of Shares of Principal and Other Sums. Except as provided to
the contrary in Sections 6.4, 6.5, 7.1, 7.3, 9.2, and 20, U.S. Bank’s and each
other Buyer’s respective shares of Repurchase Prices and other sums received by
the Administrative Agent on account of the Purchased Loans or with respect to
them shall be calculated on the basis of each Buyer’s (including U.S. Bank’s)
respective Pro Rata ownership interests in the Purchased Loans from time to
time.

22.14. Resignation or Removal of the Administrative Agent. The Administrative
Agent, or any agent or agents hereafter appointed, at any time may resign by
giving written notice of resignation to the Seller and the Buyers and complying
with the applicable provisions of this Section 22. The Required Buyers may
remove the Administrative Agent for acts constituting gross negligence or
willful misconduct by giving

 

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notice to the Administrative Agent, the Buyers and the Seller. Upon receiving
such notice of resignation or removal, with the Seller’s consent, which consent
shall not unreasonably be delayed or withheld (provided that the Seller’s
consent shall not be required if a Default has occurred that has not been cured
by the Seller or declared in writing by the Administrative Agent to have been
waived or any Event of Default has occurred that the Administrative Agent has
not declared in writing to have been cured or waived), a successor
Administrative Agent shall be promptly appointed by the Required Buyers by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning or removed Administrative Agent and one copy to the
successor Administrative Agent.

22.15. Effective Date of Resignation of the Administrative Agent. No resignation
or removal of the Administrative Agent shall be effective until both (i) 60 days
have elapsed after notice to the Seller and the Buyers of the Administrative
Agent’s election to resign or its removal, and (ii) a successor agent has been
appointed pursuant to the provisions of this Section 22 and has accepted the
appointment as provided in Section 22.16; provided that if such appointment has
not been so made or if the Administrative Agent’s duties have not been assumed
by the appointed successor on or before 90 days after the date of the
Administrative Agent’s notice of resignation, the Administrative Agent may cease
acting as agent and representative of the Buyers hereunder, and shall have no
further responsibility therefor, at the close of business on the 10th Business
Day after such 90-day period.

22.16. Successor Administrative Agent. Any successor Administrative Agent
appointed as provided in this Section 22 shall execute and deliver to the
Seller, the Buyers and to the predecessor Administrative Agent an instrument
accepting such appointment, and thereupon the resignation of the predecessor
Administrative Agent shall become effective and such successor Administrative
Agent, without any further act, deed or conveyance, shall become vested with all
the rights and obligations of its predecessor, with like effect as if originally
named as the Administrative Agent; provided that upon the written request of the
Seller, all of the Buyers or the successor Administrative Agent, the resigning
Administrative Agent shall execute and deliver (a) an instrument transferring to
such successor Administrative Agent all of the rights of the resigning
Administrative Agent and (b) to such successor Administrative Agent such
instruments as are necessary to transfer the Purchased Loans and the Repurchase
Documents to such successor Administrative Agent (including assignments of all
Purchased Loans or Repurchase Documents). Upon the request of any such successor
Administrative Agent made from time to time, the Seller shall execute any and
all papers which the successor Administrative Agent shall request or require to
more fully and certainly vest in and confirm to such successor Administrative
Agent all such rights.

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

 

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22.18. Participation; Assignment.

(a) Participations. Each Buyer reserves the rights, without the consent of the
Seller, to sell to one or more banks or other entities (a “Participant”),
participations in all or any part of such Buyer’s Commitment and Pro Rata
ownership share of the Purchased Loans or to pledge, collaterally assign or
grant a security interest in any or all of its interests under this Agreement
and in the Purchased Loans to any Federal Reserve Bank or any other Person;
provided that no such pledge, collateral assignment or grant of a security
interest shall release a Buyer from any of its obligations hereunder or
substitute any such pledgee or assignee for such Buyer as a party hereto.
Participants shall have no rights under the Repurchase Documents other than
certain voting rights as provided below. Each Buyer shall be entitled to obtain
(on behalf of its Participants) the benefits of this Agreement with respect to
all Participants in its Funding Shares of Open Transactions outstanding from
time to time; provided that the Seller shall not be obligated to pay any amount
in excess of the amount that would be due such Buyer calculated as though no
participation had been sold. No Buyer shall sell any participating interest
under which the Participant shall have any rights to approve any amendment,
modification or waiver of any Repurchase Documents, except to the extent such
amendment, modification or waiver requires the consent of all Buyers under
Section 22.3. In those cases (if any) where a Buyer grants rights to any of its
Participants to approve amendments, modifications or waivers of any Repurchase
Documents pursuant to the immediately preceding sentence, such Buyer must
include a voting mechanism as to all such approval rights in the relevant
participation agreement(s) whereby a readily-determinable fraction of such
Buyer’s portion of the Purchased Loans (whether held by such Buyer or
participated) shall control the vote for all of such Buyer’s portion of the
Purchased Loans; provided that if no such voting mechanism is provided for or is
fully and immediately effective, then the vote of such Buyer itself shall be the
vote for all of such Buyer’s portion of the Purchased Loans. Except in the case
of the sale of a participating interest to a Buyer, the relevant participation
agreement shall not permit the participant to transfer, pledge, assign, sell any
subparticipation in or otherwise alienate or encumber its participation interest
in the Purchased Loans. In no event may a Participant be an Affiliate of the
Seller.

(b) Assignments. Without any requirements for further consent of the Seller, any
Buyer may assign any or all of its rights and obligations under the Repurchase
Documents to its own Buyer Affiliates or to an assignee that is a Buyer with a
Commitment hereunder immediately prior to giving effect to such assignment. With
the prior written consent of the Administrative Agent and (unless an Event of
Default has occurred that the Administrative Agent has not declared in writing
to have been cured or waived) the Seller, which consent of the Seller will not
be unreasonably withheld, and at no cost to the Seller or the Administrative
Agent, any Buyer may assign any or all of its rights and obligations under the
Repurchase Documents to one or more assignees;

 

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provided that (1) except in the case of an assignment to a Buyer or a Buyer
Affiliate or an assignment of the entire remaining amount of the assigning
Buyer’s Committed Sum, no such assignment shall be in an amount less than
$15,000,000, unless each of the Administrative Agent and (unless a Default or
Event of Default has occurred and continuing) the Seller consents thereto,
(2) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Buyer’s rights and obligations under this Agreement,
(3) the assignee, if it is not a Buyer hereunder immediately prior to giving
effect to such assignment, shall deliver to the Administrative Agent an
administrative questionnaire in which the assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Seller and its Affiliates or their respective
securities) will be made available and who may receive such information in
accordance with the assignee’s compliance procedures and applicable laws,
including federal and state securities laws, (4) the assignee may not be an
Affiliate of the Seller and (5) each such assignment shall be effected pursuant
to an Assignment and Assumption substantially in the form of Exhibit E, to be
delivered to the Administrative Agent together with a processing and recording
fee of $3,500 (which shall not be applicable with respect to the initial
syndication of the Transactions), with the assignor to have no further right or
obligation with respect to the rights and obligations assigned to and assumed by
the assignee. The Seller agrees that, as to any assignment to any Buyer
Affiliate or if the Seller consents to any other assignment, the Seller will
cooperate with the prompt execution and delivery of documents reasonably
necessary to such assignment process to the extent that the Seller incurs no
cost or expense that is not paid by the assigning Buyer and the assignee
immediately upon delivery to the Seller of such assignment form. Subject to
acceptance and recording thereof pursuant to Section 22.18(d), from and after
the effective date specified in each Assignment and Assumption, the assignee
shall be a Buyer for all purposes under this Agreement and the other Repurchase
Documents, if the assignment is an assignment of all of the assignor’s interest
in the Purchased Loans then held by the Administrative Agent (or by the
Custodian on behalf of the Administrative Agent), the assignor shall be
automatically released from all of its obligations and liabilities hereunder,
and, whether it is such a complete assignment or only a partial assignment, the
Committed Sums shall be adjusted appropriately, and the parties agree to approve
in writing a revised and updated version of Schedule BC. Any assignment or
transfer by a Buyer of rights or obligations under this Agreement that does not
comply with this Section 22.18(b) shall be treated for purposes of this
Agreement as a sale by such Buyer of a participation in such rights and
obligations in accordance with Section 22.18(a).

(c) The Administrative Agent, acting for this purpose as an Administrative Agent
of the Seller, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Buyers, and the Committed Sum of, and amount owing to, each
Buyer pursuant to the terms hereof from time to time the (the “Register”). The
entries in the Register shall be conclusive, and the Seller, the Administrative
Agent and the Buyers may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Buyer hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Seller and any Buyer, at any reasonable time and
from time to time upon reasonable prior notice.

 

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(d) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Buyer and an assignee, the assignee’s completed administrative
questionnaire (unless the assignee shall already be a Buyer hereunder), the
processing and recordation fee referred to in Section 22.18(b) and any written
consent to such assignment required by Section 22.18(b), the Administrative
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register; provided that if either the assigning Buyer
or the assignee shall have failed to make any payment required to be made by it
hereunder, the Administrative Agent shall have no obligation to accept such
Assignment and Assumption and record the information therein in the Register
unless and until such payment shall have been made in full, together with all
accrued interest thereon. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
Section 22.18.

(e) If any interest in this Agreement is so transferred to any Person that is
organized under the Legal Requirements of any jurisdiction other than the United
States of America or any State thereof, the transferor Buyer shall cause such
Person, concurrently with the effectiveness of such transfer to comply with the
relevant provisions of Section 7.5.

(f) The Seller shall not be required to incur any cost or expense incident to
any sale to a Person of any interest in the Repurchase Documents and the
Purchased Loans pursuant to this Section 22 and all such costs and expenses
shall be for the account of the Buyer selling its rights in the Purchased Loans
to such Person.

22.19. The Administrative Agent and the Buyers are the only Beneficiaries of
this Section 22. Other than the provisions of Sections 22.9 and 22.18, this
Section 22 is intended to bind and benefit only U.S. Bank, the Administrative
Agent, and the other Buyers, if any, and does not benefit and shall not be
enforceable by the Seller or any other Person whatsoever.

23 Notices and Other Communications.

All notices, demands, consents, requests and other communications required or
permitted to be given or made hereunder (collectively, “Notices”), except as
otherwise specifically provided in this Agreement, shall be in writing and shall
be either (a) delivered in person, or (b) mailed, by certified, registered or
express mail, postage prepaid, addressed to the respective parties hereto at
their respective addresses specified below, or (c) sent in a prepaid overnight
delivery envelope via a nationally-recognized courier service (such as Federal
Express, United Parcel Service or DHL Worldwide Express) that provides weekday
next-Business Day delivery service to the addressee’s location, (d) faxed to
their respective fax numbers (with a paper copy mailed the same day as
aforesaid) as hereinafter set forth or (e) emailed (with a confirming fax for
any funding request) and/or posted to an Internet or intranet website and
acknowledged as received as hereinafter set forth; provided that any party may
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designating such party’s new address in a Notice to the other parties given at
least five Business Days before it shall become effective. All Notices shall be
conclusively deemed to have been properly given or served when received in
person, regardless of how sent. Regardless of when received, all Notices shall
be conclusively deemed to have been properly given or served if addressed in
accordance with this Section 23 and (1) if mailed, on the second Business Day
after being deposited in the mails, or (2) if sent by nationally-recognized
courier service, on the next Business Day or (3) if faxed before the close of
business at the recipient’s location on a Business Day, when faxed or if faxed
after the close of business at the recipient’s location or on a day that is not
a Business Day, on the next Business Day thereafter to the fax number set forth
below (provided that a paper copy is mailed on the same day as aforesaid) or
(4) if e-mailed, upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided that if any
such faxed or emailed notice or other communication is not sent during the
normal business hours of the recipient, such notice or communication shall be
deemed to have been sent at the opening of business on the next business day for
the recipient, and (5) notices or communications posted to an internet or
intranet website shall be deemed received upon the “receipt” by the intended
recipient at its e-mail address as described in clause (4) above of notification
that such notice or communication is available and identifying the website
address therefor:

If to the Seller:

DHI Mortgage Company, Ltd.

10700 Pecan Park Blvd. Suite 450

Austin, Texas 78750

Attention: Mark Winter / Lisa Collett

Telephone: (512) 533-1390 Fax: (866) 329-2803

email: mwinter@dhimortgage.com / lcollett@dhimortgage.com

with a copy to:

D.R. Horton, Inc.

301 Commerce Street, Suite 500

Fort Worth, Texas 76102

Attention: Ted Harbour or Jeff Tebeaux

Telephone: (817) 390-8200

If to U.S. Bank as a Buyer or the Administrative Agent:

U.S. Bank National Association

800 Nicollet Mall

Mail Station: BC-MN-H03B

Minneapolis, MN 55402

Attention: Edwin Jenkins

Telephone: (505) 424-5905

 

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Fax: (612) 303-2253

email: edwin.jenkins@usbank.com

If to the other Buyers, at the addresses shown on Schedule 23.

24 Miscellaneous.

24.1. Further Assurances. At any time and from time to time, at the sole expense
of the Seller, the Seller or the Servicer shall promptly provide such further
reasonable assurances, documents and agreements and undertake such actions as
the Administrative Agent may reasonably request in order to effect the purposes
of this Agreement, including the assignment, conveyance and transfer of all
right, title and interest of each Purchased Loan from the Seller to the
Administrative Agent, or to otherwise obtain or preserve the benefits or rights
granted under this Agreement. In the event Seller, Servicer or any subservicer,
in the performance of the Servicing Functions shall foreclose any Mortgage for
which the Administrative Agent and the Buyers have not received the Repurchase
Price, all such actions shall be taken in the name of the Administrative Agent
for the benefit of the Buyers and in accordance with Accepted Servicing
Practices.

24.2. Administrative Agent as Attorney in Fact. The Administrative Agent is
hereby appointed the attorney-in-fact of the Seller for the purpose of carrying
out the provisions of this Agreement and taking any action and executing any
instruments or documents that the Administrative Agent may deem reasonably
necessary or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest, although the
Administrative Agent agrees not to exercise its rights under this power of
attorney unless, in its opinion or the opinion of its legal counsel, an Event of
Default has occurred that the Administrative Agent has not declared in writing
to have been cured or waived. Without limiting the generality of the foregoing,
but subject to Section 18.3, the Administrative Agent shall have the right and
power during the occurrence and continuation of any Event of Default to receive,
endorse, collect and control all checks or instruments made payable to the order
of the Seller and all other forms of payment to the Seller that represent any
payment on account of the principal of or interest on or proceeds from any of
the Purchased Loans and to give full discharge for the same.

24.3. Wires to Seller. Any amounts to be transferred by the Administrative Agent
to the Seller hereunder shall be sent by journal entry (or wire transfer) in
immediately available funds to the account of Seller as follows:

Bank: U.S. Bank

ABA No.: 091000022

Account: DHI Mortgage Company, Ltd. Operating Account

Account No.: 104790245344

 

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24.4. Wires to Administrative Agent. Any amounts to be transferred by the Seller
to the Administrative Agent hereunder shall be sent by wire transfer in
immediately available funds to the account of the Administrative Agent as
follows:

U.S. Bank National Association

ABA number: 091000022

Attention: Mortgage Banking Services

Account No. 104756234365

DHI Mortgage Company, Ltd. Settlement Account

24.5. Receipt; Available Funds. Amounts received after 1:00 p.m. Minneapolis
time on any Business Day shall be deemed to have been paid and received on the
next succeeding Business Day. All payments and transfers of cash pursuant to
this Agreement shall be made (only if the paying and receiving accounts are with
the same financial institution) by journal entries, or (otherwise) by wire
transfer, of immediately available funds in U.S. dollars.

25 Entire Agreement; Severability.

This Agreement supersedes any existing agreements between the parties containing
general terms and conditions for repurchase transactions. This Agreement may not
be amended, modified or supplemented except in accordance with the provisions of
Section 22 and such amendment, modification or supplement must be set forth in a
writing signed by the parties required to do so in accordance with Section 22.
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.

26 Non-assignability; Termination.

26.1. Limited Assignment. Except with respect to any repurchase transaction,
sale, transfer, pledge or hypothecation by the Administrative Agent or any Buyer
pursuant to Sections 10 and 22.18, the rights and obligations of the parties
under this Agreement and under any Transaction shall not be assigned by any
party without the prior written consent of the other parties and any such
assignment without the prior written consent of the other parties shall be null
and void. Subject to the foregoing, this Agreement and any Transactions shall
bind and benefit the parties and their respective successors and assigns.

 

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26.2. Remedies Exception. Section 26.1 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 Section 18.

26.3. Agreement Termination. This Agreement shall terminate, automatically and
without any requirement for notice, on the date after the Termination Date on
which all Obligations have been indefeasibly paid in full, provided, that the
provisions of Sections 6.4, 6.5, 7 and 20 shall survive the termination of this
Agreement, provided further, that this Agreement and any Open Transactions may
be extended by mutual agreement of the Buyers, the Administrative Agent and the
Seller; and provided further, that no such party shall be obligated to agree to
such an extension.

27 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.

28 Governing Law, Jurisdiction and Venue.

This Agreement (including this choice-of-law provision) and the other Repurchase
Documents shall be governed by and construed and all controversies and disputes
arising under, in connection with or relating to this Agreement and the other
Repurchase Documents shall be resolved, in accordance with the laws of the State
of New York (pursuant to Section 5-1401 of the New York General Obligations Law
to the extent such laws would otherwise not apply) and the United States of
America applicable to contracts made and to be wholly performed within such
State. The Seller, the Administrative Agent and the Buyers each hereby
irrevocably submits to the nonexclusive jurisdiction and venue of the United
States District Court for the Southern District of New York located in the
Borough of Manhattan in the City of New York or, if such court does not have
jurisdiction, the Supreme Court of the State of New York, New York County for
the purpose of any action or other proceeding arising under, in connection with
or relating to the Repurchase Documents or any related Transaction, pursuant to
Section 5-1402 of the New York General Obligations Law to the extent such
submission would otherwise not be effective. To the fullest extent permitted by
applicable law, the Seller, the Administrative Agent and the Buyers each
irrevocably waives any objection that it may now or hereafter have to the laying
of venue for 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 and agrees that service of process may be made upon it in any such
proceeding by registered or certified mail. Nothing herein shall affect any
applicable right of any party at any time to initiate any suit in the United
States District Court for the Southern District of New York in Manhattan, or to
remove any pending suit to that court. Nothing herein shall affect the right of
the Administrative Agent or any Buyer to accomplish service of process in any
manner permitted by applicable law or to commence legal proceedings or otherwise
proceed against the Seller in any other jurisdiction or court.

 

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29 Waiver of Jury Trial.

Each of the Seller (in its capacity as Seller and Servicer), the Buyers and the
Administrative Agent hereby (i) covenants and agrees not to elect a trial by
jury of any issue triable of right by a jury, and (ii) waives any right to trial
by jury fully to the extent that any such right shall now or hereafter exist.
This waiver of right to trial by jury is separately given, knowingly and
voluntarily, by each of the Seller, the Buyers and the Administrative Agent, and
this waiver is intended to encompass individually each instance and each issue
as to which the right of a jury trial would otherwise accrue. The Administrative
Agent is hereby authorized and requested to submit this Agreement to any court
having jurisdiction over the subject matter and the parties hereto, so as to
serve as conclusive evidence of the foregoing waiver of the right to jury trial.
Further, the Seller hereby certifies that no representative or agent of the
Buyers or the Administrative Agent has represented, expressly or otherwise, to
any stockholder, director, officer, agent or representative of the Seller that
the Buyers or the Administrative Agent will not seek to enforce this waiver of
right to jury trial provision.

30 Relationship of the Parties.

This Agreement provides for the sale by the Seller and the purchase by the
Buyers (acting through their agent and representative, the Administrative Agent)
of Eligible Loans and the obligation of the Seller to repurchase them upon
termination of each Transaction. The relationship between the Seller and the
Buyers (and the Administrative Agent) is limited to that of seller and
repurchaser on the one hand and Buyers and resellers (and the Administrative
Agent as the Buyers’ agent and representative) on the other. The provisions in
this Agreement and the other Repurchase Documents for compliance with financial
covenants and delivery of financial statements are intended solely for the
benefit of the Buyers and the Administrative Agent to protect the interests of
the Buyers as buyers, including their and the Administrative Agent’s interest in
assuring repurchase of Purchased Loans at the termination of each Transaction,
and nothing contained in this Agreement or any of the other Repurchase Documents
shall be construed as permitting or obligating any Buyer or the Administrative
Agent to act as a financial or business advisor or consultant to the Seller, as
permitting or obligating any Buyer or the Administrative Agent to control the
Seller or to conduct the Seller’s operations, as creating any fiduciary
obligation on the part of the Buyers or the Administrative Agent to the Seller,
or as creating any joint venture, agency or other relationship between the
parties other than as explicitly and specifically stated in this Agreement. The
Seller acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation and
execution of this Agreement and the other Repurchase Documents and to obtain the
advice of such counsel with respect to all matters contained in the Repurchase
Documents including the provision for waiver of trial by jury. The Seller
further acknowledges that it is experienced with respect to financial and credit
matters and has made its own independent decisions to apply to the Buyers, the
Administrative Agent to enter into this Agreement, and to execute and deliver
this Agreement and the other Repurchase Documents.

 

105

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31 No Waivers, Etc.

No express or implied waiver of any Event of Default by any 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 the Seller and
the parties required to do so pursuant to Section 22. Without limitation on any
of the foregoing, the failure to give a notice pursuant to Section 6 or 7 will
not constitute a waiver of any right to do so at a later date. The rights and
remedies of the Buyers hereunder shall be cumulative and not exclusive of any
rights and remedies which the Buyers would otherwise have. No failure or delay
on the part of the Buyers in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

32 Use of Employee Plan Assets.

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

32.2. Audited Financial Statements Required. Subject to the last sentence of
Section 32.1, any such Transaction shall proceed only if the Seller furnishes or
has furnished to the Administrative Agent its most recent available audited
statement of its financial condition and its most recent subsequent unaudited
statement of its financial condition.

32.3. Representations. By entering into a Transaction pursuant to this
Section 32, the Seller shall be deemed (i) to represent to the Buyers and the
Administrative Agent that since the date of the Seller’s latest such financial
statements, there has been no material adverse change in the Seller’s financial
condition which the Seller has not disclosed to the Administrative Agent, and
(ii) to agree to provide the Administrative Agent with future audited and
unaudited statements of its financial condition as they are issued, so long as
it is a Seller in any Open Transaction involving a Plan Party.

 

106

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33 Intent.

33.1. Transactions are Repurchase Agreements and Securities Contracts. The
parties intend and acknowledge that each Transaction is a “repurchase agreement”
as such term is defined in Section 101 of the Bankruptcy Code (except insofar as
the type of Eligible 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 the Bankruptcy Code (except
insofar as the type of assets subject to such Transaction would render such
definition inapplicable). This Agreement also 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 any or all
of the parties is not a “financial institution” as that term is defined in
FDICIA). Seller hereby agrees that it shall not challenge the characterization
of this Agreement as a “repurchase agreement” as that term is defined in
Section 101 of the Bankruptcy Code, or as a “securities contract” as that term
is defined in Section 741 of the Bankruptcy Code in any dispute or proceeding.

33.2. Contractual Rights, Etc. Any party’s right to liquidate Eligible Loans
delivered to it in connection with Transactions hereunder or to exercise any
other remedies pursuant to Section 18, is a contractual right to liquidate,
terminate or accelerate such Transaction as described in Sections 555, 559 and
561 of the Bankruptcy Code.

33.3. FDIA. If a party hereto is an “insured depository institution,” as such
term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then
each Transaction hereunder is a “qualified financial contract,” as that term is
defined in 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).

33.4. Master Netting Agreement. 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 a 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 or any Transaction as described in Section 561 of the Bankruptcy Code.

 

107

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34 Disclosure Relating to Certain Federal Protections.

The parties acknowledge that they have been advised that:

34.1. Parties not Protected by SIPA or Insured by FDIC or NCUSIF. 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 SIPA do not protect
the other party with respect to any Transaction hereunder.

34.2. SIPA Does Not Protect Government Securities Broker or Dealer Counterparty.
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.

34.3. Transaction Funds Are Not Insured Deposits. In the case of Transactions in
which one of the parties is a financial institution, funds held by such
financial institution pursuant to a Transaction hereunder are not a deposit and
therefore are not insured by the Federal Deposit Insurance Corporation (through
either the Bank Insurance Fund or the Savings Association Insurance Fund) or the
National Credit Union Share Insurance Fund, as applicable.

35 USA Patriot Act Notification.

The Administrative Agent and the Buyers hereby notify the Seller that, pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), the Administrative Agent or the Buyers are required
to obtain, verify and record information that identifies the Seller, including
the Seller’s name and address and other information that will allow them to
identify the Seller in accordance with said Act.

36 Effect of Existing Agreement.

Effective as of the Effective Date, this Agreement amends and replaces in its
entirety and restates the Existing Agreement. The terms and conditions of this
Agreement supersede, effective as of the Effective Date, the terms and
conditions of the Existing Agreement, provided, however , that the obligations
incurred under the Existing Agreement shall not in any circumstance be
terminated, extinguished or discharged hereby but shall hereafter be governed by
the terms of this Agreement.

 

108

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The remainder of this page is intentionally blank; signature pages follow.

 

109

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EXECUTED as of the Effective Date.

 

DHI MORTGAGE COMPANY, LTD., as

Seller and Servicer

By: DHI Mortgage Company GP, Inc. Its General Partner By:  

/S/ MARK C. WINTER

Name:   Mark C. Winter Title:  

Chief Financial Officer/Executive

Vice President

 

S-1

Amended and Restated Master Repurchase Agreement

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

U.S. BANK NATIONAL ASSOCIATION,

as Administrative Agent and a Buyer

By:   /s/ EDWIN D. JENKINS Name:   Edwin D. Jenkins Title:   Senior Vice
President

 

S-2

Amended and Restated Master Repurchase Agreement

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

ASSOCIATED BANK, N.A., as a Buyer By:   /s/ THOMAS J. CONNALLY Name:   Thomas J.
Connally Title:   Senior Vice President

 

S-3

Amended and Restated Master Repurchase Agreement

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

BRANCH BANKING & TRUST

COMPANY, as a Buyer

By:   /s/ Samuel Bryan Name:   Samuel Bryan Title:   Senior Vice President

 

S-4

Amended and Restated Master Repurchase Agreement

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

COMERICA BANK, as a Buyer By:   /S/ AMY SATSKY Name:   Amy Satsky Title:   Vice
President

 

S-5

Amended and Restated Master Repurchase Agreement

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

EXHIBIT A

TO Amended and Restated Master Repurchase Agreement

FORM OF REQUEST/CONFIRMATION

 

To:    From: U.S. Bank National Association., Administrative Agent    DHI
Mortgage Company, Ltd. 800 Nicollet Mall    10700 Pecan Park Blvd. Mortgage
Banking Services BC-MN-H03B    Suite 450 Minneapolis, MN 55402    Austin, TX
78750 Attention: Compliance Manager    Attention: Lisa Collett Phone:
612-303-3543    Phone: 512-533-1382 Fax: 612-303-2255    Fax: 866-329-2803
Email: mortgagebankingservices@usbank.com    email: lcollett@dhimortgage.com

Please refer to the Amended and Restated Master Repurchase Agreement dated
March 1, 2013, among DHI Mortgage Company, Ltd. (the “Seller”), U.S. Bank
National Association (“U.S. Bank”), as a Buyer and the Administrative Agent, and
the other buyers party thereto (such other buyers, if any, together with U.S.
Bank, the “Buyers”), which, as it has been or may hereafter be supplemented,
amended, or restated from time to time, is herein called the “Current Repurchase
Agreement.” Any term defined in the Current Repurchase Agreement and used in
this request shall have the meaning given to it in the Current Repurchase
Agreement.

The Seller currently qualifies under the Current Repurchase Agreement for, and
hereby requests, purchases as set forth below (the “Requested Purchases”) to be
made on the following Purchase Date:             , 20        (which must be a
Business Day).

The Pricing Rates for this Transaction shall be determined from time to time in
accordance with the definition of that term in the Current Repurchase Agreement
and the provisions of Section 5 of the Current Repurchase Agreement.

 

Ex A-1

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   LIBOR Rate Previous Day Aggregate Outstanding Purchase Price    Purchase
Price To Be Advanced    Repurchase Price To Be Paid    Syndication Settlement
Amount    Aggregate Outstanding Purchase Price   

The Buyers’ Margin Percentage is specified in the definition of that term in the
Current Repurchase Agreement.

After the Requested Purchases, the Aggregate Outstanding Purchase Price will not
exceed the Maximum Aggregate Commitment.

The Seller has delivered today multiple Mortgage Loan Transmission Files. All
Loans listed in such Mortgage Loan Transmission Files are Eligible Loans. For
each of the Mortgage Loans listed on the Mortgage Loan Transmission Files
submitted in connection with this Request/Confirmation:

(a) The Basic Papers have been or will be executed and delivered by all
appropriate Persons.

(b) The Seller is electronically communicating to the Custodian a complete
Mortgage Loan Transmission File, and the information stated for such Mortgage
Loan in such standard Mortgage Loan Transmission File is correct and complete in
accordance with the Record Layout, as defined and provided for in (and attached
as an exhibit to) the Custody Agreement.

(c) Such Mortgage Loan has been (or will be) originated, closed, funded and (if
applicable) negotiated and assigned to the Seller.

(d) For each such Mortgage Loan being offered as a Dry Loan, the Basic Papers
are being concurrently delivered to the Custodian.

 

Ex A-2

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(e) For each such Mortgage Loan being offered as a Wet Loan, the complete File
for such Mortgage Loan, including all Basic Papers and all Supplemental Papers,
is or will be in the possession of either that Mortgage Loan’s closer, the
Seller or the Servicer or Subservicer for that Mortgage Loan, its Basic Papers
are in the process of being delivered to the Custodian and such Basic Papers
will be delivered to the Custodian on or before seven Business Days after the
Purchase Date specified above.

Pursuant to the terms of the Custody Agreement and acknowledging and agreeing
that new value, as that term is used in the New York Uniform Commercial Code,
has been given in reliance thereon, the Seller hereby sells, negotiates and
transfers to the Buyers the Mortgage Loans listed on the attached Schedule of
Mortgage Loans. The Seller acknowledges that the Administrative Agent and the
Buyers will rely on the truth of each statement in this Request/Confirmation and
such Mortgage Loan Transmission File in purchasing such Purchased Loans referred
to herein.

The Purchase Prices for the Purchased Loans referred to herein should be
deposited in the Funding Account for payment as set forth on the instructions in
the Mortgage Loan Transmission File or such other account as indicated by the
Seller.

No Default has occurred under the Repurchase Documents that has not been cured
by the Seller or declared in writing by the Administrative Agent to have been
waived, and no Event of Default has occurred under the Repurchase Documents that
the Administrative Agent has not declared in writing to have been cured or
waived. There has been no material adverse change in any of the Central Elements
in respect of the Seller or any of its Subsidiaries since the date of the
Seller’s most recent annual audited Financial Statements that have been
delivered to the Administrative Agent and the Buyers.

All items that the Seller is required to furnish to the Buyers, the
Administrative Agent or the Custodian in connection with the Requested Purchases
and otherwise have been delivered, or will be delivered before the Purchase Date
specified above, in all respects as required by the Current Repurchase Agreement
and the other Repurchase Documents. All documentation described or referred to
in the Mortgage Loan Transmission File submitted to the Administrative Agent
with this Request/Confirmation conforms in all respects with all applicable
requirements of the Current Repurchase Agreement and the other Repurchase
Documents.

The Seller hereby warrants and represents to the Buyers and the Administrative
Agent that none of the Purchased Loans (including, but not limited to, Purchased
Loans described or referred to in this request) has been sold to any Person
other than the Buyers, is pledged to any Person other than Administrative Agent,
for the benefit of itself and the Buyers, or supports any borrowing or
repurchase agreement funding other than purchases under the Current Repurchase
Agreement.

The undersigned officer hereby certifies that all of the Seller’s
representations and warranties (a) in the Current Repurchase Agreement and all
of the other Repurchase Documents (except only to the extent that (i) a
representation or warranty speaks to a specific date or (ii) the facts on which
a representation or warranty is based have been changed by transactions or
conditions contemplated or expressly permitted by the Repurchase Documents) and
(b) in this request are true and correct on the date of this request and that
the Seller qualifies for the Requested Purchases.

 

Ex A-3

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

DHI Mortgage Company, Ltd.

By: DHI Mortgage Company GP, Inc.

Its General Partner

By:     Name:     Title:    

 

Ex A-4

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EXHIBIT B

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

OPINIONS REQUIRED FOR OPINION OF COUNSEL TO SELLER

1. The Seller is duly organized and validly existing as a limited partnership in
good standing under the laws of the State of Texas and has power and authority
to enter into and perform its obligations under and to consummate the
transactions contemplated by the Repurchase Agreement and the Custody Agreement
and all other Repurchase Documents to which it is a party. The Seller is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the business transacted by it requires such qualification and
in which the failure so to qualify would have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the Seller
and its subsidiaries, considered as a whole.

2. The Repurchase Agreement and the Custody Agreement and all other Repurchase
Documents to which the Seller is a party have each been duly authorized,
executed and delivered by the Seller, and each constitutes a valid and legally
binding obligation of the Seller enforceable against the Seller in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditors’ rights generally and to general equity principles.

3. No consent, approval, authorization or order of any Texas state or federal
court or government agency or body is required to be obtained by the Seller for
the execution, delivery or performance of or the consummation of the
transactions contemplated by the Repurchase Agreement or the Custody Agreement
or any of the other Repurchase Documents.

4. The execution, delivery or performance of and the consummation of any of the
transactions contemplated by the Repurchase Agreement and the Custody Agreement
and the other Repurchase Documents will not conflict with, result in a breach
of, or constitute a default under the limited partnership agreement or any other
organizational or governance document of the Seller or the terms of any
indenture or other material agreement or instrument known to such counsel to
which the Seller is party or bound, or any order known to such counsel to be
applicable to the Seller or any laws, rules or regulations applicable to the
Seller, of any Texas state or federal court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over Seller.

5. There is no pending or, to such counsel’s actual knowledge, threatened
action, suit or proceeding before any court or governmental agency, authority or
body or any arbitrator involving the Seller or relating to the Transactions
contemplated by the Repurchase Agreement or the Custody Agreement or any of the
other Repurchase Documents which, if adversely determined, would have a material
adverse effect on the Seller.

 

Ex B-1

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6. In the event of a recharacterization of any Transaction under the Repurchase
Agreement as a financing rather than a purchase under applicable law, the
Repurchase Agreement together with the filing of a financing statement
identifying all Eligible Loans designated by the Seller from time to time as
Purchased Loans purchased by the Administrative Agent on behalf of the Buyers
creates a valid, perfected nonpossessory security interest in such Eligible
Loans in favor of the Administrative Agent for the benefit of itself and the
Buyers.

7. In the event of a recharacterization of any Transaction under the Repurchase
Agreement as a financing rather than a purchase under applicable law, the
Repurchase Agreement together with delivery to the Custodian of the Mortgage
Notes related to Purchased Loans purchased by the Buyers in Transactions from
time to time creates a valid security interest perfected by possession in such
Purchased Loans in favor of the Administrative Agent on behalf of the Buyers.

8. In accordance with the provisions of Sections 559, 362(b)(7) and 362(o),
respectively, of the Bankruptcy Code, in the event Seller were to become a
debtor in a voluntary or involuntary case under the Bankruptcy Code, neither
(i) the rights of the Administrative Agent for the benefit of the Buyers to
liquidate, terminate and/or accelerate the Repurchase Agreement because of a
condition of the kind specified in Section 365(e)(1) of the Bankruptcy Code, nor
(ii) the rights of the Administrative Agent for the benefit of the Buyers to set
off those Obligations of the Seller that arise under or in connection with the
Repurchase Agreement against cash, securities or other property held by, pledged
to, under the control of, or due from the Administrative Agent or Buyers (or the
Custodian on behalf of such parties) to margin, guarantee, secure or settle the
Repurchase Agreement, as the case may be, would be stayed, avoided or otherwise
limited by operation of any provision of the Bankruptcy Code, including, without
limitation, Section 362(a) of the Bankruptcy Code, or by order of a court or
administrative agent in any proceeding under the United States Bankruptcy Code.

9. In accordance with the provisions of Section 546(f) of the Bankruptcy Code,
transfers by Seller to the Administrative Agent for the benefit of the Buyers,
made before the commencement of a case against the Seller under the Bankruptcy
Code, of cash or any Additional Purchased Loans to cure a Margin Deficit would
not be avoidable under Section 547 of the Bankruptcy Code.

 

Ex B-2

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EXHIBIT C

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

FORM OF OFFICER’S CERTIFICATE WITH COMPUTATIONS

TO SHOW COMPLIANCE OR NON-COMPLIANCE WITH

CERTAIN FINANCIAL COVENANTS

OFFICER’S CERTIFICATE

ADMINISTRATIVE AGENT: U.S. Bank National Association

SELLER: DHI MORTGAGE COMPANY, LTD.

SUBJECT PERIOD: ended , 20            

DATE:             , 20            

This certificate is delivered to the Administrative Agent and the Buyers under
the Amended and Restated Master Repurchase Agreement dated as of March 1, 2013
(as supplemented, amended or restated from time to time, the “Current Repurchase
Agreement”), among the Seller, the Administrative Agent and the Buyers from time
to time party thereto. Unless they are otherwise defined in this request, terms
defined in the Current Repurchase Agreement have the same meanings here as
there.

The undersigned officer of the Seller certifies to the Administrative Agent that
on the date of this certificate:

1. The undersigned is an incumbent officer of the Seller, holding the title
stated below his or her signature below.

2. The Seller’s Financial Statements that are attached to this certificate were
prepared in accordance with GAAP and present fairly the Seller’s financial
condition and results of operations as of                     for that month
(the “Subject Period”) and for the year to that date (except that interim (i.e.,
other than annual) Financial Statements exclude notes to Financial Statements
and statements of changes to stockholders’ equity and are subject to year-end
adjustments).

3. The undersigned officer of the Seller supervised a review of the Seller’s
activities during the Subject Period in respect of the following matters and has
determined the following:

(a) except to the extent that (i) a representation or warranty speaks to a
specific date or (ii) the facts on which a representation or warranty is based
have changed by transactions or conditions contemplated or expressly permitted
by the Repurchase Documents, the representations and warranties of the Seller in
the Current Repurchase Agreement and the other Repurchase Documents are true and
correct in all material respects, other than the changes, if any, described on
the attached Annex A;

 

Ex C-1

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

(b) no event has occurred that could reasonably be expected to have a materially
adverse effect on any of the Central Elements of the Seller;

(c) the Seller has complied with all of its obligations under the Repurchase
Documents, other than the deviations, if any, described on the attached Annex A;

(d) no Event of Default has occurred that has not been declared by the
Administrative Agent in writing to have been cured or waived, and no Default has
occurred that has not been cured before it became an Event of Default, other
than those Events of Default and/or Defaults, if any, described on the attached
Annex A;

(e) the Seller’s HUD Compare Ratio as of the last day of the Subject Period is
accurately set forth on the attached Annex A; and

(f) compliance by the Seller with the financial covenants in Sections 17.12,
17.13, and 17.15 of the Current Repurchase Agreement is accurately calculated on
the attached Annex A.

 

DHI MORTGAGE COMPANY, LTD.

By: DHI Mortgage Company GP, Inc.

Its General Partner

By:     Name:     Title:    

 

Ex C-2

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ANNEX A TO OFFICER’S CERTIFICATE

1. Describe changes to representations and warranties, if any (clause 3(a) of
attached Officer’s Certificate); if none, so state.

2. Describe deviations from compliance with obligations under the Repurchase
Documents (clause 3(c) of attached Officer’s Certificate); if none, so state.

3. Describe Defaults or Events of Default, if (clause 3(d) of attached Officer’s
Certificate); if none, so state.

4. Seller’s HUD Compare Ratio as of the last day of the Subject Period was
            % (clause 3(e) of attached Officer’s Certificate).

5. Calculate compliance with covenants in Sections 17.12 through 17.15 of the
Current Repurchase Agreement (clause 3(f) of attached Officer’s Certificate):

(a) Section 17.12. The Seller’s Tangible Net Worth as of             is
$            (the minimum under Section 17.12 is $75,000,000.)

(b) Section 17.13. The ratio of Seller’s GAAP Indebtedness and Contingent
Indebtedness to Tangible Net Worth of the Seller on a consolidated basis with
its Restricted Subsidiaries, measured monthly is             to 1.0 (the maximum
ratio under Section 17.13 is 8.0:1.0.)

(c) Section 17.15. The Seller’s liquidity (unrestricted cash, Cash Equivalents
and unused portion of the Maximum Aggregate Commitments) for the month ended
            , 20            was $            (the minimum under Section 17.15 is
$40,000,000).

6. For the Subject Period, (i) describe and give details regarding actual
repurchase, make whole and indemnity payments made by Seller to any Person, and
(ii) provide a summary of notices received by the Seller requesting or demanding
that the Seller repurchase (or pay indemnity or other compensation in respect
of) Mortgage Loans previously sold or otherwise disposed of by the Seller to any
Investor or other Person pursuant to any express or implied repurchase or
indemnity obligation as per Section 16.5. (Attach schedule or explanation.)

 

Ex C-3

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Attachment to Exhibit C

Purchased Loans Curtailment Report

(List Purchased Loans on which unscheduled principal payment, prepayment or
reduction of

more than one regularly scheduled principal and interest installment payment was

received since last monthly report and resulting new Principal Balance.)

 

Ex C-4

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EXHIBIT D

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

List of Restricted Subsidiaries of the Seller as of the Effective Date

 

Subsidiary

   Place of organization    States where
qualified as a foreign
organization    The Seller’s
percentage of capital
stock or equity
ownership  

Operating

Subsidiaries

        

None

        

Single-Purpose

Finance Subsidiaries

        

CH Funding LLC

   Texas         100 % 

 

Ex D-1

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EXHIBIT E

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

ASSIGNMENT AND ASSUMPTION

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

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

 

1.      Assignor:

       

2.      Assignee:

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

3.      Seller:

       

4.      Administrative Agent:

               , as the agent and representative of the Buyers under the
Repurchase Agreement

 

Ex E-1

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

5. Repurchase Agreement: The Amended and Restated Master Repurchase Agreement
dated as of             among [name of Seller], the Buyers parties thereto and
[name of Administrative Agent], as Administrative Agent

6. Assigned Interest:

 

Aggregate Amount of Commitment/
Transactions for all Buyers

   Amount of Commitment/
Transactions Assigned    Percentage Assigned of
Commitment/Transactions

$

   $    $

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

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

 

ASSIGNOR [NAME OF ASSIGNOR] By:     Title:     ASSIGNEE [NAME OF ASSIGNEE] By:  
  Title:    

 

Ex E-2

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

[Consented to and] Accepted:

[NAME OF ADMINISTRATIVE AGENT], as Administrative Agent

 

By:     Title:    

[Consented to:]

[NAME OF RELEVANT PARTY]

 

By:     Title:    

 

Ex E-3

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

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

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

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Buyer under the Repurchase Agreement, (ii) it satisfies
the requirements, if any, specified in the Repurchase Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Buyer, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Repurchase Agreement as a Buyer thereunder and, to the
extent of the Assigned Interest, shall have the obligations of a Buyer
thereunder, (iv) it has received a copy of the Repurchase Agreement, together
with copies of the most recent financial statements referred to in
Section 15.2(f) thereof or delivered pursuant to Section 16.3 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent, the assignor or any other Buyer, and (v) if it is a
Person that is organized under the Legal Requirements of any jurisdiction other
than the United States of America or any State thereof, attached to this
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Repurchase Agreement, duly completed and executed
by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Buyer, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Repurchase Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Repurchase Documents are
required to be performed by it as a Buyer.

 

Ex E-4

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

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
Repurchase Price, Price Differential, fees and other amounts) to the Assignor
for amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.

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

 

Ex E-5

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

EXHIBIT F

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

SUMMARY OF TERMS AND CONDITIONS

MORTGAGE WAREHOUSE FACILITY

 

SELLER/BORROWER:         BUYER/LENDER:         PURPOSE:         COLLATERAL
CUSTODIAN:         FACILITY:         FACILITY AMOUNT:         TERMINATION DATE:
        FACILITY FEE:         INTEREST RATE:         ELIGIBLE MORTGAGE LOANS:   
  

 

Loan Type    Sublimit     Advance
Rate/Margin  

Conforming Loans

                  %                   % 

Wet Fundings

                  %                   % 

Jumbo Loans

                  %                   % 

Other Non-Conforming Conv

                  %                   % 

Non-Owner Occupied

                  %                   % 

 

SECURITY:         REPRESENTATIONS AND WARRANTIES:         EVENTS OF DEFAULT:   
     COVENANTS:        

 

Ex F

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

SCHEDULE AI

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

APPROVED INVESTORS

 

Current Investors as of 9-12-2012

Investor

 

S&P CP Rating

 

Moody’s CP Rating

 

Related Parent Company

 

Product Approval

Charter Bank   N/A   N/A     Conforming Chase Home Equity   A-1   P-1   JPMorgan
Chase Bank N.A.   Conforming/Non-conforming CitiMortgage, Inc.   A-2   P-2  
Citibank, N.A.   Conforming Colonial Savings, FA   N/A   N/A     Conforming
Federal National Mortgage Assoc. (FNMA)   N/A   N/A     Conforming Government
National Mortgage Assoc. (GNMA)   N/A   N/A     Conforming JPMorgan Chase Bank  
A-1   P-1   JPMorgan Chase & Co.   Conforming/Non-conforming Leader Financial
Services   N/A   N/A     Conforming Marsh Associates, Inc.   N/A   N/A    
Conforming PennyMac Mortgage Investment Trust   N/A   N/A     Conforming Redwood
Trust   N/A   N/A     Conforming/Non-conforming Standard Mortgage Corporation  
N/A   N/A     Conforming U.S. Bank, N.A.   A-1+   P-1   U.S. Bancorp  
Conforming/Non-conforming Wells Fargo Bank, N.A.   A-1+   P-1   Wells Fargo &
Company   Conforming/Non-conforming Housing Agencies         Alabama Housing
Finance Authority   N/A   N/A     Conforming California Housing Finance Agency  
N/A   N/A     Conforming Colorado Housing & Finance Authority   N/A   N/A    
Conforming

 

AI-1

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

Georgia Housing and Finance Authority    N/A    N/A       Conforming Illinois
Housing Development Authority    N/A    N/A       Conforming Minnesota Housing
Finance Agency    N/A    N/A       Conforming New Mexico Housing Finance
Authority    N/A    N/A       Conforming Nevada Housing Division    N/A    N/A
      Conforming North Carolina Housing Finance    N/A    N/A       Conforming
Oregon Housing and Community Services    N/A    N/A       Conforming South
Carolina State Housing Finance    N/A    N/A       Conforming Washington State
Housing Finance Commission    N/A    N/A       Conforming

 

AI-2

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

SCHEDULE BC

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

The Buyers’ Committed Sums

(in dollars)

 

Buyer

   Committed Sum  

U.S. Bank National Association

   $ 170,000,000   

Associated Bank, N.A.

   $ 30,000,000   

Branch Banking & Trust Company

   $ 50,000,000   

Comerica Bank

   $ 50,000,000   

 

BC-1

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

SCHEDULE BP

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

LIST OF BASIC PAPERS

The following are the Basic Papers for Purchased Loans:

(a) the original Mortgage Note, bearing all intervening endorsements to
negotiate it from the original payee named therein to the Seller and endorsed by
the Seller as follows:

Pay To The Order Of

Without Recourse

 

 

[SELLER’S NAME]

[signature]

[name, title]

(b) the recorded original or a Certified Copy of the power of attorney for each
maker of the Mortgage Note who (if any) did not personally execute the Mortgage
Note and for whom the Mortgage Note was executed by an attorney-in-fact;

(c) the recorded original or a Certified Copy of the Mortgage securing such
Mortgage Note;

(d) originals or Certified Copies of all intervening assignments (if any)
reflecting a complete chain of assignment of such Mortgage from the original
mortgagee to the Seller; provided that intervening assignments are not required
for any Mortgage that has been originated in the name of MERS and registered
under the MERS® System; and

(e) the signed original of a Mortgage Assignment assigning the Mortgage in blank
in a form that is complete so as to be recordable in the jurisdiction where the
Mortgaged Premises are located without the need for completion of any blanks or
supplying of any other information; provided that no Mortgage Assignment is
required for any Mortgage that has been originated in the name of MERS and
registered under the MERS® System with U.S. Bank as Interim Funder.

 

BP-1

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

SCHEDULE DQ

TO Amended and Restated Master Repurchase Agreement

DISQUALIFIERS

“Disqualifier” means any of the following events; after the occurrence of any
Disqualifier, unless the Administrative Agent shall have waived it, or declared
it cured, in writing, the Market Value of the affected Purchased Loan shall be
deemed to be zero, and the Administrative Agent shall be deemed to have marked
such Purchased Loan to market:

1. Any event occurs, or is discovered to have occurred, after which the affected
Purchased Loan fails to satisfy any element of the definition of “Eligible
Loan.”

2. In respect of any Purchased Loan, for any reason whatsoever any of the
Seller’s special representations concerning Purchased Loans set forth in
Section 15.3 applicable to that type of Purchased Loan becomes untrue, or is
discovered to be untrue, in any respect that is material to the value or
collectability of that Purchased Loan, considered either by itself or together
with other Purchased Loans.

3. Any Purchased Loan becomes In Default.

4. Seven Business Days elapse after the Purchase Date upon which a Wet Loan has
been sold to the Buyers without all of the Wet Loan’s Basic Papers having been
received by the Custodian.

5. For any Purchased Loan, any Basic Paper has not sent to the Seller or its
designee for correction, collection or other action and has not been returned to
the Custodian on or before 19 days after it was so sent to the Seller.

6. Any Purchased Loan is assumed by (or otherwise becomes the liability of), or
the real property securing it becomes owned by, any corporation, partnership or
other entity that is not a natural person or a trust for natural persons unless
payment in full of such Purchased Loan is guaranteed by a natural person. The
Administrative Agent, the Buyers and Custodian may rely on the Seller’s
representation and warranty that no Purchased Loans have been so assumed by (or
otherwise become the liability of) such a Person except as otherwise specified
by written notice(s) to the Custodian.

7. Any Purchased Loan is assumed by (or otherwise become the liability of), or
the real property securing it becomes owned by, an Affiliate of the Seller or
any of the Seller’s or its Affiliates’ directors, managers, members or officers.
The Administrative Agent, the Buyers and Custodian may rely on the Seller’s
representation and warranty that no Purchased Loans have been so assumed by (or
otherwise become the liability of) such a Person except as otherwise specified
by written notice(s) to the Custodian.

8. Any Purchased Loan shipped to an Approved Investor is not paid for or
returned to the Custodian or the Administrative Agent (whichever shipped it) on
or before 45 days after it is shipped.

 

DQ-1

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

9. More than 60 days elapse since the Purchase Date of a Conforming Mortgage
Loan, a MIP Mortgage Loan, or a Streamline Refinance Loan.

10. More than 60 days elapse since the Purchase Date of a Jumbo Mortgage Loan or
Super Jumbo Mortgage Loan.

11. More than 60 days elapse since the Purchase Date of any Mortgage Loan made
in conjunction with a bond program.

12. Any Purchased Loan is shipped to the Seller for correction of one or more
Basic Papers when the Purchase Value of all Purchased Loans so shipped to the
Seller exceeds $10,000,000.

13. Any Purchased Loan is listed on a Custodian’s Exception Report and the
Administrative Agent has not exercised its discretion to exclude such Purchased
Loan from this list of Disqualifiers under Section 22.5(a) (for avoidance of
doubt, this means a Purchased Loan is subject to discrepancies, inconsistencies
or has documents that are incomplete).

14. Three Business Days elapse after the Purchase Date upon which any Purchased
Loan has been sold to Buyers without such Purchased Loan being registered in the
MERS System and the Administrative Agent being designated as “interim funder” of
such Purchased Loan in the MERS System.

 

DQ-2

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

SCHEDULE EL

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

ELIGIBLE LOANS

“Eligible Loans” means Single-family Loans that are amortizing Conforming
Mortgage Loans with original terms to stated maturities of 30 years or less and
that satisfy all applicable requirements of this Agreement for Conforming
Mortgage Loans and shall also mean Single-family Loans that are Jumbo Mortgage
Loans, Super Jumbo Mortgage Loans, MIP Mortgage Loans, or Streamline Refinance
Loans that otherwise meet all criteria for Eligible Loans set forth on this
Schedule EL and are not subject to a Disqualifier. It must be secured by a first
priority Lien on its related Mortgaged Premises. It may bear interest at a fixed
interest rate, at a fluctuating interest rate or at a fixed or fluctuating
interest rate for part of its term followed, respectively, by a fluctuating or
fixed interest rate for the remainder of its term. No Mortgage Loan shall be an
Eligible Loan at any time:

(1) If the Mortgaged Premises securing it is a mobile home, manufactured
housing, or cooperative housing unit.

(2) If it does not satisfy the Seller’s Underwriting Guidelines for a
Single-Family Loan in all material respects.

(3) If it contains or is otherwise subject to any contractual restriction or
prohibition on the free transferability of such Mortgage Loan, all Liens
securing it and all related rights (other than Legal Requirements requiring
notification to its obligor(s) of any transfer of it or of its servicing or
administration), either absolutely or as security.

(4) If any of its owners-mortgagors is a corporation, partnership or any other
entity that is not a natural person or a trust for natural persons unless its
full payment when due is guaranteed by a natural person.

(5) If any of its owner-mortgagors is an Affiliate of the Seller or any of the
Seller’s or any such Affiliate’s directors, members, managers or officers.

(6) Whose related Mortgaged Premises are not covered by a Hazard Insurance
Policy.

(7) That is a construction, rehabilitation or commercial loan. The
Administrative Agent, Buyers and Custodian may rely on the Seller’s
representation and warranty that no Purchased Loan is such a loan.

(8) In the case of a Jumbo Mortgage Loan or Super Jumbo Mortgage Loan, that
(i) has a loan-to-value ratio greater than 80% or a cumulative loan-to-value
ratio greater than 90%, (ii) has a FICO score less than 700, (iii) is not fully
documented as to income or asset values, (iv) is not eligible for purchase by
two Approved Investors with short-term unsecured obligations rated not lower
than A-1/P-1, or (v) is not a Redwood Trust Jumbo Mortgage Loan and has not been
prior approved for purchase by an

 

EL-1

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

Approved Investor with short-term unsecured obligations rated not lower than
A-1/P-1, except, in the case of a Jumbo Mortgage Loan (but not a Super Jumbo
Mortgage Loan), in cases where the Seller has delegated underwriting guaranties
for Mortgage Loans with an original principal balance up to 1,000,000.

(9) That was originated more than 30 days before its Purchase Date.

(10) That is In Default or ever was In Default.

(11) That contains any term or condition such that the repayment schedule
results in the outstanding principal balance increasing over time, rather than
amortizing, whether or not such Mortgage Loan is deemed to be an “option ARM,”
“negative amortization” or “graduated payment” loan. The Administrative Agent,
the Buyers and the Custodian may rely on the Seller’s representation and
warranty that any Mortgage Loan duly sold to the Buyers amortizes over time.

(12) In connection with the origination of which a policy of single-premium life
insurance on the life of a mortgagor, borrower or guarantor was purchased.

(13) That (i) is subject to the special Truth-in-Lending disclosure requirements
imposed by Section 32 of Regulation Z of the Federal Reserve Board (12 C.F.R.
§ 226.32) or any similar state or local Law relating to high interest rate
credit or lending transactions or (ii) contains any term or condition, or
involves any loan origination practice, that (1) has been defined as “high
cost,” “high risk,” “predatory,” “covered,” “threshold” or a similar term under
any such applicable federal, state or local law, (2) has been expressly
categorized as an “unfair” or “deceptive” term, condition or practice in any
such applicable federal, state or local law (or the regulations promulgated
thereunder) or (3) by the terms of such Law exposes assignees of Mortgage Loans
to possible civil or criminal liability or damages or exposes any Buyer or the
Administrative Agent to regulatory action or enforcement proceedings, penalties
or other sanctions. The Administrative Agent, Buyers and Custodian may rely on
the Seller’s representation and warranty that no Purchased Loan is such a loan.

(14) That the Seller or any Affiliate has previously warehoused with any other
Person, whether under a lending arrangement or an arrangement involving a sale
in contemplation of a subsequent further sale to (or securitization by) a
secondary mortgage market purchaser, whether with or without the Seller’s having
any conditional repurchase or other recourse obligation, and that was rejected
or became ineligible or disqualified to be lent against or purchased and held by
such other Person; provided that this provision shall not be construed or
applied to disqualify a Purchased Loan simply because it was purchased by the
Seller out of a pool of Serviced Loans or from a whole loan investor for whose
Mortgage Loans the Seller is a Servicer pursuant to the Seller’s (or an
Affiliate’s) obligation or election as Servicer to do so. The Administrative
Agent, Buyers and Custodian may rely on the Seller’s representation and warranty
that no Purchased Loan is such a loan.

 

EL-2

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

(15) That the Seller or any Affiliate sold and transferred, or attempted to sell
and transfer, to any other Person; provided that this provision shall not be
construed or applied to disqualify a Purchased Loan simply because it was
purchased by the Seller out of a pool of Serviced Loans or from a whole loan
investor for whose Mortgage Loans the Seller is a Servicer pursuant to the
Seller’s (or an Affiliate’s) obligation or election as Servicer to do so. The
Administrative Agent, Buyers and Custodian may rely on the Seller’s
representation and warranty that no Purchased Loan is such a loan.

(16) That is not a MIP Mortgage Loan or a Streamline Refinance Loan and has a
Cumulative Loan-to-Value Ratio greater than:

(a) for qualifying FHA Loans and VA Loans, 105.5%, and

(b) for all other Mortgage Loans (other than MIP Mortgage Loans and Streamline
Refinance Loans), 90%.

(17) That has a loan to value ratio greater than (a) for MIP Mortgage Loans,
105%, (b) for Streamline Refinance Loans, 105%, and (c) for all other Mortgage
Loans, 80%, unless such Mortgage Loan is guaranteed by VA or insured by FHA;
provided, however, that a Conforming Mortgage Loan may have a loan to value
ratio greater than 80% (but not more than 100%), so long as the portion of such
Conforming Mortgage Loan in excess of 80% of the value of the related Mortgaged
Premises is covered by mortgage insurance acceptable to the Administrative Agent
(the Administrative Agent, Buyers and the Custodian may rely on the Seller’s
representation and warranty in Schedule 15.3(n) as to whether this condition is
satisfied for any such Purchased Loan).

(18) As to which any Disqualifier exists.

(19) Unless all of the Seller’s right, title and interest in and to the
Purchased Loan is subject to a first priority perfected security interest in
favor of the Administrative Agent for the benefit of the Buyers subject to no
other liens, security interests, charges or encumbrances other than the Seller’s
right to repurchase the Purchased Loan hereunder.

(20) Unless all the representations and warranties set forth in this Agreement,
including, without limitation, Section 15.3 and Schedule 15.3, are true and
correct with respect to such Purchased Loan at all times on and after the
related Purchase Date.

(21) If such Mortgage Loan is not a Conforming Mortgage Loan, if Seller has
materially changed Seller’s Underwriting Guidelines for such Mortgage Loan and
the Administrative Agent has not approved such changes.

(22) That is not covered by an Investor Commitment or Hedge Agreement.

 

EL-3

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

SCHEDULE 15.2(f)

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT MATERIAL

ADVERSE CHANGES AND CONTINGENT LIABILITIES

1. Material adverse changes and material unrealized losses since the Statement
Date, as referred to in Section 15.2(f): None

2. Contingent liabilities as of the Effective Date, as referred to in
Section 15.2(f): None

 

15.2(f)-1

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

SCHEDULE 15.2(g)

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

PENDING LITIGATION

None

 

15.2(g)-1

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

SCHEDULE 15.2(o)

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

EXISTING LIENS

None

 

15.2(o)-1

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

SCHEDULE 15.2(q)

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Seller’s Plans

No ERISA Plans other than welfare benefit plans

 

15.2(q)-1

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

SCHEDULE 15.3

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Special representations and warranties with respect to each Purchased Loan

As of the related Purchase Date, for each Purchased Loan the Seller makes the
following representations and warranties:

(a) The information with respect to each Purchased Loan set forth in the related
Mortgage Loan Transmission File is true and correct as of the date specified in
all material respects.

(b) The Seller is the sole legal and equitable owner (except in the case of MERS
Designated Loans, as to which MERS, as nominee for the Seller and its successors
and assigns, is the record owner), free and clear of all Liens other than
Permitted Encumbrances, of all Mortgage Loans to be sold to the Buyers by the
Seller pursuant to this Agreement and has full right to sell such Mortgage Loans
to the Buyers.

(c) All Purchased Loans, including Wet Loans, have been duly authorized and
validly created.

(d) Each of the Purchased Loans sold to the Buyers by the Seller complies with
all of the requirements of this Agreement and the Custody Agreement and is
genuine and what it purports to be.

(e) All information concerning each item or grouping of Purchased Loans listed
in any Loan Schedule or in a Mortgage Loan Transmission File sent to the
Administrative Agent or the Custodian was, is and/or shall be (as applicable)
true and complete in all material respects as of the date of such Loan Schedule
or Mortgage Loan Transmission File.

(f) The Seller has complied and will continue to comply in all material respects
with all Legal Requirements relating to each Purchased Loan.

(g) Each Mortgage Note and Mortgage related to a Purchased Loan, including Wet
Loans, has been duly (i) endorsed or assigned to the Seller and (ii) endorsed or
assigned by the Seller in blank (assignment of the Mortgage in blank is not
required when MERS is designated in the Mortgage as the original mortgagee or
the nominee of the original mortgagee, its successors and assigns) and delivered
(or in the case of Wet Loans are in the process of being delivered) to the
Custodian.

(h) All Basic Papers for each Purchased Loan (except Wet Loans) will be
transmitted to the Custodian with the Request/Confirmation with which it is
submitted for purchase.

(i) Each assignment to the Administrative Agent of the Lien securing any
Purchased Loan will be in proper and sufficient form for recording in the
appropriate government office in the U.S. jurisdiction where the related
Mortgaged Premises are located (no such assignment is required for any Mortgage
that has been originated in the name of MERS and registered under the MERS®
System).

 

15.3-1

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

(j) The Seller has and will continue to have the full right, power and authority
to sell the Purchased Loans to the Buyers, and the Purchased Loans sold and to
be sold to the Buyers by the Seller under this Agreement or pursuant to it may
be further sold, resold, assigned and reassigned to any Person or Persons
without any requirement for the further consent of the Seller or the consent of
any other party to any of the Loan Papers or obligated in respect of the
Purchased Loans.

(k) The Seller will maintain the Lien on the real estate described in, or
referred to as covered by, each Purchased Loan as a Lien having the priority
represented by the Seller to the Administrative Agent or the Custodian, subject
only to the Permitted Encumbrances, until that Purchased Loan shall have been
repurchased by the Seller.

(l) Each Purchased Loan is covered by an ALTA mortgage title insurance policy or
such other form of title insurance as is acceptable to Fannie Mae or Freddie
Mac, issued by and constituting the valid and binding obligation of a title
insurer that is generally acceptable to prudent mortgage lenders who regularly
originate or purchase Mortgage Loans comparable to the Purchased Loans that are
for sale to prudent investors in the secondary market in which investors invest
in Mortgage Loans such as the Purchased Loan insuring the Seller, its successors
and assigns, as to the first priority of the Lien of the Mortgage on the related
Mortgaged Premises, in an amount equal to the original principal amount of such
Purchased Loan. The Seller is the sole named insured of such mortgage title
insurance policy, the assignment to the Administrative Agent of the Seller’s
interest in such policy does not require the consent of or notice to the insurer
(or such consent has been obtained or notice given), and such policy is and will
be in full force and effect and inure to the benefit of the Administrative Agent
as and when such Purchased Loan is sold to the Buyers. No claims have been made
under such policy and no prior holder of the Purchased Loan, including the
Seller, has done, by act or omission, anything that would impair the coverage of
such policy.

(m) The Mortgaged Premises securing each Purchased Loan are capable of being
lawfully occupied under applicable Laws, all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of such Mortgaged Premises and, with respect to the use and occupancy of the
same, including certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate Governmental Authority.

(n) Each Purchased Loan that is not a Conforming Mortgage Loan secured by a
first Mortgage Lien that has a Cumulative Loan-to-Value Ratio greater than 80%
is either guaranteed by VA or insured by FHA or private mortgage insurance
provided by an insurer approved by the Administrative Agent.

 

15.3-2

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(o) The Seller has no knowledge of any circumstances or conditions with respect
to the Mortgage, the Mortgaged Premises or the Customer in respect of any
Purchased Loan (other than the Customer’s credit standing) that can reasonably
be expected to cause private institutional investors that regularly invest in
Mortgage Loans similar to such Purchased Loan to regard such Purchased Loan as
an unacceptable investment or adversely affect the value or marketability of
such Purchased Loan to other similar institutional investors.

(p) Each Purchased Loan’s Mortgage contains an enforceable provision for
acceleration of the maturity of the unpaid principal balance thereof in the
event that the Mortgaged Premises are sold or transferred without the prior
written consent of the holder thereof.

(q) No Purchased Loan contains provisions pursuant to which monthly payments are
paid in whole or in part with funds deposited in any separate account
established by the Seller, the relevant Customer or anyone on behalf of the
Customer, or paid by any source other than the Customer, or any other similar
provisions currently in effect that effectively constitute a “buydown”
provision.

(r) No Purchased Loan is a graduated payment Mortgage Loan or has a shared
appreciation or other contingent interest feature.

(s) All interest rate adjustments, if any, in respect of each Purchased Loan
have been made in strict compliance with applicable Law and the terms of the
related Mortgage Note, and any interest required to be paid pursuant to
applicable Law has been properly paid and credited.

(t) No Customer in respect of any Purchased Loan has notified the Seller, and
the Seller has no knowledge, of any relief requested by or allowed to such
Customer under the Servicemembers’ Civil Relief Act of 2003.

(u) The Seller used no selection procedures that identified the Eligible Loans
relating to a Transaction as being less desirable or valuable than other
comparable assets in Seller’s portfolio on the related Purchase Date, and no
Purchased Loan was selected for inclusion in a Transaction on any basis that was
intended to have a material adverse effect on the Buyers or the Administrative
Agent.

(v) No Purchased Loan is subject to a bankruptcy plan.

(w) Each Purchased Loan is a “qualified mortgage” within the meaning of
§860G(a)(3) of the Internal Revenue Code.

(x) All Purchased Loans and all related papers included in the Purchased Loans:

(1) were originated by the Seller, a duly licensed mortgage lender in the
ordinary course of its business;

 

15.3-3

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(2) have been made in compliance with all applicable requirements of the Real
Estate Settlement Procedures Act, the Equal Credit Opportunity Act, the federal
Truth-In-Lending Act, the Fair Credit Billing Act, the Fair Credit Reporting
Act, related statutes and regulations and all applicable Legal Requirements
under usury, truth-in-lending, equal credit opportunity and all other Laws, and
the continued compliance of the Purchased Loans is not affected by their sale to
the Buyers;

(3) are the legal, valid and binding obligations of the respective Customers who
entered into them and are and will continue to be valid and enforceable in
accordance with their terms, without any claim, right of rescission,
counterclaim, defense or offset, including any claim or defense of usury, except
as such enforceability may be limited by bankruptcy and other laws affecting the
rights of creditors generally and by principles of equity, excepting rights
that, by applicable law, cannot be waived, and neither the operation of any of
their respective contract terms nor the exercise of any right thereunder will
render any of them partly or wholly unenforceable or subject to any such claim,
right of rescission, counterclaim, defense or offset, and no such claim, right
of rescission, counterclaim, defense or setoff has been asserted;

(4) have not been modified or amended and none of their requirements has been
waived, except as expressly and completely reflected in the applicable Loan
Papers furnished to the Custodian;

(5) have fair market values equal to or greater than the Purchase Price
respectively attributed or allocated to them under this Agreement on the
Purchase Date;

(6) comply and will continue to comply with the terms of this Agreement and the
Custody Agreement;

(7) were not originated in, and are not subject to the laws of, any jurisdiction
whose laws (i) make unlawful their sale to the Buyers pursuant to this
Agreement, or (ii) render the Purchased Loans unenforceable;

(8) are in full force and effect and have not been satisfied or subordinated in
whole or in part or rescinded, and the residential real property securing each
Purchased Loan has not been partially or completely released from the Lien of
such Purchased Loan;

(9) evidence and are each secured by a valid first Lien in favor of the Seller
on real property securing the amount owed by the Customer(s) under the related
Mortgage, subject only to Permitted Encumbrances;

(10) are each executed in full accordance with all requirements of the
applicable Laws of the jurisdiction in which the related Mortgaged Premises are
located, with the Mortgage for each being (i) duly acknowledged and sealed by
such official and in such manner and form as to be both recordable and effective
under such Laws to give such constructive notice to all Persons as shall be
necessary to establish and continue the Lien of such Mortgage with the priority
that the Seller represents it has to the Administrative Agent and (ii) so
recorded,

 

15.3-4

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and with the Mortgage Note, Mortgage and all related papers executed with the
genuine original signature(s) of the Customer(s) obligated on such Purchased
Loan, and all parties to each such Purchased Loan had full legal capacity to
execute it;

(11) are secured by Single-family residential property;

(12) are the subject of a Current Appraisal that complies with all applicable
requirements of FIRREA of which the Seller has possession and which the Seller
will make available to the Custodian on request, and the Seller has in its
possession and will make available to the Custodian on request evidence of value
and how it was determined; or, if any Purchased Loan is not the subject of such
a Current Appraisal, (i) the Seller has received a Property Inspection Waiver
finding from the applicable FNMA/FHLMC/FHA/VA automated underwriting program
with respect to such Purchased Loan or (ii) such Purchased Loan is exempt from
appraisal delivery requirements under FNMA/FHLMC/FHA/VA underwriting guidelines
(e.g., eligible FHA streamlined refinance) and such Purchased Loan is eligible
for purchase by an Approved Investor without a Current Appraisal;

(13) are not subject to the Home Ownership and Equity Protection Act of 1994;

(y) As to each Purchased Loan and its Loan Papers:

(1) the Loan Papers contain customary and enforceable provisions so as to render
the rights and remedies of their holder adequate for the realization against the
Purchased Loan of the benefits of the security intended to be provided by it;

(2) there is only one original executed Mortgage Note, and, except in the case
of Wet Loans, that original has been delivered to the Custodian;

(3) none of its makers or mortgagors is an Affiliate of the Seller or any of its
or its Subsidiaries’ directors or officers;

(4) does not contain any term or condition such that the repayment schedule
results in the outstanding principal balance increasing over time, rather than
amortizing, whether or not such Purchased Loan is deemed to be an “option ARM,”
“negative amortization” or “graduated payment” loan. The Administrative Agent
and the Custodian may rely on the Seller’s representation and warranty that any
Purchased Loan amortizes over time.

(z) Each Mortgage is a Lien on the premises and property described in it having
the priority represented to the Administrative Agent, and the description of the
Mortgaged Premises in each Mortgage is legally adequate and each Purchased Loan
has been fully advanced in its face amount.

 

15.3-5

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(aa) No default, and no event that with notice or lapse of time or both would
become a default, has occurred and is continuing in respect of any Purchased
Loan except as to which the Seller has given notice to the Administrative Agent
(by reporting Purchased Loans that are delinquent Mortgage Loans), and if any
such default or event has occurred, it has not continued for more than 30 days,
reckoned and counted from the most recent month end, and the Seller will
promptly notify the Administrative Agent of any such Purchased Loan that is in
default for a longer period of time.

(bb) The Mortgaged Premises in each Mortgage is insured by a fire and extended
perils insurance policy and such other hazards as are customary in the area
where the Mortgaged Property is located or customary under Seller’s servicing
procedures and the amount of the insurance is in the amount of the full
insurable value of the Mortgaged Property on a replacement cost basis or the
unpaid balance of the Mortgage Loans, whichever is less. If the Mortgaged
Property is in an area identified by any federal governmental authority as
having special flood hazards, and flood insurance is available, a flood
insurance policy meeting the current guidelines of the Federal Insurance
Administration is in effect. All such insurance policies (collectively, the
“Hazard Insurance Policy”) contain a standard mortgage clause naming the
originator and its successors and assigns (including subsequent owners of the
Mortgage Loan), as mortgagee

(cc) Each Purchased Loan is covered by an Investor Commitment and is eligible
and qualified for refinancing on or before seven Business Days after its
Purchase Date under a committed Mortgage Loan repurchase or warehousing
agreement between the Seller and a repurchase agreement counterparty or
warehouse lender other than the Buyers.

 

15.3-6

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SCHEDULE 16.1

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Market Analysis Report

The Market Analysis Report shall contain the following fields:

 

1. Lender code

 

2. Loan ID

 

3. Borrower Name

 

4. Address

 

5. City

 

6. State

 

7. Zip Code

 

8. Loan Amount

 

9. Purchase Value (initial)

 

10. Production stage (wet or dry)

 

11. Credit Grade

 

12. Amortization Code

 

13. Investor Code

 

14. Acquisition cost

 

15. Mortgage Date

 

16. Interest rate

 

17. FICO

 

18. Lien

 

19. Sale Date

 

20. Age from sale date

 

21. Aging days

 

22. Branch code

 

16.1-1

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24. Region

 

25. Sublimit

 

27. DHI Investor Code

 

28. Amortization term

 

29. Borrower FICO

 

30. CLTV Ratio

 

31. Current rate

 

32. Documentation type

 

33. First Payment Date

 

34. Interest only flag

 

35. Interest only term in months

 

36. Lien Position

 

37. LTV Ratio

 

38. Owner Occupancy

 

39. Next payment due date

 

40. Prepayment description

 

41. Prepayment penalty years

 

42. Product Description

 

43. Property type

 

44. State

 

45. Unpaid balance

 

46. Appraisal value

 

47. ARM First Pay Adjust Date

 

48. ARM First Rate Adjust Date

 

49. ARM Initial Pay Teaser Period

 

16.1-2

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50. ARM Margin

 

51. ARM Pay Adjust Freq.

 

52. ARM Rate Adjust Freq

 

53. Balloon flag

 

54. Credit Grade

 

55. DTI Ratio

 

56. First periodic cap

 

57. Floor

 

58. Life Cap

 

59. Maturity Date

 

60. Maximum Rate

 

61. Negam Flag

 

62. Original Rate

 

63. Funded

 

64. Payment paid thru

 

65. Periodic cap

 

66. Purchase Price

 

67. Total units

 

68. Unpaid Balance curr senior

 

69. Unpaid balance original

 

70. DU result

 

71. LP Doc Class

 

72. LP Purch Elig

 

73. LP Risk Class

 

74. First time HB

 

16.1-3

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75. MI Company

 

76. MI Percent

 

77. Self employed

 

78. LPMI flag

 

16.1-4

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SCHEDULE 23

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Buyers’ Addresses for Notice

As of March 1, 2013

Edwin Jenkins

U.S. Bank National Association

800 Nicollet Mall – BC-MN-H03B

Minneapolis, MN 55402-7020

Tel: (505) 424-5905

Fax: (612) 303-2253

edwin.jenkins@usbank.com

Tom Connally

Associated Bank, N.A.

Mortgage Warehouse Group

130 East Randolph Drive, ML2

Chicago, IL 60601

Tel: (312) 565-5273

Fax: (312) 861-1518

thomas.connally@associatedbank.com

Von Ringger

Comerica Bank

411 West Lafayette Blvd

6th Floor

Detroit, MI 48226

Tel: (313) 222-9285

vlringger@comerica.com

Amy Satsky

Comerica Bank

1717 Main Street

Dallas, TX 75201

Tel: (214) 462-4283

awsatsky@comerica.com

Jeff Ellison

BB&T

201 E Pine St

6th Floor

Orlando, FL 32801

Tel: (407) 835-6622

jellison@bbandt.com

Samuel Bryan

BB&T

1425 Seminole Trail

4th Floor

Charlottesville, VA 22901

Tel: (434) 422-9613

sbryan@bbandt.com

 

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Company Contacts:

Mark Winter / Lisa Collett

DHI Mortgage

10700 Pecan Park Blvd.

Suite 450

Austin, Texas 78750

Tel: (512) 533-1390 / 1382

Fax: (866) 329-2803

mwinter@drhorton.com

lcollett@dhimortgage.com

Jeff Tebeaux

D.R. Horton, Inc.

301 Commerce Street, Suite 500

Ft. Worth, Texas 76102

Tel: (817) 390-8371

Fax: (469) 522-8453

jtebeaux@drhorton.com

 

23-2