Exhibit 10.1




 





 


 


MASTER REPURCHASE AGREEMENT




Dated as of December 31, 2008




among


 


Guaranty Bank,

as the Administrative Agent for the various Buyers from time to time,


 


the Buyers,




and


 


Ryland Mortgage Company,

as the Seller,




 


 





 













 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Applicability

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Initiation/Purchase; Termination;
  Repurchase

  	
  25

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Conditions Precedent to Initial Transaction

  	
  25

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Conditions Precedent to all Transactions

  	
  26

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Initiation

  	
  27

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Repurchase, Purchase Price Decrease

  	
  27

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Reserved

  	
  29

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Delivery of Additional Mortgage Loans

  	
  29

  
	
   

  	
   

  	
   

  
	
  3.7

  	
  Reduction in Value of Mortgage Loans in the
  Asset Base

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Margin Amount Maintenance

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Price Differential; Income Payments

  	
  30

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Periodic Advance Repurchase Payment

  	
  30

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Application of Income

  	
  30

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Charging of Accounts

  	
  31

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Application to Settlement Account

  	
  31

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Settlement Account

  	
  31

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Offset

  	
  32

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Pricing Rate

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Requirements of Law

  	
  32

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Increased Costs

  	
  32

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Reduction of Return

  	
  32

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Claims

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Taxes

  	
  33

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Payments Free of Taxes

  	
  33

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Other Taxes

  	
  33

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  Tax Indemnity

  	
  33

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Evidence of Payment

  	
  34

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Foreign and Non-Exempt Buyers

  	
  34

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  Failure to Provide Form

  	
  35

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  Survival

  	
  36

  



 


iii













 


TABLE OF CONTENTS
 (continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Security Interest

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Payment, Transfer and Custody

  	
  37

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Payment

  	
  37

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Transfer to Administrative Agent

  	
  37

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Transfer to Custodian

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  [Reserved]

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Representations

  	
  37

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Acting as Principal

  	
  37

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Mortgage Loan Schedule

  	
  38

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Solvency

  	
  38

  
	
   

  	
   

  	
   

  
	
  11.4

  	
  No Broker

  	
  38

  
	
   

  	
   

  	
   

  
	
  11.5

  	
  Ability to Perform

  	
  38

  
	
   

  	
   

  	
   

  
	
  11.6

  	
  Existence

  	
  38

  
	
   

  	
   

  	
   

  
	
  11.7

  	
  Financial Statements

  	
  38

  
	
   

  	
   

  	
   

  
	
  11.8

  	
  No Breach

  	
  39

  
	
   

  	
   

  	
   

  
	
  11.9

  	
  Action

  	
  39

  
	
   

  	
   

  	
   

  
	
  11.10

  	
  Approvals

  	
  39

  
	
   

  	
   

  	
   

  
	
  11.11

  	
  Enforceability

  	
  39

  
	
   

  	
   

  	
   

  
	
  11.12

  	
  Indebtedness

  	
  39

  
	
   

  	
   

  	
   

  
	
  11.13

  	
  Material Adverse Effect

  	
  39

  
	
   

  	
   

  	
   

  
	
  11.14

  	
  No Default

  	
  40

  
	
   

  	
   

  	
   

  
	
  11.15

  	
  Underwriting Guidelines

  	
  40

  
	
   

  	
   

  	
   

  
	
  11.16

  	
  Adverse Selection

  	
  40

  
	
   

  	
   

  	
   

  
	
  11.17

  	
  Title to Properties

  	
  40

  
	
   

  	
   

  	
   

  
	
  11.18

  	
  Litigation

  	
  40

  
	
   

  	
   

  	
   

  
	
  11.19

  	
  Margin Regulations

  	
  40

  
	
   

  	
   

  	
   

  
	
  11.20

  	
  Taxes

  	
  40

  
	
   

  	
   

  	
   

  
	
  11.21

  	
  Investment Company Act and Public Utility
  Holding Company Act

  	
  41

  
	
   

  	
   

  	
   

  
	
  11.22

  	
  Purchased Mortgage Loans

  	
  41

  
	
   

  	
   

  	
   

  
	
  11.23

  	
  Chief Executive Office/Jurisdiction of
  Organization

  	
  42

  
	
   

  	
   

  	
   

  
	
  11.24

  	
  Location of Books and Records

  	
  43

  
	
   

  	
   

  	
   

  
	
  11.25

  	
  Hedging

  	
  43

  



 


iiiii













 


TABLE OF CONTENTS
 (continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  11.26

  	
  True and Complete Disclosure

  	
  43

  
	
   

  	
   

  	
   

  
	
  11.27

  	
  ERISA

  	
  43

  
	
   

  	
   

  	
   

  
	
  11.28

  	
  Agency Approvals

  	
  44

  
	
   

  	
   

  	
   

  
	
  11.29

  	
  No Reliance

  	
  44

  
	
   

  	
   

  	
   

  
	
  11.30

  	
  Plan Assets

  	
  44

  
	
   

  	
   

  	
   

  
	
  11.31

  	
  Anti-Money Laundering Laws

  	
  44

  
	
   

  	
   

  	
   

  
	
  11.32

  	
  No Prohibited Persons

  	
  44

  
	
   

  	
   

  	
   

  
	
  11.33

  	
  USA PATRIOT Act

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Covenants

  	
  45

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Preservation of Existence; Compliance With
  Law

  	
  45

  
	
   

  	
   

  	
   

  
	
  12.2

  	
  Taxes

  	
  45

  
	
   

  	
   

  	
   

  
	
  12.3

  	
  Notice of Proceedings or Adverse Change

  	
  45

  
	
   

  	
   

  	
   

  
	
  12.4

  	
  Financial Statements and Reports

  	
  46

  
	
   

  	
   

  	
   

  
	
  12.5

  	
  [RESERVED]

  	
  49

  
	
   

  	
   

  	
   

  
	
  12.6

  	
  Visitation and Inspection Rights

  	
  49

  
	
   

  	
   

  	
   

  
	
  12.7

  	
  Reimbursement of Expenses

  	
  49

  
	
   

  	
   

  	
   

  
	
  12.8

  	
  Further Assurances

  	
  49

  
	
   

  	
   

  	
   

  
	
  12.9

  	
  True and Correct Information

  	
  50

  
	
   

  	
   

  	
   

  
	
  12.10

  	
  ERISA Events

  	
  50

  
	
   

  	
   

  	
   

  
	
  12.11

  	
  Financial Covenants

  	
  51

  
	
   

  	
   

  	
   

  
	
  12.12

  	
  Hedging

  	
  51

  
	
   

  	
   

  	
   

  
	
  12.13

  	
  No Adverse Selection

  	
  51

  
	
   

  	
   

  	
   

  
	
  12.14

  	
  [RESERVED]

  	
  51

  
	
   

  	
   

  	
   

  
	
  12.15

  	
  Insurance

  	
  51

  
	
   

  	
   

  	
   

  
	
  12.16

  	
  Books and Records

  	
  52

  
	
   

  	
   

  	
   

  
	
  12.17

  	
  Illegal Activities

  	
  52

  
	
   

  	
   

  	
   

  
	
  12.18

  	
  Change in Business

  	
  52

  
	
   

  	
   

  	
   

  
	
  12.19

  	
  Limitation on Dividends and Distributions

  	
  52

  
	
   

  	
   

  	
   

  
	
  12.20

  	
  Disposition of Assets; Liens

  	
  52

  
	
   

  	
   

  	
   

  
	
  12.21

  	
  Transactions with Affiliates

  	
  52

  
	
   

  	
   

  	
   

  
	
  12.22

  	
  ERISA Matters

  	
  52

  
	
   

  	
   

  	
   

  
	
  12.23

  	
  Consolidations, Mergers and Sales of Assets

  	
  53

  



 


iiiiii













 


TABLE OF CONTENTS
 (continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  12.24

  	
  Chief Executive Office; Jurisdiction of
  Organization

  	
  53

  
	
   

  	
   

  	
   

  
	
  12.25

  	
  Agency Approvals; Servicing

  	
  53

  
	
   

  	
   

  	
   

  
	
  12.26

  	
  Guarantees

  	
  53

  
	
   

  	
   

  	
   

  
	
  12.27

  	
  [RESERVED]

  	
  53

  
	
   

  	
   

  	
   

  
	
  12.28

  	
  [RESERVED]

  	
  53

  
	
   

  	
   

  	
   

  
	
  12.29

  	
  [RESERVED]

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.30

  	
  Maintenance of Properties

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.31

  	
  Dividends

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.32

  	
  MERS Status

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.33

  	
  [RESERVED]

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.34

  	
  [RESERVED]

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.35

  	
  Limitation on Indebtedness

  	
  54

  
	
   

  	
   

  	
   

  
	
  12.36

  	
  Loans, Advances, and Investments

  	
  55

  
	
   

  	
   

  	
   

  
	
  12.37

  	
  Liens

  	
  55

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Events of Default

  	
  55

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Payment Failure

  	
  55

  
	
   

  	
   

  	
   

  
	
  13.2

  	
  Breach of Financial Representation or
  Covenant

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.3

  	
  Breach of Non-Financial Representation

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.4

  	
  Breach or Other Covenant

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.5

  	
  Judgment

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.6

  	
  Insolvency

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.7

  	
  Enforceability

  	
  56

  
	
   

  	
   

  	
   

  
	
  13.8

  	
  Security Interest

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.9

  	
  Cross-Default

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.10

  	
  Going Concern

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.11

  	
  Change in Control

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.12

  	
  Inability to Perform

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.13

  	
  Parent Default

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.14

  	
  Credit Facility Default

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.15

  	
  Environmental

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.16

  	
  Cessation of Business

  	
  57

  
	
   

  	
   

  	
   

  
	
  13.17

  	
  Business Condition

  	
  58

  



 


iviii













 


TABLE OF CONTENTS
 (continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 14. 

  	
  Remedies

  	
  58

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Exercise of Remedies

  	
  58

  
	
   

  	
   

  	
   

  
	
  14.2

  	
  Possession of Files

  	
  58

  
	
   

  	
   

  	
   

  
	
  14.3

  	
  Sale of Purchased Mortgage Loans

  	
  59

  
	
   

  	
   

  	
   

  
	
  14.4 

  	
  Liability of Seller

  	
  59

  
	
   

  	
   

  	
   

  
	
  14.5 

  	
  Cumulative Rights

  	
  59

  
	
   

  	
   

  	
   

  
	
  14.6 

  	
  Remedies Non-Exclusive

  	
  59

  
	
   

  	
   

  	
   

  
	
  14.7 

  	
  Enforcement

  	
  60

  
	
   

  	
   

  	
   

  
	
  14.8 

  	
  Liability for Additional Amounts

  	
  60

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Indemnification and Expenses

  	
  60

  
	
   

  	
   

  	
   

  
	
  15.1 

  	
  Indemnification

  	
  60

  
	
   

  	
   

  	
   

  
	
  15.2 

  	
  Costs and Expenses

  	
  61

  
	
   

  	
   

  	
   

  
	
  15.3 

  	
  Recourse

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Servicing

  	
  61

  
	
   

  	
   

  	
   

  
	
  16.1 

  	
  Duty of Servicer

  	
  61

  
	
   

  	
   

  	
   

  
	
  16.2 

  	
  Escrowed Funds

  	
  61

  
	
   

  	
   

  	
   

  
	
  16.3 

  	
  Settlement Account Deposits

  	
  62

  
	
   

  	
   

  	
   

  
	
  16.4 

  	
  Termination of Rights

  	
  62

  
	
   

  	
   

  	
   

  
	
  16.5 

  	
  Notification of Default

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 17. 

  	
  Recording of Communications

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Single Agreement

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Set-Off

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 20. 

  	
  Notices and Other Communications

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Entire Agreement; Severability

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section 22. 

  	
  Assignment

  	
  63

  
	
   

  	
   

  	
   

  
	
  22.1 

  	
  Assignment and Assumption

  	
  63

  
	
   

  	
   

  	
   

  
	
  22.2 

  	
  Register

  	
  63

  
	
   

  	
   

  	
   

  
	
  22.3 

  	
  Disclosure

  	
  64

  
	
   

  	
   

  	
   

  
	
  22.4 

  	
  Federal Reserve Transfers

  	
  64

  
	
   

  	
   

  	
   

  
	
  Section 23. 

  	
  Tax Treatment

  	
  64

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Terminability

  	
  64

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  APPLICABLE LAW

  	
  64

  



 


viii













 


TABLE OF CONTENTS

(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  WAIVERS; JURY TRIAL; CONSEQUENTIAL DAMAGES

  	
  65

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  No Waivers, Etc

  	
  66

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Netting

  	
  66

  
	
   

  	
   

  	
   

  
	
  Section 29.

  	
  Periodic Due Diligence Review

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  Administrative Agent’s Appointment as
  Attorney-In-Fact

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 31.

  	
  Miscellaneous

  	
  69

  
	
   

  	
   

  	
   

  
	
  31.1

  	
  Counterparts

  	
  69

  
	
   

  	
   

  	
   

  
	
  31.2

  	
  Captions

  	
  69

  
	
   

  	
   

  	
   

  
	
  31.3

  	
  Acknowledgment

  	
  69

  
	
   

  	
   

  	
   

  
	
  31.4

  	
  Documents Mutually Drafted

  	
  69

  
	
   

  	
   

  	
   

  
	
  31.5

  	
  Credit Agreement Termination

  	
  69

  
	
   

  	
   

  	
   

  
	
  Section 32.

  	
  Confidentiality

  	
  69

  
	
   

  	
   

  	
   

  
	
  Section 33.

  	
  Intent/Usury

  	
  70

  
	
   

  	
   

  	
   

  
	
  Section 34.

  	
  Disclosure Relating to Certain Federal
  Protections

  	
  72

  
	
   

  	
   

  	
   

  
	
  Section 35.

  	
  Conflicts

  	
  72

  
	
   

  	
   

  	
   

  
	
  Section 36.

  	
  Authorizations

  	
  72

  
	
   

  	
   

  	
   

  
	
  Section 37.

  	
  Acknowledgement of Anti-Predatory Lending
  Practices

  	
  72

  
	
   

  	
   

  	
   

  
	
  Section 38.

  	
  General Interpretive Principles

  	
  72

  
	
   

  	
   

  	
   

  
	
  Section 39.

  	
  Fees

  	
  73

  
	
   

  	
   

  	
   

  
	
  39.1

  	
  Facility Fee

  	
  73

  
	
   

  	
   

  	
   

  
	
  39.2

  	
  Non-Use Fee

  	
  73

  
	
   

  	
   

  	
   

  
	
  39.3

  	
  Administrative Agency Fee

  	
  73

  
	
   

  	
   

  	
   

  
	
  Section 40.

  	
  Amendments

  	
  73

  
	
   

  	
   

  	
   

  
	
  Section 41.

  	
  Electronic Transmissions

  	
  74

  



 


viiii













 


TABLE OF CONTENTS
 (continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
  SCHEDULES:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
  –

  	
  AUTHORIZED REPRESENTATIVES

  	
   

  
	
  SCHEDULE II

  	
  –

  	
  LIST OF BUYERS

  	
   

  
	
  SCHEDULE III

  	
  –

  	
  SCHEDULE OF REQUIRED MORTGAGE FILE DOCUMENTS

  FOR EACH MORTGAGE LOAN TRANSACTION

  	
   

  
	
  SCHEDULE IV

  	
  –

  	
  ADDITIONAL REQUIRED MORTGAGE LOAN DOCUMENTS 

  	
   

  
	
  SCHEDULE V 

  	
  –

  	
  EXISTING GUARANTEES

  	
   

  
	
  SCHEDULE VI

  	
  –

  	
  EXISTING INDEBTEDNESS

  	
   

  
	
  SCHEDULE VII

  	
  –

  	
  EXISTING INVESTMENTS IN SUBSIDIARIES AND OTHER

  INVESTMENTS

  	
   

  
	
  SCHEDULE VIII

  	
  –

  	
  SCHEDULED LIENS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  –

  	
  FORM OF TRANSACTION REQUEST / MORTGAGE LOAN

  SCHEDULE

  	
   

  
	
  EXHIBIT B

  	
  –

  	
  [RESERVED]

  	
   

  
	
  EXHIBIT C

  	
  –

  	
  WAREHOUSE LENDER’S RELEASE

  	
   

  
	
  EXHIBIT D

  	
  –

  	
  [RESERVED]

  	
   

  
	
  EXHIBIT E

  	
  –

  	
  OFFICER’S CERTIFICATE

  	
   

  
	
  EXHIBIT F

  	
  –

  	
  FORM OF ASSET BASE CERTIFICATE[RESERVED]

  	
   

  
	
  EXHIBIT G

  	
  –

  	
  FORM OF SECTION 7 CERTIFICATE

  	
   

  
	
  EXHIBIT H

  	
  –

  	
  FORM OF COMPLIANCE CERTIFICATE

  	
   

  
	
  EXHIBIT I

  	
  –

  	
  APPROVED TAKEOUT INVESTORS

  	
   

  
	
  EXHIBIT J

  	
  –

  	
  FORM OF SERVICER NOTICE

  	
   

  
	
  EXHIBIT K

  	
  –

  	
  RESERVED

  	
   

  
	
  EXHIBIT L

  	
  –

  	
  [RESERVED

  	
   

  
	
  EXHIBIT M

  	
  –

  	
  FORM OF DAILY HEDGE REPORT

  	
   

  



 


viiiii













 


MASTER REPURCHASE AGREEMENT


 


This MASTER REPURCHASE AGREEMENT, dated as of
December 31, 2008, is among RYLAND MORTGAGE COMPANY, an Ohio corporation
(the “Seller”),
GUARANTY BANK, (individually referred to as “Guaranty Bank,” in its capacity as the
Administrative Agent, pursuant to the Administration Agreement, referred to as
the “Administrative
Agent”, and in its capacity as the Collateral Agent, the “Collateral Agent”)
and the Buyers party hereto from time to time.


 


Section 1.               Applicability. In accordance with the terms and
conditions of this Repurchase Agreement for the mutual benefit of Buyers and
Seller, from time-to-time on or before the Termination Date the parties hereto
shall enter into transactions in which the Seller agrees to transfer to the
Administrative Agent, for the benefit of Buyers as more particularly set forth
in the Administration Agreement, Mortgage Loans against the simultaneous transfer
of funds by Administrative Agent for the benefit of Buyers, to the Seller with
a simultaneous agreement by Administrative Agent for the benefit of Buyers to
transfer to the Seller such Mortgage Loans against the transfer of Cash by a
Takeout Investor and/or the Seller to the Administrative Agent for the benefit
of the Buyers, as more particularly set forth in this Repurchase Agreement.
Each such transaction shall be referred to herein as a “Transaction” and
shall be governed by this Repurchase Agreement, unless otherwise agreed in
writing.


 


Section 2.               Definitions. As used herein, the following
terms shall have the following meanings (all terms defined in this
Section 2 or in other provisions of this Repurchase Agreement in the
singular to have the same meanings when used in the plural and vice versa).


 


“Accepted Servicing Practices” shall mean,
with respect to any Mortgage Loan, those mortgage servicing practices of
prudent mortgage lending institutions which service mortgage loans of a similar
type as such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located.


 


“Additional Mortgage Loan Equivalents” shall
mean Eligible Mortgage Loans, Cash or Cash Equivalents provided by the Seller
to the Administrative Agent pursuant to Section 4 of this Repurchase
Agreement.


 


“Adjusted Floating LIBOR” shall mean, for any
day, the rate per annum equal to the sum of (a) the greater of
(i) the Floating LIBOR for such day or (ii) two percent (2%), plus (b) the Applicable Floating
LIBOR Margin, provided that the Adjusted Floating LIBOR shall never exceed the
Maximum Rate.


 


“Adjusted Tangible Net Worth” shall mean, for
the Seller as of a particular date, Tangible Net Worth as of such date, minus the outstanding amount of
Intercompany Loans.


 


“Administration Agreement” shall mean that
certain Administration Agreement, dated as of the date hereof, among the
Administrative Agent, the Buyers and the Seller, as amended from time to time.


 













 


“Administrative Agent” shall mean Guaranty
Bank, in its capacity as the administrative agent for the Buyers under this
Repurchase Agreement and the other Repurchase Documents and not in its
individual capacity as a Buyer, and any of its successors in interest and
assigns.


 


“Administrative Fee” shall have the meaning set
forth in Section 39.3 hereof.


 


“Affiliate” shall mean, as to any Person that
directly or indirectly (through one or more intermediaries or otherwise)
controls, is controlled by, or is under common control with, such Person.


 


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


 


“Agency Approval” shall have the meaning
specified in Section 12.25 hereof.


 


“ALTA” shall mean the American Land Title
Association or any successor in interest thereto.


 


“Anti-Money Laundering Laws” shall have the
meaning set forth in Section 11.31 hereof.


 


“Applicable Floating LIBOR Margin” shall mean
(a) from the date hereof through and including January 31, 2009, one
and one-half percent (1.50%) per annum and (b) from February 1, 2009
and thereafter, one and seventy-five/hundredths percent (1.75%) per annum.


 


“Applicable Sublimit” shall mean, for each
Mortgage Loan classification listed below, the percentage of the Maximum
Purchase Price listed opposite such Mortgage Loan classification:


 




	
  Wet Loans

  	
   

  	
  35

  	
  % *

  
	
  Prime Loans

  	
   

  	
  100

  	
  %

  
	
  Second Lien Loans

  	
   

  	
  2

  	
  .5%

  






 


* provided, however, that in the last five (5) and first
five (5) Business Days of every calendar month, the Applicable Sublimit
for Wet Loans shall be fifty percent (50%) of the Maximum Purchase Price.


 


“Appraisal” shall mean an appraisal of a
Mortgaged Property (a) by a state licensed or state certified real estate
appraiser (in accordance with the provisions of Title XI of FIRREA)
(b) selected in accordance with Agency guidelines and not identified to
the Seller as an unacceptable appraiser by an Agency, (c) who, to the
knowledge of the Seller, is experienced in estimating the value of property of
that same type in the community where it is located, and (d) for which a
signed copy of the written report of the Appraisal is in the possession of the
Seller or the Servicer.


 


“Appraised Value” shall mean, for any Mortgage
Loan, the appraised value of the property secured by the Mortgage as determined
by an Appraisal made in connection with the origination of the related Mortgage
Loan, performed in full compliance with Agency appraisal requirements and on an
appraisal form approved by an Agency.


 


2


 












 


“Asset Base” shall mean, at any date, all
Eligible Mortgage Loans for which the applicable Mortgage File has been
delivered to and held by the Custodian or in the case of Wet Loans, have been
identified as Eligible Mortgage Loans and with respect to which the applicable
Mortgage File shall be delivered to the Custodian on or before the seventh
(7) Business Day after the applicable Purchase Date.


 


“Asset Base Certificate” shall mean a
certificate describing the Eligible Mortgage Loans to be included in the Asset
Base in the form attached hereto as Exhibit F,
or another form acceptable to the Administrative Agent.


 


“Asset Value” shall mean, on any day, with
respect to each Eligible Mortgage Loan included in the Asset Base, an amount
equal to the Purchase Price Percentage multiplied by the least of the
following:


 


(a)                             the Market Value of the
Mortgage Note evidencing such Mortgage Loan,


 


(b)                            the outstanding principal
balance of the Mortgage Note evidencing such Mortgage Loan,


 


(c)                             if applicable, the
purchase price under the Takeout Commitment to which such Eligible Mortgage
Loan has been assigned or


 


(d)                            the Seller’s cost of
origination,


 


provided, that if
any such Eligible Mortgage Loan is a Prime Loan that has been included in the
Asset Base for more than sixty (60) days, the Asset Value of such Eligible
Mortgage Loan as determined by the above calculation shall be reduced by five
percent (5%) on such Eligible Mortgage Loan’s sixty-first (61st) day in the
Asset Base;


 


provided further
that if any such Eligible Mortgage Loan is a Second Lien Loan that has been
included in the Asset Base for more than thirty (30) days, the Asset Value of
such Mortgage Loan as determined by the above calculation shall be reduced by
ten percent (10%) on such Eligible Mortgage Loan’s thirty-first (31st) day and
sixty-first (61st) in the Asset Base;


 


provided further,
that the following Mortgage Loans shall have an Asset Value of Zero Dollars
($0):


 


(i)                                a Purchased Mortgage
Loan upon otherwise ceasing to be an Eligible Mortgage Loan;


 


(ii)                             a Purchased Mortgage Loan
that has been released from the possession of the Custodian under the Custodial
Agreement (other than to a Takeout Investor pursuant to a Bailee Letter) for a
period in excess of ten (10) Business Days;


 


(iii)                          a Purchased Mortgage Loan
that has been released from the possession of the Custodian under the Custodial
Agreement to a Takeout Investor pursuant to a Bailee Letter for a period in
excess of forty-five (45) calendar days;


 


3













 


(iv)                         a Purchased Mortgage Loan that
fails to be subject to a Takeout Commitment;


 


(v)                            a Purchased Mortgage Loan
that is a Wet Loan for which the related Mortgage File have not been received
by the Administrative Agent by the seventh (7th) Business Day following the
related Purchase Date;


 


(vi)                         a Purchased Mortgage Loan for
which the Asset Value of such Purchased Mortgage Loan when added to the Asset
Value of all other Purchased Mortgage Loans in the same Mortgage Loan
classification exceeds the Applicable Sublimit for such Mortgage Loan
classification;


 


(vii)                      a Purchased Mortgage Loan that is
a Mortgage Loan for which the Mortgaged Property has been foreclosed upon or
has been converted to REO Property.


 


“Asset Value of the Asset Base” shall mean, on
any day, the sum of the Asset Values of all Eligible Mortgage Loans in the
Asset Base on such day as determined by the Administrative Agent based upon
information then available to the Administrative Agent.


 


“Assignment and Assumption” shall have the
meaning specified in Section 22 hereof.


 


“Authorized Representative” shall mean, for
the purposes of this Repurchase Agreement only, an agent of the applicable
party, as listed on Schedule I
hereto, as such Schedule I
may be amended from time to time.


 


“Available Purchase Price” shall mean, on any
date of determination, the excess, if any, of the Maximum Purchase Price less
the Purchase Price then outstanding hereunder.


 


“Bailee Letter” shall have the meaning set
forth in the Custodial Agreement.


 


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


 


“Broker’s Price Opinion” shall mean a report
conducted by a real estate broker acceptable to the Administrative Agent in its
reasonable discretion, licensed in the State in which the Property securing the
Mortgage Loan is located, and located in the neighborhood in which the Property
securing the Mortgage Loan is located. The report must combine information, if
available, from a drive-by exterior examination, external data sources,
previous sale data, property assessment data, recent comparable sales and
current listings of homes similar to that securing the Mortgage located in the
same neighborhood, as well as a photograph of the subject Mortgage Property. It
must also include a description of any visibly needed repairs, neighborhood
information, and value estimate for “as is” and “as repaired” values.


 


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


 


4













 


“Buyers” shall mean Guaranty Bank and those
Buyers listed on Schedule II,
hereto, as amended from time to time, and their successors in interest and
assigns.


 


“Cash” shall mean lawful money of the United
States of America.


 


“Cash Equivalents” shall mean
(i) securities issued or directly and fully guaranteed or insured by the
United States Government or any agency or instrumentality thereof which mature
within ninety (90) days from the date of acquisition, and (ii) time
deposits and certificates of deposit, which mature within ninety (90) days from
the date of acquisition, of any Buyer or any other domestic commercial bank
having capital and surplus in excess of $200,000,000, which has, or the holding
company of which has, a commercial paper rating of at least A-1 or the
equivalent thereof by Standard & Poors (a division of the McGraw-Hill
Companies) or P-1 or the equivalent thereof by Moody’s Investors
Service, Inc.


 


“Change in Control” shall mean:


 


(a)                             any transaction or event
as a result of which Parent ceases to own 100% of the voting control and
membership interests of the Seller; or


 


(b)                            the sale, transfer, or
other disposition of all or substantially all of Seller’s or Parent’s assets.


 


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


 


“Combined Loan to Value Ratio” or “CLTV” shall mean,
with respect to any Mortgage Loan, as to any Mortgage Loan, the ratio expressed
as a percentage determined by dividing (i) the face amount of such
Mortgage Loan and the face amount of all other loans secured by the residential
real property and improvements serving as collateral for the Mortgage Loan, by
(ii) the Appraised Value of the residential real property and improvements
serving as collateral for the Mortgage Loan.


 


“Commitment” shall have the meaning specified
in the Administration Agreement.


 


“Confidential Terms” shall have the meaning
set forth in Section 32 hereof.


 


“Conforming Mortgage Loan” shall mean a
Mortgage Loan which (i) receives one of the following responses from
Fannie Mae Desktop Underwriter: (a) Approve/Eligible,
(b) Approve/Ineligible, (c) Refer/Eligible, or (d) EA-I,-II,-III/Eligible,
or (ii) receives one of the following responses from Freddie Mac Loan
Prospector: (x) Accept/Accept, or (y) A-Minus. Mortgage Loans
receiving a “Refer/Eligible” response must be accompanied by the Takeout
Investor’s approval to the exception. Mortgage Loans receiving approval under
the “Expanded Approval” (“EA”) criteria or “A-Minus” criteria are permitted
only if Seller provides Administrative Agent with a copy of the Fannie Mae or
Freddie Mac contract which allows delivery by Seller for this loan type.
Mortgage Loans receiving an “Approve/Ineligible” response are permitted only if
Seller or applicable Takeout Investor represents and warrants to Administrative
Agent that Seller possesses an Agency waiver with respect to such Mortgage Loan,
thereby making such Mortgage Loan Agency eligible.


 


5













 


“Consolidated” shall mean the consolidation of
any Person in accordance with GAAP, with its properly consolidated
subsidiaries. References herein to a Person’s Consolidated financial
statements, financial position, financial condition, liabilities, etc. refer to
the consolidated financial statements, financial position, financial condition,
liabilities, etc. of such Person and its properly consolidated subsidiaries.


 


“Costs” shall have the meaning specified in
Section 15 hereof.


 


“Countrywide Purchase Agreement” shall mean
that certain Loan Purchase Agreement, dated as of June 26, 1995 between
Countrywide Home Loans, Inc. and Seller, and all amendments, modifications
and supplements thereto and amendments and restatements thereof.


 


“Credit Agreement” shall mean that certain
Credit Agreement dated as of January 24, 2008, by and among Seller as the
borrower (the “Borrower”),
and Administrative Agent as the Lender (the “Lender”).


 


“Credit Agreement Termination Date” shall mean
January 15, 2009.


 


“Custodial Agreement” shall mean that certain
Custodial Agreement dated as of the date hereof, among the Seller,
Administrative Agent and Custodian as the same may be amended from time to
time.


 


“Custodian” shall mean Guaranty Bank and any
successor under the Custodial Agreement.


 


“Debtor Laws” shall mean all applicable
liquidation, conservatorship, bankruptcy, moratorium, arrangement,
receivership, insolvency, reorganization or similar Laws from time to time in
effect affecting the rights of creditors generally and general principles of
equity.


 


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


 


“Defaulting Party” shall have the meaning set
forth in Section 28(b) hereof.


 


“Dividends,” in respect of any corporation,
shall mean (a) cash distributions or any other distributions on, or in
respect of, any class of equity security of such corporation, except for
distributions made solely in shares of securities of the same class; and
(b) any and all funds, cash or other payments made in respect of the
redemption, repurchase or acquisition of such securities.


 


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


 


“Due Date” shall mean the day of the month on
which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.


 


“Due Diligence Costs” shall have the meaning
set forth in Section 29 hereof.


 


6













 


“Due Diligence Review” shall mean the
performance by the Administrative Agent or Buyers of any or all of the reviews
permitted under Section 29 hereof with respect to any or all of the
Mortgage Loans, as desired by the Administrative Agent and Buyers from time to
time.


 


“Effective Date” shall mean the date upon
which the conditions precedent set forth in Section 3.1 shall have been
satisfied, but in no event earlier than January 15, 2009.


 


“Electronic Agent” shall mean
MERSCORP, Inc. or its successors in interest or assigns.


 


“Electronic Tracking Agreement” shall mean an
Electronic Tracking Agreement among Administrative Agent, Seller, MERS and the
Electronic Agent, to the extent applicable as the same may be amended,
supplemented, restated or otherwise modified from time to time.


 


“Electronic Transmissions” shall have the
meaning specified in Section 41 hereof.


 


“Eligible Mortgage Loan” shall mean either
(a) a Purchased Mortgage Loan or (b) a Mortgage Loan transferred to
the Administrative Agent pursuant to Section 3.6 or Section 4 hereof,
which in either case satisfies the following requirements:


 


(a)                             Such Mortgage Loan is a
binding and valid obligation of the Mortgagor thereon, in full force and effect
and enforceable in accordance with its terms, except as enforceability may be
limited by Debtor Laws;


 


(b)                            The Mortgage Note
evidencing such Mortgage Loan is genuine in all respects as appearing on its
face and as represented in the books and records of Seller, and all information
set forth therein is true and correct;


 


(c)                             Such Mortgage Loan is free
of any default (other than as permitted by subparagraph (d) below) of any
party thereto (including Seller), counterclaims, offsets and defenses,
including the defense of usury, and from any rescission, cancellation or
avoidance, and all right thereof, whether by operation of Law or otherwise;


 


(d)                            No payment under such
Mortgage Loan is more than thirty (30) days past due the payment due date set
forth in the underlying Mortgage Note and Mortgage;


 


(e)                             The Mortgage Note and
related Mortgage evidencing such Mortgage Loan contains the entire agreement of
the parties thereto with respect to the subject matter thereof, has not been
modified or amended in any respect not expressed in writing therein and is free
of concessions or understandings with the Mortgagor thereon of any kind not
expressed in writing therein;


 


(f)                               Such Mortgage Loan is in
all respects in accordance with all Requirements of Law applicable thereto, including,
without limitation, the federal Consumer Credit Protection Act and the
regulations promulgated thereunder and all applicable usury Laws and
restrictions, and all notices, disclosures and other statements or information
required by Law or regulation to be given, and any other act required by Law or
regulation to be performed, in connection with such Mortgage Loan have been
given and performed as required;


 


7













 


(g)                                 All advance payments
and other deposits on such Mortgage Loan have been paid in cash, and no part of
said sums has been loaned, directly indirectly, by Seller to the Mortgagor,
and, other than as disclosed to the Administrative Agent in writing, there have
been no prepayments;


 


(h)                                 At all times such
Mortgage Loan will be free and clear of all Liens, except those Liens in favor
of the Administrative Agent, for the benefit of the Buyers;


 


(i)                                     The Property
covered by such Mortgage Loan is insured against loss or damage by fire and all
other hazards normally included within standard extended coverage in accordance
with the provisions of such Mortgage Loan with Seller named as a loss payee
thereon;


 


(j)                                     Such Mortgage Loan
is secured by a first Mortgage, or in the case of any Second Lien Loan, a second
Mortgage, on Single Family property;


 


(k)                                  The date of
origination of such Mortgage Loan is not more than thirty (30) days prior to
the date such Mortgage Loan was first included in the Asset Base;


 


(l)                                     Such Mortgage Loan
has not been included in the Asset Base for more than ninety (90) days;


 


(m)                               If such Mortgage Loan is
included in the Asset Base and has been withdrawn from the possession of the
Administrative Agent on terms and subject to conditions set forth in the
Custodial Agreement:


 


(i)                                If such Mortgage Loan
was withdrawn by Seller for purposes of correcting clerical or other
non-substantive documentation problems, the Mortgage Note and other documents
relating to such Mortgage Loan are returned to the Administrative Agent within
ten (10) calendar days from the date of withdrawal; and the Asset Value of
such withdrawn and released Mortgage Loan when added to the Asset Value of
other Mortgage Loans which have been similarly released to Seller and have not
been returned does not exceed $2,500,000.


 


(ii)                             If such Mortgage Loan was
shipped by the Administrative Agent directly to a permanent investor for
purchase, (x) such investor is in full compliance with the terms of the
bailee letter under which such Mortgage loan was shipped, and (y) the full
purchase price for such Mortgage Loan has been received by the Administrative
Agent (or such Mortgage Loan has been returned to the Administrative Agent)
within forty-five (45) calendar days from the date of shipment by the
Administrative Agent.


 


(n)                                 Such Mortgage Loan is
subject to a Takeout Commitment which is in full force and effect;


 


(o)                                 Such Mortgage Loan
conforms to and satisfies the requirements for one of the following Mortgage
Loan classification and has been designated by Seller as one (1), and only one (1),
of the following: (i) Prime Loan or (ii) Second Lien Loan; provided
that, within each Mortgage Loan classification listed above, the Asset Value of
such Mortgage Loan when


 


8













 


added to the Asset Value of all other Mortgage Loans in the same
Mortgage Loan classification does not exceed the Applicable Sublimit for such
Mortgage Loan classification;


 


(p)                            The Mortgage File has been
delivered to the Administrative Agent prior to the inclusion of such Mortgage Loan
in any computation of the Asset Base or, if such items have not been delivered
to the Administrative Agent on or prior to the date such Mortgage Loan is first
included in any computation of the Asset Base, (a) Seller has pledged and
agreed to deliver the Mortgage File pursuant to a Transaction Request delivered
to Administrative Agent prior to such inclusion, and (b) the Asset Value
of such Mortgage Loan when added to the Asset Value of all other Mortgage Loans
for which the Administrative Agent has not received the Mortgage File does not
exceed the Applicable Sublimit for Wet Loans, provided that all Mortgage Files
with respect to such Mortgage Loan shall be delivered to the Administrative
Agent within seven (7) Business Days after the Purchase Date with respect
thereto;


 


(q)                            No more than four
(4) Eligible Mortgage Loans with the same Mortgagor or an Affiliate of
such Mortgagor are included in the Asset Base at the same time, provided
further, that such Mortgage Loans must be no more than a maximum of one
(1) Principal Residence Mortgage Loan, one (1) Second/Vacation
Property Mortgage Loan, and two (2) Investment Loans;


 


(r)                               The Property covered by
such Mortgage Loan is located within fifty United States;


 


(s)                             Such Mortgage Loan has
been underwritten by the originator thereof in accordance with such originator’s
then current underwriting guidelines, which underwriting guidelines have been
previously approved by the Administrative Agent in its reasonable discretion;
and


 


(t)                               The representations and
warranties set forth in Section 11.22 hereof are true and correct for such
Mortgage Loan at any time.


 


“E-Mail Address” shall have the meaning
specified in Section 41 hereof.


 


“Environmental Laws” shall mean any and all
Laws relating to (a) the protection of the environment,
(b) emissions, discharges or releases of pollutants, contaminants,
chemicals or hazardous or toxic substances or wastes into the environment
including ambient air, surface water, ground water or land, or (c) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes or the clean-up or other remediation
thereof.


 


“ERISA” shall, with respect to any Person,
mean the Employee Retirement Income Security Act of 1974, as amended from time
to time and any successor thereto, and the regulations promulgated and rulings
issued thereunder.


 


“ERISA Affiliate” shall, with respect to any
Person, mean any Person which is a member of any group of organizations
(i) described in Section 414(b) or (c) of the Code of which
such Person is a member, or (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA


 


9













 


and Section 412(n) of the Code, described in
Section 414(m) or (o) of the Code of which such Person is a
member.


 


“Escrow Payments” shall mean, with respect to
any Mortgage Loan, the amounts constituting ground rents, taxes, assessments,
water rates, sewer rents, municipal charges, mortgage insurance premiums, fire
and hazard insurance premiums, condominium charges, and any other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to the
Mortgage or any other document.


 


“E-Sign Act” shall mean the Electronic
Signatures in Global and National Commerce Act, as amended from time to time.


 


“Event of Default” shall have the meaning
specified in Section 13 hereof, provided that any requirement in
connection with such event for the giving of notice or the lapse of time, or
the happening of any further condition, event or act necessary for such event
to constitute an Event of Default has been satisfied.


 


“Event of ERISA Termination” shall mean, with
respect to the Seller, (i) with respect to any Plan, a Reportable Event,
as defined in Section 4043 of ERISA, as to which the PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA that it
be notified within 30 days of the occurrence of such event, or (ii) the
withdrawal of Seller or any ERISA Affiliate thereof from a Plan during a plan
year in which it is a substantial employer, as defined in
Section 4001(a)(2) of ERISA, or (iii) the failure by Seller or
any ERISA Affiliate thereof to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA with respect to any
Plan, including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, or (iv) the distribution under
Section 4041 of ERISA of a notice of intent to terminate any Plan or any
action taken by Seller or any ERISA Affiliate thereof to terminate any Plan, or
(v) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is a part if
Seller or any ERISA Affiliate thereof fails to timely provide security to the
Plan in accordance with the provisions of said Sections, or (vi) the
institution by the PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or
(vii) the receipt by Seller or any ERISA Affiliate thereof of a notice
from a Multiemployer Plan that action of the type described in the previous
clause (vi) has been taken by the PBGC with respect to such Multiemployer
Plan, or (viii) any event or circumstance exists which may reasonably be
expected to constitute grounds for Seller or any ERISA Affiliate thereof to
incur liability in excess of $500,000.00 under Title IV of ERISA or under
Sections 412(c)(11) or 412(n) of the Code with respect to any Plan.


 


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


 


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


 


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


 


10













 


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


 


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


 


(e)                             that such Person or any
Affiliate shall become insolvent; or


 


(f)                               if such Person or any
Affiliate is a corporation, such Person or any Affiliate, or any of their
subsidiaries, shall take any corporate action in furtherance of, or the action
of which would result in any of the actions set forth in the preceding clause
(a), (b), (c), (d) or (e).


 


“Exception Report” shall have the meaning set
forth in the Custodial Agreement.


 


“Excluded Taxes” shall have the meaning specified
in Section 7.5 hereof.


 


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


 


“Facility Fee” shall have the meaning set
forth in Section 39.1.


 


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


 


“FDIA” shall have the meaning set forth in
Section 33(c) hereof.


 


“FHA” shall mean the Federal Housing
Administration, an agency within the United States Department of Housing and
Urban Development, or any successor thereto, and including the Federal Housing
Commissioner and the Secretary of Housing and Urban Development where
appropriate under the FHA Regulations.


 


“FHA Loan” shall mean a Mortgage Loan insured
by the FHA.


 


11













 


“FHA Regulations” shall mean the regulations
promulgated by the Department of Housing and Urban Development under the
National Housing Act, as amended from time to time and codified in 24 Code of
Federal Regulations, and other Department of Housing and Urban Development
issuances relating to FHA Loans, including the related handbooks, circulars,
notices and mortgagee letters.


 


“FICO” shall mean FICO®, a registered
trademark of Fair Isaacs and Company, being the “delinquency predictor” model
established by Fair Isaacs and Company and shown on a credit report prepared by
Equifax, Experian, Trans Union, or any other authorized national credit
reporting agency. For all purposes hereunder, if two FICO scores are obtained
for any individual, the lower score shall be used. If three FICO scores are
obtained for any individual, the middle score shall be used.


 


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


 


“Financing Lease” shall mean (i) any
lease of Property if the then present value of the minimum rental commitment
thereunder should, in accordance with GAAP, be capitalized on a balance sheet
of the lessee, and (ii) any other lease obligations which are capitalized
on a balance sheet of the lessee.


 


“FIRREA” shall mean the Financial Institutions
Reform Recovery and Enforcement Act of 1989, as amended from time to time, together
with the regulations from time to time promulgated with respect thereto.


 


“Fiscal Quarter” shall mean each period of
three calendar months ending March 31, June 30, September 30 and
December 31 of each year.


 


“Fiscal Year” shall mean each period of twelve
(12) calendar months ending December 31 of each year.


 


“Fitch” shall mean Fitch Ratings, Inc.,
or any successor thereto.


 


“Floating LIBOR” shall mean, for any day, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the rate appearing on Bloomberg Professional (or, if not available,
any other nationally recognized trading screen reporting the British Bankers’
Association LIBOR) at 10:00 a.m. (Central time) as the British Bankers’
Association LIBOR for deposits in U.S. Dollars with a term equivalent to one
month. In the event that such rate does not appear on Bloomberg Professional, “Floating
LIBOR” for purposes of this definition shall be determined by reference to such
other comparable publicly available service for displaying London inter-bank
offered rates as may be selected by the Administrative Agent.


 


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


 


“Funding Account” shall mean the account
referred to in Section 9.2 hereof, and any successor non-interest bearing
demand checking account established by the Seller with the


 


12


 












 


Administrative Agent to be used for (a) the initial deposit of
proceeds of Transactions by the Administrative Agent; and (b) the funding
or purchase of a Mortgage Loan by Seller; provided that the Funding
Account shall be pledged to the Administrative Agent, for the benefit of
Buyers, and the Seller shall not be entitled to withdraw funds from the Funding
Account.


 


“GAAP” shall mean those generally accepted
accounting principles and practices which are recognized as such by the
Financial Accounting Standards Board (or any generally recognized successor)
and which, in the case of Seller and its Consolidated subsidiaries, are applied
for all periods after the date hereof in a manner consistent with the manner in
which such principles and practices were applied to the financial statements
described in Section 12.4 of this Repurchase Agreement. If any change in
any accounting principle or practice is required by the Financial Accounting
Standards Board (or any such successor) in order for such principle or practice
to continue as a generally accepted accounting principle or practice, all
reports and financial statements required hereunder with respect to Seller or
Parent may be prepared in accordance with such change, but all calculations and
determinations to be made hereunder may be made in accordance with such change
only after notice of such change is given to the Administrative Agent and the
Administrative Agent agrees to such change insofar as it affects the accounting
of Seller.


 


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


 


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


 


“Guaranty Obligation” of any Person shall mean
any contract, agreement or understanding of such Person pursuant to which such
Person guarantees, or in effect guarantees, any Indebtedness, lease, dividends
or other obligations (the “Primary
Obligations”) of any other Person (the “Primary Obligor”) in
any manner, whether directly or indirectly, contingently or absolutely, in
whole or in part, including without limitation agreements:


 


(a)           to
purchase such Primary Obligation or any property constituting direct or indirect
security therefor;


 


13













 


(b)         to
advance or supply funds (A) for the purchase or payment of any such
Primary Obligation, or (B) to maintain working capital or other balance
sheet conditions of the Primary Obligor or otherwise to maintain the net worth
or solvency of the Primary Obligor;


 


(c)          to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such Primary Obligation of the ability of the Primary Obligor
to make payment of such Primary Obligation; or


 


(d)         otherwise
to assure or hold harmless the owner of any such Primary Obligation against
loss in respect thereof;


 


provided that “Guaranty Obligation”
shall not include endorsements that are made in the ordinary course of business
of negotiable instruments or documents for deposit or collection and customary,
industry-standard indemnities given in connection with the sale of Mortgage
Loans by such Person which are not of a nature which would cause such sale to
be classified as a sale on a “recourse” basis. The amount of any Guaranty
Obligation shall be deemed to be the maximum amount for which the guarantor may
be liable pursuant to the agreement that governs such Guaranty Obligation,
unless such maximum amount is not stated or determinable, in which case the
amount of such obligation shall be the maximum reasonably anticipated liability
thereon, as determined by such guarantor in good faith.


 


“High Cost Mortgage Loan” shall mean a
Mortgage Loan classified as (a) a “high cost” loan under the Home
Ownership and Equity Protection Act of 1994 (b) a “high cost” or “covered”
loan as defined in the then current S&P LEVELS Version 5.6(c) Glossary
Revised Appendix E; or (c) a “high cost,” “threshold,” “covered,” or
“predatory” loan under any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law, regulation
or ordinance imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest rates, points
and/or fees).


 


“HUD” shall mean the Department of Housing and
Urban Development.


 


“Income” shall mean, with respect to any
Mortgage Loan at any time, any principal thereof then payable and all interest,
dividends or other distributions payable thereon.


 


“Indebtedness” of any Person at a particular
date shall mean 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, (b) all obligations of such Person under any
Financing Lease, (c) all obligations of such Person in respect of letters
of credit, acceptances, or similar obligations issued or created for the
account of such Person, (d) all Guarantees of such Person, (e) 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, (f) any liability of such Person in respect of unfunded vested
benefits under an ERISA Plan, (g) Net Mark-to-Market Exposure under Rate
Management Transactions, and (h) all liabilities of such Person in respect
of indemnities or repurchase obligations made in connection with the sale of
Mortgage Loans.


 


“Indemnified Party” shall have the meaning
specified in Section 15 hereof.


 


14













 


“Index” shall mean, with respect to each
adjustable rate Mortgage Loan, the index as provided in the related Mortgage
Note.


 


“Intercompany Loan” shall mean a loan or
advance from a Related Person to an Affiliate or shareholder, member or partner
of any Related Person.


 


“Investment Loan” shall mean a Mortgage Loan
(i) secured by a Mortgage on an Investment Property and (ii) covered
by a Takeout Commitment.


 


“Investment Property” shall mean a Single
Family dwelling which the Mortgagor has represented to Seller is not the
Principal Residence or Second/Vacation Property of the Mortgagor under the
related Mortgage Loan.


 


“Late Payment Fee” shall have the meaning
specified in Section 5.1 hereof.


 


“Law” shall mean any statute, law, regulation,
ordinance, rule, treaty, judgment, order, decree, permit, concession, franchise,
license, agreement or other governmental restriction of the United States or
any state or political subdivision thereof. Any reference to a Law includes any
amendment or modification to such Law, and all regulations, rulings, and other
Laws promulgated under such Law.


 


“Lien” shall mean any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (whether
statutory or otherwise), or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to secure
payment of any obligations or liabilities (including, without limitation, any
conditional sale or other title retention agreement, any Financing Lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction in respect of any of the foregoing).


 


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


 


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


 


“Margin Excess” shall have the meaning
specified in Section 4(e) hereof.


 


“Mark-to-Market” shall have the meaning
specified in Section 4(a) hereof.


 


“Market Value” on any day of determination,
the value of such Mortgage Loan determined as to any Mortgage Loan delivered to
the Administrative Agent pursuant to this Agreement by the Administrative
Agent, made in its reasonable discretion, based upon (a) information then
available to the Administrative Agent regarding quotes to dealers for the
purchase of mortgage notes similar to the Mortgage Notes that have been
delivered to the Administrative Agent pursuant to this Repurchase Agreement or
(b) sales prices actually received by the Seller for mortgage notes sold
by the Seller during the immediately preceding thirty (30) day period similar
to the Mortgage Notes that have been delivered to the Administrative Agent
pursuant to this Repurchase Agreement.


 


15













 


“Material Adverse Effect” shall mean a
material adverse effect on (a) the Property, business, operations or
financial condition of (i) the Seller or (ii) the Seller and any of
its Subsidiaries (in each case taken as a whole), (b) the ability of the
Seller or any of its Subsidiaries to perform its obligations under any of the
Repurchase Documents to which it is a party, (c) the validity or
enforceability of any of the Repurchase Documents and (d) the rights and
remedies of the Administrative Agent or Buyers under any of the Repurchase
Documents.


 


“Maximum Purchase Price” shall mean
$60,000,000.


 


“Maximum Rate” shall mean, with respect to
each Buyer, the maximum non-usurious rate of interest that such Buyer is
permitted under applicable Law to contract for, take, charge, or receive with
respect to its Purchases.


 


“MERS” shall mean Mortgage Electronic
Registration Systems, Inc., a corporation organized and existing under the
laws of the State of Delaware, or any successor thereto.


 


“MERS Agreement” shall mean those agreements
by and among Seller, Administrative Agent, MERS and MERSCORP, Inc., as
amended, modified, supplemented, extended, restated or replaced from time to
time, including, without limitation, the Electronic Tracking Agreement.


 


“MERS Mortgage Loan” shall mean any Purchased
Mortgage Loan registered with MERS on the MERS System.


 


“MERS® System” shall mean the system of
recording transfers of mortgages electronically maintained by MERS.


 


“MIN” shall mean, with respect to each
Mortgage Loan, the Mortgage Identification Number for such Mortgage Loan
registered with MERS on the MERS® System.


 


“MOM Loan” shall mean, with respect to any
Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as
nominee for the originator or Seller, as the case may be, of such Mortgage Loan
and its successors and assigns.


 


“Monthly Payment” shall mean the scheduled
monthly payment of principal and/or interest on a Mortgage Loan.


 


“Moody’s” shall mean Moody’s Investors
Service, Inc. or any successors thereto.


 


“Mortgage” shall mean each mortgage,
assignment of rents, security agreement and fixture filing, deed of trust, deed
to secure debt, or similar instrument on standard forms customary for
transactions of such type and otherwise in form and substance satisfactory to
the Administrative Agent in its reasonable discretion, securing a Mortgage Note
and granting a perfected, first or second priority lien on Single Family
property.


 


“Mortgage File” shall mean with respect to
each Mortgage Loan, the documents and other items specified in Schedule III hereto relating to the
Transaction.


 


16













 


“Mortgage Loan” shall mean any first or second
lien, one-to-four-family residential mortgage loan evidenced by a Mortgage Note
and secured by a Mortgage, which is an Eligible Mortgage Loan subject to a
Transaction hereunder, which in no event shall include any mortgage loan which
(a) is subject to Section 226.32 of Regulation Z or any similar state
law or local (relating to high interest rate credit/lending transactions),
(b) includes any single premium credit life or accident and health
insurance or disability insurance, or (c) is a High Cost Mortgage Loan.


 


“Mortgage Loan Schedule” shall mean with
respect to any Transaction as of any date, a mortgage loan schedule in the form
of an Excel® or other electronic medium approved by the Administrative Agent
generated by Seller and delivered to the Administrative Agent and the
Custodian, which provides information (including, without limitation, the
information set forth on Exhibit A
attached hereto) relating to the Purchased Mortgage Loans in a format
acceptable to the Administrative Agent.


 


“Mortgage Note” shall mean the promissory note
or other evidence of indebtedness evidencing the Indebtedness of a Mortgagor
under a Mortgage Loan.


 


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


 


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


 


“Multiemployer Plan” shall mean, with respect
to any Person, a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding five years contributed to by the Seller or
any ERISA Affiliate thereof on behalf of its employees and which is covered by
Title IV of ERISA.


 


“Net Income” shall mean, for any Person for
any period, the net income (less capital expenditures and net charge offs) of
such Person for such period as determined in accordance with GAAP.


 


“Net Mark to Market Exposure” of a Person
shall mean, as of any date of determination, the excess (if any) of all
unrealized losses over all unrealized profits of such Person arising from Rate
Management Transactions. “Unrealized losses” shall mean the fair market value
of the cost to such Person of replacing such Rate Management Transactions as of
the date of determination (assuming the Rate Management Transactions were to be
terminated as of that date), and “unrealized profits” shall mean the fair
market value of the gain to such Person of replacing such Rate Management
Transactions as of the date of determination (assuming such Rate Management
Transactions were to be terminated as of that date)


 


“Net Worth” of any Person shall mean, as of
any date, an amount equal to all Consolidated assets of such Person minus such
Person’s Consolidated liabilities, each as determined by GAAP.


 


“Nondefaulting Party” shall have the meaning
set forth in Section 28(b) hereof.


 


“Non-Excluded Taxes” shall have the meaning
set forth in Section 7.1 hereof.


 


17













 


“Non-Exempt Buyer” shall have the meaning set
forth in Section 7.5 hereof.


 


“Non-Recourse Debt” shall mean Indebtedness
under a credit or repurchase facility payable solely from the assets sold or
pledged to secure such facility under which facility no purchaser or creditor
has recourse to the Seller or any of their Subsidiaries if such assets are
inadequate or unavailable to pay off such credit or repurchase facility, and
neither the Seller nor any of their Subsidiaries effectively has any obligation
to directly or indirectly pay any such deficiency.


 


“Non-Use Fee” shall have the meaning set forth
in Section 39.2.


 


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


 


“OFAC” shall have the meaning set forth in
Section 11.32 hereof.


 


“Operating Account” shall mean the
non-interest bearing demand checking account (whether one or more) established
by the Seller with the Administrative Agent to be used for the Seller’s
operations. Subject to the Administrative Agent’s rights under Section 19
hereof, the Seller shall be entitled to withdraw funds from the Operating
Account.


 


“Other Taxes” shall have the meaning set forth
in Section 7.2 hereof.


 


“Parent” shall mean The Ryland
Group, Inc., a Maryland corporation, and owner of all of the outstanding
capital stock of Seller.


 


“Parent Debt Agreement” shall mean that
certain Credit Agreement, dated as of January 12, 2006, among the Parent,
JPMorgan Chase Bank, N.A., as agent, and the lenders party thereto, and all
amendments, modifications and supplements thereto and amendments and
restatements thereof, and including any subsequent credit facilities
refinancing any indebtedness thereunder.


 


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


 


“PBGC” shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its functions under
ERISA.


 


“Periodic Advance Repurchase Payment” shall
have the meaning specified in Section 5.1.


 


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


 


18













 


“Plan” shall mean, with respect to any Person,
any employee benefit or similar plan that is or was at any time during the
current year or immediately preceding five years established or maintained by
such Person or any ERISA Affiliate thereof and that is covered by Title IV of
ERISA, other than a Multiemployer Plan.


 


“PMI Policy” shall mean a policy of primary
mortgage guaranty insurance issued by a Qualified Insurer, as required by this
Repurchase Agreement with respect to certain Mortgage Loans.


 


“Post-Default Rate” shall mean, at the time in
question, with respect to all Obligations, the sum of (i) four percent
(4%) per annum, plus (ii) the per annum interest rate otherwise payable in
respect of the Obligations, provide that in no event shall the Default Rate
Ever exceed the Maximum Rate.


 


“Price Differential” shall mean, with respect
to any Transaction hereunder as of any date, the aggregate amount obtained by
daily application of the Pricing Rate (or, during the continuation of an Event
of Default, by daily application of the Post-Default Rate) for such Transaction
to the Purchase Price for such Transaction on a 360-day per year basis for the
actual number of days during the period commencing on (and including) the
Purchase Date for such Transaction and ending on (but excluding) the Repurchase
Date (reduced by any amount of such Price Differential previously paid by the
Seller to Administrative Agent for the benefit of the Buyers with respect to
such Transaction).


 


“Pricing Rate” shall mean the Adjusted
Floating LIBOR. Each calculation by the Administrative Agent of the amount of
the Pricing Rate shall be conclusive absent manifest error.:


 


“Prime Loan” shall mean a Single Family
Mortgage Loan which is secured by a first-lien mortgage and is a Conforming
Mortgage Loan, FHA Loan or VA Loan.


 


“Principal Residence” shall mean a Single
Family dwelling that the Mortgagor represents as being occupied as the
Mortgagor’s primary residence.


 


“Prohibited Person” shall have the meaning set
forth in Section 11.32 hereof.


 


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


 


“PUHC Act” shall mean the Public Utility
Holding Company Act of 1935, as amended.


 


“Purchase Date” shall mean any date on which
Purchased Mortgage Loans are transferred by the Seller to the Administrative
Agent for the benefit of the Buyers.


 


“Purchase Price” shall mean, on any date, an
aggregate amount equal to the amount paid in cash to the Seller by the Buyers
for Purchased Mortgage Loans, for which the Purchase Price portion of the
Repurchase Price has not been paid, except where the Administrative Agent and
the Seller agree otherwise, such Purchase Price shall be decreased by the
amount without duplication, of any, Income, Purchase Price Decrease and any Margin
Deficit actually paid and


 


19













 


received by Administrative Agent for the benefit of the Buyers pursuant
to Section 5 or applied to reduce the Seller’s obligations under
Section 4(a) hereof. The Purchase Price for a Mortgage Loan delivered
by Seller under Section 3.6 shall be Zero Dollars ($0.00) unless and until
it is submitted by Seller as part of a Transaction.


 


“Purchase Price Decrease” shall have the
meaning specified in Section 3.4(d).


 


“Purchase Price Decrease Date” shall have the
meaning specified in Section 3.4(c).


 


“Purchase Price Percentage” shall mean for
each Mortgage Loan classification listed below, the rate listed opposite such
Mortgage Loan classification:


 


	
  Prime Loans (Wet)

  	
   

  	
  98%

  
	
  Second Lien Loans (Wet)

  	
   

  	
  90%

  
	
  Prime Loans (Dry)

  	
   

  	
  98%

  
	
  Second Lien Loans (Dry)

  	
   

  	
  90%

  



 


“Purchased Mortgage Loans” shall mean the
Mortgage Loans sold by Seller to Administrative Agent for the benefit of the
Buyers in a Transaction or transferred to Administrative Agent pursuant to
Section 3.6 or Section 4 hereof.


 


“Qualified Insurer” shall mean a mortgage
guaranty insurance company duly authorized and licensed where required by law
to transact mortgage guaranty insurance business with respect to PMI Policies,
and a property insurance company duly authorized and licensed where required by
law in the state where the Mortgaged Property is located with respect to
insurance described in clause (i) of the definition of Eligible Mortgage
Loan, and both acceptable under the Underwriting Guidelines.


 


“Quarterly Facility Usage” shall mean for each
Fiscal Quarter, the average Purchase Price for such Fiscal Quarter.


 


“Rate Management Obligations” of a Person
shall mean any and all obligations of such Person, whether absolute or contingent
and howsoever and whensoever created, arising, evidenced or acquired (including
all renewals, extensions and modifications thereof and substitutions therefor),
under (i) any and all Rate Management Transactions, and (ii) any and
all cancellations, buy backs, reversals, terminations or assignments of any
Rate Management Transactions.


 


“Rate Management Transaction” shall mean any
transaction (including an agreement with respect thereto) now existing or
hereafter entered into between Seller and any Person which is a rate swap,
basis swap, forward rate-transaction, commodity swap, commodity option, equity
or equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.


 


20













 


“Register” shall have the meaning specified in
Section 22.2 hereof.


 


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


 


“Regulation T, U and X” shall mean Regulations
T, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from
time to time.


 


“Regulation Z” shall mean Regulation Z promulgated
by the Board of Governors of the Federal Reserve System (or any successor), 12
C.F.R. Part 226, as the same may be modified and supplemented and in
effect from time to time.


 


“Related Persons” shall mean Seller and each
of Seller’s Subsidiaries.


 


“Reportable Event” shall mean any of the
events set forth in Section 4043(c) of ERISA, other than those events
as to which the thirty-day notice period is waived under subsections .21, .22,
..24, .26, .27 or .28 of PBGC Reg. § 4043.


 


“Repurchase Agreement” shall mean this Master
Repurchase Agreement, by and among Administrative Agent, Buyers and the Seller,
dated as of the date hereof, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.


 


“Repurchase Assets” shall have the meaning
provided in Section 8 hereof.


 


“Repurchase Date” shall mean the date on which
the Seller is to repurchase the Purchased Mortgage Loans subject to a
Transaction from Administrative Agent for the benefit of the Buyers, which date
shall be the earlier of (i) the applicable date requested pursuant to
Section 3.4 or (ii) the Termination Date, including any date
determined by application of the provisions of Sections 3 or 14.


 


“Repurchase Documents” shall mean this
Repurchase Agreement, the Custodial Agreement, the Servicer Notice, the MERS
Agreement, and the Administration Agreement.


 


“Repurchase Price” shall mean, for any
Mortgage Loan, the price at which such Purchased Mortgage Loan is to be
transferred from the Administrative Agent on behalf of the Buyers to the
Seller, which price will be calculated in each case (including Transactions
terminable upon demand) as the sum of the outstanding Purchase Price paid
therefor and the Price Differential thereon as of the applicable Repurchase
Date; provided, however, the amount constituting the Price Differential shall
be due and payable when and as set forth in Section 5.1.


 


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


 


“REO Property” shall mean real property
acquired by Seller, including a Mortgaged Property acquired through foreclosure
of a Mortgage Loan or by deed in lieu of such foreclosure.


 


21













 


“Requirement of Law” shall mean as to any
Person, the certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule, regulation,
procedure or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.


 


“S&P” shall mean Standard &
Poor’s Ratings Services, or any successor thereto.


 


“SEC” shall mean the Securities and Exchange
Commission.


 


“Second Lien Loan” shall mean a Single Family
Mortgage Loan which (i) has an unpaid principal balance less than
$150,000.00; (ii) is secured by a traditional closed-end second-lien
Mortgage known as a “piggy-back” second as such terms are traditionally defined
by the mortgage banking industry, (ii) has at least one Mortgagor with a
FICO score greater than or equal to 720, and (iii) has a CLTV less than or
equal to 90%, and (iv) is eligible for purchase by an Agency.


 


“Second/Vacation Property” shall mean a Single
Family dwelling that the Mortgagor has represented to Seller is not used for
rental purposes and that the Mortgagor occupies for some portion of the year.


 


“Section 7 Certificate” shall have the
meaning specified in Section 7.5(b) hereof.


 


“Securities Exchange Act of 1934” or “1934 Act” shall have
the meaning set forth in Section 34(a) hereof.


 


“Securities Investor Protection Act of 1970”
or “SIPA”
shall have the meaning set forth in Section 34(a) hereof.


 


“Seller” shall mean Ryland Mortgage Company,
an Ohio corporation and/or any successor in interest thereto.


 


“Seller’s Escrow Account” shall mean that
certain account, maintained by Seller, for its sole benefit at Ryland Title
Company.


 


“Servicer” shall mean the Seller, or any
successor or permitted assigns or any other Person approved by Administrative
Agent in writing (which approval shall not be unreasonably conditioned,
withheld or delayed).


 


“Servicer File” shall mean, with respect to
any Mortgage Loan, all Mortgage Loan papers and documents required to be
maintained pursuant to the Takeout Commitment and all other papers and records
of whatever kind or description, whether developed or originated by the Seller
or others, required to document or service the Mortgage Loan, including but not
limited to the items set forth in Schedule
IV, excluding the Mortgage File.


 


“Servicer Notice” shall mean the notice
acknowledged by the Servicer (when the Servicer is not the Seller)
substantially in the form of Exhibit J
hereto.


 


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“Servicing Agreement” shall mean a servicing
agreement between the Seller and Servicer, as the same may be amended from time
to time.


 


“Servicing Records” shall mean all contracts
and other documents, books, records and other information (including without
limitation, computer programs, tapes, discs, punch cards, data processing
software and related property and rights) maintained with respect to the
Servicing Rights.


 


“Servicing Rights” shall mean all of right,
title and interest of any Related Person in and under the Servicing Agreements,
including, without limitation, the rights of a Related Person to income and
reimbursement thereunder.


 


“Settlement Account” shall mean the account
referred to in Section 9.1 hereof, and any successor non interest bearing
demand deposit account established by the Seller with the Administrative Agent
to be used for (i) the deposit of proceeds from the repurchase of a
Purchased Mortgage Loan, (ii) the deposit of all income upon and during
the continuance of an Event of Default, and (iii) the payment of the
Obligations; provided that (a) the Settlement Account shall be
pledged to the Administrative Agent for the benefit of the Buyers, and
(b) the Seller shall not be entitled to withdraw funds from the Settlement
Account.


 


“Shipping Request” shall have the meaning set
forth in the Custodial Agreement.


 


“Single-Employer Plan” shall mean a
single-employer plan as defined in Section 4001(a)(15) of ERISA which is
subject to the provisions of Title IV of ERISA.


 


“Single Family” shall mean residential real
property consisting of a completed one-to-four unit single family dwelling
thereon (including Principal Residences, Second/Vacation Property and
Investment Property), which may be a condominium unit, and which is fully
completed and ready for occupancy, and which is not used for commercial
purposes, is not a leasehold interest, and is not a manufactured or mobile
home.


 


“Statement Date” shall have the meaning set
forth in Section 11.7 hereof.


 


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


 


“Takeout Commitment” shall mean, with respect
to any Eligible Mortgage Loan, a written master commitment of a Takeout
Investor to purchase a pool of Mortgage Loans or an individual commitment of a
Takeout Investor to purchase an individual Mortgage Loan under which such Eligible
Mortgage Loan(s) will be delivered to such Takeout Investor on terms
customary for transactions of this type and otherwise satisfactory to the
Administrative Agent, in


 


23













 


its reasonable discretion, and under which the Seller is obligated to
sell said Eligible Mortgage Loan(s), and which are valid and enforceable in
accordance with their respective terms except as enforceability may be limited
by Debtor Laws.


 


“Takeout Investor” shall mean any institution
listed on Exhibit I
hereto which has made a Takeout Commitment and has been approved by
Administrative Agent.


 


“Tangible Net Worth” shall mean, as of any
date, for any Person, the Net Worth of such Person minus all
Consolidated assets of such Person which would be classified as intangible
assets under GAAP, including but not limited to goodwill (whether representing
the excess cost over book value of assets acquired or otherwise), patents,
trademarks, trade names, copyrights, franchises, deferred charges, and
capitalized servicing rights.


 


“Taxes” shall have the meaning set forth in
Section 7.1 hereof.


 


“Termination Date” shall mean the earlier of
(i) January 14, 2010 ( or (ii) such other date as provided for
in the Repurchase Documents.


 


“Total Adjusted Liabilities” shall mean all
Indebtedness of Seller and its consolidated Subsidiaries including Non-Recourse
Debt and all contingent liabilities and obligations (including recourse
servicing, recourse sale and other recourse obligations, and Guarantee,
indemnity and mortgage loan repurchase obligations); all as, in accordance with
GAAP, are reflected on a Seller’s consolidated balance sheet, as applicable. In
addition, for the purposes of reporting under this Repurchase Agreement, all
mortgage loans sold by the Seller to Countrywide Home Loans, Inc. under
the early purchase program set forth in and remaining subject to the terms of
the Countrywide Purchase Agreement shall be included in the calculation of
Total Adjusted Liabilities.


 


“Total Recourse Liabilities” shall mean Total
Adjusted Liabilities minus Non-Recourse Debt.


 


“Transaction” has the meaning specified in
Section 1.


 


“Transaction Request” shall mean a Transaction
Request together with a Mortgage Loan Schedule delivered by Seller to
Administrative Agent, substantially in the form of Exhibit A  hereto, to enter
into a Transaction.


 


“UCC” shall mean the Uniform Commercial Code,
as defined below.


 


“UETA” shall mean the Texas Uniform Electronic
Transaction Act, as amended from time to time.


 


“Underwriting Guidelines” shall mean the
respective underwriting guidelines promulgated by the Takeout Investors, as
such underwriting guidelines may be amended from time to time.


 


24













 


“Unencumbered Liquid Assets” shall mean, as of
any date of determination, the sum of (a) Cash which is not subject to any
liens or security interests, and (b) Cash Equivalents which are not
subject to any liens or security interests.


 


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


 


“VA” shall mean the U.S. Department of
Veterans Affairs, an agency of the United States of America, or any successor
thereto including the Secretary of Veterans Affairs.


 


“VA Loan” shall mean a Mortgage Loan
guaranteed by the VA.


 


“Wet Loan” shall mean an Eligible Mortgage
Loan included in the Asset Base (a) that has been closed and funded,
(b) for which the complete Mortgage File is in the possession of Seller,
the Seller’s Servicer, a title agent, or a closing attorney, and (c) for
which the complete Mortgage File shall be delivered to the Custodian on or
prior to the seventh (7th) Business Day after the related Purchase Date.


 


Section 3.           Initiation/Purchase;
Termination; Repurchase.


 


3.1                             Conditions
Precedent to Initial Transaction. Administrative Agent’s obligation to
enter into the initial Transaction hereunder, for the benefit of the Buyers, is
subject to the satisfaction, immediately prior to or concurrently with the making
of such Transaction, of the condition precedent that Administrative Agent shall
have received from the Seller any fees and expenses then due and payable
hereunder, and all of the following documents, each of which shall be
satisfactory to Administrative Agent and the Buyers in form and substance:


 


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


 


(b)                               Opinions
of Counsel. An opinion or opinions of outside counsel and general counsel
to the Seller, satisfactory to the Administrative Agent;


 


(c)                                Organizational
Documents. A certificate of corporate existence of Seller delivered to
Administrative Agent prior to the Effective Date and an officer’s certificate
satisfactory to the Administrative Agent, including certified copies of their
articles of incorporation, by-laws, resolutions and incumbency (or equivalent
documents) of Seller and of all corporate or other authority for Seller with
respect to the execution, delivery and performance of the Repurchase Documents
and each other document to be delivered by Seller from time to time in
connection herewith;


 


25













 


(d)           Security Interest. In accordance with
Section 8, evidence that all other actions necessary or, in the opinion of
Administrative Agent, desirable to perfect and protect Administrative Agent’s
and Buyers’ interest in the Purchased Mortgage Loans and other Repurchase
Assets have been taken, including, without limitation, UCC searches and duly
authorized and filed Uniform Commercial Code financing statements on
Form UCC-1;


 


(e)           Credit Agreement. All obligations
owed by the Seller under the Credit Agreement shall be paid in full on the
Credit Agreement Termination Date;


 


(f)            Insurance. Evidence that Seller has
added Administrative Agent as agent for the Buyers as an additional loss payee
under their Fidelity Insurance and copies thereof;


 


(g)           Tax Identification Number. Tax
identification number for Seller to be listed below Seller’s name on its
signature page hereof; and


 


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


 


3.2           Conditions Precedent to all Transactions.   Administrative Agent’s obligation to enter
into each Transaction, for the benefit of Buyers, (including the initial
Transaction) is subject to the satisfaction of the following further conditions
precedent, both immediately prior to entering into such Transaction and also
after giving effect thereto:


 


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


 


(b)          Both immediately prior
to the Transaction and also after giving effect thereto the representations and
warranties made by Seller in Section 11 hereof, shall be true, correct and
complete on and as of such Purchase Date in all material respects with the same
force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific earlier date, as of such specific earlier date);


 


(c)           The amount requested in the Transaction
Request does not exceed the then Available Purchase Price;


 


(d)          After giving effect to
the requested Transaction, the Asset Value of all Purchased Mortgage Loans in
the Asset Base that have not been repurchased is not less than the aggregate
Purchase Price; and


 


(e)          The Custodian shall have
completed its examination of the Mortgage Files as set forth in Section 3.1
(except with respect to each Eligible Mortgage Loan which is a Wet Loan subject
to Section 3.2) of the Custodial Agreement, the Administrative Agent shall
have reviewed such other documents, records, agreements, instruments, mortgaged
properties or information relating to such Purchased Mortgage Loans as the
Administrative Agent in its sole discretion deems appropriate to review, and
such examination and review shall be satisfactory to the Custodian and the
Administrative Agent in their sole discretion;


 


26













 


(f)            The Administrative Agent shall have
received all fees and expenses of counsel to the Administrative Agent as
contemplated by Sections 15.2, 29 and 39, then due and payable, which amount,
at the Administrative Agent’s option, may be withheld from any Transaction
hereunder;


 


(g)           To the extent Seller is selling Mortgage
Loans which are registered on the MERS® System, the Seller shall have delivered
an Electronic Tracking Agreement entered into, duly executed and delivered by
the parties thereto (including, the Administrative Agent) and being in full
force and effect, free of any modification, breach or waiver; and


 


(h)           Each Transaction Request delivered by Seller
hereunder shall constitute a certification by Seller that all the conditions
set forth in this Section 3.2 and Section 3.3 have been satisfied
(both as of the date of such notice or request and as of the date of such
purchase).


 


3.3           Initiation.


 


(a)           Seller shall electronically deliver a
Transaction Request to the Administrative Agent by 3:00 p.m. (Central
time) on the date Seller wishes to enter into a Transaction. Such Transaction
Request shall include a Mortgage Loan Schedule (which shall also be delivered
electronically to Administrative Agent’s Mortgage Warehouse Services Division)
and, if applicable, the Warehouse Lenders Release in the form of Exhibit C hereto, duly executed by
all Persons holding a lien, security interest or other encumbrance on the
Mortgage Loans being purchased by the Administrative Agent, except for liens,
security interests and other encumbrances held by the Administrative Agent.


 


(b)           In no event shall a Transaction be entered
into when the Repurchase Date for such Transaction would be later than the
Termination Date.


 


(c)           Except with respect to each Eligible
Mortgage Loan which is a Wet Loan, the Seller shall deliver to the Custodian
the Mortgage File pertaining to each Eligible Mortgage Loan in accordance with
the terms of the Custodial Agreement.


 


(d)           Subject to the provisions of Sections 3.2
and 3.3, the Purchase Price will then be made available to the Seller by the
Administrative Agent on behalf of the Buyers, by transferring to the Funding
Account and from the Funding Account to Seller’s Escrow Account, both via wire
transfer in funds immediately available, the aggregate amount of such Purchase
Price by 4:00 p.m. (Central time).


 


3.4           Repurchase, Purchase Price Decrease.


 


(a)           The Repurchase Date for each Transaction
shall not be later than the date which is ninety (90) days after the related
Purchase Date.


 


(b)           The Seller may from time to time repurchase
or ship any of its Purchased Mortgage Loans as set forth in this Section,
unless a Default or an Event of Default has occurred and is continuing. The
Seller may repurchase Purchased Mortgage Loans without penalty or premium,
subject to the last sentence of this Section 3.4(b), on the date provided
in the applicable Repurchase Request, or pursuant to a Shipping Request. The
Repurchase Price


 


27













 


payable for the repurchase of any such Purchased Mortgage Loan shall be
reduced as provided in Section 5.4. If the Seller intends to make such a
repurchase, the Seller shall deliver to the Administrative Agent a Repurchase
Request for direct repurchase of such Purchased Mortgage Loan by Seller or a
Shipping Request for shipping such Purchased Mortgage Loans to and purchase by
a Takeout Investor hereto, at least one (1) Business Day prior to the
requested Repurchase Date. The amounts set forth on the Repurchase Request and
Shipping Request shall be applied to the Repurchase Price for the applicable
Purchased Mortgage Loans.


 


(c)           On the Repurchase Date, the Administrative
Agent shall reassign the Purchased Mortgage Loans being repurchased to Seller
or its designee against the simultaneous transfer to the Settlement Account of
an amount as follows:


 


(i)            if after such reassignment and application
of an amount equal to the Repurchase Prices for such Purchased Mortgage Loans,
the aggregate Purchase Price for all Purchased Mortgage Loans in the Asset Base
is less than or equal to the aggregate Asset Value for all such
Purchased Mortgage Loans, an amount equal to the aggregate of the Repurchase
Prices of such Purchased Mortgage Loans, or


 


(ii)           if after such reassignment and application
of an amount equal to the Repurchase Prices for such Purchased Mortgage Loans,
the aggregate Purchase Price for all Purchased Mortgage Loans in the Asset Base
is more than the aggregate Asset Value for all such Purchased Mortgage
Loans, an amount equal to the greater of (1) the aggregate of the
Repurchase Prices of such Purchased Mortgage Loans or (2) the aggregate of
purchase price for all such Purchased Mortgage Loans under the Takeout
Commitment


 


provided, however, that the Seller is obligated (x) to obtain the
Mortgage Files from the Custodian at the Seller’s expense on or after the
Repurchase Date and (y) to pay any accrued and unpaid Price Differential
relating to such Purchased Mortgage Loans being repurchased on the next
succeeding Payment Date immediately following such Repurchase Date and in
accordance with Section 5. Upon payment on the Repurchase Date of the
amount set forth in (i) or (ii) above, as applicable, (other than the
portion constituting the Price Differential) relating to such Purchased
Mortgage Loans being repurchased, the Transaction will be terminated.


 


(d)           Seller may at any time, and from time to
time, request a decrease in the Purchase Price (a “Purchase Price Decrease”)
of some or all of the Mortgage Loans in the Asset Base by sending a notice to
the Administrative Agent at least one (1) Business Day prior to the date
that the Seller intends to effectuate such Purchase Price Decrease, specifying
the date of the Purchase Price Decrease (a “Purchase Price Decrease Date”). Unless
after such Purchase Price Decrease the aggregate Purchase Price for all
Purchased Mortgage Loans in the Asset Base is less than or equal to the
aggregate Asset Value for all such Purchased Mortgage Loans, the Purchase Price
Decrease amount shall be due and payable in Cash on the Purchase Price Decrease
Date and such Purchase Prices shall not be reduced on the books of the
Administrative Agent and the Buyers by the Purchase Price Decrease unless and
until the amount thereof has been paid by Seller to Administrative Agent in
Cash.


 


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3.5           Reserved.


 


3.6          Delivery of
Additional Mortgage Loans. From time to time the Seller may deliver to the
Administrative Agent Eligible Mortgage Loans without entering into a new
Transaction. The Seller and Administrative Agent agree that such Mortgage Loans
shall be treated as Purchased Mortgage Loans and part of the Asset Base for all
purposes hereunder, with a Purchase Price of Zero Dollars ($0.00) unless and
until it is submitted by Seller as part of a Transaction.


 


3.7          Reduction in Value of
Mortgage Loans in the Asset Base. For the purposes of calculating the Asset
Value of the Asset Base a Purchased Mortgage Loan’s value shall be reduced as
set forth in the definition of Asset Value, and shall be Zero Dollars ($0) as
specified therein and at any time it does not satisfy the requirements under
the definition of an Eligible Mortgage Loan.


 


Section 4.           Margin Amount
Maintenance.


 


(a)           If at any time the aggregate Asset Values of
all Purchased Mortgage Loans in the Asset Base is less than the aggregate
Purchase Price for all such Transactions (a “Margin Deficit”), then the
Administrative Agent may by notice to the Seller (as such notice is more particularly
set forth below, a “Mark-to-Market”), require the Seller to transfer to
Administrative Agent for the benefit of Buyers or its designee Additional
Mortgage Loan Equivalents so that the aggregate Asset Value of the Purchased
Mortgage Loans, including any such Additional Mortgage Loan Equivalents, will
thereupon equal or exceed the aggregate Purchase Price for all Transactions. If
Administrative Agent delivers a Mark-to-Market to Sellers on or prior to
10:00 a.m. (Central Time) on any Business Day, then the Seller shall
transfer Additional Mortgage Loan Equivalents to Administrative Agent for the
benefit of Buyers no later than 2:00 p.m. (Central Time) that day. In the
event the Administrative Agent delivers a Mark-to-Market to Seller after 10:00 a.m.
(Central Time) on any Business Day, the Sellers shall be required to transfer
Additional Mortgage Loan Equivalents no later than 2:00 p.m. (Central
Time) on the subsequent Business Day.


 


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


 


(c)           Any Cash transferred to the Administrative
Agent pursuant to Section 4(a) above shall be credited to the
Repurchase Price of the related Transactions.


 


(d)           On any day, the aggregate Purchase Price of
all Transactions outstanding under the Repurchase Agreement shall in no event
exceed the Maximum Purchase Price. The Seller shall (a) if notice is given
on or before 10:00 a.m. (Central time), by 2:00 p.m. on that same
Business Day or (b) if notice is given after 10:00 a.m. (Central
time), by 1:00 p.m. on the next Business Day, in each case, repurchase
Purchased Mortgage Loans such that the aggregate Purchase Price for all such
Transactions equals or is less than the Maximum Purchase Price.


 


(e)           On any day on which the aggregate Asset
Values of all Purchased Mortgage Loans in the Asset Base exceeds the then
outstanding aggregate Purchase Price (a


 


29













 


“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 request
from Seller complying with Section 41 of this Repurchase Agreement, remit
Cash to the Operating Account or release Cash Equivalents or Purchased Mortgage
Loans as requested by the Seller, in either case, in an amount equal to the
lesser of (i) the amount requested by the Seller and (ii) such Margin
Excess to Seller. To the extent that the Administrative Agent remits Cash to
the Seller, such Cash shall be additional Purchase Price with respect to the
Transactions, subject in all respects to each Buyer’s Available Commitment
Amount (as defined under the Administration Agreement). Any request received by
the Buyer after 10:00 a.m. (Central time) shall be remitted by the Buyer
on the next Business Day.


 


(f)           Administrative Agent
shall not be obligated to remit an amount or release Purchased Mortgage Loans
requested pursuant to a request for Margin Excess which (i) Administrative
Agent determines is based on erroneous information or would result in a
Transaction other than in accordance with the terms of this Repurchase Agreement,
(ii) does not reflect the current determination of Asset Value as provided
in the definition thereof, (iii) exceeds the Available Purchase Price, or
(iv) exceeds a Buyer’s Available Commitment Amount (as defined under the
Administration Agreement).


 


Section 5.           Price Differential;
Income Payments.


 


5.1          Periodic Advance
Repurchase Payment.          Notwithstanding
that Administrative Agent and the Seller intend that the Transactions hereunder
be sales to the Administrative Agent for the benefit of the Buyers of the Purchased
Mortgage Loans, the Seller shall pay to Administrative Agent for the benefit of
the Buyers the accrued and unpaid Price Differential (less any amount of such
Price Differential previously paid by the Seller to Administrative Agent for
the benefit of Buyers) plus the amount of any unpaid Margin Deficit (each such
payment, a “Periodic
Advance Repurchase Payment”) on each Payment Date.
Notwithstanding the preceding sentence, if Seller fails to make all or part of
the Periodic Advance Repurchase Payment by 1:00 p.m. (Central time) on any
Payment Date or the date which is two (2) Business Days after receipt of
notice of such Periodic Advance Repurchase Payment, whichever is earlier, the
Pricing Rate shall be equal to the Post-Default Rate until the Periodic Advance
Repurchase Payment is received in full by Administrative Agent (any such
amounts in excess of the standard Price Differential, the “Late Payment Fee”).
Any payment received after 1:00 p.m. (Central time) shall be deemed to
have been received by Administrative Agent on the next Business Day.


 


5.2           Application of Income. The Seller
shall hold for the benefit of, and in trust for, Administrative Agent for the
benefit of Buyers all Income, including without limitation all Income received
by or on behalf of the Seller with respect to Purchased Mortgage Loans. All
such Income held in trust for Administrative Agent for the benefit of Buyers,
shall constitute the property of Administrative Agent for the benefit of Buyers
and shall not be commingled with other property of the Seller or any Affiliate
of the Seller except as expressly permitted below. So long as no Event of
Default has occurred and is continuing (during the continuance of which Event
of Default, all Income shall be placed in the Settlement Account pursuant to
Sections 5.4 and 5.5), with respect to each Payment Date, the Seller shall
remit all Income as follows:


 


30













 


(a)           first, to the payment of all costs and fees
then due and payable by the Seller pursuant to this Repurchase Agreement;


 


(b)           second, to the Administrative Agent for the
benefit of Buyers in payment of any accrued and unpaid Price Differential;


 


(c)           third, without limiting the rights of
Administrative Agent under Section 4 of this Repurchase Agreement, to the
Administrative Agent, in the amount of any unpaid Margin Deficit; and


 


(d)           fourth, any excess to the Seller.


 


5.3          Charging of Accounts.
If and to the extent any payment is not made when due under this Repurchase
Agreement or any of the other Repurchase Documents, or from and after the
occurrence and during the continuance of an Event of Default other than for
such non-payment the Seller authorizes the Administrative Agent for the benefit
of the Buyers to charge any amounts so due and unpaid against any or all of the
Seller’s accounts with the Administrative Agent; 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.


 


5.4          Application to
Settlement Account. Seller shall not be entitled to withdraw funds from the
Settlement Account. Except during the existence of an Event of Default, if on
any Business Day the amount in the Settlement Account (after giving effect to
any Purchase Price Decrease) exceeds the amount needed in order to maintain the
Asset Value of the Asset Base at an amount equal to or greater than the amount
of the aggregate Purchase Price of all Purchased Mortgage Loans in the Asset
Base, the Administrative Agent shall cause such excess amount at Seller’s
Request to be transferred to the Operating Account. If an Event of Default has
occurred and is continuing, or on any Business Day the amount in the Settlement
Account (after giving effect to any Purchase Price Decrease) is less than the
amount needed to maintain the Asset Value of the Asset Base in an amount equal
to or greater than the amount of the aggregate Purchase Price of all Purchased
Mortgage Loans in the Asset Base, and Seller has not made any payment when and
as provided in Section 4(a)(iii), all Income shall be deposited into the
Settlement Account in accordance with Section 5.5, and the Administrative
Agent shall not be obligated to transfer any funds to the Operating Account and
may cause an amount equal to any such deficiency to be transferred from the
Operating Account to the Settlement Account.


 


5.5          Settlement Account.
After the occurrence of an Event of Default which shall be continuing, the
Seller shall deposit all such Income in the Settlement Account with the
Administrative Agent. All such Income shall be held in trust for Administrative
Agent for the benefit of Buyers, shall constitute the property of Administrative
Agent for the benefit of Buyers and shall not be commingled with other property
of the Seller or any Affiliate of the Seller except as expressly permitted
above. Funds deposited in the Settlement Account during any month after the
occurrence and during the continuance of an Event of Default shall be held
therein, in trust for the Administrative Agent for the benefit of the Buyers,
until the next Payment Date.


 


31













 


5.6           Offset. Administrative Agent shall
offset against the Repurchase Price of each such Transaction all Income and
Periodic Advance Repurchase Payments actually received by Administrative Agent
pursuant to Section 5.1, excluding any Late Payment Fees paid pursuant to
Section 5.1.


 


5.7          Pricing Rate. The
Price Differential shall accrue on all Transactions each day from and including
the Purchase Date to but excluding the Repurchase Date at the Pricing Rate.


 


Section 6.           Requirements of Law.  


 


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


 


(a)           shall subject any Buyer to any Tax or
increased Tax of any kind whatsoever with respect to this Repurchase Agreement
or any Transaction or change the basis of taxation of payments to such Buyer in
respect thereof;


 


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


(c)           shall impose on any 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 reasonably 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 such Buyer such additional amount or amounts as reasonably
calculated by such Buyer as will compensate such Buyer for such increased cost
or reduced amount receivable equal to such increased costs or additional
amounts reasonably determined by such Buyer.


 


6.2          Reduction of Return.
If any Buyer shall have determined that the adoption of or any change in any
Requirement of Law (other than with respect to any amendment made to such Buyer’s
certificate of incorporation and by-laws or other organizational or governing
documents) regarding capital adequacy or in the interpretation or application
thereof or compliance by such Buyer or any corporation controlling such Buyer
with any request or directive regarding capital adequacy (whether or not having
the force of law) from any Governmental Authority made subsequent to the date
hereof shall have the effect of reducing the rate of return on such Buyer’s or
such corporation’s capital as a consequence of its obligations hereunder to a
level below that which such Buyer or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Buyer’s
or such corporation’s policies with respect to capital adequacy) by an amount
reasonably deemed by such


 


32












 


Buyer to be material, then from time to time, the Seller shall promptly
pay to such Buyer such additional amount or amounts equal to such Buyer for
such reduction.


 


6.3           Claims.  If any Buyer becomes entitled to claim any
additional amounts pursuant to this Section, Administrative Agent shall notify
the Seller of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this
Section submitted by such Buyer shall be conclusive in the absence of manifest
error. Any amounts payable pursuant to this Section shall be reasonably
determined by such Buyer exercising good faith.


 


Section 7.               Taxes.


 


7.1           Payments Free of Taxes.  Any and all payments by the Seller under or in
respect of this Repurchase Agreement or any other Repurchase Documents to which
Seller is a party shall be made free and clear of, and without deduction or
withholding for or on account of, any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities (including
penalties, interest and additions to tax) with respect thereto, whether now or
hereafter imposed, levied, collected, withheld or assessed by any taxation
authority or other Governmental Authority (collectively, “Taxes”), unless
required by law. If the Seller shall be required under any applicable
Requirement of Law to deduct or withhold any Taxes from or in respect of any
sum payable under or in respect of this Repurchase Agreement or any of the
other Repurchase Documents to any Buyer, (i) Seller shall make all such
deductions and withholdings in respect of Taxes, (ii) Seller shall pay the
full amount deducted or withheld in respect of Taxes to the relevant taxation
authority or other Governmental Authority in accordance with any applicable
Requirement of Law, and (iii) the sum payable by Seller shall be increased
as may be necessary so that after Seller has made all required deductions and
withholdings (including deductions and withholdings applicable to additional
amounts payable under this Section 7) such that Buyer receives an amount
equal to the sum it would have received had no such deductions or withholdings
been made in respect of Non-Excluded Taxes. For purposes of this Repurchase
Agreement the term “Non-Excluded
Taxes” are Taxes other than, in the case of a Buyer, Taxes that
are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the jurisdiction under the laws of which such Buyer is organized or
of its applicable lending office, or any political subdivision thereof, unless
such Taxes are imposed as a result of such Buyer having executed, delivered or
performed its obligations or received payments under, or enforced, this
Repurchase Agreement or any of the other Repurchase Documents (in which case such
Taxes will be treated as Non-Excluded Taxes).


 


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


 


7.3           Tax Indemnity.  The Seller will indemnify such Buyer for, and
to hold it harmless against, the full amount of Non-Excluded Taxes and Other
Taxes, and the full amount of Taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 7


 


33


 













 


imposed on or paid by such Buyer and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. The indemnity by the Seller provided for in this
Section 7.3 shall apply and be made whether or not the Non-Excluded Taxes
or Other Taxes for which indemnification hereunder is sought have been
correctly or legally asserted. Amounts payable by the Seller under the
indemnity set forth in this Section 7.3 shall be paid within ten
(10) days from the date on which such Buyer makes written demand therefor.


 


7.4           Evidence of Payment.  Promptly upon the request by the
Administrative Agent, the Seller (or any Person making such payment on behalf
of Seller) shall furnish to such Buyer for its own account a certified copy of
the original official receipt evidencing payment thereof. For purposes of
Section 7.5, the terms “United States” and “United States person” shall
have the meanings specified in Section 7701 of the Internal Revenue Code.


 


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


 


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


 


(b)           in the case of an individual, (x) a
complete and executed U.S. Internal Revenue Service Form W-8BEN (or any
successor forms thereto) and a certificate substantially in the form of Exhibit G (a “Section 7 Certificate”),
or (y) a complete and executed U.S. Internal Revenue Service Form W-9
(or any successor forms thereto); or


 


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


 


(d)           in the case of a Non-Exempt Buyer that
(x) is not organized under the laws of the United States, any State thereof,
or the District of Columbia and (y) is treated as a corporation for U.S.
federal income tax purposes, a complete and executed U.S. Internal Revenue
Service Form W-8BEN claiming a zero rate of withholding (or any successor
forms thereto) and a Section 7 Certificate; or


 


(e)           in the case of a Non-Exempt Buyer that
(A) is treated as a partnership or other non-corporate entity, and
(B) is not organized under the laws of the United States, any State
thereof, or the District of Columbia, (x)(i) a complete and executed U.S.
Internal Revenue Service Form W-81MY (or any successor forms thereto)
(including all required documents and


 


34













 


attachments) and (ii) a Section 7 Certificate, and
(y) without duplication, with respect to each of its beneficial owners and
the beneficial owners of such beneficial owners looking through chains of
owners to individuals or entities that are treated as corporations for U.S.
federal income tax purposes (all such owners, “beneficial owners”), the
documents that would be required by clause (a), (b), (c), (d), (f), (g), and/or
this clause (e) of this Section 7.5 with respect to each such
beneficial owner if such beneficial owner were such Buyer, provided, however,
that no such documents will be required with respect to a beneficial owner to
the extent the actual Buyer is determined to be in compliance with the
requirements for certification on behalf of its beneficial owner as may be
provided in applicable U.S. Treasury regulations, or the requirements of this
clause (e) are otherwise determined to be unnecessary, all such
determinations under this clause (e) to be made in the sole discretion of
the Seller, provided, however, that such Buyer shall be provided an opportunity
to establish such compliance as reasonable; or


 


(f)            in the case of a Non-Exempt Buyer that is
disregarded for U.S. federal income tax purposes, the document that would be
required by clause (a), (b), (c), (d), (e), (g), and/or this clause (f) of
this Section 7.5 with respect to its beneficial owner if such beneficial
owner were such Buyer; or


 


(g)           in the case of a Non-Exempt Buyer that
(A) is not a United States person and (B) is acting in the capacity
as an “intermediary” (as defined in U.S. Treasury Regulations), (x)(i) a
U.S. Internal Revenue Service Form W-81MY (or any successor form thereto)
(including all required documents and attachments) and (ii) a
Section 7 Certificate, and (y) if the intermediary is a
“non-qualified intermediary” (as defined in U.S. Treasury Regulations), from
each person upon whose behalf the “non-qualified intermediary” is acting the
documents that would be required by clause (a), (b), (c), (d), (e), (f), and/or
this clause (g) of this Section 7.5 with respect to each such person
if each such person were such Buyer.


 


If the forms referred to above in this
Section 7.3 that are provided by a Buyer at the time such Buyer first
becomes a party to this Repurchase Agreement or, with respect to a grant of a
participation, the effective date thereof, indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
treated as Taxes other than “Non-Excluded Taxes” (“Excluded Taxes”) and
shall not qualify as Non-Excluded Taxes unless and until such Buyer provides
the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate shall be considered Excluded Taxes solely
for the periods governed by such form. If, however, on the date a Person
becomes an assignee, successor or participant to this Repurchase Agreement,
Buyer transferor was entitled to indemnification or additional amounts under
this Section 7, then such Buyer assignee, successor or participant shall
be entitled to indemnification or additional amounts to the extent (and only to
the extent), that such Buyer transferor was entitled to such indemnification or
additional amounts for Non-Excluded Taxes, and such Buyer assignee, successor
or participant shall be entitled to additional indemnification or additional amounts
for any other or additional Non-Excluded Taxes only if the forms referred to in
Sections 7.1 to 7.5 are provided by such assignee, successor or participant.


 


7.6           Failure to Provide Form.  For any period with respect to which such
Buyer has failed to provide the Seller with the appropriate form, certificate
or other document described in Section 7.5 (other than (a) if such
failure is due to a change in any applicable Requirement of Law, or in the
interpretation or application thereof, occurring after the date on which a
form,


 


35













 


certificate or other document originally was required to be provided,
(b) if such form, certificate or other document otherwise is not required
under Section 7.5, or (c) if it is legally inadvisable or otherwise
commercially disadvantageous for such Buyer to deliver such form, certificate
or other document, such Buyer shall not be entitled to indemnification or
additional amounts under Section 7.1 or 7.3 with respect to Non-Excluded
Taxes imposed by the United States by reason of such failure; provided,
however, that should a Buyer become subject to Non-Excluded Taxes because
of its failure to deliver a form, certificate or other document required
hereunder, the Seller shall take such steps as such Buyer shall reasonably
request, to assist such Buyer in recovering such Non-Excluded Taxes.


 


7.7           Survival.  Without prejudice to the survival of any other
agreement of the Seller hereunder, the agreements and obligations of the Seller
contained in this Section 7 shall survive the termination of this
Repurchase Agreement in accordance with the applicable statue of limitations.
Nothing contained in this Section 7 shall require such Buyer to make
available any of its tax returns or any other information that it deems to be
confidential or proprietary.


 


Section 8.               Security
Interest.  Although the parties
intend that all Transactions hereunder be sales and purchases (other than for
accounting and tax purposes) and not loans, in the event any such Transactions
are deemed to be loans, Seller hereby pledges to Administrative Agent for the
benefit of Buyers as security for the performance by the Seller of its
Obligations and hereby grants, assigns and pledges to Administrative Agent for
the benefit of Buyers a fully perfected first priority security interest in the
Purchased Mortgage Loans, the records, and all servicing rights related to the
Purchased Mortgage Loans, the Repurchase Documents (to the extent such
Repurchase Documents and Seller’s right thereunder relate to the Purchased
Mortgage Loans), any Property relating to any Purchased Mortgage Loan or the
related Mortgaged Property, any Takeout Commitments relating to any Purchased
Mortgage Loan, all insurance policies and insurance proceeds relating to any
Purchased Mortgage Loan or the related Mortgaged Property, including but not
limited to any payments or proceeds under any related primary insurance or
hazard insurance, any Income relating to any Purchased Mortgage Loan, the
Settlement Account, the Funding Account, the Operating Account, the Settlement
Account, any Rate Management Transaction relating to any Purchased Mortgage
Loan, and any other contract rights, accounts (including any interest of Seller
in escrow accounts) and any other payments, rights to payment (including
payments of interest or finance charges) and general intangibles to the extent
that the foregoing relates to any Purchased Mortgage Loan and any other assets
relating to the Purchased Mortgage Loans (including, without limitation, any
other accounts) or any interest in the Purchased Mortgage Loans, the servicing
of the Purchased Mortgage Loans, all collateral and distributions and any other
property, rights, title or interests as are specified on an Exception Report
with respect to any of the foregoing, in all instances, whether now owned or
hereafter acquired, now existing or hereafter created (collectively, the “Repurchase Assets”).


 


The Seller hereby authorizes the
Administrative Agent to file such financing statement or statements relating to
the Repurchase Assets as the Administrative Agent, at its option, may
reasonably deem appropriate. The Seller shall pay the filing costs for any
financing statement or statements prepared pursuant to this Section 8.


 


36













 


Section 9.               Payment,
Transfer and Custody.


 


9.1           Payment.  Unless otherwise mutually agreed in writing,
all transfers of funds to be made by the Seller hereunder shall be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Administrative Agent at the following account (the “Settlement Account”)
maintained by the Administrative Agent:


 


Guaranty Bank


Operations Contact: Mortgage Warehouse Services – Sara Vazquez


Phone No.: (214) 360-8854


ABA Routing No. 314970664


Account Name: Ryland Mortgage Co Settlement Account


Account No.: 3805954454


 


not later than 12:00 noon (Central time), on the date on which such
payment shall become due (and each such payment made after such time shall be deemed
to have been made on the next succeeding Business Day). The Seller acknowledges
that it has no rights of withdrawal from the Settlement Account.


 


9.2           Transfer to Administrative Agent.  On the Purchase Date for each Transaction,
ownership of the Purchased Mortgage Loans shall be transferred to the
Administrative Agent for the benefit of the Buyers against the simultaneous
transfer of the Purchase Price to the following account of the Seller: Account
No. 3805954462, for the account of Seller, Guaranty Bank, ABA Routing
No. 314970664 (the “Funding
Account”), simultaneously with the delivery to the
Administrative Agent for the benefit of the Buyers of the Purchased Mortgage
Loans relating to each Transaction. With respect to the Purchased Mortgage
Loans being sold by Seller on a Purchase Date, Seller hereby sells, transfers,
conveys and assigns to Administrative Agent for the benefit of the Buyers
without recourse, but subject to the terms of this Repurchase Agreement, all
the right, title and interest Seller has in and to the Purchased Mortgage Loans
together with all right, title and interest in and to the proceeds of any
related Repurchase Assets.


 


9.3           Transfer to Custodian.  In connection with such sale, transfer,
conveyance and assignment, on or prior to each Purchase Date, or with respect
to Wet Loans, by the seventh (7th) Business Day after the Purchase
Date, the Seller shall deliver or cause to be delivered and released to the
Custodian the Mortgage File for the related Purchased Mortgage Loans.


 


Section 10.             [Reserved].


 


Section 11.             Representations.
 Seller represents and warrants (as to
itself and its respective Subsidiaries and Affiliates, as applicable and in all
cases only to the extent such entity is specifically mentioned) to the
Administrative Agent and the Buyers that as of the date of this Repurchase
Agreement and the date of each Transaction hereunder:


 


11.1         Acting as Principal.  The Seller will engage in such Transactions as
principal (or, if agreed in writing in advance of any Transaction by the other
party hereto, as agent for a disclosed principal).


 


37













 


11.2         Mortgage Loan Schedule.  The information set forth in the related
Mortgage Loan Schedule and all other information or data furnished by, or on
behalf of, the Seller to Administrative Agent or Buyers is complete, true and
correct in all material respects, and the Seller acknowledges that neither the
Administrative Agent nor the Buyer has verified the accuracy of such
information or data.


 


11.3                         Solvency.
 Neither the Repurchase Documents nor any
Transaction thereunder are entered into in contemplation of insolvency or with
intent to hinder, delay or defraud any of Seller’s creditors. The transfer of
the Mortgage Loans subject hereto is not undertaken with the intent to hinder,
delay or defraud any of Seller’s creditors. The Seller is not insolvent within
the meaning of 11 U.S.C. Section 101(32) and the transfer and sale of the
Mortgage Loans pursuant hereto (i) will not cause Seller to become insolvent,
(ii) will not result in Seller having unreasonably small capital, and
(iii) will not result in debts that would be beyond Seller’s ability to
pay as same mature. The Seller has received reasonably equivalent value in
exchange for the transfer and sale of the Purchased Mortgage Loans subject
hereto.


 


11.4         No Broker.  The Seller has not dealt with any broker,
investment banker, agent, or other person, except for the Administrative Agent,
who may be entitled to any commission or compensation in connection with the
sale of Purchased Mortgage Loans pursuant to this Repurchase Agreement.


 


11.5         Ability to Perform.  Seller does not believe, nor does it have any
reason to cause it to believe, that it cannot perform each and every covenant
to be performed by Seller contained in the Repurchase Documents to which it is
a party.


 


11.6         Existence.  Seller (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio, (b) has all requisite corporate or other power, and has all
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted, and (c) is qualified to do business and is in good standing in
all other jurisdictions in which the nature of the business conducted by it
makes such qualification necessary. Seller is duly registered as mortgage
lenders and servicers, as applicable, 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 Requirement of Law.


 


11.7                         Financial
Statements.  The Seller has
heretofore furnished to the Administrative Agent a copy of its
(a) Consolidated balance sheet as of December 31, 2007, and the
related Consolidated statements of income and retained earnings and of cash
flows for the Seller and its Consolidated Subsidiaries, meeting the requirement
of Section 12.4(a)(i), and (b) Consolidated balance sheet for the
monthly fiscal period of the Seller ended September 30, 2008, and the
related Consolidated statements of income and retained earnings and of cash
flows for the Seller and its Consolidated Subsidiaries for such monthly fiscal
period, meeting the requirement of Section 12.4(a)(iii), setting forth in
each case in comparative form the figures for the previous year. All such
financial statements are complete and correct and fairly present, in all
material respects, the Consolidated financial condition of the Seller and its
Subsidiaries and the Consolidated results of their operations as of such dates
and for such fiscal periods, all in accordance with GAAP applied on a
consistent basis. The Seller does not have, on the date of


 


38













 


the statements delivered pursuant to this Section (the “Statement Date”), any
liabilities, direct or indirect, fixed or contingent, matured or unmatured,
known or unknown, or liabilities for taxes, long-term leases or unusual forward
or long-term commitments not disclosed by, or reserved against in, said balance
sheet and related statements, and at the present time there are no material
unrealized or anticipated losses from any loans, advances or other commitments
of the Seller which are required to be disclosed in or reserved against in said
balance sheet and related statement under GAAP.


 


11.8         No Breach.  Neither (a) the execution and delivery of
the Repurchase Documents nor (b) the consummation of the Transactions
therein contemplated to be entered into by the Seller, in compliance with the
terms and provisions thereof, will conflict with or result in a breach of the
charter or by-laws of the Seller, or any applicable law, rule or
regulation, or any order, writ, injunction or decree of any Governmental
Authority, or other material agreement or instrument to which the Seller or any
of its Subsidiaries is a party or by which any of them or any of their Property
is bound or to which any of them is subject, or constitute a default under any
such material agreement or instrument or result in the creation or imposition
of any Lien (except for the Liens created pursuant to the Repurchase Documents)
upon any Property of the Seller or any of its Subsidiaries pursuant to the
terms of any such agreement or instrument.


 


11.9         Action.  The Seller has all necessary corporate or
other power, authority and legal right to execute, deliver and perform its
obligations under each of the Repurchase Documents, as applicable; the
execution, delivery and performance by the Seller of each of the Repurchase Documents
have been duly authorized by all necessary corporate or other action on its
part; and each Repurchase Document has been duly and validly executed and
delivered by the Seller, as applicable.


 


11.10                   Approvals.
No authorizations, approvals or consents of, and no filings or registrations
with, any Governmental Authority or any securities exchange are necessary for
the execution, delivery or performance by the Seller of the Repurchase
Documents or for the legality, validity or enforceability thereof, except for
filings and recordings in respect of the Liens created pursuant to the
Repurchase Documents.


 


11.11       Enforceability.  This Repurchase Agreement and all of the other
Repurchase Documents executed and delivered by the Seller in connection
herewith are legal, valid and binding obligations of the Seller and are
enforceable against the Seller in accordance with their terms except as such
enforceability may be limited by (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors rights generally, and (ii) general principles of equity.


 


11.12       Indebtedness.  As of the Effective Date, the Seller does not
have any Indebtedness, excluding accruals and trade payables and obligations of
the Seller under the Countrywide Purchase Agreement, except as disclosed on Schedule VI to this Repurchase
Agreement.


 


11.13      Material Adverse Effect.
 Since September 30, 2008, there has
been no development or event nor, to Seller’s knowledge, any prospective
development or event, which has had or would reasonably be expected to have a
Material Adverse Effect.


 


39













 


11.14       No Default.  No Default or Event of Default has occurred
and is continuing.


 


11.15       Underwriting Guidelines.  Seller has underwritten each Purchased Mortgage
Loan in conformity with the Underwriting Guidelines of the applicable Takeout
Investor.


 


11.16       Adverse Selection.  Seller has not selected the Purchased Mortgage
Loans in a manner so as to adversely affect the Administrative Agent’s or any
Buyer’s interests.


 


11.17       Title to Properties.  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 financial statements
most recently furnished to the Administrative Agent or any Buyer, except for
such Properties and assets as have been disposed of since the date of such current
financial statements in the ordinary course of business, and all such
Properties and assets are free and clear of all Liens except for (i) the
lien of current real property Taxes and assessments other than those being
contested in good faith, (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.


 


11.18       Litigation.  There are no actions, suits, arbitrations,
investigations (including, without limitation, any of the foregoing which are
pending or to the best of the Seller’s knowledge threatened, in writing) or
other legal or arbitrable proceedings pending which affect the Seller or any of
their Subsidiaries or affecting any of the Property of any of them before any
Governmental Authority that (i) questions or challenges the validity or
enforceability of any of the Repurchase Documents or any action to be taken in
connection with the transactions contemplated hereby, or (ii) which,
individually or in the aggregate, if adversely determined, could be reasonably
likely to have a Material Adverse Effect.


 


11.19       Margin Regulations.  The proceeds of all Purchased Mortgage Loans
shall be used by Seller solely for the origination and purchase of Eligible
Mortgage Loans to be owned by Seller and pledged by Seller to the
Administrative Agent hereunder pending sale to an Investor as contemplated by
this Repurchase Agreement. None of such proceeds shall be used for the purpose
of purchasing or carrying any “margin stock” as defined in Regulation U, or for
the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry margin stock or for any other purpose which might
constitute this transaction a “purpose credit” within the meaning of such
Regulation U. Neither Seller nor any Person acting on behalf of Seller shall
take any action in violation of Regulations T, U or Regulation X promulgated by
the Board of Governors of the Federal Reserve System as the same may from time
to time be amended, supplemented or otherwise modified, or shall violate
Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereafter be in effect.


 


11.20       Taxes.  Except for any such Taxes as are being
contested by appropriate proceedings diligently conducted and with respect to
which adequate reserves have been


 


40













 


provided (i) the Seller and its Subsidiaries have timely filed all
tax returns that are required to be filed by them and have timely paid all
Taxes, and (ii) there are no Liens for Taxes, except for statutory liens
for Taxes not yet due and payable.


 


11.21       Investment Company Act and Public Utility
Holding Company Act.  The Seller is
not an “investment company,” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.
Neither Seller nor any of its Subsidiaries is an Affiliate or a Subsidiary of a
“public utility company,” or a “holding company,” or an “affiliate” or a
“subsidiary company” of a “holding company,” as such terms are defined in the
PUHC Act. Further, none of the transactions contemplated under this Repurchase
Agreement shall cause or constitute a violation of any of the provisions,
rules, regulations or orders, of or under the PUHC Act and the PUHC Act does
not in any manner impair the legality, validity or enforceability of the
Repurchase Documents.


 


11.22       Purchased Mortgage Loans.


 


(a)           Seller has not assigned, pledged, or
otherwise conveyed or encumbered any Purchased Mortgage Loan that is part of the
Asset Base to any other Person, and immediately prior to the sale or the
transfer of such Mortgage Loan to the Administrative Agent for the benefit of
the Buyers, the Seller was the sole owner of such Mortgage Loan and had good
and marketable title thereto, free and clear of all Liens, in each case except
for Liens to be released simultaneously with the sale to the Administrative
Agent for the benefit of the Buyers hereunder.


 


(b)           The provisions of this Repurchase Agreement
are effective to either constitute a sale of Repurchase Assets to the
Administrative Agent for the benefit of the Buyers or to create in favor of the
Administrative Agent for the benefit of the Buyers a valid security interest in
all right, title and interest of the Seller in, to and under the Repurchase
Assets.


 


(c)           The following matters with respect to the
Mortgage Loans comprising the Asset Base are true and correct:


 


(i)            Seller has good and marketable title to
each Mortgage Note and Mortgage, is the sole owner thereof and has full right
to pledge the Mortgage Loan to Administrative Agent, for the benefit of Buyers,
free and clear of any other Lien at the time of such pledging to Administrative
Agent;


 


(ii)           To the knowledge of Seller, other than any
delinquency of payments permitted in subparagraph (d) of the definition of
Eligible Mortgage Loan, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Mortgage Note and there
is no event of acceleration existing under any Mortgage or the related Mortgage
Note and there is no event which, with the passage of time or with notice
and/or the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration and no such default, breach,
violation or event of acceleration has been waived;


 


(iii)          To the knowledge of Seller, the physical
condition of the Property subject to the Mortgage has not deteriorated since
the date of origination of the related secured


 


41













 


Mortgage Loan (normal wear and tear accepted) and there is no
proceeding pending for the total or partial condemnation of any Property
subject to the Mortgage;


 


(iv)          Each Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the related Property subject to
the Mortgage of the benefits of the security provided thereby (subject to
Debtors Laws), including (1) in the case of a Mortgage designated as a deed
of trust, by trustee’s sale, and (2) otherwise, by judicial or
non-judicial foreclosure;


 


(v)           Each Mortgage Loan is secured by a first
lien or second lien on a Single Family residence, and has been underwritten by
the originator thereof in accordance with such originator’s then current
underwriting guidelines, which guidelines have been previously submitted to and
approved by Administrative Agent;


 


(vi)          Each Mortgage Note is either (1) payable
in monthly installments of principal and interest, which may be at an
adjustable rate, with interest payable in arrears, and requires a monthly
payment which (irrespective of the maturity date of such Mortgage Note) is
sufficient to amortize the original principal balance over an amortization
period not to exceed thirty (30) years, and to pay interest at the related
interest rate, or (2) payable in monthly installments of interest only,
with interest payable in arrears, with principal payments to begin no later
than ten (10) years from closing with payments which are sufficient to
fully amortize the original principal balance over a period not to exceed forty
(40) years; and no Mortgage Note provides for any extension of the original
term;


 


(vii)         No Mortgage Loan is a loan in respect of
either the purchase of a manufactured home or mobile home or the purchase of
the land on which a manufactured home or mobile home will be placed;


 


(viii)                      The
origination practices used by the originator or each Mortgage Loan and the
collection practices used by the Seller with respect to each Mortgage Loan have
been in all material respects legal, proper, prudent and customary in the loan
origination and servicing business;


 


(ix)           No Mortgage Loan is subject to
Section 32 of Regulation Z or is a Mortgage Loan classified as predatory
under any applicable Law;


 


(x)            Each Mortgage Loan was originated in
compliance with all applicable Laws and no fraud or misrepresentation was
committed by any Person in connection therewith; and


 


(xi)                              For
each Mortgage Loan, Seller has obtained either a closing protection letter from
the underwriter for the title insurance policy for such Mortgage Loan or a
blanket closing protection letter from the underwriters for the respective
title insurance policies for such Mortgage Loans.


 


11.23       Chief Executive Office/Jurisdiction of
Organization. On the Effective Date, Seller’s chief executive office is,
and has been, located at 24025 Park Sorrento, Suite 400, Calabasas,
California 91302. Seller’s jurisdiction of organization is Ohio.


 


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11.24                     Location of Books and Records.  The
location where the Seller keeps its books and records, including all computer
tapes and records related to the Repurchase Assets is its national operations
center located at 14635 North Kierland Boulevard, Suite 200, Scottsdale,
Arizona 85254 and its chief executive office identified in Section 11.23
above.


 


11.25                     Hedging.
 The Seller shall have entered into Rate
Management Transactions in accordance with their hedging policies.


 


11.26                     True and Complete Disclosure.  The
information, reports, financial statements, exhibits and schedules furnished in
writing by or on behalf of the Seller to the Administrative Agent or Buyers in
connection with the negotiation, preparation or delivery of this Repurchase
Agreement and the other Repurchase Documents or included herein or therein or
delivered pursuant hereto or thereto (other than with respect to the Mortgage
Loans), when taken as a whole, do not contain any untrue statement of material
fact or omit to state any material fact which would make the statements herein
or therein, in light of the circumstances under which they were made,
misleading. There is no fact known to an Authorized Representative of the
Seller, after due inquiry, that could reasonably be expected to have a Material
Adverse Effect that has been disclosed herein, in the other Repurchase
Documents or in a report, financial statement, exhibit, schedule, disclosure
letter or other writing furnished to the Administrative Agent for use in
connection with the transactions contemplated hereby or thereby.


 


11.27                     ERISA.


 


(a)                                  No liability under Section 4062, 4063, 4064 or
4069 of ERISA has been or is expected by the Seller to be incurred by the
Seller or any ERISA Affiliate thereof with respect to any Plan which is a Single-Employer
Plan in an amount that could reasonably be expected to have a Material Adverse
Effect.


 


(b)                                 No Plan of the Seller, which is a Single-Employer
Plan had an accumulated funding deficiency, whether or not waived, as of the
last day of the most recent fiscal year of such Plan ended prior to the date
hereof. Neither the Seller nor any ERISA Affiliate thereof is (i) required
to give security to any Plan which is a Single-Employer Plan pursuant to Section 401(a)(29)
of the Code or Section 307 of ERISA, or (ii) subject to a Lien in
favor of such a Plan under Section 302(f) of ERISA.


 


(c)                                  Each Plan of the Seller, each of its Subsidiaries
and each of their ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code, except where the failure
to comply would not result in any Material Adverse Effect.


 


(d)                                 Neither the Seller nor any of its Subsidiaries has
incurred a tax liability under Section 4975 of the Code or a penalty under
Section 502(i) of ERISA in respect of any Plan which has not been
paid in full, except where the incurrence of such tax or penalty would not
result in a Material Adverse Effect.


 


(e)                                  Neither the Seller nor any of its Subsidiaries or
any ERISA Affiliate thereof has incurred or reasonably expects to incur any
withdrawal liability under Section 4201 of ERISA as a result of a complete
or partial withdrawal from a Multiemployer Plan which will


 


43













 


result in withdrawal liability to the Seller,
or any of their Subsidiaries or any ERISA Affiliate thereof in an amount that
could reasonably be expected to have a Material Adverse Effect.


 


11.28                     Agency Approvals.  Seller is an approved seller and
servicer with both Fannie Mae and Freddie Mac, and, to the extent necessary,
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act. Seller is in good standing, with no
event having occurred nor the Seller having any reason whatsoever to believe or
suspect will occur, including, without limitation, a change in insurance
coverage which would either make Seller unable to comply with the eligibility
requirements for maintaining all such applicable approvals or require
notification to the relevant Agency. Seller has (or has access to) adequate
financial standing, servicing facilities, procedures and experienced personnel
necessary for the sound servicing of mortgage loans of the same types as may
from time to time constitute Mortgage Loans and in accordance with Accepted
Servicing Practices.


 


11.29                     No Reliance.  Seller made its own independent
decision to enter into the Repurchase Documents to which it is a party and
Seller has made its own independent decision to enter into each Transaction and
as to whether such Transaction is appropriate and proper for it is based upon
its own judgment and upon advice from such advisors (including without
limitation, legal counsel and accountants) as it has deemed necessary. Seller
is not relying upon any advice from Administrative Agent or any Buyer as to any
aspect of the Transactions, including without limitation, the legal, accounting
or tax treatment of such Transactions.


 


11.30                     Plan Assets.  Seller is not an employee
benefit plan as defined in Section 3 of Title I of ERISA, or a plan
described in Section 4975(e)(1) of the Code, and the Purchased
Mortgage Loans are not “plan assets” within the meaning of 29 CFR § 2510.3 101
in the Seller’s hands.


 


11.31                     Anti-Money Laundering Laws.  If
applicable to the Seller, it has complied with all applicable anti-money
laundering laws and regulations, including without limitation the USA PATRIOT
Act of 2001 (collectively, the “Anti-Money Laundering Laws”); the Seller has established
an anti-money laundering compliance program as required by the Anti-Money
Laundering Laws, has conducted the requisite due diligence in connection with
the origination of each Mortgage Loan for purposes of the Anti-Money Laundering
Laws, including with respect to the legitimacy of the applicable Mortgagor and
the origin of the assets used by the said Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering Laws.


 


11.32                     No Prohibited Persons.  Neither
Seller nor any of its Affiliates, officers, directors, partners or members, is
an entity or person (or to the Seller’s knowledge, owned or controlled by an
entity or person): (i) that is listed in the Annex to, or is otherwise
subject to the provisions of Executive Order 13224 issued on September 24,
2001 (“EO13224”);
(ii) whose name appears on the United States Treasury Department’s Office
of Foreign Assets Control (“OFAC”) most current list of “Specifically
Designated National and Blocked Persons” (which list may be published from time
to time in various mediums including, but not limited to, the OFAC website,
http:www.treas.gov/ofac/tllsdn.pdf); (iii) who commits, threatens to
commit or


 


44













 


supports “terrorism,” as that term is defined
in EO13224; or (iv) who is otherwise affiliated with any entity or person
listed above (any and all parties or persons described in clauses (i) through
(iv) above are herein referred to as a “Prohibited Person”).


 


11.33                     USA PATRIOT Act.  Seller acknowledges that
pursuant to the requirements of the USA PATRIOT Act, the Administrative Agent
is required to obtain, verify and record information that identifies the
Seller, which information includes the name and address of Seller and other
information that will allow the Administrative Agent to identify the Seller in
accordance with the USA PATRIOT Act.


 


Section 12.                                      Covenants.  On and as of the date of this
Repurchase Agreement and each Purchase Date and each day until this Repurchase
Agreement is no longer in force, Seller (only as to itself and its Subsidiaries
and Affiliates, as applicable, and in all cases only to the extent such entity
is specifically mentioned) covenants as follows:


 


12.1                           Preservation of Existence; Compliance With Law. Seller shall:


 


(a)                                  Preserve and maintain its legal existence and all
of its material rights, privileges, licenses, permits and other approvals, and
franchises necessary for the operation of its business;


 


(b)                                 Comply with the requirements of all applicable
laws, rules, regulations and orders, whether now in effect or hereafter enacted
or promulgated by any applicable Governmental Authority (including, without
limitation, Environmental Laws);


 


(c)                                  Keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP consistently
applied; and


 


(d)                                 Permit representatives of the Administrative Agent
and Buyers, upon reasonable notice (unless an Event of Default shall have
occurred and is continuing, in which case, no prior notice shall be required),
during normal business hours, to examine, copy and make extracts from its books
and records, to inspect any of its Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by the
Administrative Agent.


 


12.2         Taxes.  The Seller and its Subsidiaries shall timely
file all tax returns that are required to be filed by them and shall timely pay
all Taxes due, except for any such Taxes as are being appropriately contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves have been provided.


 


12.3         Notice of Proceedings or Adverse
Change.  The Seller shall give notice
to the Administrative Agent:


 


(a)                                  immediately after Seller has any knowledge of the
occurrence of any Default (other than an Event of Default) which continues for
two (2) Business Days or an Event of Default;


 


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(b)                                 immediately after Seller has any knowledge of any (a) default
or event of default under any Indebtedness of the Seller in an aggregate amount
in excess of $1,000,000 or (b) litigation, investigation, regulatory
action or proceeding that is pending or threatened by or against the Seller in
any federal or state court or before any Governmental Authority which, if not
cured or if adversely determined, would reasonably be expected to have a
Material Adverse Effect or constitute a Default or Event of Default, and (c) any
Material Adverse Effect with respect to the Seller;


 


(c)                                  immediately after a responsible officer of the
Seller has any knowledge of any litigation or proceeding that is pending or
threatened against (a) the Seller in which the amount claimed exceeds
$1,000,000 and is not covered by insurance, in which injunctive or similar
relief is sought, or which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, or (b) any litigation or
proceeding that is pending or threatened in connection with any of the
Repurchase Assets, which, if adversely determined, could reasonably be expected
to have a Material Adverse Effect;


 


(d)                                 as soon as reasonably possible after a responsible
officer of the Seller has any knowledge of:


 


(i)                                     a material change in the insurance coverage of the
Seller with a copy of evidence of same attached;


 


(ii)                                  any material change in accounting policies or
financial reporting practices of the Seller;


 


(iii)                               the termination or nonrenewal of any debt
facilities of the Seller which have a maximum principal amount (or equivalent)
available of more than $5,000,000.


 


(iv)                              promptly upon receipt of notice or knowledge of any
Lien or security interest (other than security interests created hereby or
under any other Repurchase Document) on, or claim asserted against, any of the
Repurchase Assets;


 


(v)                                 the filing, recording or assessment of any material
federal, state or local tax lien for Fifty Thousand Dollars ($50,000) or more
against Seller or any of its Subsidiaries or any assets of any of them; and


 


(vi)                              any other event, circumstance or condition that has
resulted, or could reasonably be likely to result, in a Material Adverse
Effect.


 


(e)                                  Promptly, but no later than three (3) Business
Days after the Seller receives any of the same, deliver to the Administrative
Agent a true, complete, and correct copy of any schedule, report, notice, or
any other document delivered to Seller by any Person pursuant to, or in
connection with, any material portion of the Repurchase Assets.


 


12.4                           Financial Statements and Reports.


 


(a)                                  Seller shall furnish to Administrative Agent and
each of the Buyers the following, all in form and detail reasonably
satisfactory to Administrative Agent:


 


46













 


(i)                                Promptly after becoming available, and in any event
within ninety (90) days after the close of each Fiscal Year, Seller’s audited
Consolidated balance sheet as of the end of such Fiscal Year, and the related
audited Consolidated statements of income, stockholders’ equity and cash flows
of Seller for such Fiscal Year, setting forth in each case in comparative form
the corresponding figures for the preceding Fiscal Year. Such financial
statements shall be accompanied by the unqualified audit report of independent
certified public accountants reasonably acceptable to Administrative Agent
which report shall be to the effect that such statements have been prepared in
accordance with GAAP applied on a basis consistent with prior periods except
for such changes in such principles with which the independent public
accountants shall have concurred, and such financial statements shall also be
accompanied by management letters with respect thereto, if any;


 


(ii)                             Promptly after becoming available, and in any event
within ninety (90) days after the close of each Fiscal Year, Parent’s audited
Consolidated and consolidating balance sheet as of the end of such Fiscal Year,
and the related audited Consolidated and consolidating statements of income,
stockholders’ equity and cash flows of Parent for such Fiscal Year, setting
forth in each case in comparative form the corresponding figures for the
preceding Fiscal Year, such financial statements shall be unqualified and shall
be accompanied by the related audit report of independent certified public
accountants acceptable to Lender which report shall be to the effect that such
statements have been prepared in accordance with GAAP applied on a basis
consistent with prior periods except for such changes in such principles with
which the independent public accountants shall have concurred;


 


(iii)                          Promptly after becoming available, and in any event
within thirty (30) days after the end of each calendar month (other than the
last calendar month in each Fiscal Year), a Consolidated balance sheet of
Seller as of the end of such month and the related Consolidated statements of
income and stockholders’ equity of Seller for such month and the period from
the first day of the then current Fiscal Year through the end of such month,
certified by the chief financial officer or other executive officer of Seller
as being fairly stated in all material respects (subject to normal Fiscal
Year-end adjustments);


 


(iv)                         Promptly after becoming available, and in any event
within thirty (30) days after the end of each Fiscal Quarter, a Consolidated
statement of cash flows of Seller for such Fiscal Quarter and the period from
the first day of the then current Fiscal Year through the end of such Fiscal
Quarter, certified by the chief financial officer or other executive officer of
Seller as being fairly stated in all material respects (subject to normal
Fiscal Year-end adjustments);


 


(v)                            Promptly and in any event within thirty (30) days
after the end of each calendar month (except the last) in each Fiscal Year of
Seller, and concurrently with the delivery of the financial statements pursuant
to Section 12.4(a)(i) above, a completed Officer’s Certificate in the
form of Exhibit H
hereto, executed by the president or chief financial officer of Seller;


 


(vi)                         Promptly and in any event within ninety (90) days
of the beginning of each Fiscal Year, an annual operating budget of Seller for
such Fiscal Year, in form and substance satisfactory to Lender;


 


47













 


(vii)                           Promptly and in any event within thirty (30) days
after the end of each Fiscal Quarter, a mortgage loan production report as of
the end of such Fiscal Quarter, reflecting Seller’s Mortgage Loan production
and acquisition volumes during such Fiscal Quarter, and such other similar
information as reasonably requested by Lender to be in such report;


 


(viii)                        Promptly after becoming available, a monthly
management report (delivered in any event within thirty (30) days after the end
of each calendar month) in form and detail acceptable to Administrative Agent
including, without limitation detail on Seller’s pipeline position, commitment
position, production statistics and any other report reasonably requested by
Administrative Agent (and Administrative Agent agrees that the form heretofore
delivered to Administrative Agent is acceptable in form and detail, subject to
the future addition of any other report reasonably requested by Administrative
Agent);


 


(ix)                                With each Repurchase Request and in any event
within thirty (30) days after the end of each calendar month, an Asset Base
Certificate;


 


(x)                                   Promptly and in any event within seven (7) days
after the end of each week, a hedging coverage report showing, in detail and
form satisfactory to Administrative Agent, Seller’s hedging coverage of all
Eligible Mortgage Loans subject to a Rate Management Transaction;


 


(xi)                                Promptly upon receipt thereof, a copy of each other
report submitted to Seller by independent accountants in connection with any
annual, interim or special audit of the books of Seller;


 


(xii)                             Within five (5) Business Days of receipt
thereof, any communication or notice from a Governmental Authority relating to
any contemplated audits or compliance reviews of the Seller and its mortgage
operations and within ten (10) Business Days of the receipt of the
compliance and audit reports from such Governmental Authority in connection
with such audit or compliance reviews, a summary of the findings from such
audits or reviews and if requested by the Administrative Agent, copies of the
full and complete compliance and audit reports received from such Governmental
Authority and all documents submitted by Seller in connection with any such
audits or review by such Governmental Authority within ten (10) Business
Days of its request; and promptly upon receipt, a copy of any notice from (i) any
Federal Agency to the effect that it is or is contemplating withdrawing its
approval of Seller as an approved seller and servicer for any Agency or as an
approved lender with FHA, VA and HUD, or (ii) any private mortgage insurer
which insures any of the Purchased Mortgaged Loans to the effect that it is
contemplating withdrawing its approval of Seller as an approved originator of
Mortgage Loans insured by such insurer;


 


(xiii)                          As soon as possible and in any event within ten (10) days
after Seller knows that any Reportable Event has occurred with respect to any
ERISA Plan, a statement, signed by the chief financial officer of such Seller,
describing said Reportable Event and the action which Seller proposes to take
with respect thereto;


 


48













 


(xiv)        As soon as possible and in any event
within ten (10) days after receipt by Seller, a copy of (a) any
notice or claim to the effect that Seller or any of its Subsidiaries is or may
be liable to any Person as a result of the release by Seller, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or substance
into the environment, and (b) any notice alleging any violation of any
federal, state or local environmental, health or safety law or regulation by
Seller or any of its Subsidiaries, which, in either case, could reasonably be
expected to have a Material Adverse Effect; and


 


(b)                                 such other information concerning the business,
properties or financial condition of any Related Person as Administrative Agent
or any Buyer may reasonably request.


 


12.5                           [RESERVED]


 


12.6                           Visitation and Inspection Rights.  Seller
shall, and shall cause each Related Person to, permit authorized
representatives of Administrative Agent and/or any Buyer to discuss the
business, operations, assets and financial condition of such Related Person
with their officers and employees, to examine their Servicing Records and books
of records and account and make copies or extracts thereof and to visit and
inspect any of the Properties of each Related Person, all at such reasonable
times and as reasonably required by Administrative Agent or any Buyer may
request. Each Related Person will provide its accountants with a copy of this
Repurchase Agreement promptly after the execution hereof and will instruct its
accountants to meet with any designated officers or other authorized
representatives of Administrative Agent and/or such Buyer to answer candidly
any and all questions that such officers or authorized representatives may
address to them in reference to the financial condition or affairs of any
Related Person as those conditions or affairs relate to this Repurchase
Agreement. Each Related Person may have its representatives in attendance at
any meetings between the officers or other representatives of Administrative
Agent or any Buyer and such Related Person’s accountants held in accordance
with this authorization.


 


12.7                           Reimbursement of Expenses.  Subject to
Section 15.2, on the date of execution of this Repurchase Agreement, the
Seller shall reimburse the Administrative Agent for all expenses incurred by
the Administrative Agent in connection with the Repurchase Documents on or
prior to such date. From and after such date, the Seller shall promptly reimburse
the Administrative Agent for all expenses as the same are incurred by the
Administrative Agent in connection with the Repurchase Documents and within
thirty (30) days of the receipt of invoices therefor.


 


12.8                           Further Assurances.  The Seller
shall, within five (5) Business Days after the request of Administrative
Agent or any Buyer, execute and deliver to the Administrative Agent all further
documents, financing statements, agreements and instruments, and take all
further action that may be required under applicable law, or that the
Administrative Agent may reasonably request, in order to effectuate the
transactions contemplated by this Repurchase Agreement and the Repurchase
Documents or, without limiting any of the foregoing, to grant, preserve, protect
and perfect the validity and first-priority of the security interests created
or intended to be created hereby. The Seller shall do all things necessary to
preserve the Repurchase Assets so that they remain subject to a first priority
perfected security interest hereunder. Without limiting the foregoing, the
Seller will comply with all rules, regulations, and


 


49













 


other laws of any Governmental Authority and
cause the Repurchase Assets to comply with all applicable rules, regulations
and other laws. The Seller shall fully perform or cause to be performed when
due all of its material obligations under any Repurchase Assets, the Repurchase
Documents, any Takeout Commitment or any agreement between Seller and any
Person pursuant to which Seller undertakes to service Mortgage Loans. The
Seller will keep the Administrative Agent informed of the current name, address
and contact information concerning the Seller’s other mortgage warehouse credit
and repurchase facilities and will cooperate and assist the Administrative
Agent in exchanging information with such others (and their document custodians
or trustees) to prevent and promptly correct conflicting claims to and
interests in Repurchase Assets between or among lenders or repurchase
facilities counterparties.


 


12.9                           True and Correct Information.  All
information, reports, exhibits, schedules, financial statements or certificates
of the Seller or any of their Affiliates thereof or any of their officers
furnished to Administrative Agent or Buyers in connection with this Repurchase
Agreement or other Repurchase Documents and the transactions contemplated
hereby and during Administrative Agent’s or a Buyer’s diligence of the Seller
are and will be true, accurate and complete in all material respects and do not
omit to disclose any material facts necessary to make the statements therein or
therein, in light of the circumstances in which they are made, not materially
misleading or (in the case of projections) based on good faith estimates based
on the reasonable business judgment of the Seller, on the date as of which such
information is stated or certified. All required Financial Statements,
information and reports delivered by the Seller to the Administrative Agent
pursuant to this Repurchase Agreement shall be prepared in accordance with
GAAP, or in applicable, SEC filings, the appropriate SEC accounting
requirements.


 


12.10                     ERISA Events.


 


(a)                                  Promptly upon becoming aware of the occurrence of
any Event of ERISA Termination which together with all other Events of
Termination occurring within the prior twelve (12) months involve a payment of
money by or a potential aggregate liability of the Seller or any ERISA
Affiliate thereof or any combination of such entities in excess of $500,000 the
Seller shall give the Administrative Agent a written notice specifying the
nature thereof, what action the Seller or any ERISA Affiliate thereof has taken
and, when known, any action taken or threatened by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto;


 


(b)                                 Promptly upon receipt thereof, the Seller shall
furnish to the Administrative Agent copies of (i) all notices received by
the Seller or any ERISA Affiliate thereof of the PBGC’s intent to terminate any
Plan or to have a trustee appointed to administer any Plan, (ii) all
notices received by the Seller or any ERISA Affiliate thereof from the sponsor
of a Multiemployer Plan pursuant to Section 4202 of ERISA involving a
withdrawal liability in excess of $500,000, and (iii) all funding waiver
requests filed by the Seller or any ERISA Affiliate thereof with the Internal
Revenue Service with respect to any Plan, the accrued benefits of which exceed
the present value of the plan assets as of the date the waiver request is filed
by more than $500,000, and all communications received by the Seller or any
ERISA Affiliate thereof from the Internal Revenue Service with respect to any
such funding waiver request.


 


50













 


12.11                     Financial Covenants.


 


(a)                                  Minimum Adjusted Tangible Net Worth. As of the end of each calendar month, the
Adjusted Tangible Net Worth of Seller shall not be less than $7,500,000.


 


(b)                                 Maximum Leverage Ratio. Seller shall at all times maintain the ratio of
Total Recourse Liabilities to Adjusted Tangible Net Worth no greater than 10:1,
to be measured as of the date of any financial statements under Section 12.4(a)(i)
or (ii).


 


(c)                                  Maximum Adjusted Leverage Ratio. Seller shall at all times maintain the ratio of
Total Adjusted Liabilities to Adjusted Tangible Net Worth no greater than 15:1,
to be measured as of the date of any financial statements under Section 12.4(a)(i)
or (iii).


 


(d)                                 Minimum Profitability. As of the end of each Fiscal Quarter, Seller’s Consolidated
Net Income for the period of four preceding Fiscal Quarters ended as of the end
of such Fiscal Quarter shall be a positive number equal to or greater than
$1.00.


 


(e)                                  Maintenance of Liquidity. Seller shall at all times have Unencumbered
Liquid Assets equal to not less than $6,000,000.


 


12.12                     Hedging.
 If at any time during the term of this
Repurchase Agreement, the Seller is hedging its investments in Purchased
Mortgage Loans, the Seller will, in accordance with Section 12.4(a)(ix),
prepare its periodic hedge position reports in the form attached as Exhibit M, or such other form,
substance and detail satisfactory to the Administrative Agent, including
without limitation, any Rate Management Obligations related to the Transactions
having a Net Mark-to-Market Exposure and the Seller will pledge to the
Administrative Agent for the benefit of the Buyers any investment securities
acquired by the Seller and held from time to time to so hedge such investments
in Purchased Mortgage Loans.


 


12.13                     No Adverse Selection.  The Seller
shall not select Eligible Mortgage Loans to be sold to Buyers as Purchased
Mortgage Loans using any type of adverse selection or other selection criteria
which would adversely affect any Buyer.


 


12.14                     [RESERVED]


 


12.15                     Insurance.  The Seller shall and shall cause
the Servicer to continue to maintain Fidelity Insurance in respect of its
officers, employees and agents, with respect to any claims made in connection
with all or any portion of the Repurchase Assets with responsible insurance
companies, in such amounts and against such risks as is customarily carried by
similar businesses. The Seller shall maintain liability insurance protecting
the Seller and 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 upon the Administrative Agent’s request
made from time to time and without cost to the Administrative Agent. The Seller
shall notify the Administrative Agent of any material change in the terms of
any such Fidelity Insurance.


 


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12.16                     Books and Records.  Seller shall maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Repurchase Assets in
the event of the destruction of the originals thereof), and keep and maintain
or obtain, as and when required, all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Repurchase Assets.


 


12.17                     Illegal Activities.  The Seller
shall not engage in any illegal conduct or activity that could subject their
respective material assets to forfeiture or seizure.


 


12.18                     Change in Business.  The Seller
shall not make any material change in the nature of its businesses as carried
on at the date hereof, other than engaging in activities related to the
mortgage banking industry and approved by Administrative Agent, such approval
not to be unreasonably withheld.


 


12.19                     Limitation on Dividends and Distributions.  Following
the occurrence and during the continuation of an Event of Default or if an
Event of Default would result therefrom, the Seller shall not make any payment
on account of, or set apart assets for, a sinking or other analogous fund for
the purchase, redemption, defeasance, retirement or other acquisition of any
equity interest of Seller, whether now or hereafter outstanding, or make any
other dividend or distribution in respect of any of the foregoing or to any
shareholder or equity owner of Seller, either directly or indirectly, whether
in cash or property or in obligations of Seller or any of Seller’s Consolidated
Subsidiaries.


 


12.20                     Disposition of Assets; Liens.  The Seller
shall not cause any of the Repurchase Assets to be sold, pledged, assigned or
transferred except as contemplated hereby; nor shall the Seller create, incur,
assume or suffer to exist any mortgage, pledge, Lien, charge or other
encumbrance of any nature whatsoever on any of the Repurchase Assets, whether
real, personal or mixed, now or hereafter owned, other than Liens in favor of
the Administrative Agent for the benefit of the Buyers.


 


12.21                     Transactions with Affiliates.  The Seller
shall not enter into any transaction, including, without limitation, the
purchase, sale, lease or exchange of property or assets or the rendering or
accepting of any service with any Affiliate, unless such transaction is (a) not
otherwise prohibited in this Repurchase Agreement, (b) in the ordinary
course of Seller’s business, and (c) upon fair and reasonable terms no
less favorable to Seller, as the case may be, than it would obtain in a
comparable arm’s length transaction with a Person which is not an Affiliate.


 


12.22                     ERISA Matters.


 


(a)                                  Seller shall not permit any event or condition
which is described in any of clauses (i) through (vii) of the definition
of Event of ERISA Termination to occur or exist with respect to any Plan or
Multiemployer Plan.


 


(b)                                 The Seller shall not be an employee benefit plan as
defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1)
of the Code and the Seller shall not use “plan assets” within the meaning of 29
CFR § 2510.3-101 to engage in this Repurchase Agreement or the Transactions
hereunder.


 


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12.23                     Consolidations, Mergers and Sales of Assets. Unless otherwise approved by Majority Buyers,
prior to any such action, which approval shall not be unreasonably withheld, no
Related Person shall merge or consolidate with or into any Person; provided that
Seller may merge or consolidate with any wholly owned subsidiary of Seller if
Seller is the surviving corporation; and provided further that after giving
effect thereto, no Default or Event of Default would exist hereunder. No
Related Person shall acquire by purchase, or otherwise, all or substantially
all of the assets or capital stock of any Person. Seller will not issue any
securities other than shares of its common stock and any options or warrants
giving the holders thereof only the right to acquire such shares. No Related
Person other than Seller will issue any additional shares of its capital stock
or other securities or any options, warrants or other rights to acquire such
additional shares or other securities except to Seller and only to the extent
not otherwise forbidden under the terms hereof. No Subsidiary of Seller which
is a partnership will allow any diminution of Seller’s interest (direct or
indirect) therein. There shall be no Change of Control. No Related Person shall
dissolve or liquidate or sell, transfer, lease or otherwise dispose of any
material portion of their property or assets or business; provided, however,
nothing in this Section 12.22 shall be construed to prohibit any Related
Person from selling rights to service mortgage loans and pools of mortgage
loans or Mortgage Notes in the ordinary course of their business.


 


12.24                     Chief Executive Office; Jurisdiction of
Organization. Seller shall not
move its chief executive office from the address referred to in Section 11.23
or change its jurisdiction of organization from the jurisdiction referred to in
Section 11.23 unless it shall have provided Administrative Agent thirty
(30) days prior written notice of such change.


 


12.25                     Agency Approvals; Servicing. Seller shall maintain its status with Fannie Mae
as an approved lender and Freddie Mac as an approved seller/servicer, in each
case in good standing (each such approval, an “Agency Approval”). Should the Seller,
for any reason, cease to possess all such applicable Agency Approvals to the
extent necessary, or should notification to the relevant Agency or to HUD, FHA
or VA be required, Seller shall so notify Administrative Agent immediately in
writing. Notwithstanding the preceding sentence, Seller shall take all
necessary action to maintain all of its applicable Agency Approvals at all
times during the term of this Repurchase Agreement and each outstanding
Transaction.


 


12.26                     Guarantees. Except as set forth in Section 12.35, Seller shall not, either
directly or indirectly, assume, Guarantee, endorse, or otherwise become liable
for the Indebtedness or other obligation of any Person or entity except (a) by
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, (b) guaranties by the Seller of Indebtedness of its
Subsidiaries, or joint and several liabilities of the Seller with one or more
of its Affiliates pursuant to warehouse or aggregation borrowing arrangements, (c) contingent
liabilities arising out of the Seller’s recourse sales to others of the rights
to service mortgage loans, and (d) under the Seller’s existing contingent
liabilities described on Schedule V
hereto.


 


12.27                     [RESERVED]


 


12.28                     [RESERVED]


 


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12.29                     [RESERVED]


 


12.30                     Maintenance of Properties. Seller will (a) maintain, preserve and
protect all of its material properties and equipment necessary in the operation
of its business in good working order and condition, ordinary wear and tear
excepted and subject to exceptions for extraordinary or reasonably
unforeseeable events; (b) make all necessary repairs thereto and renewals
and replacements thereof in a reasonably timely manner except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect;
and (c) use the standard of care typical in the industry in the operation
and maintenance of its facilities.


 


12.31                     Dividends. Seller shall not, nor shall it permit any Subsidiary to, declare or pay
any Dividends, unless at the time of each Dividend by Seller, (x) no
Default or Event of Default shall have occurred and be continuing or would
result therefrom and (y) after giving effect to such Dividend, the
Borrower is in compliance on a pro forma basis with the covenants set forth in Section 12.11(a) through
(e).


 


12.32                     MERS Status.


 


(a)                                  Seller will (a) at all times, maintain its
status as a MERS member in good standing, (b) at all times remain in full
compliance with all terms and conditions of membership in MERS, including the
MERSCORP, Inc. “Rules of Membership” most recently promulgated by
MERSCORP, Inc., the “MERS Procedures Manual” most recently promulgated by
MERS, and any and all other guidelines or requirements set forth by MERS or
MERSCORP, Inc., as each of the foregoing may be modified from time to time,
including, but in no way limited to compliance with guidelines and procedures
set forth with respect to technological capabilities, drafting and recordation
of Mortgages, registration of Mortgages on the MERS System, including
registration of the interest of the Administrative Agent and the Buyers in such
mortgages and membership requirements, (c) promptly, upon the request of
the Agent, execute and deliver to the Agent an assignment of mortgage, in
blank, with respect to any MERS Mortgage that the Agent determines shall be
removed from the MERS System during the existence of an Event of Default, and (d) at
all times maintain the Electronic Tracking Agreement by and between Seller and
Administrative Agent in full force and effect, as the same may be hereafter
amended.


 


(b)                                 Seller shall not de-register or attempt to
de-register any Mortgage from the MERS System unless Seller has complied with
the requirements set forth in the Electronic Tracking Agreement and the
requirements of the Repurchase Document relating to the reassignment of
Purchased Mortgage Loans.


 


12.33                     [RESERVED]


 


12.34                     [RESERVED]


 


12.35                     Limitation on Indebtedness. No Related Person shall incur, create, contract,
assume, have outstanding, Guarantee or otherwise be or become, directly or
indirectly, liable in respect of any Indebtedness or Guaranty Obligations
unless at the time of the incurrence of such Indebtedness or Guaranty
Obligations (x) no Default or Event of Default shall have occurred and be
continuing or would result therefrom and (y) after giving effect to such


 


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Indebtedness or Guaranty Obligations, the
Seller is in compliance on a pro forma basis with the covenants set forth in Section 12.11(a) through
(e) as a result thereof; and provided further, to the extent such
Indebtedness is in respect of another mortgage warehouse credit facility,
Administrative Agent is collateral manager and custodian of the collateral
thereunder.


 


12.36                   Loans, Advances, and Investments. Unless otherwise approved by Majority Buyers,
prior to any such action, which approval shall not be unreasonably withheld, no
Related Person shall make any loan (other than Mortgage Loans), advance,
extension of credit, or capital contribution to, or investment in (including any
investment in any Subsidiary, joint venture or partnership), or purchase or
otherwise acquire any of the capital stock, securities, or evidences of
indebtedness of, any Person (including, without limitation, any employee,
officer or Affiliate of any Related 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 third parties when acquired by a Related Person 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 financial condition of such
Related Person;


 


(c)                                  Mortgage Notes originated or acquired by a Related
Person in the ordinary course of such Related Person’s business;


 


(d)                                 Margin accounts for the purpose of trading in hedge
instruments; and


 


(e)                                  Investments by any Related Person other than those
described in the preceding clauses (a) through (c) in a business or
venture substantially similar to those engaged in by such Related Person,
provided that the aggregate amount of all such other Investments for all
Related Persons shall at no time exceed $500,000.


 


12.37                     Liens.
No Related Person shall grant, create, incur, assume, permit or suffer to exist
any Lien, upon any of its Property, including without limitation any and all of
Seller’s Mortgage Notes and Servicing Rights and the proceeds from any thereof,
other than (a) Liens which secure payment of the Obligations, (b) first
Liens on Property which also secures Second Lien Loans, so long as the Asset
Value of such Mortgage Notes secured thereby does not exceed the Applicable Sublimit
for Second Lien Loans, and (c) Liens on Property other than Mortgage Loans
included in the Asset Base which secure payment of the Indebtedness permitted
to be incurred hereunder.


 


Section 13.                                      Events of Default. If any of the following events (each an “Event of Default”) occur, the
Administrative Agent, for the benefit of the Buyers, shall have the rights set
forth in Section 14, as applicable:


 


13.1                         Payment Failure. The Seller shall default in the payment (a) of (i) a Mark-to-Market,
(ii) any Price Differential, Purchase Price or Repurchase Price, or (iii) Expenses,
Obligations or any other sum which has become due, on a Payment Date or a
Repurchase Date or


 


55













 


otherwise, when due and payable under the terms
hereof, for a period of five (5) days or greater, or (b) on the
Termination Date of the aggregate Repurchase Price for all Purchased Mortgage
Loans in the Asset Base.


 


13.2                           Breach of Financial Representation or Covenant. The failure of the Seller to perform, comply with
or observe any term, covenant or agreement applicable to the Seller contained
in Sections 12.1, 12.9, 12.10, 12.11, 12.17, 12.18, 12.19, 12.21, 12.22, 12.23,
12.26, 12.31, 12.34; 12.35; or 12.36.


 


13.3                           Breach of Non-Financial Representation. Any representation, warranty or certification
made or deemed made herein or in any other Repurchase Document by the Seller,
as applicable, or any certificate furnished to the Administrative Agent
pursuant to the provisions hereof or thereof or any information with respect to
the Mortgage Loans furnished in writing by or on behalf of the Seller shall
prove to have been untrue or misleading in any material respect as of the time
made or furnished (it being understood that if any representations and warranties
made in respect of any Mortgage Loans included as Eligible Mortgage Loans in
the Asset Base are not true and correct as of any date, such Mortgage Loan’s
Asset Value shall be $0.00, and if as a result the aggregate Purchase Price
exceeds the Asset Value of the Asset Base, the Seller may cure such Default by,
within one (1) Business Day after receipt of written notice from the
Administrative Agent to the Seller, (x) substituting Cash, Cash
Equivalents or other Eligible Mortgage Loans therefor and/or (y) making a
Purchase Price Decrease); or


 


13.4                           Breach or Other Covenant. The Seller shall fail to observe or perform any
other covenant or agreement contained in this Repurchase Agreement (and not
identified in Section 13.2 or any other Repurchase Document), and if such
default shall be capable of being remedied, and such failure to observe or
perform shall continue unremedied for a period of fifteen (15) days; or


 


13.5                           Judgment. Any money judgment, writ or warrant of attachment or similar process
against the Seller in excess of $500,000 in the aggregate (to the extent not
adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage), shall be entered or filed against
the Seller or any of its assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of thirty (30) days; or


 


13.6                          Insolvency. An Event of Insolvency shall have occurred with respect to the Seller,
the Seller’s Subsidiaries, or the Parent; or


 


13.7                           Enforceability. (i) Any Repurchase Document shall for whatever reason be
terminated or cease to be in full force and effect in all material respects or
shall not be enforceable in all material respects in accordance with its terms
and the Purchased Mortgage Loans shall not be repurchased by the Seller within
two (2) Business Days, or (ii) any Lien granted pursuant thereto
shall fail to be perfected and of first priority, or (iii) any Person
(other than the Administrative Agent for the benefit of the Buyers) shall
contest the validity, enforceability, perfection or priority of any Lien
granted pursuant thereto, or (iv) any party thereto (other than the
Administrative Agent for the benefit of the Buyers) shall seek to disaffirm,
terminate, limit or reduce its obligations hereunder; or


 


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13.8                           Security Interest. The Seller shall grant, or suffer to exist, any Lien on any Repurchase
Asset (except any Lien in favor of the Administrative Agent for the benefit of
the Buyers); or the Repurchase Assets shall not have been sold to the Buyers or
the Liens contemplated hereby shall cease or fail to be first priority
perfected Liens on any Repurchase Assets in favor of the Administrative Agent
for the benefit of the Buyers; or


 


13.9                           Cross-Default. The Seller or any of its Subsidiaries fails to make when due or within
any applicable grace period any payment on any Indebtedness (other than the
Obligations) with an unpaid principal balance of over $1,000,000.00; or any
event or condition occurs under any provision contained in any agreement under
which such obligation is governed, evidenced or secured (or any other material
breach or default under such obligation or agreement occurs) if the effect
thereof is to cause or permit the holder or trustee of such obligation to cause
such obligation to become due prior to its stated maturity; or any such
obligation becomes due (other than by regularly scheduled payments) prior to
its stated maturity; or any of the foregoing occurs with respect to any one or
more items of Indebtedness of any of the Seller or any of its Subsidiaries with
unpaid principal balances exceeding, in the aggregate, $1,000,000.00; or


 


13.10                     Going Concern. The Seller’s audited financial statements or notes thereto or other
opinions or conclusions stated therein shall be qualified or limited by
reference to the status of the Seller as a “going concern” or reference of
similar import; or


 


13.11                     Change in Control. A Change in Control shall have occurred; or


 


13.12                     Inability to Perform. An officer of the Seller shall admit in writing
its inability to, or its intention not to, perform any material Seller’s
Obligations hereunder; or


 


13.13                    Parent Default. Any event or condition occurs under any provision contained in the
Parent Debt Agreement (or any other material breach or default under the Parent
Debt Agreement occurs) if the effect thereof is to cause or permit the holder
or trustee of such obligation to cause such obligation to become due or
repurchased, prepaid, redeemed or defeased prior to its stated maturity; or any
default or event of default occurs under any provision contained in any line of
credit maintained by Seller and such default is not cured within any applicable
given period; or


 


13.14                     Credit Facility Default. Any default or event of default occurs under any
provision contained in any credit facility or other repurchase facility
maintained by Seller after giving effect to applicable notice and grace
periods, if any; or


 


13.15                    Environmental. The Seller or any of its Subsidiaries shall (i) be the subject of
any proceeding or investigation pertaining to the release by Seller or any of
its Subsidiaries or any other Person of any toxic or hazardous waste or
substance into the environment, or (ii) violate any Environmental Laws,
which in the case of an event described in clause (i) and (ii), could
reasonably be expected to have a Material Adverse Effect; or


 


13.16                     Cessation of Business. The Seller and/or Parent shall terminate its
existence or suspend or discontinue their business; or


 


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13.17                     Business Condition. A change occurs, or is reasonably likely to
occur, in the business condition (financial or otherwise), operations or
properties of Seller or Parent, or the ability of Seller or Parent to pay
amounts owed to the Administrative Agent and Buyers under the Repurchase
Documents which could reasonably be expected to have a Material Adverse Effect.


 


Section 14.                                      Remedies.


 


14.1                           Exercise of Remedies. If an Event of Default exists with respect to the
Seller, the Administrative Agent may, or at the direction of the Majority
Buyers shall, exercise the following rights and remedies for the benefit of the
Buyers:


 


(a)                                  By written notice (which may be electronic) to the
Seller (which option shall be deemed to have been exercised, even if no notice
is given, immediately upon the occurrence of an Event of Insolvency of the
Seller), the Repurchase Date for each Transaction hereunder, if it has not
already occurred, shall be deemed immediately to occur.


 


(b)                                 If the Administrative Agent exercises or is deemed
to have exercised the option referred to in subsection (a) of this
Section,


 


(i)                                          the Seller’s obligations in such Transactions to
repurchase all Purchased Mortgage Loans, at the Repurchase Price therefor on
the Repurchase Date determined in accordance with subsection (a) of this
Section, shall thereupon become immediately due and payable, and all Income
paid after such exercise or deemed exercise shall be retained by the
Administrative Agent and applied to the aggregate unpaid Repurchase Price and
any other amounts owed by the Seller hereunder;


 


(ii)                                       to the extent permitted by applicable law, the
Repurchase Price with respect to each such Transaction shall be increased by
the aggregate amount accrued by daily application of, on a 360-day per year
basis for the actual number of days during the period from and including the
date of the exercise or deemed exercise of such option to but excluding the
date of payment of the Repurchase Price as so increased, (x) the
Post-Default Rate to (y) the Repurchase Price for such Transaction as of
the Repurchase Date as determined pursuant to subsection (a) of this Section (decreased
as of any day by (i) any amounts actually in the possession of the
Administrative Agent for the benefit of the Buyers pursuant to Section 14.2,
and (ii) any proceeds from the sale of Purchased Mortgage Loans applied to
the Repurchase Price pursuant to Section 14.3; and


 


(iii)                                    all Income actually received by the Administrative
Agent for the benefit of the Buyers pursuant to Section 5 (excluding any
Late Payment Fees paid pursuant to Section 5.1) shall be applied to the
aggregate unpaid Repurchase Price owed by the Seller.


 


(c)                                 By written notice (which may be electronic) to the
Seller, the Repurchase Price for each Transaction hereunder shall be deemed to
be due and payable on each Repurchase Date therefor.


 


14.2                           Possession of Files. Upon the occurrence of one or more Events of
Default, the Administrative Agent shall have the right to obtain physical
possession of all files of


 


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the Seller relating to the Purchased Mortgage
Loans and the Repurchase Assets and all documents relating to the Purchased
Mortgage Loans which are then or may thereafter come in to the possession of
the Seller or any third party acting for the Seller and the Seller shall
deliver to the Administrative Agent such assignments as the Administrative
Agent shall request. The Administrative Agent shall be entitled to specific performance
of all agreements of the Seller contained in the Repurchase Documents.


 


14.3                           Sale of Purchased Mortgage Loans. At any time on the Business Day following notice
to the Seller (which notice may be the notice given under Section 14.1(a) of
this Section), in the event the Seller has not repurchased all Purchased
Mortgage Loans, the Administrative Agent may immediately sell, without demand
or further notice of any kind, at a public or private sale and at such price or
prices as the Administrative Agent may deem satisfactory any or all Purchased
Mortgage Loans and the Repurchase Assets, on a servicing released basis, and
apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any
other amounts owing by the Seller hereunder. Any Buyer or the Administrative
Agent may be a purchaser of any Purchased Mortgage Loan at any public or
private sale and such Buyer or Administrative Agent shall be entitled, for the
purpose of bidding or making settlement or payment of the purchase price for
all or portion of the Purchased Mortgage Loan sold at any such sale to credit
amounts owed to such Buyer or Administrative Agent to such sale amount. The
proceeds of any disposition of Purchased Mortgage Loans and the Repurchase
Assets shall be applied first to the costs and expenses incurred by the
Administrative Agent in connection with the Seller’s default; second to costs
of cover and/or related hedging transactions owed to Administrative Agent
and/or any Buyer for the benefit of all the Buyers; third to the Repurchase
Price; and fourth to any other outstanding Obligations of the Seller.


 


14.4                           Liability of Seller. The Seller shall be liable to Administrative
Agent and Buyers for (i) the amount of all reasonable legal or other
expenses (including, without limitation, all costs and expenses of
Administrative Agent and Buyers in connection with the enforcement of this
Repurchase Agreement or any other agreement evidencing a Transaction, whether
in action, suit or litigation or bankruptcy, insolvency or other similar proceeding
affecting creditors’ rights generally, further including, without limitation,
the reasonable fees and expenses of counsel (including the costs of internal
counsel of Administrative Agent and Buyers) incurred in connection with or as a
result of an Event of Default, (ii) damages in an amount equal to the cost
(including all fees, expenses and commissions) of entering into replacement
transactions and entering into or terminating hedge transactions in connection
with or as a result of an Event of Default, and (iii) any other loss,
damage, cost or expense directly arising or resulting from the occurrence of an
Event of Default in respect of a Transaction.


 


14.5                           Cumulative Rights. The Administrative Agent shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other agreement or
applicable law.


 


14.6                           Remedies Non-Exclusive. Administrative Agent may exercise one or more of
the remedies available to Administrative Agent immediately upon the occurrence
of an Event of Default and, except to the extent provided in Sections 14.1(a) and
14.3, at any time thereafter without notice to the Seller. All rights and
remedies arising under this Repurchase


 


59













 


Agreement as amended from time to time
hereunder are cumulative and not exclusive of any other rights or remedies
which Administrative Agent may have.


 


14.7                           Enforcement. Administrative Agent may enforce its rights and remedies hereunder
without prior judicial process or hearing, and the Seller hereby expressly
waives any defenses Seller might otherwise have to require Administrative Agent
to enforce its rights by judicial process. The Seller also waives any defense
(other than a defense of payment or performance) the Seller might otherwise
have arising from the use of nonjudicial process, enforcement and sale of all
or any portion of the Repurchase Assets, or from any other election of
remedies. Seller recognizes that nonjudicial remedies are consistent with the
usages of the trade, are responsive to commercial necessity and are the result
of a bargain at arm’s length.


 


14.8                           Liability for Additional Amounts. To the extent permitted by applicable law, the
Seller shall be liable to the Administrative Agent (for itself and 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
Administrative Agent’s rights hereunder. Interest on any sum payable by the
Seller to the Administrative Agent under this paragraph 14.8 shall be at a rate
equal to the Post- Default Rate.


 


Section 15.                                      Indemnification and Expenses.


 


15.1                           Indemnification. The Seller agrees to hold the Administrative Agent and the Buyers, and
their Affiliates and their officers, directors, employees, agents and advisors
(each an “Indemnified
Party”) harmless from and indemnify any Indemnified Party
against all liabilities, losses, damages, judgments, reasonable costs and
expenses of any kind which may be imposed on, incurred by or asserted against
such Indemnified Party (collectively, “Costs”), relating to or arising out of this
Repurchase Agreement, any other Repurchase Document or any transaction contemplated
hereby or thereby, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, this Repurchase Agreement, any other
Repurchase Document to which it is a party or any transaction contemplated
hereby or thereby, in each case, INCLUDING THOSE COSTS ARISING FROM AN
INDEMNIFIED PARTY’S STRICT LIABILITY, OR COMPARATIVE, CONTRIBUTORY OR SOLE
NEGLIGENCE; PROVIDED, HOWEVER, THAT THE SELLER SHALL NOT BE
LIABLE FOR THE PAYMENT OF ANY COSTS TO THE EXTENT DETERMINED IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM THE ADMINISTRATIVE AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Without
limiting the generality of the foregoing, the Seller agrees to hold any
Indemnified Party harmless from and indemnify such Indemnified Party against
all Costs with respect to all Mortgage Loans relating to or arising out of any
Non-Excluded Taxes. In any suit, proceeding or action brought by an Indemnified
Party in connection with any Mortgage Loan for any sum owing thereunder, or to
enforce any provisions of any Mortgage Loan, the Seller will save, indemnify
and hold such Indemnified Party harmless from and against all Costs suffered by
reason of any defense, set-off, counterclaim, recoupment or reduction or
liability whatsoever of the account debtor or obligor thereunder, arising out
of a breach by the Seller of any obligation thereunder or arising out of any
other agreement, indebtedness or liability at any time owing to or in favor of
such account debtor or obligor or its successors from


 


60













 


the Seller. The Seller also agrees to
reimburse an Indemnified Party as and when billed by such Indemnified Party for
all the Indemnified Party’s reasonable costs and expenses incurred in
connection with the enforcement or the preservation of the Administrative
Agent’s and the Buyers’ rights under this Repurchase Agreement, any other
Repurchase Document or any transaction contemplated hereby or thereby,
including without limitation the reasonable fees and disbursements of its
counsel.


 


15.2                           Costs and Expenses. The Seller agrees to pay as and when billed by
the Administrative Agent all of the reasonable out-of-pocket costs and expenses
incurred by the Administrative Agent in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Repurchase Agreement, any other Repurchase Document or any other documents
prepared in connection herewith or therewith, provided Seller’s
Obligations to pay for costs and expenses in connection with the preparation
and negotiation prior to the Effective Date of this Repurchase Agreement and
other Repurchase Documents shall be as set forth in a separate agreement
between the Seller and the Administrative Agent. The Seller agrees to pay as
and when billed by the Administrative Agent all of the reasonable out-of-pocket
costs and expenses incurred in connection with the consummation and
administration of the transactions contemplated hereby and thereby including
without limitation filing fees and all the reasonable fees, disbursements and
expenses of counsel to the Administrative Agent. Subject to the limitations set
forth in Section 29 hereof, the Seller agrees to pay to the Administrative
Agent all the reasonable out of pocket due diligence, inspection, testing and
review costs and expenses incurred by the Administrative Agent with respect to
Mortgage Loans submitted by the Seller for purchase under this Repurchase
Agreement, including, but not limited to, those out of pocket costs and
expenses incurred by the Administrative Agent pursuant to Sections 15.2 and 29
hereof.


 


15.3                          Recourse. The obligations of the Seller from time to time to pay the Repurchase
Price, the Periodic Advance Repurchase Payments, and all other amounts due
under this Repurchase Agreement shall be full recourse obligations of the
Seller.


 


Section 16.                                      Servicing.


 


16.1                           Duty of Servicer. The Servicer shall maintain the Servicer File and service the Mortgage
Loans consistent with the degree of skill and care that such Servicer
customarily requires with respect to similar Mortgage Loans owned or managed by
it and in accordance with all applicable industry standards. The Servicer shall
(i) comply with all applicable Federal, State and local laws and
regulations, (ii) maintain all state and federal licenses necessary for it
to perform its servicing responsibilities hereunder, and (iii) not impair
the rights of any Buyer in any Mortgage Loans or any payment thereunder.
Administrative Agent may terminate the servicing of any Mortgage Loan with the
then existing servicer in accordance with Section 16.4 hereof.


 


16.2                           Escrowed Funds. The Servicer shall hold or cause to be held all escrow funds collected
by the Servicer with respect to any Purchased Mortgage Loans in trust accounts
and shall apply the same for the purposes for which such funds were collected.


 


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16.3                           Settlement Account Deposits. Upon the occurrence of an Event of Default, the
Servicer shall deposit all collections received by the Servicer and Seller on
account of the Purchased Mortgage Loans in the Settlement Account.


 


16.4                           Termination of Rights. Upon the occurrence of an Event of Default
hereunder, Administrative Agent shall have the right to immediately terminate
the Servicer’s right to service the Purchased Mortgage Loans without payment of
any penalty or termination fee. The Seller and the Servicer shall cooperate in
transferring the servicing of the Purchased Mortgage Loans to a successor
servicer appointed by Administrative Agent in its sole discretion.


 


16.5                           Notification of Default. If the Seller should discover that, for any
reason whatsoever, any entity responsible to the Seller by contract for
managing or servicing any such Purchased Mortgage Loan has failed to perform
fully the Seller’s obligations under the Repurchase Documents or any of the
obligations of such entities with respect to the Purchased Mortgage Loans, the
Seller shall promptly notify Administrative Agent.


 


Section 17.                                      Recording of Communications. The Administrative Agent, the Buyers and the
Seller shall have the right (but not the obligation) from time to time to make
or cause to be made tape recordings of communications between its employees and
those of the other party with respect to Transactions upon notice to the other
party of such recording. The Administrative Agent, the Buyers and the Seller
consent to the admissibility of such tape recordings in any court, arbitration,
or other proceedings. The parties agree that a duly authenticated transcript of
such a tape recording shall be deemed to be a writing conclusively evidencing
the parties’ agreement.


 


Section 18.                                      Single Agreement. The Administrative Agent, Buyers and the Seller acknowledge that, and
have entered hereinto and will enter into each Transaction hereunder in
consideration of and in reliance upon the fact that, all Transactions hereunder
constitute a single business and contractual relationship and that each has
been entered into in consideration of the other Transactions. Accordingly, each
of the Administrative Agent, Buyers and the Seller agree (i) to perform
all of its obligations in respect of each Transaction hereunder, and that a
default in the performance of any such obligations shall constitute a default
by it in respect of all Transactions hereunder, (ii) that each of them
shall be entitled to set off claims and apply property held by them in respect
of any Transaction against obligations owing to them in respect of any other Transaction
hereunder, (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,
and (iv) to promptly provide notice to the other after any such set off or
application.


 


Section 19.                                      Set-Off.
In addition to any rights and remedies of the Administrative Agent and the
Buyers hereunder and by law, the Administrative Agent and the Buyers shall have
the right, without prior notice to the Seller, any such notice being expressly
waived by the Seller to the extent permitted by applicable law, upon any amount
becoming due and payable by the Seller hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or


 


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demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent and the Buyers
or any Affiliate thereof to or for the credit or the account of the Seller or
any Affiliate thereof.


 


Section 20.                                     Notices and Other Communications. Except as otherwise expressly permitted by this
Repurchase Agreement, all notices, requests and other communications provided
for herein (including without limitation any modifications of, or waivers,
requests or consents under, this Repurchase Agreement) shall be given or made
in writing (including without limitation by telecopy) delivered to the intended
recipient at the “Address for Notices” specified below its name on the
signature pages hereof or thereof); or, as to any party, at such other
address as shall be designated by such party in a written notice to each other
party. Except as otherwise provided in this Repurchase Agreement and except for
notices given under Section 3 (which shall be effective only on receipt),
all such communications shall be deemed to have been duly given when
transmitted by telecopy or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.


 


Section 21.                                      Entire Agreement; Severability. This Repurchase Agreement, together with the
Repurchase Documents, constitute the entire understanding between
Administrative Agent and the Seller with respect to the subject matter they
cover and shall supersede any existing agreements, understandings, inducements
and conditions, express or implied, oral or written between the parties
containing general terms and conditions for repurchase transactions involving
Purchased Mortgage Loans. By acceptance of this Repurchase Agreement,
Administrative Agent and the Seller acknowledge that they have not made, and
are not relying upon, any statements, representations, promises or undertakings
not contained in this Repurchase Agreement. 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.


 


Section 22.                                      Assignment. The rights and obligations of the parties under this Repurchase
Agreement and under any Transaction shall not be assigned by any party hereto
except as set forth in the Administration Agreement. Subject to the foregoing,
this Repurchase Agreement and any Transactions shall be binding upon and shall
inure to the benefit of the parties and their respective successors and
assigns. Nothing in this Repurchase Agreement express or implied, shall give to
any Person, other than the parties to this Repurchase Agreement and their
successors hereunder, any benefit of any legal or equitable right, power,
remedy or claim under this Repurchase Agreement.


 


22.1                           Assignment and Assumption. Each Buyer may assign and participate its rights
and obligations hereunder, in accordance with the Administration Agreement and
pursuant to an executed assignment and assumption by such Buyer and assignee (“Assignment and Assumption”).


 


22.2                           Register. The Administrative Agent shall maintain, as agent for the Buyers and
the Seller, a register (the “Register”) on which it will record each Buyer’s rights
hereunder, and each Assignment and Acceptance and participation. The Register
shall include the names and addresses of the Buyer (including all assignees,
successors and participants) and


 


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the percentage or portion of such rights and
obligations assigned. Failure to make any such recordation, or any error in
such recordation shall not affect the Seller’s obligations in respect of such
rights. If a Buyer sells a participation in its rights hereunder, it shall
provide the Administrative Agent (as agent for the Seller), or maintain as
agent of the Seller, the information described in this paragraph and permit the
Administrative Agent (as agent for the Seller) to review such information as
reasonably needed for the Administrative Agent (as agent for the Seller) to
comply with its obligations under this Repurchase Agreement or under any
applicable Requirement of Law.


 


22.3                           Disclosure. Each Buyer may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 22, disclose
to the assignee or participant or proposed assignee or participant, as the case
may be, any information relating to the Seller or any of its Subsidiaries or to
any aspect of the Transactions that has been furnished to such Buyer by or on
behalf of the Seller or any of its Subsidiaries; provided that such
assignee or participant agrees to hold such information subject to the
confidentiality provisions of this Repurchase Agreement.


 


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


 


Section 23.                                      Tax Treatment. Each party to this Repurchase Agreement acknowledges that it is its
intent for purposes of U.S. federal, state and local income and franchise
taxes, to treat each Transaction as indebtedness of the Seller that is secured
by the Purchased Mortgage Loans and that the Purchased Mortgage Loans are owned
by the Seller in the absence of a Default by the Seller. All parties to this
Repurchase Agreement agree to such treatment and agree to take no action
inconsistent with this treatment, unless required by law.


 


Section 24.                                     Terminability. Each representation and warranty made or deemed to be made by entering
into a Transaction, herein or pursuant hereto shall survive the making of such
representation and warranty, and the Administrative Agent shall not be deemed
to have waived any Default that may arise because any such representation or
warranty shall have proved to be false or misleading, notwithstanding that the
Administrative Agent may have had notice or knowledge or reason to believe that
such representation or warranty was false or misleading at the time the
Transaction was made. Notwithstanding any such termination or the occurrence of
an Event of Default, all of the representations and warranties and covenants
hereunder shall continue and survive. The obligations of the Seller under Section 15
hereof shall survive the termination of this Repurchase Agreement.


 


Section 25.                                      APPLICABLE LAW. ALL OF THE REPURCHASE DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS. WITHOUT LIMITING
THE RIGHT OF THE ADMINISTRATIVE AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST
THE OTHER PARTIES HERETO ARISING OUT OF OR RELATING TO ITS OBLIGATIONS UNDER
THE REPURCHASE DOCUMENTS (AN “ACTION”) IN THE


 


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COURTS OF OTHER JURISDICTIONS, THE PARTIES
HERETO HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF TEXAS OR ANY FEDERAL COURT IN THE STATE OF TEXAS, AND THE PARTIES HERETO
HEREBY IRREVOCABLY AGREE THAT ANY ACTION MAY BE HEARD AND DETERMINED IN
SUCH STATE OR FEDERAL COURT. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION IN THE JURISDICTION. THE
SELLER HEREBY IRREVOCABLY AGREES THAT THE SUMMONS AND COMPLAINT OR ANY OTHER
PROCESS IN ANY ACTION IN ANY JURISDICTION MAY BE SERVED BY MAILING TO ANY
OF THE ADDRESSES SET FORTH HEREIN OR BY HAND DELIVERY TO A PERSON OF SUITABLE
AGE AND DISCRETION AT ANY SUCH ADDRESS. SUCH SERVICE SHALL BE COMPLETE ON THE
DATE SUCH PROCESS IS SO MAILED OR DELIVERED.


 


Section 26.                                      WAIVERS; JURY TRIAL; CONSEQUENTIAL DAMAGES. EACH OF THE PARTIES HERETO RECOGNIZES THAT IN
MATTERS RELATED TO THIS REPURCHASE AGREEMENT, IT MAY BE ENTITLED TO A
TRIAL IN WHICH MATTERS OF FACT ARE DETERMINED BY A JURY (AS OPPOSED TO A TRIAL
IN WHICH SUCH MATTERS ARE DETERMINED BY A FEDERAL OR STATE JUDGE). EACH OF THE
UNDERSIGNED ALSO RECOGNIZES THAT ONE OF THE REMEDIES AVAILABLE TO IT IN ANY
TRIAL MAY, UNDER CERTAIN CIRCUMSTANCES, BE THE RIGHT TO RECEIVE DAMAGES IN
EXCESS OF THOSE ACTUALLY SUSTAINED BY IT. IN THE PAST, IN SOME INSTANCES, SUCH
DAMAGES HAVE EQUALED OR EXCEEDED THE AMOUNT OF ACTUAL DAMAGES.


 


(a)                            EACH PARTY TO THIS REPURCHASE AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (i) ARISING UNDER THIS REPURCHASE AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS REPURCHASE AGREEMENT
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS REPURCHASE AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.


 


(b)                           TO THE MAXIMUM EXTENT NOW PERMITTED BY LAW, EACH OF
THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH


 


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LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE
OR CONSEQUENTIAL DAMAGES, OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES.


 


(c)                            EACH OF THE UNDERSIGNED HEREBY CERTIFIES THAT
NEITHER ANY REPRESENTATIVE OR AGENT OF THE ADMINISTRATIVE AGENT NOR THE
ADMINISTRATIVE AGENT’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT THE ADMINISTRATIVE AGENT WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH OF THE UNDERSIGNED ACKNOWLEDGES
THAT IT HAS BEEN INDUCED TO ENTER INTO THIS TRANSACTION BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.


 


Section 27.                                      No Waivers, Etc. No waiver of or consent to any departure from any provision hereof
shall be effective unless in writing and signed by the Administrative Agent and
shall be effective only in the specific instance for the purpose for which
given and to the extent specified in such writing. No Transaction hereunder
shall constitute a waiver of any of the conditions to such Transaction, nor, in
the event Seller fails to satisfy any such condition, shall any Transaction
have the effect of precluding the Administrative Agent from thereafter
declaring such failure to be an Event of Default. No failure on the part of the
Administrative Agent or any Buyer to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power or privilege under any
Repurchase Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under any Repurchase Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. An Event of Default shall be deemed
to be continuing unless expressly waived by the Administrative Agent in
writing. No waiver of any Event of Default shall affect or constitute a waiver
of any later Event of Default.


 


Section 28.                                      Netting.
If the Administrative Agent and the Seller are “financial institutions” as now
or hereinafter defined in Section 4402 of Title 12 of the United States
Code (“Section 4402”)
and any rules or regulations promulgated thereunder,


 


(a)                            All amounts to be paid or advanced by one party to
or on behalf of the other under this Repurchase Agreement or any Transaction
hereunder shall be deemed to be “payment obligations” and all amounts to be
received by or on behalf of one party from the other under this Repurchase
Agreement or any Transaction hereunder shall be deemed to be “payment
entitlements” within the meaning of Section 4402, and this Repurchase
Agreement shall be deemed to be a “netting contract” as defined in Section 4402.


 


(b)                           The payment obligations and the payment
entitlements of the parties hereto pursuant to this Repurchase Agreement and
any Transaction hereunder shall be netted as follows. In the event that either
party (the “Defaulting
Party”) shall fail to honor any payment obligation under this
Repurchase Agreement or any Transaction hereunder, the other party (the “Nondefaulting Party”)
shall be entitled to reduce the amount of any payment to be made by the
Nondefaulting Party to the Defaulting Party by the amount of the payment
obligation that the Defaulting Party failed to honor.


 


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Section 29.                                      Periodic Due Diligence Review. The Seller acknowledges that the Administrative
Agent and the Buyers have the right to perform continuing due diligence reviews
with respect to the Mortgage Loans, for purposes of verifying compliance with
the representations, warranties and specifications made hereunder, or
otherwise, and the Seller agrees that upon reasonable (but no less than one (1) Business
Day’s) prior notice unless an Event of Default shall have occurred and be
continuing, in which case no notice is required, to the Seller, the
Administrative Agent and the Buyers or their Authorized Representatives will be
permitted during normal business hours to examine, inspect, and make copies and
extracts of, the Servicer Files and any and all documents, records, agreements,
instruments or information relating to such Mortgage Loans in the possession or
under the control of the Seller. The Seller also shall make available to the
Administrative Agent and the Buyers a knowledgeable financial or accounting
officer for the purpose of answering questions respecting the Servicer Files
and the Mortgage Loans. Without limiting the generality of the foregoing, the
Seller acknowledges that the Administrative Agent and the Buyers may purchase
Mortgage Loans from the Seller based solely upon the information provided by
the Seller to the Administrative Agent and the Buyers in the Mortgage Loan
Schedule and the representations, warranties and covenants contained herein,
and that the Administrative Agent and the Buyers, at their option, have the
right at any time to conduct a partial or complete due diligence review on some
or all of the Mortgage Loans purchased in a Transaction, including, without
limitation, ordering Broker’s Price Opinions, new credit reports and new
Appraisals on the related Mortgaged Properties and otherwise regenerating the
information used to originate such Mortgage Loan. The Administrative Agent and
the Buyers may underwrite such Mortgage Loans itself or engage a third party
underwriter to perform such underwriting. The Seller agrees to cooperate with
the Administrative Agent and the Buyers and any third party underwriter in
connection with such underwriting, including, but not limited to, providing the
Administrative Agent and the Buyers and any third party underwriter with access
to any and all documents, records, agreements, instruments or information
relating to such Mortgage Loans in the possession, or under the control, of the
Seller. The Seller further agrees that the Seller shall pay all reasonable
expenses incurred by the Administrative Agent in connection with the
Administrative Agent’s activities pursuant to this Section 29 (“Due Diligence Costs”).


 


Section 30.                                      Administrative Agent’s Appointment as Attorney-In-Fact.


 


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


 


(i)                                    in the name of Seller, or in its own name, or
otherwise, to take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due with
respect to any other Repurchase Assets and to file any claim


 


67













 


or to take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys due
with respect to any other Repurchase Assets whenever payable;


 


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


 


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


 


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


 


(c)                                  Seller also authorizes the Administrative Agent, if
an Event of Default shall have occurred, from time to time, to execute, in
connection with any sale provided for in Section 14 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Repurchase Assets.


 


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


 


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Section 31.                                      Miscellaneous.


 


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


 


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


 


31.3                           Acknowledgment. Seller acknowledges that:


 


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


 


(b)                                 the Administrative Agent has no fiduciary
relationship to the Seller; and


 


(c)                                  no joint venture exists between the Administrative
Agent and the Seller.


 


31.4                          Documents Mutually Drafted. The Seller, Administrative Agent and Buyers agree
that this Repurchase Agreement and each other Repurchase Document prepared in
connection with the Transactions set forth herein have been mutually drafted
and negotiated by each party, and consequently such documents shall not be
construed against either party as the drafter thereof.


 


31.5                           Credit Agreement Termination.


 


(a)                                 All obligations owed by the Seller under the Credit
Agreement shall be due and payable on the Credit Agreement Termination Date, and
all obligations owed to the Seller under the Credit Agreement and other Loan
Documents (as defined in the Credit Agreement) must be satisfied as of the
Credit Agreement Termination Date. All rights and obligations of the Borrower
and the Lender under the Credit Agreement shall terminate effective as of the
Credit Agreement Termination Date, except to the extent such rights and
obligations are expressly deemed by the Credit Agreement to survive such
termination. Notwithstanding the foregoing or anything herein to the contrary,
any waivers or admissions made by any Person in any Loan Documents and any
obligations which any Person may have to indemnify or compensate Lender shall
survive this termination of the Credit Agreement.


 


(b)                                Notwithstanding anything to the contrary in the
Credit Agreement, the parties hereto agree that no further notice or action by
any party shall be required to terminate the Credit Agreement.


 


Section 32.                                      Confidentiality. The Administrative Agent, Buyers and Seller hereby acknowledge and
agree that all written or computer-readable information provided by one party
to any other regarding material non-public information about the other party,
the terms set forth in any of the Repurchase Documents or the Transactions
contemplated thereby (the “Confidential
Terms”), shall be kept confidential and shall not be divulged to
any party (other


 


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than Affiliates and Subsidiaries thereof who
agree to be bound by the provision of this Section 32) without the prior
written consent of such other party except to the extent that (i) it is
necessary to do so in working with legal counsel, auditors, taxing authorities
or other governmental agencies or regulatory bodies or in order to comply with
any applicable federal or state laws or regulations, (ii) any of the
Confidential Terms are in the public domain other than due to a breach of this
covenant, (iii) during an Event of a Default the Administrative Agent
determines such information regarding the Repurchase Documents or Transactions
to be necessary or desirable to disclose in connection with the marketing and
sales of the Purchased Mortgage Loans or otherwise reasonably necessary to
enforce or exercise the Administrative Agent’s rights hereunder, (iv) to
the extent a Buyer deems necessary or appropriate, in connection with an
assignment or participation under Section 22 of this Repurchase Agreement
or under the Administration Agreement or in connection with any hedging
transaction related to Purchased Mortgage Loans, (v) such disclosures as
may be required in any report, statement or testimony submitted to, or in
respect to any inquiry by any municipal, state or federal regulatory body
having or claiming to have jurisdiction over the Administrative Agent or any
Buyer, including the Board of Governors of the Federal Reserve System of the
United States, the Office of the Comptroller of the Currency or the Federal
Deposit Insurance Corporation or similar organizations or their successors, or (vi) such
disclosures as may be required in respect to any summons or subpoena or in
connection with any litigation related to the Repurchase Documents or
Transactions contemplated thereby. The provisions set forth in this Section 32
shall survive the termination of this Repurchase Agreement for a period of one
year following such termination.


 


Section 33.                                      Intent/Usury.


 


(a)                                 The parties recognize that each Transaction is a
“repurchase agreement” as that term is defined in Section 101 of Title 11
of the United States Code, as amended, and constitute “repurchase agreements”
under Sections 546(f), 559 and 362(b)(7) of the Bankruptcy Code (except
insofar as the type of Mortgage Loans subject to such Transaction or the term
of such Transaction would render such definition inapplicable), a “securities
contract” as that term is defined in Section 741 of Title 11 of the United
States Code, as amended (except insofar as the type of assets subject to such
Transaction would render such definition inapplicable), and a “master netting
agreement” as that term is defined in Section 101 of the Bankruptcy Code,
and that all payments hereunder are deemed “margin payments” or “settlement
payments” as defined in Title 11 of the United States Code.


 


(b)                                It is understood that either party’s right to
liquidate Mortgage Loans delivered to it in connection with Transactions
hereunder or to exercise any other remedies pursuant to Section 14 hereof
is a contractual right to liquidate such Transaction as described in Sections
555, 559 and 561 of Title 11 of the United States Code, as amended.


 


(c)                                 The parties agree and acknowledge that 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).


 


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


 


(e)                                 This Repurchase Agreement is intended to be a
“repurchase agreement” and a “securities contract,” within the meaning of Section 555
and Section 559 under the Bankruptcy Code.


 


(f)                                   It is the intent of the Seller, the Administrative
Agent and the Buyers in the execution and acceptance of this Repurchase
Agreement to contract in strict compliance with applicable usury law. In
furtherance thereof, the Seller, the Administrative Agent and the Buyers
stipulate and agree that none of the terms and provisions contained in this
Repurchase Agreement, or in any other instrument now or hereafter executed in
connection herewith, shall ever be construed to create a contract to pay for
the use, forbearance or detention of money, interest at a rate in excess of the
Maximum Rate; the Seller shall never be obligated or required to pay as Price
Differential or interest on the Obligations at a rate in excess of the maximum
interest that may be lawfully charged under applicable law; and that the
provisions of this Section shall control over all other provisions of this
Repurchase Agreement, and any other instruments now or hereafter executed in
connection herewith or any other oral or written agreement which may be in
apparent conflict herewith. The Administrative Agent and the Buyers expressly
disavow any intention to charge or collect excessive unearned interest or
finance charges in the event the maturity of the Obligations is accelerated. If
the Repurchase Agreement shall be accelerated for any reason or if the
Repurchase Price is paid prior to the Termination Date, and as a result thereof
the amount received from the Seller for the actual period of existence of the
Purchased Mortgage Loans exceeds the amount of a Price Differential or interest
at the applicable maximum lawful rate under applicable law, the Buyers shall,
at their option, either refund to the Seller the amount of such excess or
credit the amount of such excess against the Repurchase Price then outstanding
and thereby shall render inapplicable any and all penalties of any kind
provided by applicable law as a result of such excess amount. In the event that
the Administrative Agent or Buyers shall contract for, charge or receive any amount
or amounts and/or any other thing of value from the Seller which are determined
to constitute interest which would increase the effective interest rate on the
Obligations to a rate in excess of that permitted to be charged by applicable
law, all such amounts determined to constitute interest in excess of the lawful
rate shall, upon such determination, at the option of the Buyers, be either
immediately returned to the Seller or credited against the principal balance of
the Repurchase Price then outstanding, in which event any and all penalties of
any kind under applicable law as a result of such excess interest shall be
inapplicable. By execution of this Repurchase Agreement, the Seller
acknowledges that the Seller believes the Obligations to be non-usurious and
agrees that if, at any time, the Seller should have reason to believe that the
Obligations is in fact usurious, the Seller will give the Administrative Agent
notice of such condition and the Seller agrees that the Administrative Agent
and Buyers shall have ninety (90) days in which to make appropriate refund or
other adjustment in order to correct such condition if in fact such exists. The
term “applicable law” as used in this Section shall mean the laws of the
State of Texas or the


 


71













 


laws of the United States, whichever laws
allow the greater rate of interest, as such laws now exist or may be changed or
amended or come into effect in the future.


 


Section 34.                                     Disclosure Relating to Certain Federal Protections. The parties acknowledge that they have been
advised that:


 


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


 


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


 


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


 


Section 35.                                     Conflicts. In the event of any conflict between the terms of this Repurchase
Agreement and any other Repurchase Document, the documents shall control in the
following order of priority: first, the terms of this Repurchase Agreement
shall prevail and then the terms of the Repurchase Documents shall prevail.


 


Section 36.                                     Authorizations. Any of the persons whose signatures and titles appear on Schedule I are authorized, acting
singly, to act for the Seller or Administrative Agent, as the case may be,
under this Repurchase Agreement.


 


Section 37.                                     Acknowledgement of Anti-Predatory Lending Practices. Administrative Agent has in place internal
policies and procedures that expressly prohibit its purchase of any High Cost
Mortgage Loan.


 


Section 38.                                     General Interpretive Principles. For purposes of this Repurchase Agreement, except
as otherwise expressly provided or unless the context otherwise requires:


 


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


 


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


 


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


 


72












 


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


 


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


 


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


 


(g)           all times specified herein or in any
other Repurchase Document (unless expressly specified otherwise) are Central
times unless otherwise stated.


 


Section 39.            Fees. Payments below shall be
made in Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to Administrative Agent at such account designated by
Administrative Agent:


 


39.1         Facility Fee. In consideration
of the Buyers’ commitments to make the Purchases, Seller shall pay to
Administrative Agent a non-refundable facility fee (the “Facility Fee”)
determined by applying a rate of fifteen basis points (0.15%) per annum,
expressed as a per diem rate, to the actual aggregate amount of all Buyers’
Commitments for each day during each full or partial calendar month. Promptly
upon receipt, Administrative Agent shall allocate such facility fee among the
Buyers on a pro rata basis in accordance with each Buyer’s Commitment during
such full or partial calendar month. This facility fee shall be due and payable
in arrears on the last day of each calendar month and on the Termination Date.


 


39.2         Non-Use Fee. In consideration of
Buyers’ commitment to make the Purchases, Seller shall pay to Administrative
Agent for the benefit of Buyers a non-refundable, non-use fee (the “Non-Use Fee”) for
each Fiscal Quarter in which the aggregate amount of the Quarterly Facility
Usage is less than 40% of all Buyers’ Commitments. The amount of such non-use
fee for any such Fiscal Quarter shall be determined by applying a rate of seven
and one-half basis points (0.075%) per annum to the amount equal to the
aggregate amount of all Buyers’ Commitments less the Quarterly Facility Usage
for such Fiscal Quarter, and shall be due and payable on the fifteenth (15th)
day of the calendar month next succeeding the end of such Fiscal Quarter.
Promptly upon receipt, Administrative Agent shall allocate such facility fee
among the Buyers on a pro rata basis in accordance with each Buyer’s Commitment
during such full or partial Fiscal Quarter.


 


39.3          Administrative Agency Fee. The
Seller agrees to pay to the Administrative Agent such administrative fees,
agency fees, syndication/arrangement fees, and file fees (collectively, the “Administrative Fee”)
for the Administrative Agent’s services in administering this Repurchase
Agreement and the other Repurchase Documents as may be provided for in a
separate agreement between the Seller and the Administrative Agent.


 


Section 40.             Amendments. This Repurchase
Agreement may not be amended or modified, except by a writing signed by the
parties hereto and subject to the terms of the Administration Agreement.


 


73













 


Section 41.            Electronic
Transmissions.


 


(a)           The Seller shall use the e-mail
address on Schedule I (the “E-mail Address”) for delivery of Transaction
Requests (including Mortgage Loan Schedules), Repurchase Requests and Shipping
Requests (collectively, the “Electronic Transmissions”). The Seller agrees to
utilize the security features of the software used to prepare, and transmit
their Electronic Transmissions. The Seller agrees to protect the access to the
E-mail Address from use by others, and use security methods sufficient to
protect the content of the Electronic Transmissions delivered to the
Administrative Agent and Custodian from being alterable without detection after
they are electronically delivered.


 


(b)           The Seller acknowledges and agrees
that (1) the Administrative Agent and the Custodian may rely on any
Electronic Transmission sent electronically from the Seller’s E-mail Address to
be a valid written Electronic Transmission prepared and delivered pursuant to
this Repurchase Agreement or any other Repurchase Document by the Seller
without further inquiry by the Administrative Agent or the Custodian, (2) there
are risks associated with the use of electronic transmission, (3) neither
the Administrative Agent nor the Custodian controls the method of transmittal
or service providers, and has no obligation or responsibility whatsoever and
assumes no duty or obligation for the security, receipt, or third party
interception of Electronic Transmissions, and (4) the Seller will release,
hold harmless and indemnify the Administrative Agent and Custodian from any
claim, damage or loss, including those arising in whole or part from the
Administrative Agent or the Custodian’s strict liability, or sole, comparative
or contributory negligence, related to the electronic transmittal of Electronic
Transmissions.


 


(c)           Seller affirmatively consents and
agrees to permit Administrative Agent and Buyers and their successors and
assigns to enter into transactions, including those specifically described in Section 4(e),
with Seller involving “electronic records” and “electronic means,” as those
terms are defined in UETA and the E-Sign Act.


 


[SIGNATURE PAGES FOLLOW]


 


74













 


[Signature Page to Master Repurchase Agreement]


 


IN WITNESS
WHEREOF, the parties have entered into this Repurchase Agreement as of the date
set forth above.


 


	
  SELLER:

  	
   

  	
  RYLAND MORTGAGE
  COMPANY,

  
	
  Seller’s Address:

  	
   

  	
  an Ohio corporation

  
	
  24025 Park Sorrento, Suite 400

  	
   

  	
   

  
	
  Calabasas, CA 91302 

  	
   

  	
   

  
	
  Fax: (818) 223-7792

  	
   

  	
   

  
	
  Tel: (818) 223-7500 

  	
   

  	
   

  
	
  Tax ID Number: 31-0839569

  	
   

  	
   

  



 


	
   

  	
  By:

  	
  /s/ Dave A. Brown

  
	
   

  	
   

  	
  Name: Dave A. Brown

  
	
   

  	
   

  	
  Title:   Senior Vice President and Secretary

  
				



 


	
  STATE OF California

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF Los Angeles

  	
   

  	
  §

  



 


On December    ,
2008, before me,                                                                            
, Notary Public, personally appeared Dave Brown who proved to me on the
basis of satisfactory evidence to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which person acted, executed the instrument.


 


I certify under
PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct


 


	
   

  	
  WITNESS my hand and official seal

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature of Notary Public

  



 













 


[Signature Page to Master Repurchase
Agreement]


 


 


	
  ADMINISTRATIVE
  AGENT:

  	
  GUARANTY BANK,

  
	
  Address:

  	
  a Federal savings bank

  
	
  8333 Douglas Avenue, 11th Floor

  	
   

  



Dallas, Texas 75225


Attention: Valerie Hagar


Fax: (214) 360-1659


	
  Tel: (214) 360-8854

  	
  By:

  	
  /s/ Mark Short

  
	
   

  	
  Name:

  	
  Mark Short

  
	
   

  	
  Title:

  	
  Vice President

  
				



 













 


[Signature Page to Master
Repurchase Agreement]


 


 


	
  BUYER:

  	
  GUARANTY BANK,

  
	
  Address:

  	
  a Federal savings bank,

  
	
  8333 Douglas Avenue, 11th Floor

  	
  as a Buyer

  



Dallas, Texas 75225


Attention: Mark Short


Fax: (214) 360-4892


	
  Tel: (214) 360-1684

  	
  By:

  	
  /s/ Mark Short

  
	
   

  	
  Name:

  	
  Mark Short

  
	
   

  	
  Title:

  	
  Vice President

  
				



 













 


[Signature Page to Master
Repurchase Agreement]


 


 


	
  BUYER:

  	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
  Address:

  	
   

  	
  as a Buyer

  



800 Nicolett Mall


BC-MN-H03B


Minneapolis, MN 55402


	
  Attn: Darin Kragenbring

  	
  By:

  	
  /s/ Darin Kragenbring

  
	
  Fax: (612) 303-2253

  	
  Name:

  	
  Darin Kragenbring

  
	
  Tel: (612) 303-3579

  	
  Title:

  	
  Vice President

  
				



 













 


SCHEDULE I


 


AUTHORIZED
REPRESENTATIVES


 


SELLER NOTICES:


 


Ryland Mortgage Company


24025 Park Sorrento, Suite 400


Calabasas, CA 91302 


Fax: (818) 223-7792


Tel: (818) 223-7500


 


With a Copy to Counsel:


 


Timothy J. Geckle 


General Counsel


The Ryland Group


24025 Park Sorrento, Suite 400


Calabasas, CA 91302 


Fax: (818) 223-7792


Tel: (818) 223-7500


 


Mitchell M. Chupack


Financial Services Counsel


Ryland Mortgage Company


24025 Park Sorrento, Suite 400


Calabasas, CA 91302


Fax: (818) 223-7792


Tel: (818) 223-7500


 


 


SELLER AUTHORIZATIONS:


 


 


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


 


	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
  Dave A. Brown

  	
   

  	
  Senior Vice President and

  	
   

  	
  /s/ Dave A. Brown

  
	
   

  	
   

  	
  Secretary

  	
   

  	
   

  
	
  Martyn Watson

  	
   

  	
  Vice President

  	
   

  	
  /s/ Martyn Watson

  



 


 


SELLER’S
EMAIL ADDRESS FOR ELECTRONIC TRANSMISSIONS


 


[dabrown@ryland.com]


 


I - 1













 


ADMINISTRATIVE
AGENT NOTICES:


 


Guaranty Bank


National Residential Lending Group


8333 Douglas Avenue, 11th Floor


Dallas, Texas 75225


Attention: Valerie Hagar


E-mail: Valerie.hagar@guarantybank.com


Telephone No. (214) 360-8854


Facsimile No.: (214) 360-1659


 


With a Copy to Counsel:


 


Winstead PC


1100 JPMorgan Chase Tower 


600 Travis Street


Houston, Texas 77002


Attn: Mr. Jeff J. Brashier


E-mail: jbrashier@winstead.com


Telephone No.: (713) 650-2755


Facsimile No.: (713) 650-2400


 


 


ADMINISTRATIVE
AGENT AUTHORIZATIONS:


 


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


 


	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


I - 2













 


SCHEDULE II


 


BUYERS


 


Guaranty Bank


 


U.S. Bank National Association


 


II - 1













 


SCHEDULE III


 


SCHEDULE OF REQUIRED MORTGAGE
FILE DOCUMENTS FOR EACH

MORTGAGE LOAN TRANSACTION


 


1.           Original Mortgage
Note executed in favor of the Seller or the originator who sold such Mortgage
Note to the Seller (with a complete series of endorsements without recourse
from the original payee thereof, through any subsequent holders to the Seller
if purchased by the Seller) and endorsed by an authorized signatory of the
Seller in blank.


 


2.           Unless the Mortgage
is registered on the MERS® System, an assignment of the Mortgage executed by
the Seller in blank in recordable form, such assignment may be in the form of
one or more blanket assignments covering Mortgage Loans located in the same
county, if the Buyer so agrees.


 


3.           The original or a
certified copy of the Mortgage, including all available Mortgage riders
relating to the Mortgage Loan, noting the presence of the MIN of the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with the recording information indicated thereon.


 


III - 1


 












 


SCHEDULE IV


 


ADDITIONAL REQUIRED MORTGAGE LOAN DOCUMENTS


 


1.           The original recorded Mortgage securing the Mortgage Note
if not delivered to the Administrative Agent.


 


2.           Evidence of fire and extended coverage insurance in an
amount equal to or greater than the lesser of: (a) the maximum insurable value
of the improvements, or (b) the amount of the Mortgage Loan. Administrative
Agent reserves the right to obtain a loss payable endorsement in its favor if
it so desires.


 


3.           Evidence of Notice to Customer required by the federal
Truth in Lending Law and Federal Reserve Regulation Z.


 


4.           In the case of an FHA Mortgage Note, an FHA insurance
certificate or a commitment to deliver such; in the case of a VA mortgage note;
a VA guaranty certificate or a commitment to deliver such and in the case of a
conventional mortgage note, an appraisal.


 


5.           A copy of the preliminary policy of or commitment for
title insurance insuring the Mortgage as a first lien on the property subject
thereto written by a title company and in amount and containing exceptions
customary for financings of such type or otherwise satisfactory to
Administrative Agent.


 


6.           A copy of the executed Takeout Commitment relating to such
Purchased Mortgage Loan together with a certificate of Seller confirming that
such Purchased Mortgage Loan will be delivered under such Takeout Commitment or
a copy of the executed Rate Management Transaction relating to such Purchased
Mortgage Loan.


 


7.           Evidence of certificate of completion, as appropriate
under the circumstances.


 


8.           Other documentation as Administrative Agent may reasonably
deem appropriate, as well as documentation necessary to fulfill requirements
under the applicable Takeout Commitments.


 


9.           Such additional documents as may be deemed necessary by
Administrative Agent to transfer to Administrative Agent, for the benefit of
the Buyers, the title to any Purchase Mortgage Loan.


 


IV - 1













 


SCHEDULE V


 


EXISTING
GUARANTEES


 


NONE


 


V - 1













 


SCHEDULE VI


 


EXISTING
INDEBTEDNESS


 


NONE


 


VI - 1













 


SCHEDULE VII


 


EXISTING
INVESTMENTS IN SUBSIDIARIES

AND OTHER INVESTMENTS


 


Associates Funding, Inc., a Delaware
corporation


 


Associates Mortgage Funding Corporation, a
Delaware corporation


 


Cornerstone Title Company, a Maryland
corporation


Ryland Title Company of Maryland, a Maryland
corporation 


Cornerstone Title Insurance Company, a
Vermont corporation


 


Ryland Insurance Services, a California
corporation


 


VII - 1













 


SCHEDULE VIII


 


SCHEDULED LIENS


 


NONE.


 


VIII - 1













 


EXHIBIT A


 


TRANSACTION
PURCHASE REQUEST AND ASSIGNMENT


 


A - 1













 


EXHIBIT B


 


[RESERVED]


 


B - 1













 


EXHIBIT C


 


WAREHOUSE
LENDER’S RELEASE


 


Guaranty Bank, as Administrative Agent


8333 Douglas Avenue


Dallas, Texas 75225


 


Ladies and Gentlemen:


 


We hereby release all right, interest or
claim of any kind, including any security interest or lien, with respect to the
mortgage loan(s) referenced below, such release to be effective automatically
without any further action by any party, upon payment, in one or more
installments, by Guaranty Bank, in accordance with the wire instructions set
forth below, of an aggregate amount of $_____________.


 


	
  Loan No.

  	
   

  	
  Mortgagor

  	
   

  	
  Street Address

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  ZIP

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [WAREHOUSE LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


Wire Instructions:


 


Bank Name:


City, State:


ABA No.:


Account No.:


Account Name:


 


C - 1













 


EXHIBIT D


 


[RESERVED]


 


D - 1


 












 


EXHIBIT
E


 


OFFICER’S
CERTIFICATE


 


The undersigned,
Senior Vice President of Ryland Mortgage Company, an Ohio corporation (the “Seller”), hereby
certifies on behalf of the Seller as follows:


 


1.                                      This Certificate is delivered in connection with
that certain Master Repurchase Agreement dated as of December 31, 2008
among the Seller, the buyers from time to time party thereto (the “Buyers”) and Guaranty
Bank, as Administrative Agent for the Buyers (the “Repurchase Agreement”)
and the other Repurchase Documents specified therein. Unless otherwise defined
herein, capitalized terms used in this Certificate shall have the meanings set
forth in the Repurchase Documents.


 


2.                                      The Seller is duly formed, validly existing and in
good standing under the laws of the State of Ohio. There are no liquidation or
dissolution proceedings pending or to my knowledge threatened against the
Seller, nor has any other event occurred affecting or threatening the corporate
existence of the Seller.


 


3.                                      Attached hereto as Exhibit A is a true,
correct and complete copy of the Articles of Incorporation of the Seller, and
all amendments thereto through and including the date hereof, which Articles of
Incorporation have been certified by the Ohio Secretary of State and has not
been revoked and is in full force and effect;


 


4.                                      Attached hereto as Exhibit B is a true,
correct and complete copy of the Bylaws of the Seller, and all amendments
thereto through and including the date hereof, which Bylaws have not been
revoked and are in full force and effect;


 


5.                                      Attached hereto as Exhibit C is a
Certificate of Good Standing issued by the Ohio Secretary of State, certifying
that the Company is duly incorporated under the laws of the State of Ohio, is
in good standing, has a legal existence as a corporation, is duly authorized to
transact business, and the Seller’s annual reports have been filed to date;


 


6.                                      In each State where the nature of business in which
the Seller is engaged requires the Seller to be qualified as a foreign
corporation, Seller is a company in good standing and duly qualified to do
business in each such State as a foreign corporation. [This has not been
required previously and would take too long to obtain for 20 states by closing]


 


7.                                      Attached hereto as Exhibit D is a true,
correct and complete copy of resolutions (the “Resolutions”) which were duly adopted by
unanimous written consent of the Board of Directors of the Seller (the “Directors”)
authorizing the execution, delivery and performance by the Seller of the
Repurchase Agreement and the other Repurchase Documents to which the Seller is
or is to be a party and such Resolutions have not been amended, modified,
revoked or rescinded. Except as attached hereto as Exhibit E, no
resolutions have been adopted by the Directors which deal with the execution,
delivery or performance of any of the Repurchase Documents. The Repurchase
Agreement, the Custodial Agreement, the Administration Agreement and the other
Repurchase Documents are substantially in the form approved by the Resolutions
or pursuant to authority duly granted by the Resolutions.


 


E - 1













 


8.                                      On the date hereof, the representations and
warranties of the Seller set forth in the Repurchase Documents to which it is a
party are true and correct in all material respects (except to the extent such
representations and warranties relate, by their terms, to a specific earlier
date, in which case they shall be true and correct in all material respects on
and as of such earlier date.)


 


9.                                      On the date hereof, no Default or Event of Default
has occurred or is continuing or would result from any Transaction under the
Repurchase Agreement.


 


10.                                On the date hereof, all of the conditions set forth
in Sections 3.1 and 3.2 of the Repurchase Agreement have been satisfied.


 


11.                                The undersigned, as an officer of the Seller or as
attorney-in-fact, is authorized to and has signed manually, the Repurchase
Documents or any other document, agreement, instrument or certificate delivered
in connection with the transactions contemplated thereby, was duly elected or
appointed, was qualified and acting as such officer or attorney-in-fact at the
respective times of the signing and delivery thereof, and was duly authorized
to sign such document on behalf of the Seller, and the signature of such person
appearing on any such document is the genuine signature of such person.


 


	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
  Dave A. Brown

  	
   

  	
  Senior Vice President

  	
   

  	
   

  
	
   

  	
   

  	
  and Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


E - 2













 


IN WITNESS
WHEREOF, the undersigned has hereunto executed this Certificate as of the 31st
day of December, 2008.


 


	
   

  	
   

  
	
   

  	
  Ryland Mortgage Company,

  an Ohio corporation,

  
	
   

  	
  as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:  Dave A. Brown

  
	
   

  	
      Title:  Senior Vice President and Secretary

  



 


 


The undersigned hereby certifies that the
person named above is the duly elected and qualified Senior Vice President and
Secretary of the Seller and that the signature above is such person’s true and
genuine signature.


 


 


IN WITNESS
WHEREOF, the undersigned has hereunto executed this Certificate as of this 31st
day of December, 2008.


 


	
   

  	
  Ryland Mortgage Company,

  an Ohio corporation,

  
	
   

  	
  as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Martyn Watson

  
	
   

  	
  Title:

  	
  Vice President, Treasurer and Controller

  
				



 


E - 3













 


Exhibit A to Officer’s
Certificate


 


ARTICLES OF INCORPORATION OF
SELLER


 


(See attached)


 


E - 4













 


Exhibit B to Officer’s
Certificate


 


Bylaws of Seller


 


(See attached)


 


E - 5













 


Exhibit C to Officer’s
Certificate


 


CERTIFICATE OF GOOD STANDING AND
EXISTENCE FOR THE SELLER ISSUED BY

THE OFFICE OF OHIO SECRETARY OF STATE


 


(See attached)


 


E - 6













 


Exhibit D to Officer’s
Certificate


 


CERTIFICATES OF GOOD STANDING AND
EXISTENCE


 


(See attached)


 


E - 7













 


Exhibit E to Officer’s
Certificate


 


RESOLUTIONS OF THE SELLER


 


(See attached)


 


E - 8













 


RYLAND MORTGAGE
COMPANY


 


UNANIMOUS WRITTEN CONSENT IN LIEU
OF

MEETING OF THE BOARD OF DIRECTORS


 


December 31, 2008


 


The undersigned,
being all of the members of the Board of Directors (the “Directors”) of RYLAND MORTGAGE COMPANY, an
Ohio corporation (the “Seller”), in lieu of holding a meeting of the Directors,
do hereby waive notice of such meeting and take the following actions and adopt
the following resolutions by their unanimous written consent:


 


WHEREAS, it is
proposed that the Seller (a) transfer mortgage loans (“Mortgage Loans”)
from time to time to Guaranty Bank (the “Administrative Agent”) for the benefit of the
Buyers (as hereinafter defined) against the transfer of funds by the
Administrative Agent, with a simultaneous agreement by the Administrative Agent
for the benefit of the Buyers to transfer to the Seller such Mortgage Loans,
against the transfer of funds by the Seller pursuant to the terms and
conditions of (i) a certain Master Repurchase Agreement (the “Repurchase Agreement”)
among the Seller, the buyers party thereto (the “Buyers”) and the Administrative Agent, (ii) a
certain Custodial Agreement (the “Custodial Agreement”) among the Seller and
the Administrative Agent, as documents custodian and (iii) a certain
Administration Agreement (the “Administration Agreement”) among the Seller, the Buyers
and the Administrative Agent (the Repurchase Agreement, the Custodial
Agreement, the Administration Agreement and all other agreements, instruments,
documents, and certificates entered into or made by the Seller relating
thereto, collectively, the “Repurchase Documents”).


 


WHEREAS, the
Seller desires to enter into, and the Directors deem it to be necessary or
convenient to the conduct, promotion or attainment of the business of the
Seller to execute and deliver each Repurchase Document; and


 


WHEREAS, the
Seller has determined that the execution and delivery of each Repurchase
Document is reasonably expected to benefit, directly and indirectly, the
Seller.


 


NOW, THEREFORE, BE
IT


 


RESOLVED, that it
be, and it hereby is, determined by the Directors to be in the best interests
of the Seller, in pursuit of its authorized objectives, and is reasonable,
necessary or convenient to the conduct, promotion or attainment of the business
of the Seller that the Seller execute and deliver the Repurchase Documents,
each in substantially the form previously delivered to the Directors, and all
other agreements, documents, instruments and certificates to be made and/or
executed and/or delivered by the Seller pursuant to or in connection with any
of the Repurchase Documents (collectively, the “Transaction Documents”), and the
execution and delivery of the Transaction Documents by the Seller with such
changes, amendments, modifications, supplements, corrections and completions
thereto as any Authorized Officer (as defined below) may approve as being
necessary, desirable or appropriate, the consummation of the transactions
contemplated thereby and the performance of its obligations thereunder be, and
hereby are, in all respects authorized and approved.


 


E - 9













 


FURTHER RESOLVED,
that the Seller and its subsidiaries will benefit directly and indirectly from
the execution, delivery and performance of the Transaction Documents, and all
other agreements, documents, instruments and certificates made and/or executed
by the Seller pursuant to or in connection with the foregoing.


 


FURTHER RESOLVED,
that the Transaction Documents and all exhibits, annexes and schedules attached
or related thereto be, and the same hereby are, ratified, confirmed and
approved, together with any such changes, amendments, modifications,
supplements, corrections and completions thereto as any Authorized Officer (as
defined below) may approve as being necessary, desirable or appropriate.


 


FURTHER RESOLVED,
that the officers of the Seller (each an “Authorized Officer” and collectively the “Authorized Officers”)
are, and each of them acting singly hereby is, hereby authorized, empowered and
directed, for and in the name of and on behalf of the Seller, to execute and
deliver the Transaction Documents, or any of them, with such changes,
amendments, modifications, supplements, corrections and completions therein as
any such Authorized Officer may by his, her or their execution thereof approve,
the execution and delivery of any such Transaction Document to be conclusive
evidence that the same have been approved by the Directors.


 


FURTHER RESOLVED,
that any and all actions, transactions and agreements undertaken prior to the
adoption of these resolutions by any Authorized Officer, for and in the name of
and on behalf of the Seller, in connection with any of the foregoing matters,
including, but not limited to, the preparation and negotiation of any of the
Transaction Documents, are hereby ratified, confirmed, approved and adopted by
the Seller and the Directors in all respects and for all purposes.


 


FURTHER RESOLVED,
that any Authorized Officer be, and each of them individually and severally
hereby is, authorized at any time and from time to time, for and in the name
and on behalf of the Seller, to prepare, negotiate, administer, execute,
deliver, make oath to, acknowledge, certify, attest, accept, record, furnish
and file any and all such orders, directions, agreements, instruments,
documents, certificates, notices, statements, resolutions, consents and other
papers, and to do or cause to be done any and all such other acts and things as
may be shown by his, her or their execution or performance thereof to be in
his, her or their judgment reasonable, necessary, desirable or appropriate in
connection with any of the Transaction Documents (including without limitation
any amendments, restatements, modifications or supplements thereto) and the
consummation of the transactions contemplated by any of them or to otherwise
effectuate or carry out the purposes of and intent of any of the foregoing
resolutions, the taking of any such action to be conclusive evidence that the
same has been approved by the Directors.


 


E - 10













 


IN WITNESS
WHEREOF, the undersigned, being all of the members of the Board of Directors,
have executed this Unanimous Written Consent as of the date first above written
and direct that this Unanimous Written Consent of the Board of Directors be
filed with the minutes of the proceedings of the Directors.


 


 


	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  



 


E - 11












 


EXHIBIT F


 


[RESERVED]


 


F - 1













 


EXHIBIT G


 


FORM OF SECTION 7
CERTIFICATE


 


Reference is
hereby made to the Repurchase Agreement dated as of December 31, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the “Repurchase Agreement”),
among Ryland Mortgage Company, an Ohio corporation (the “Seller”), the Buyers
from time to time party thereto and Guaranty Bank, as administrative agent for
the Buyers (the “Administrative
Agent”). Pursuant to the provisions of Section 7 of the
Repurchase Agreement, the undersigned hereby certifies that:


 


1.                                      It is a                 
natural individual person,                  treated as a corporation for U.S. federal
income tax purposes,                 
disregarded for federal income tax purposes (in which case a copy of this Section 7
Certificate is attached in respect of its sole beneficial owner), or                 
treated as a partnership for U.S. federal income tax purposes (one must be
checked).


 


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


 


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


 


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


 


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


 


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


 


	
   

  	
  [NAME OF UNDERSIGNED]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


 


Date:                      ,       


 


G - 1













 


EXHIBIT H


 


FORM OF FINANCIAL COMPLIANCE
CERTIFICATE

As of and for the period ending


                            
         , 20    


 


Reference is made to that
certain Master Repurchase Agreement dated as of December 31, 2008 (as from
time to time amended, the “Agreement”),
by and among Ryland Mortgage Company, an Ohio corporation (“Seller”), GUARANTY
BANK, as Administrative Agent for the Buyers (“Agent”), and the Buyers party thereto (“Buyers”) which
Agreement is in full force and effect on the date hereof. Terms which are
defined in the Agreement are used herein with the meanings given them in the
Agreement.


 


This Certificate is furnished
pursuant to Section 12.4(a)(iv) of the Agreement. Together herewith
Seller is furnishing to Agent and each Buyer Seller’s audited annual financial
statements or monthly financial statements (the “Financial Statements”) dated                ,
200   (the “Reporting Date”). Seller hereby represents, warrants,
and acknowledges to Agent and each Buyer that:


 


(a)                                 the officer of Seller
signing this instrument is the duly elected chief financial officer or other executive officer of Seller identified in the
signature line below;


 


(b)                                the Financial Statements
are fairly stated in all respects (subject to normal year-end adjustments under
GAAP);


 


(c)                              attached hereto is
Schedule H-1 showing Seller’s compliance as of the Reporting Date with the
requirements of Section 12.11 of the Agreement [and Seller’s
non-compliance as of such date with the requirements of Section(s)            
of the Agreement];


 


(d)                                on the Reporting Date
Seller was, and on the date hereof Seller is, in full compliance with the
disclosure requirements of Article 12 of the Agreement, and no Default
otherwise existed on the Reporting Date or otherwise exists on the date of this
instrument [except for Default(s) under Section(s)             
of the Agreement, which (is/are) more fully described on a schedule attached
hereto].


 


The officer of Seller signing
this instrument hereby certifies that such officer has reviewed the Repurchase
Documents and the Financial Statements and has otherwise undertaken such
inquiry as was in such officer’s opinion necessary to express an informed
opinion with respect to the above representations, warranties and
acknowledgments of Seller and, to the best of such officer’s knowledge, such
representations, warranties, and acknowledgments are true, correct and
complete.


 


	
   

  	
  RYLAND MORTGAGE COMPANY
 an Ohio corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:          Martyn Watson

  
	
   

  	
  Title:                Vice President,
  Treasurer and Controller

  



 


H - 1













 


SCHEDULE H-1


 


RYLAND MORTGAGE
COMPANY

Schedule H-1 to Compliance Certificate

Compliance as of and for the period ending


                                 
       , 2008


with Provisions 12.11 of the Agreement



 


SCHEDULE H-1


 


	
  Financial Covenants

  	
   

  	
  Required

  	
   

  	
  Actual [or in compliance]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.                                       Adjusted Tangible Net Worth

  	
   

  	
  Not less than $7,500,000

  	
   

  	
   

  	
   

  
	
  [12.11(a)]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.                                       Total Recourse Liabilities to

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted
  Tangible Net Worth

  	
   

  	
  Not more than 10.0 to 1.0

  	
   

  	
   

  	
   

  
	
  [12.11(b)]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.                                       Total Adjusted Liabilities to

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted
  Tangible Net Worth

  	
   

  	
  Not more than 15 to 1.0

  	
   

  	
   

  	
   

  
	
  [12.11(c)]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.                                       Profitability [12.11(d)]

  	
   

  	
  Not less than $1.00 (as of the end of each period
  of four consecutive Fiscal
  Quarters)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.                                       Liquidity[12.11(e)]

  	
   

  	
  Not less than $6,000,000

  	
   

  	
   

  	
   

  



 


	
   

  	
  RYLAND MORTGAGE
  COMPANY
 an Ohio corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


 


(Date)


 


H - 1













 


EXHIBIT I


 


APPROVED TAKEOUT
INVESTORS


 


California Housing Finance Agency (CalHFA)


 


CitiMortgage Inc.


 


Countrywide Home Loans


 


Federal Home Loan Mortgage Corporation 


 


Federal National Mortgage Association 


 


GMAC Bank


 


Government National Mortgage Association 


 


Guaranty Bank


 


J.P. Morgan Chase


 


North Carolina Housing Finance Agency


 


South Carolina Housing Finance Agency 


 


Texas Dept. of Housing & Community
Affairs 


 


US Bank Home Mortgage


 


Virginia Housing Development Authority 


 


Wells Fargo


 


I - 1













 


EXHIBIT J


 


FORM OF
SERVICER NOTICE


 


[Date]


 


[                                                    ],
as Servicer


[ADDRESS]


Attention:                                      


 


Re:                             Master Repurchase Agreement, dated as of December 31,
2008 (as amended, restated, supplemented or otherwise modified, the “Repurchase Agreement”),
by and among RYLAND MORTGAGE COMPANY, an Ohio corporation (the “Seller”), the Buyers
from time to time party thereto, and GUARANTY BANK (the “Administrative Agent”)


 


Ladies and Gentlemen:


 


[                                      ] (the “Servicer”) is servicing certain mortgage
loans for Seller pursuant to that certain Servicing Agreement between the
Servicer and Seller. Pursuant to the Repurchase Agreement between
Administrative Agent, the Buyers and Seller, the Servicer is hereby notified
that Seller has sold to Administrative Agent for the benefit of the Buyers
certain mortgage loans which are serviced by Servicer which are subject to a
security interest in favor of Administrative Agent for the benefit of the
Buyers.


 


Upon receipt of a
notice of Event of Default from Administrative Agent in which Administrative
Agent shall identify the mortgage loans which are then sold to Administrative
Agent for the benefit of the Buyers under the Repurchase Agreement (the “Mortgage Loans”), the
Servicer shall segregate all amounts collected on account of such Mortgage
Loans, hold them in trust for the sole and exclusive benefit of Administrative
Agent, and remit such collections in accordance with Administrative Agent’s
written instructions. Following such notice of Event of Default, Servicer shall
follow the instructions of Administrative Agent with respect to the Mortgage
Loans, and shall deliver to Administrative Agent any information with respect
to the Mortgage Loans reasonably requested by Administrative Agent.


 


Notwithstanding
any contrary information which may be delivered to the Servicer by Seller, the
Servicer may conclusively rely on any information or notice of Event of Default
delivered by Administrative Agent, and Seller shall indemnify and hold the
Servicer harmless for any and all claims asserted against it for any actions
taken by the Servicer in connection with the delivery of such information or
notice of Event of Default.


 


Further, upon the
occurrence and continuance of an Event of Default under the Repurchase
Agreement, the Servicer agrees that the Administrative Agent shall have the
right to terminate the Servicer as provided in the Servicing Agreement. Upon
such termination, the Servicer shall transfer servicing of the Mortgage Loans
and shall deliver the related Servicing Files to the Administrative Agent’s
designee in accordance with the terms of the Servicing Agreement. The Servicer
shall (x) follow the instructions of the Administrative Agent with


 


J - 1













 


respect to the Mortgage Loans, and (y) treat
this letter agreement as a separate and distinct servicing agreement among the
Servicer and the Seller and the Administrative Agent (incorporating the terms
of the Servicing Agreement by reference), subject to no setoff or counterclaims
arising in favor of the Servicer (or any third party claiming through the
Servicer) under any other agreement or arrangement between the Servicer and any
Seller and/or guarantor or otherwise. Notwithstanding anything to the contrary
herein or in the Servicing Agreement, in no event shall the Administrative
Agent be liable for any fees, indemnities, costs, reimbursements or expenses of
the Servicer incurred prior to such Event of Default or otherwise owed to the
Servicer in respect of the period of time prior to such Event of Default.


 


Please acknowledge
receipt of this instruction letter by signing in the signature block below and
forwarding an executed copy to Administrative Agent promptly upon receipt. Any
notices to Administrative Agent should be delivered to the following addresses:
8333 Douglas Avenue, 11th Floor, Dallas, Texas 75225, Attention: Valerie Hagar,
Telephone (214) 360-8854, Facsimile (214) 360-1659.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  GUARANTY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


ACKNOWLEDGED AND AGREED TO BY:


 


[                                                         ],
as Servicer


 


 


	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  
						



 


J - 2













 


EXHIBIT K


 


[RESERVED]


 


K - 1













 


EXHIBIT L


 


[RESERVED]


 


L - 1













 


EXHIBIT M


FORM OF
DAILY HEDGE REPORT 


 


Ryland Mortgage
Company Fixed Pipe PIPELINE 


 


Report Date:      -     -            


 


	
  Report

  	
   

  	
  Commitment

  	
   

  	
  Trade

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
  Security

  	
   

  	
  Settlement

  	
   

  	
  Trade

  	
   

  	
   

  	
   

  	
  Mark to

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  No.

  	
   

  	
  ID

  	
   

  	
  Dealer

  	
   

  	
  Prefix

  	
   

  	
  Rate

  	
   

  	
  Date

  	
   

  	
  Amount

  	
   

  	
  Beta

  	
   

  	
  Market

  	
   

  	
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total:

  	
   

  	
  (               )

  	
   

  	
   

  	
   

  	
  (             )

  	
   

  	
   

  	
   

  



 


 


	
  Report

  	
   

  	
  Mortgage

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Loan

  	
   

  	
  Security

  	
   

  	
   

  	
   

  	
  Tuttle

  	
   

  	
  Tuttle

  	
   

  	
  Gross

  	
   

  
	
  Date

  	
   

  	
  No.

  	
   

  	
  Stage

  	
   

  	
  Coverage

  	
   

  	
  Amount

  	
   

  	
  Prefix

  	
   

  	
  Note Rate

  	
   

  	
  Price

  	
   

  	
  Cost

  	
   

  	
  P&L

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


M - 1