**Exhibit 10.1**

 

**MASTER REPURCHASE AGREEMENT**

 

**Dated as of June 24, 2010**

 

**Between:**

 

**EASTWEST BANK, on the one hand,**

 

**and**

 

**SYNERGYCAPITAL MORTGAGE CORP.**

 

**and**

 

**EXCELMORTGAGE SERVICING, INC., on the other hand**

 

**1.****                                     ****Applicability**

 

Fromtime to time the parties hereto may enter into transactions in which either **Synergy Capital Mortgage Corp.**or **ExcelMortgage Servicing, Inc.** (each a “Seller” and, collectively,the “Sellers”) agrees to transfer to **East WestBank** (“Buyer”) Eligible Loans against the transfer of fundsby Buyer to the relevant Seller, with a simultaneous agreement by Buyer totransfer to the relevant Seller such Eligible Loans at a date certain or ondemand, against the transfer of funds by such Seller.  Each such transaction shall be referred toherein as a “Transaction” and shall be governed by this Agreement (including ,without limitation, the terms and conditions contained in the Term Sheet), asthe same shall be amended from time to time in accordance with the termshereof.  This Agreement is a commitmentby Buyer to enter into Transactions up to the Maximum Aggregate Purchase Price.

 

**2.****                                     ****Definitions**

 

(a)                          “AcceptedServicing Practices” shall mean with respect to any Mortgage Loan, thoseaccepted and prudent mortgage servicing practices (including collectionprocedures) of prudent mortgage lending institutions that service mortgageloans of the same type as the Mortgage Loans in the jurisdiction where therelated Mortgaged Property is located, and which are in each case in accordancewith FHA, VA, Ginnie Mae, Freddie Mac and Fannie Mae servicing guides(including, without limitation, future updates) and all servicing requirementsof the Approved Takeout Investor for such Mortgage Loan, and in a manner atleast equal in quality to the servicing each Seller or Seller’s designeeprovides to mortgage loans which it owns in its own portfolio.

 

(b)                         “Act ofInsolvency” shall mean (i) the commencement by such party as debtor ofany case or proceeding under any bankruptcy, insolvency, reorganization,liquidation, moratorium, dissolution, delinquency or similar law, or such partyseeking the appointment or election of a receiver, conservator, trustee,custodian or similar official for such party or any substantial part of itsproperty or the convening of any meeting of creditors for purposes ofcommencing any such case or proceeding or seeking such an appointment orelection, (ii) the 

 

----

 

commencement of any such case or proceeding againstsuch party, or another seeking such an appointment or election, or the filingagainst a party of an application for a protective decree under the provisionsof the Securities Investor Protection Act of 1970, which (A) is consentedto or not timely contested by such party, (B) results in the entry of anorder for relief, such an appointment or election, the issuance of such aprotective decree or the entry of an order having a similar effect, or(C) is not dismissed within 15 days, (iii) the making by such partyof a general assignment for the benefit of creditors, or (iv) the admissionin writing by such party of such party’s inability to pay such party’s debts asthey become due;

 

(c)                          “AdditionalPurchased Eligible Loans” shall have the meaning set forth inParagraph 4(a) hereof;

 

(d)                         “Aged Loans”shall mean a category of Purchased Eligible Loans, specified in the Term Sheet,to which additional terms and conditions shall apply;

 

(e)                          “Agreement”shall mean this Master Repurchase Agreement, as the same may be amended,supplemented or restated from time to time;

 

(f)                            “ApprovedOriginator” shall mean each Seller or an originator (approved in writing byBuyer, which approval shall not be unreasonably withheld) from which a Sellerpurchases Mortgage Loans from time to time for the purchase and sale ofEligible Loans hereunder.  Buyer shallrespond to requests for approval of any originator within five (5) BusinessDays after  Sellers provide all requiredinformation to Buyer;

 

(g)                         “ApprovedTakeout Investor” shall mean (i) Fannie Mae, Freddie Mac, and GinnieMae, and (ii) any other Person named on a list provided by Sellers andapproved in writing by Buyer, as that list may be modified from time to time bySellers with the written approval of Buyer, in each case such written approvalnot to be unreasonably withheld.  Buyershall respond to requests for approval of any investor within five (5) BusinessDays after Sellers provide all required information to Buyer;

 

(h)                         “Assignmentof Mortgage” shall mean an assignment of a Mortgage Loan executed by therelevant Seller in blank with respect to Mortgage Loans that are not registeredwith MERS, which is delivered to Buyer as a condition of funding a Transaction,as described in Paragraph 3(a) hereof, and thereafter may be(i) delivered to an Approved Takeout Investor pursuant to Paragraph 3(b)hereof, or (ii) used by Buyer should any Seller fail to complete itsobligation to repurchase any Purchased Eligible Loan;

 

(i)                             “BusinessDay” shall mean any day other than a Saturday, Sunday and any day on whichbanks located in the State of California are authorized or required to closefor business;

 

(j)                             “CashCollateral Account” shall have the meaning set forth in the Term Sheet;

 

(k)                          “ClosingAgent” shall mean the title company or escrow agent that is responsible forthe final closing of a Mortgage Loan in favor of a Mortgagor.  Buyer may from time to time specify inwriting to Sellers that certain Closing Agents are not approved.  Sellers may not use a Closing Agent that hasbeen disapproved by Buyer;

 

2

----

 

(l)                             “ClosingProtection Letter” means a letter of indemnification from a title insureraddressed to the relevant Seller, with coverage that is customarily acceptableto Persons engaged in the Origination of mortgage loans, identifying theClosing Agent covered thereby and indemnifying the relevant Seller againstlosses incurred due to defects in title caused by malfeasance or fraud by theClosing Agent or the failure of the Closing Agent to follow the specificclosing instructions specified by the relevant Seller in the escrow letter withrespect to the closing of one or more Mortgage Loans.  The Closing Protection Letter shall be eitherwith respect to the individual Mortgage Loan being purchased pursuant hereto ora blanket Closing Protection Letter that covers closings conducted by theClosing Agent in the jurisdiction in which the closing of such Mortgage Loantakes place;

 

(m)                       “Custodian”shall initially mean Buyer.  The partieswill work together in good faith to enter into a tri-party custodial agreementwith a third-party custodian reasonably acceptable to Buyer and Sellers;provided, however, that in the event the parties are unable to reach agreementon a third party custodian and a tri-party custodial agreement the Custodianshall continue to be Buyer.  When Buyer,Sellers and the third party custodian execute a tri-party custodial agreement,this definition shall thereafter refer to such third-party custodian;

 

(n)                         “CustodialAgreement” shall mean the Custodial Agreement entered into between Buyer,Sellers and the third-party custodian as described in the definition of “Custodian”,providing for the custody of records relating to the Purchased Eligible Loans,as the same may be amended or restated from time to time;

 

(o)                         “DeterminationDate” shall mean any date on which a determination is made by Buyerrelative to an applicable factor or amount under this Agreement, includingPrice Differential, Maximum Aggregate Purchase Price or Repurchase Price;

 

(p)                         “Dry FundedMortgage Loan” shall mean an Eligible Mortgage Loan for which the documentsas described in  Exhibit A-2hereto have been delivered to Buyer on or prior to the Purchase Date inconjunction with a Transaction Request as described in Exhibit A-1hereto;

 

(q)                         “EligibleLoan” shall mean any Mortgage Loan owned by a Seller that satisfies therequirements for purchase hereunder, including without limitation therepresentations and warranties set forth in Exhibit B hereto pursuant toParagraph 9(c) hereof.

 

(r)                            “Event ofDefault” shall mean any of the events specified in Paragraph 10hereof;

 

(s)                          “ExcelOperating Account” shall have the meaning set forth in the Term Sheet.

 

(t)                            “ExcelSettlement Account” shall have the meaning set forth in the Term Sheet.

 

(u)                         “Fannie Mae”shall mean the Federal National Mortgage Association;

 

(v)                         “FHA”shall mean the Federal Housing Administration;

 

(w)                       “Freddie Mac”shall mean the Federal Home Loan Mortgage Corporation;

 

3

----

 

(x)                           “GovernmentalAuthority” shall mean any applicable nation or government, an agency,department, state or other political subdivision thereof, or anyinstrumentality thereof, and any entity exercising executive, legislative,judicial, regulatory or administrative functions of or pertaining to government.  Governmental Authority shall include, withoutlimitation, each of Fannie Mae, Freddie Mac, FHA and Ginnie Mae.

 

(y)                         “GAAP”shall mean generally accepted accounting principles in the United States;

 

(z)                           “Guarantor”shall mean any Person who delivers a Guaranty hereunder;

 

(aa)                    “Guaranty” shall meanthe guaranty as of the date hereof as the same may be amended from time totime, pursuant to which Guarantor fully and unconditionally guarantees theobligations of each Seller hereunder, as the same may be amended or restatedfrom time to time, in the form of Exhibit D hereto;

 

(bb)                  “Ginnie Mae” shallmean the Government National Mortgage Association;

 

(cc)                    “Income” shall meanwith respect to any Eligible Loan at any time, any principal thereof then payableand all interest, sale proceeds and other collections and distributions thereonor proceeds thereof (but not including any commitment fees, origination feesand/or servicing fees);

 

(dd)                  “LIBOR” shall mean,with respect to each day a Transaction is outstanding, the rate per annum equalto the one-month London Interbank Offered Rate as compiled by the BritishBankers Association and published at or about 11:00 a.m., London, England timeon such date (and if such day is not a Business Day, the LIBOR rate in effecton the Business Day immediately preceding such day); provided, that ifsuch rate shall not be so quoted, then as determined by Buyer, the one-monthPrime Rate on such date as published in *The Wall Street Journal*,Western edition; provided, further that Buyer’s determination of LIBORshall be conclusive upon the parties absent manifest error on the part ofBuyer;

 

(ee)                    “Material Adverse Effect”shall mean, with respect to any Person, any material adverse effect on(i) the validity or enforceability of this Agreement or any otherTransaction Document, (ii) the business, operations, total property orfinancial condition of such Person, (iii) the Purchased Eligible Loans(together with each of the other assets granted to Buyer pursuant to Paragraph6 hereof), (iv) the enforceability or priority of the lien and securityinterest in favor of Buyer in respect of any material portion of the PurchasedEligible Loans (together with each of the other assets granted to Buyerpursuant to Paragraph 6 hereof), or (v) the ability of such Person tofulfill its obligations under this Agreement or any other Transaction Document;

 

(ff)                        “MaximumAggregate Purchase Price” shall mean the amount set forth in the TermSheet;

 

(gg)                  “MERS” shall meanMortgage Electronic Registration Systems, Inc.;

 

(hh)                  “Mortgage” shall meanthe mortgage, deed of trust or other instrument creating a first lien on anestate in fee simple interest in real property securing a Note;

 

4

----

 

(ii)                          “MortgageDocuments” shall mean originals or certified copies of all of theagreements, certificates and other documents evidencing, or related to theorigination and servicing of a Mortgage Loan, including, but not limited to,the Note, the Mortgage, the Assignment of Mortgage, appraisals, guarantees,insurance certificates, credit reports, the title insurance policy and titledocument, as may be applicable to a particular Eligible Loan, all as and to theextent the same have been delivered by the relevant Seller to Custodian forBuyer.

 

(jj)                          “MortgageLoan” shall mean a first lien mortgage loan on single family residentialproperty consisting of a Note secured by a Mortgage, which satisfies therequirements of the relevant Seller’s mortgage lending programs, and whichMortgage Loan includes all right, title and interest of the lender or mortgageeof such Mortgage Loan as a holder of both the beneficial and legal title tosuch Mortgage Loan, including without limitation (i) all loan documents,files and records of the mortgagee for such Mortgage Loan, (ii) themonthly payments, any prepayments, insurance and other proceeds, (iii) allServicing Rights with respect to such Mortgage Loan, and (iv) all otherrights, interests, benefits, security, proceeds, remedies, claims and covenantsof the lender or mortgagee arising from or in connection with such MortgageLoan;

 

(kk)                    “Mortgagor” shallmean the obligor on a Note;

 

(ll)                          “Note”shall mean the promissory note or other evidence of indebtedness evidencing theindebtedness of a Mortgagor under a Mortgage Loan;

 

(mm)              “Operating Account”and “Operating Accounts” shall have the meaning set forth in the TermSheet;

 

(nn)                  “Payment Date” shallmean the 15th day of each month (or if such day is not a Business Day the nextsucceeding Business Day).

 

(oo)                  “Person” shall meanany individual, corporation, company, voluntary association, partnership, jointventure, limited liability company, trust, unincorporated association orgovernment (or any agency, instrumentality or political subdivision thereof);

 

(pp)                  “Pledge Agreement”shall mean the pledge agreement as of the date hereof as the same may beamended from time to time, pursuant to which each Seller pledges to Buyercertain deposit accounts, in the form of Exhibit C hereto;

 

(qq)                  “Price Differential”shall mean, with respect to any Transaction hereunder as of any date, theaggregate amount obtained by daily application of the Pricing Rate for suchTransaction to the Purchase Price for such Transaction on a 360 day per yearbasis for the actual number of days each Pricing Rate was in effect, commencingon (and including) the Purchase Date and ending on (but excluding) theDetermination Date (reduced by any amount of such Price Differential previouslypaid by a Seller to Buyer with respect to such Transaction);

 

(rr)                        “PricingRate” shall mean the per annum percentage rate for determination of thePrice Differential, which initial rate shall be specified in the Term Sheet,subject to subsequent periodic adjustments as provided for in the Term Sheet;

 

5

----

 

(ss)                    “Prime Rate” shallmean the prime rate of U.S. money center commercial banks as published in *The Wall Street Journal*, Western edition or, if more thanone such rate is published, the average of such rates;

 

(tt)                        “PurchaseCommitment” shall mean a written commitment by an Approved Takeout Investorto purchase from the relevant Seller a Mortgage Loan that is the subject of aTransaction;

 

(uu)                  “Purchase Date” shallmean the date with respect to each Transaction on which Purchased EligibleLoans are to be transferred by the relevant Seller to Buyer hereunder;

 

(vv)                  “Purchase Price”shall mean, subject to Paragraph 3(c) hereof, (i) on the PurchaseDate, the price at which Purchased Eligible Loans are sold by the relevantSeller to Buyer hereunder, and (ii) thereafter, except where Buyer and therelevant Seller agree otherwise, such price decreased by the amount of any cashtransferred by any Seller to Buyer pursuant to Paragraph 3(c) hereof andpursuant to the Term Sheet; *provided, however,*that the Purchase Price for any Purchased Eligible Loan shall not exceed ninetyfive-percent (95%) of the original unpaid principal balance of the EligibleLoan (subject in all events to the sublimits set forth in the Term Sheet); *further**provided, however,*that each Seller and Buyer hereby acknowledge and agree that the Purchase Priceis inclusive of (and reflects a premium paid by Buyer) for the purchase of theServicing Rights in connection with the Purchased Eligible Loans;

 

(ww)              “Purchased Eligible Loans”shall mean the Eligible Loans sold by the relevant Seller to Buyer in aTransaction hereunder.  The term “PurchasedEligible Loans” with respect to any Transaction at any time also shall includeAdditional Purchased Eligible Loans delivered pursuant to Paragraph 4(a)hereof;

 

(xx)                      “RepurchaseDate” shall mean the date on which the relevant Seller is required torepurchase the Purchased Eligible Loans from Buyer, calculated in accordancewith the Term Sheet, which Repurchase Date shall in no event be later than theTermination Date;

 

(yy)                  “Repurchase Price”shall mean the price at which a Purchased Eligible Loans is to be resold byBuyer to the relevant Seller upon termination of the Transaction for such PurchasedEligible Loan, which Repurchase Price in each case (including, withoutlimitation, Transactions terminable upon demand) shall equal the sum of thePurchase Price and the unpaid Price Differential as of the Repurchase Date forsuch Purchased Eligible Loan;

 

(zz)                      “RESPA”means the Real Estate Settlement Procedures Act, as amended from time to time.

 

(aaa)              “Servicer” shallmean, collectively, with respect to each Purchased Eligible Loan, any Personwho is primarily responsible for performing the servicing functions for suchPurchased Eligible Loan and is identified in a RESPA notification letter as thePerson to whom the related mortgagor sends scheduled loan payments.  Notwithstanding that another Person may performservicing obligations, each Seller expressly acknowledges and agrees that thepurchase by Buyer of Eligible Loans hereunder shall include all ServicingRights

 

(bbb)           “Servicing Records”shall have the meaning set forth in Paragraph 11(a) hereof.

 

6

----

 

(ccc)              “Servicing Rights”shall mean contractual, possessory or other rights of any Person, whetherarising hereunder or under a servicing agreement, a subservicing agreement, theCustodial Agreement or otherwise, to administer, service or subservice aPurchased Eligible Loan or to possess related Servicing Records.

 

(ddd)           “Settlement Account”and “Settlement Accounts” shall have the meaning set forth in the TermSheet;

 

(eee)              “Subservicer” shallmean, collectively, with respect to each Purchased Eligible Loan, any Personwho is primarily responsible for performing the subservicing functions for suchMortgage Loan and is identified in a RESPA notification letter as the Person towhom the related mortgagor sends scheduled loan payments.  Notwithstanding that another person mayperform subservicing obligations, each Seller expressly acknowledges and agreesthat the purchase by Buyer of Eligible Loans hereunder shall include allServicing Rights;

 

(fff)                    “Synergy OperatingAccount” shall have the meaning set forth in the Term Sheet.

 

(ggg)           “Synergy SettlementAccount” shall have the meaning set forth in the Term Sheet.

 

(hhh)           “Tangible Net Worth”shall mean, with respect to any Person, the excess of the total assets of suchPerson over the total liabilities of such Person determined in accordance withGAAP, but excluding from the determination of total assets:  (a) all assets which would be classified asintangible assets under GAAP including, without limitation, goodwill (whetherrepresenting the excess cost over book value of assets acquired or otherwise),patents, trademarks, trade names, copyrights, franchises and deferred charges(including, without limitation, unamortized debt discount and expense,organization costs and research and product development costs), (b) loans to,accounts receivable from or other extensions of credit to officers, employees,shareholders or affiliates of such Person (to the extent not otherwiseeliminated in consolidation), and (c) investments in subsidiaries of suchPerson;

 

(iii)                       “Term Sheet”shall mean the term sheet substantially in the form attached hereto as AnnexI hereto, as executed by and between Buyer and Sellers, which isincorporated herein by reference;

 

(jjj)                       “TerminationDate” shall mean June 20, 2011 or such earlier date on which thisAgreement shall terminate or be terminated in accordance with the provisionshereof (including without limitation the provisions of Paragraph 10hereof) or by operation of law;

 

(kkk)              “Transaction” shallhave the meaning set forth in Paragraph 1 of this Agreement;

 

(lll)                       “TransactionDocuments” shall mean this Agreement (including, without limitation, theTerm Sheet made a part hereof), the Custodial Agreement, the Guaranty, thePledge Agreement and any other documents and agreements entered into inconnection with any of the foregoing;

 

(mmm)     “Transaction Request”,the document incorporating the relevant Seller’s request to initiate aTransaction and Buyer’s approval of such request, in the form of Exhibit A-1hereto;

 

7

----

 

(nnn)           “VA” shall mean theUnited States Department of Veterans Affairs; and

 

(ooo)           “Wet Funded Mortgage Loan”shall mean an Eligible Mortgage Loan for which the documents described in Exhibit A-2hereto have been delivered to Buyer on or prior to the Purchase Date inconjunction with a Transaction Request as described in Exhibit A-1hereto.

 

**3.****                                     ****Initiation;Transaction Request; Repurchase; Delivery of Wet Funding Documents; CustodialDuties of Buyer**

 

(a)                          If a Sellerdesires to enter into a Transaction hereunder, that Seller shall deliver toBuyer prior to 12:00 p.m., Los Angeles time, one (1) Business Day prior to theproposed Purchase Date, a Transaction Request in the form of Exhibit A-1hereto.  Provided that the Mortgage Loanslisted on the Transaction Request are Eligible Loans, Buyer shall confirm itsacceptance of the proposed Transaction and shall proceed to fund theTransaction and purchase such Eligible Loan by wire transfer of funds to theaccount of the Closing Agent designated by the relevant Seller, *provided that*:

 

(i)                                     With respect to any DryFunded Mortgage Loan, the relevant Seller has delivered to the Custodian thedocuments identified in Paragraph I of Exhibit A-2 hereto with respectto such Eligible Loan and (if a third-party custodian is then in place) theCustodian has issued a trust receipt with respect thereto; and

 

(ii)                                  With respect to any WetFunded Mortgage Loan, the relevant Seller has delivered to the Custodian theDocuments identified in Paragraph II of Exhibit A-2 hereto with respectto such Eligible Loan and (if a third-party custodian is then in place) theCustodian has issued a trust receipt with respect thereto.

 

(b)                         The relevantSeller shall repurchase each Purchased Eligible Loan on its respectiveRepurchase Date.

 

(c)                          EachTransaction shall be subject to any Sublimits set forth in the Term Sheet ascalculated with respect to all Transactions hereunder.  To the extent that as of any DeterminationDate any of the Sublimits set forth in the Term Sheet have been exceeded (each,an “Excess Purchase Price”), then Buyer by notice to the relevant Seller(which notice may be telephonic or by email) may require that Seller to payBuyer cash in an amount at least equal to such Excess Purchase Price, in whichcase such cash shall be paid to Buyer no later than the close of business inLos Angeles on the next Business Day immediately following the date of suchnotice.  Such a cash payment received byBuyer shall be applied as a partial payment of the Repurchase Price.

 

(d)                         With respect toany Wet Funded Mortgage Loan, the relevant Seller shall deliver to theCustodian all documents identified in Paragraph I of Exhibit A-2 nolater than four (4) Business Days after the related Purchase Date.

 

(e)                          So long as Buyeris the Custodian, Buyer agrees as follows:

 

(i)                                     Buyer shall maintaincontinuous custody of all items constituting the Mortgage Documents in securefacilities in accordance with customary standards for such custody.  Buyer shall issue a receipt to the relevantSeller for each Mortgage Document that it 

 

8

----

 

receivesfrom or on behalf of such Seller.  EachNote (and Assignment of Mortgage, if applicable) shall be maintained in fireresistant facilities.  Buyer shall, uponreceipt of a written request from the relevant Seller, release MortgageDocuments in the possession of Buyer to an Approved Takeout Investor.  The request for release shall indicate thePurchased Eligible Loans to be sold, such information to be provided in anelectronic medium acceptable to Buyer, the approximate amount of sale proceedssuch Seller anticipates receiving, the date of such anticipated sale, the nameand address of the Approved Takeout Investor and the required method and date ofdelivery.  Any transmittal of MortgageDocuments in the possession of Buyer in connection with the sale thereof to anApproved Takeout Investor will be under cover of a bailee letter substantiallyin the form attached hereto as Exhibit E, duly completed and executed byBuyer.  Promptly upon receipt by Buyer ofthe full amount of the takeout proceeds into the account set forth in thebailee letter, Buyer will notify the relevant Seller thereof in writing.  Any takeout proceeds sent by an ApprovedTakeout Investor shall be sent to the Excel Settlement Account or the SynergySettlement Account, as appropriate. Buyer agrees to reimburse, indemnify and hold each Seller and itsdirectors, officers, agents and employees harmless against any and allliabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs or out-of-pocket expenses of any kind or nature whatsoever,including reasonable attorney’s fees, that may be imposed on, incurred by, orasserted against it or them in any way relating to the loss by Buyer of anyMortgage Document for which Buyer has provided Seller a receipt.

 

**4.****                                     ****Representationand Warranty Breach Repurchase**

 

(a)                          Upon discoveryby any Seller of a breach of any of the representations and warranties setforth on Exhibit B to this Agreement, such Seller shall give promptwritten notice thereof to Buyer.  EachSeller and Buyer understand and agree that each and every one of therepresentations and warranties set forth in Exhibit B hereto withrespect to the Purchased Eligible Loans shall survive delivery of therespective Mortgage Documents to the Custodian and shall inure to the benefitof Buyer.  The fact that Buyer hasconducted or has failed to conduct any partial or complete due diligenceinvestigation in connection with its purchase of any Purchased Eligible Loanshall not affect Buyer’s right to demand repurchase any or all PurchasedEligible Loans as provided under this Agreement.  With respect to any Purchased Eligible Loan,the Sellers shall, within two (2) BusinessDays after the earlier of any Seller’s discovery of or receiving noticewith respect to (i) any breach of a representation or warranty containedin Exhibit B hereto, or (ii) any failure to deliver any of theitems required to be delivered as part of the Mortgage Documents within thetime period required for delivery pursuant to the Custodial Agreement, promptlycure such breach or delivery failure in all material respects.  Within two (2) Business Days after the earlier of any Seller’s discoveryof such breach or delivery failure or any Seller receiving notice thereof, ifsuch breach or delivery failure has not been remedied, the relevant Sellershall promptly upon receipt of written instructions from Buyer repurchase suchPurchased Eligible Loan at a purchase price equal to the Repurchase Price withrespect to such Purchased Eligible Loan by wire transfer to the ExcelSettlement Account or the Synergy Settlement Account, as appropriate.

 

**5.****                                     ****Paymentsof Price Differential; Income Payments**

 

(a)                          On each PaymentDate each Seller shall pay to Buyer all accrued but unpaid Price Differentialon its Transactions for the preceding calendar month.

 

9

----

 

(b)                         When aparticular Transaction’s term extends over an Income payment date on thePurchased Eligible Loans subject to that Transaction, all payments anddistributions, whether in cash or in kind, made on or with respect to thePurchased Eligible Loans shall, unless otherwise mutually agreed by Buyer andeach Seller and so long as no Event of Default on the part of any Seller shallhave occurred and be continuing, be retained by the relevant Seller, in itscapacity as the Subservicer, upon receipt from the related Mortgagor.  All such Income amounts shall be held by eachSeller for the benefit of, and in trust for, Buyer.  Notwithstanding anything to the contrarycontained herein, each Seller shall immediately pay over to Buyer all partialor full prepayments of principal by a Mortgagor.

 

**6.****                                     ****SecurityInterest**

 

Althoughthe parties intend that all Transactions hereunder be sales and purchases andnot loans, in the event any such Transactions are deemed to be loans, eachSeller shall be deemed to have pledged, and hereby does pledge, to Buyer assecurity for the performance by each Seller of its obligations under each suchTransaction, and all of each Seller’s payment and performance obligations underthe Transaction Documents, and shall be deemed to have granted, and hereby doesgrant, to Buyer a security interest in, all of such Seller’s now existing orhereafter acquired or arising right, title and interest in, to and under thePurchased Eligible Loans with respect to all Transactions hereunder and allrelated (i) loan documents, files and records of the mortgagee for such MortgageLoan, (ii) Income, any prepayments, insurance and other proceeds,(iii) Servicing Rights and other rights to service or subservice suchMortgage Loan and the proceeds thereof, and (iv) other rights, interests,benefits, security, proceeds, remedies, claims and covenants of the lender ormortgagee arising from or in connection with such Mortgage Loan.  In connection with such security interest,each Seller hereby authorizes Buyer to file any financing or continuationstatement under the applicable Uniform Commercial Code (without the signatureof any Seller) as Buyer may deem appropriate, and appoints Buyer as such Seller’sattorney-in-fact in accordance with Paragraph 17 hereof to (a) authenticate anysuch financing statement or statements in such Seller’s name and (b) take suchother actions as Buyer deems necessary or appropriate to perfect and continuethe security interest granted hereby and to protect, preserve and realize uponthe same (provided that Buyer will provide each Seller with notice of Buyer’sexercise of this power of attorney within five (5) Business Days after theexercise thereof).  Each Seller herebycovenants, jointly and severally, to pay all customary fees and expensesassociated with perfecting such security interest including, withoutlimitation, the cost of filing financing and continuation statements under theUniform Commercial Code and recording assignments of mortgage as and whenrequired by Buyer in its sole discretion. This Agreement shall constitute a security agreement, and Buyer shallhave all of the rights of a secured party under applicable law and each of eachSeller represents and warrants as to itself that each remittance of amounts bya Seller to Buyer under this Agreement will have been (x) in payment of a debtincurred by such Seller in the ordinary course of business or financial affairsof Seller and (y) made in the ordinary course of business or financialaffairs of such Seller.

 

**7.****                                     ****Paymentand Transfer**

 

Unlessotherwise mutually agreed, all transfers of funds hereunder shall be inimmediately available funds.  AllEligible Loans transferred by one party hereto to the other party shall betransferred (a) by notice to the Custodian to the effect that theCustodian is now

 

10

----

 

holdingfor the benefit of Buyer all documents and assignment forms delivered to itunder the Custodial Agreement and (b) in the case of loans that areregistered on MERS, by notice to MERS, in accordance with MERS procedures.

 

**8.****                                     ****Segregationof Documents Relating to Purchased Eligible Loans**

 

AllMortgage Documents and other files and records relating to Purchased EligibleLoans in the possession of any Seller or its designee shall be segregated fromother documents and securities in the possession of such Seller or its designeeand shall be identified as being owned by Buyer and subject to thisAgreement.  Segregation may beaccomplished by appropriate identification of ownership on the books andrecords of the holder, including a financial or securities intermediary or aclearing corporation.  Each Seller shallmark its master data processing records to indicate which of the Mortgage Loansconstitute Purchased Eligible Loans.  Allright, title and interest of each and every Seller in the Purchased EligibleLoans, including without limitation all Servicing Rights, shall pass to Buyeron the Purchase Date and nothing in this Agreement shall preclude Buyer fromengaging in repurchase transactions with the Purchased Eligible Loans orotherwise selling, transferring, pledging or hypothecating the PurchasedEligible Loans, but no such transaction shall relieve Buyer of its obligationsto transfer Purchased Eligible Loans to the relevant Seller pursuant toParagraphs 3, 4 or 10 hereof, or of Buyer’s obligation to credit or payIncome actually received by Buyer to, or apply Income actually received byBuyer to the obligations of, the relevant Seller pursuant to Paragraph 5hereof.

 

**9.****                                     ****Representations,Warranties and Covenants**

 

(a)                          Each Seller,jointly and severally as to all Sellers, and Buyer each represent and warrant,and shall on and as of the Purchase Date of any Transaction be deemed torepresent and warrant, to the other that:

 

(i)                                     it is duly authorized toexecute and deliver this Agreement and the other Transaction Documents to whichit is a party, to enter into the Transactions contemplated hereunder and toperform its obligations hereunder and has taken all necessary action toauthorize such execution, delivery and performance;

 

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

 

(iii)                               the Person signing thisAgreement and the other Transaction Documents to which it is a party on itsbehalf is duly authorized to do so on its behalf (or on behalf of any suchdisclosed principal);

 

(iv)                              it has obtained allauthorizations of any governmental body required in connection with thisAgreement, the other Transaction Documents and the Transactions hereunder andthereunder and such authorizations are in full force and effect; and

 

(v)                                 the execution, delivery andperformance of this Agreement, the other Transaction Documents and theTransactions hereunder and thereunder will not violate any law, 

 

11

----

 

ordinance,charter, by-law or rule applicable to it or any agreement by which it isbound or by which any of its assets are affected.

 

(b)                         Each Sellerrepresents and warrants to Buyer, and shall on and as of the Purchase Date ofany Transaction be deemed to represent and warrant, jointly and severally, asfollows:

 

(i)                                     The documents disclosedand/or delivered by each Seller to Buyer pursuant to this Agreement or anyother Transaction Documents are either original documents or genuine and truecopies thereof;

 

(ii)                                  Each Seller is a separateand independent corporate or other entity from the Custodian, no Seller doesowns a controlling interest in the Custodian either directly or throughaffiliates and no director or officer of any Seller is also a director orofficer of the Custodian;

 

(iii)                               None of the Purchase Pricefor any Eligible Loan will be used either directly or indirectly to acquire anysecurity, as that term is defined in Regulation T of the Regulations of theBoard of Governors of the Federal Reserve System, and no Seller has taken anyaction that might cause any Transaction to violate any regulation of theFederal Reserve Board;

 

(iv)                              Each Eligible Loan wasunderwritten and originated by an Approved Originator, and each Eligible Loanwas underwritten in accordance with the written underwriting standards of suchApproved Originator, which have been furnished by the relevant Seller to Buyer,and no change to such underwriting standards has occurred since the date thatthe last written revision to such standards was furnished to Buyer by therelevant Seller;

 

(v)                                 Each Seller shall be at thetime it transfers to Buyer any Eligible Loans for any Transaction the legal andbeneficial owner of such Eligible Loans, free and clear of any lien, securityinterest, option or encumbrance; and

 

(vi)                              No Seller hasused any selection procedures that identified the Eligible Loans relating to aTransaction as being less desirable or valuable than other comparable assets insuch Seller’s portfolio on the related Purchase Date.

 

(vii)                           Neither any Seller, nor Guarantor, nor any of their respective officers,directors, shareholders, partners, members or affiliates (including theindirect holders of equity interests in any Seller) is or will be an entity orperson:  (a) that is listed in the Annex to, or is otherwisesubject to the provisions of Executive Order 13224 issued on September 24,2001 (“EO13224”); (b) whosename appears on the United States Treasury Department’s Office of ForeignAssets Control (“OFAC”) most current list of “Specifically DesignatedNational and Blocked Persons” (which list may be published from time to time invarious mediums including, but not limited to, the OFAC website,http:www.treas.gov/ofac/t11sdn.pdf); (c) who commits, threatens to commit or supports “terrorism”, as that term isdefined in EO13224; or (d) who isotherwise affiliated with any entity or person listed above (any and allparties or persons described in clauses (a) through (d) above areherein referred to as a “Prohibited Person”).  Each covenants and agrees that neither suchSeller, nor Guarantor, nor any of their respective officers, directors,shareholders, partners, members or affiliates (including the indirect holdersof equity 

 

12

----

 

interests in such Seller) will:  (x) conduct any business, or engage in any transaction ordealing, with any Prohibited Person, including, but not limited to, the makingor receiving of any contribution of funds, goods, or services, to or for thebenefit of a Prohibited Person; or (y) engage in or conspire to engage in any transaction that evades or avoids,or has the purpose of evading or avoiding, or attempts to violate, any of theprohibitions set forth in EO13224.  EachSeller further covenants and agrees to deliver (from time to time) to Buyer anysuch certification or other evidence as may be requested by Buyer in Buyer’ssole and absolute discretion, confirming that: (i) neither such Seller, norany Guarantor, nor their respective officers, directors, shareholders,partners, members or affiliates (including the indirect holders of equityinterests in any Seller) is a Prohibited Person; and (ii) neither such Seller, nor any Guarantor, nor their respectiveofficers, directors, shareholders, partners, members or affiliates (includingthe indirect holders of equity interests in such Seller) has engaged in anybusiness, transaction or dealings with a Prohibited Person, including, but notlimited to, the making or receiving of any contribution of funds, goods, orservices, to or for the benefit of a Prohibited Person.

 

(viii)                        Except as otherwise disclosed in the financial statements of the Sellersand Guarantor delivered to Buyer prior to the date of this Agreement, there isno action, proceeding or investigation by or before any court, governmental oradministrative agency or arbitrator affecting any of the Purchased EligibleLoans, any Seller, Guarantor or any of their affiliates, pending or threatened,which is reasonably likely to be adversely determined and which, if adverselydetermined would have a reasonable likelihood of having a Material AdverseEffect.

 

(ix)                                The financial statements of Sellers and Guarantor, copies of which havebeen furnished to Buyer, (A) are, as of the dates and for the periodsreferred to therein, complete and correct in all material respects,(B) present fairly in all material respects the financial condition andresults of operations of Sellers and Guarantor as of the dates and for theperiods indicated, and (C) have been prepared in accordance with GAAPconsistently applied, except as noted therein (subject as to interim statementsto normal year-end adjustments).  Sincethe date of the most recent financial statements, there has been no MaterialAdverse Effect with respect to any Seller or Guarantor.  Except as disclosed in such financialstatements, neither any Seller nor Guarantor is subject to any contingentliabilities or commitments that, individually or in the aggregate, have areasonable likelihood of causing a Material Adverse Effect with respect to suchSeller or Guarantor.

 

(x)                                   None of the documents or information prepared by or on behalf of anySeller or Guarantor and provided by such Seller or Guarantor****to Buyer relating to such Seller’s or Guarantor’s financialcondition contain any statement of a material fact with respect to any Selleror Guarantor or the Transactions that was untrue or misleading in any materialrespect when made in light of the circumstances then existing.  Since the furnishing of such documents orinformation, there has been no change, nor any development or event involving aprospective change known to any Seller or Guarantor, that would render any of suchdocuments or information untrue or misleading in any material respect.

 

(xi)                                Each Seller and Guarantor is each solvent and no Seller nor Guarantor willbe rendered insolvent by the Transactions and, after giving effect to each suchTransaction, neither any Seller nor Guarantor will be left with an unreasonablysmall amount of capital with 

 

13

----

 

which to engage its business. Neither any Seller nor Guarantor intends to incur, nor believes that ithas incurred, debts beyond its ability to pay such debts as they mature.  Neither any Seller nor Guarantor iscontemplating the commencement of insolvency, bankruptcy, liquidation orconsolidation proceedings or the appointment of a receiver, liquidator,conservator, trustee or similar official in respect of such Seller or Guarantoror any of their assets.  No Seller istransferring any Purchased Eligible Loan with any intent to hinder, delay ordefraud any of its creditors.

 

(xii)                             Each Seller and Guarantor has each filed all federal and state tax returnswhich are required to be filed and paid all taxes, including any assessmentsreceived by it, to the extent that such taxes have become due (other than fortaxes that are being contested in good faith or for which it has establishedadequate reserves).  Any taxes, fees andother governmental charges payable by any Seller or Guarantor in connectionwith a Transaction shall be paid by the relevant Seller or Guarantor when due.

 

(c)                          Each Seller,jointly and severally, makes the representations and warranties set forth in Exhibit Bhereto with respect to each Eligible Loan, both as of the related Purchase Dateand as of the date of each Transaction hereunder.  Further, as of each Purchase Date, eachSeller shall be deemed to have represented and warranted, jointly andseverally, in like manner that such Seller hasno knowledge that any such representation or warranty either has ceased or isreasonably likely to cease to be true in a material respect as of such date,except as otherwise stated in a Transaction Request (any such exception toidentify the applicable representation or warranty and specify in reasonabledetail the related knowledge of such Seller).  The representations and warranties set forthin Exhibit B hereto are intended to supplement and be consistentwith the Term Sheet, but in the event of any conflict between the terms of Exhibit Bhereto and the Term Sheet, the Term Sheet shall prevail.

 

(d)                         Each Selleracknowledges that Buyer has the right to perform continuing loan level duediligence reviews with respect to the Eligible Loans, for purposes of verifyingcompliance with the representations, warranties and specifications madehereunder, or otherwise, and each Seller agrees that upon at least one (1) BusinessDay’s prior notice to the relevant Seller, Buyer or its authorizedrepresentatives will be permitted timely and reasonable access to examine,inspect, and make copies and extracts of, the related mortgage loan files andany and all documents, records, agreements, instruments or information relatingto such Eligible Loans in the possession or under the control of any Seller,the Subservicer or the Custodian.  EachSeller also shall make available to Buyer a knowledgeable financial oraccounting officer for the purpose of answering questions respecting themortgage loan files and the Eligible Loans. Without limiting the generality of the foregoing, each Selleracknowledges that Buyer may purchase Eligible Loans from such Seller basedsolely upon the information provided by such Seller to Buyer in the TransactionRequest and the representations, warranties and covenants contained herein, andthat Buyer, at its option, has the right at any time to conduct a partial orcomplete due diligence review on some or all of the Eligible Loans prior to orfollowing their purchase in a Transaction, including without limitationordering new credit reports and new appraisals on the property securing therelated Mortgage and otherwise re-generating the information used to originatesuch Eligible Loan.  Buyer may conductthe due diligence review of such Eligible Loans itself or engage a third partyunderwriter selected by Buyer to perform such review.  Each Seller agrees to, and to cause theSubservicer to, cooperate with Buyer and 

 

14

----

 

any third party underwriter in connection with suchdue diligence review, including without limitation providing Buyer and anythird party underwriter with access to any and all documents, records,agreements, instruments or information relating to such Eligible Loans in thepossession, or under the control, of any Seller or the Subservicer.  Notwithstanding any provision to the contraryherein regarding reasonable prior notice, if an Event of Default by any Sellershall have occurred and be continuing, then Buyer, upon notice to Sellers,shall have the right to immediate access and review of each Seller and the loaninformation contemplated in this Paragraph 9(d), provided that to theextent that a Seller does not have possession of such loan information, suchSeller shall cause the applicable Subservicer to provide Buyer with access andreview of such loan information within a reasonable period of time, but not toexceed any prior notification time provided under the related servicing agreementwith such Subservicer.  Pursuant toParagraph 14 hereof, Sellers hereby covenant, jointly and severally, topay all costs and expenses incurred by Buyer in connection with Buyer’s duediligence review of any Eligible Loans and promptly reimburse Buyer upon itsrequest for such payment.

 

(e)                          Sellers shallcomply at all times with the financial covenants set forth in the Term Sheet.

 

(f)                            Each Sellercovenants with Buyer, from and after the date hereof, as follows:

 

(i)                                     Sellers shall promptly, butno later than the end of the Business Day, notify Buyer if an Event of Defaultby any Seller shall have occurred;

 

(ii)                                  No Seller shall make futureadvances on a Note to the related Mortgagor;

 

(iii)                               No Seller will directly orindirectly use any of the proceeds from the sale of the Eligible Loans, orlend, contribute or otherwise make available any such proceeds to anysubsidiary, joint venture partner or other Person, for the purpose of financingthe activities of any Person that is subject to sanctions under any programadministered by the Office of Foreign Assets Control of the United StatesDepartment of the Treasury, including without limitation those implemented byregulations codified in Subtitle B, Chapter V, of Title 31, Code of FederalRegulations; and

 

(iv)                              Each Seller shall provideBuyer access to Sellers’ internet siteftp://ftp.impaccompanies.com/Outbound/BackFeed/MISC/EastWest/, subject to Buyer’sagreement to (A) maintain the confidentiality of all information containedtherein and (B) not to utilize the website for any purpose other than duediligence and monitoring with respect to Purchased Eligible Loans.

 

**10.****                              ****Eventsof Default**

 

(a)                          The followingevents shall constitute events of default (each an “Event of Default”)hereunder with respect to all Sellers:

 

(i)                                     Any Seller fails torepurchase Purchased Eligible Loans on the applicable Repurchase Date pursuantto the terms hereof or to pay Price Differential as and when due;

 

(ii)                                  Any Seller fails to complywith Paragraph 4 hereof;

 

15

----

 

(iii)                               Any Seller fails to pay anyamount due and payable hereunder or under any other Transaction Document andnot referenced in subparagraphs 10(a)(i) and 10(a)(ii) above withinfive (5) Business Days after the due date thereof or if such fee, expenseor other amount due does not have a due date, within five (5) BusinessDays after the written request by Buyer of such payment;

 

(iv)                              An Act of Insolvency occurswith respect to any Seller or Guarantor;

 

(v)                                 Any representation orwarranty made by any Seller shall have been incorrect or untrue in any materialrespect when made or repeated or deemed to have been made or repeated; *provided, however,* that in the case of representations andwarranties made with respect to the Purchased Eligible Loans as set forth inParagraph 9(c) hereof, such circumstance shall not constitute anEvent of Default, unless such incorrect representation or warranty was madeknowingly and intentionally by such Seller, but shall be used solely for thepurpose of determining whether the relevant Mortgage Loan is an Eligible Loan;

 

(vi)                              Any Seller shall breach anycovenant contained herein or in any other Transaction Document in any materialrespect and shall fail to cure such breach within five (5) Business Daysafter the earlier of (A) discovery of such breach by Seller or(B) written notice of such breach from Buyer to Sellers;

 

(vii)                           At any time after any Sellerbecomes a Fannie Mae, Freddie Mac or Ginnie Mae eligible originator, sellerand/or servicer such Seller loses that eligibility or any GovernmentalAuthority cancels any of such Seller’s right to be an originator, seller orservicer of Mortgage Loans (other than in each case by virtue of a voluntarysurrender of such eligibility or right without any investigation or chargespending or threatened and following not less than ten (10) days priornotice to Buyer of such Seller’s intent to so surrender);

 

(viii)                        Failure of any Seller tocorrect an imbalance in any escrow account established with such Seller,Servicer or Subservicer as either an originator, purchaser or servicer ofMortgage Loans, which imbalance may have a Material Adverse Effect, within five(5) Business Days after demand by any beneficiary of such account or byBuyer;

 

(ix)                                Failure of any Seller tomeet, at all times, the minimum net worth requirements of Fannie Mae, FreddieMac or Ginnie Mae as an originator, seller or servicer, as applicable, to theextent such Seller is required to satisfy such requirements;

 

(x)                                   The occurrence of any eventthat would have a Material Adverse Effect on the enforceability orcollectability of any significant portion of the Purchased Eligible Loans, theability of any Seller to perform hereunder or the financial condition orbusiness of any Seller from and after the date hereof;

 

(xi)                                Buyer shall cease to have avalid and perfected first lien priority security interest in the PurchasedEligible Loans (together with each of the other assets granted to Buyerpursuant to Paragraph 6 hereof) unless such cessation is due to an act oromission of Buyer;

 

(xii)                             The aggregate Tangible NetWorth of Sellers and Guarantor on a consolidated basis shall be less thanSeventeen Million Dollars ($17,000,000);

 

16

----

 

(xiii)                          The aggregate amount of cashor cash equivalents (inclusive of the funds on deposit in the Cash CollateralAccount and the Operating Accounts) maintained or held on deposit by Sellersand Guarantor shall be less than Five Million Dollars ($5,000,000);

 

(xiv)                         Buyer shall have determinedin its reasonable discretion that any Seller is or will be unable to meet itscommitments under this Agreement or the other Transaction Documents, shall havenotified Sellers of such determination, and Sellers shall not have respondedwith appropriate information to the contrary to the satisfaction of Buyer inBuyer’s sole discretion within five (5) Business Days following the dateof such notification;

 

(xv)                            Either (A) thisAgreement and the other Transaction Documents shall for any reason not cause,or shall cease to cause, Buyer to be the owner of all Notes for the PurchasedEligible Loans or, if recharacterized as a secured financing, a secured partywith respect to all Notes for the Purchased Eligible Loans, in each case freeof any adverse claim, liens and other rights of others (other than as grantedor expressly disclosed herein), or (B) if a Transaction is recharacterizedas a secured financing, this Agreement and the other Transaction Documents withrespect to such Transaction shall for any reason cease to create a valid firstpriority security interest in favor of Buyer in all of the Notes for therelated Purchased Eligible Loans, or (C) if this Agreement or any otherTransaction Document shall cease to be in full force and effect or if itsenforceability is challenged by or on behalf of any Seller;

 

(xvi)                         A final judgment by anycompetent court in the United States of America for the payment of money in anamount of at least $1,000,000 is rendered against any Seller, and the sameremains undischarged for a period of thirty (30) days during which execution ofsuch judgment is not effectively stayed;

 

(xvii)                      Any event of default shalloccur and be continuing under any repurchase or other financing agreement forborrowed funds or indenture for borrowed funds by which any Seller is bound oraffected shall occur and be continuing;

 

(xviii)                   In the judgment of Buyer in its reasonablediscretion a material adverse change shall have occurred in the business,operations, properties or financial condition of any Seller;

 

(xix)                           A breach by Guarantor of anymaterial representation, warranty or covenant set forth in the relevantGuaranty or any other Transaction Document, any “event of default” by Guarantorunder the Guaranty, any repudiation of the Guaranty by Guarantor, or if theGuaranty is not enforceable against Guarantor;

 

(xx)                              Any Seller shall fail topromptly notify Buyer of (A) the acceleration of any debt obligation orthe termination of any credit facility of such Seller; (B) the amount andmaturity of any such debt assumed after the date hereof; (C) any adversedevelopments with respect to pending or future litigation involving any Seller;and (D) any other developments that might materially and adversely affectthe business, operations, properties or condition (financial or otherwise) ofany Seller; or

 

(xxi)                           Any Seller shall have failedto comply in any material respect with its obligations under any otherTransaction Document.

 

17

----

 

(b)                         If an Event ofDefault shall have occurred and be continuing, then, at Buyer’s option,exercised by written notice to Sellers, the Repurchase Date for any or allTransactions hereunder shall be deemed immediately to occur; *provided* that upon the occurrence of an Act of Insolvencysuch option shall be deemed to have been exercised immediately without thegiving of any notice.

 

(c)                          Upon theexercise by Buyer of the option referred to in subparagraph (b) above ofthis Paragraph 10, (i) all of Sellers’ obligations hereunder torepurchase all Purchased Eligible Loans in such Transactions shall thereuponbecome immediately due and payable, (ii) to the extent permitted byapplicable law, the Repurchase Price with respect to each such Transaction shallbe increased by the aggregate amount obtained by daily application of(x) the greater of the Pricing Rate for such Transaction and the PrimeRate to (y) the Repurchase Price for such Transaction as of the RepurchaseDate as determined pursuant to subparagraph (b) of this Paragraph 10(decreased as of any day by (A) any amounts retained by Buyer with respectto such Repurchase Price pursuant to clause (iii) of thissubparagraph, (B) any proceeds from the sale of Purchased Eligible Loanspursuant to subparagraph (d)(i) below of this Paragraph 10, and(C) any amounts credited to the account of the relevant Seller pursuant tosubparagraph (d)(ii) below of this Paragraph 10) on a 360 day peryear basis for the actual number of days during the period from and includingthe date of the Event of Default giving rise to such option to but excludingthe date of payment of the Repurchase Price as so increased, (iii) allIncome paid after such exercise or deemed exercise shall be payable to andretained by Buyer and applied to the aggregate unpaid Repurchase Prices owed bySellers, and (iv) Sellers shall immediately deliver or cause the Custodianto deliver to Buyer any documents relating to Purchased Eligible Loans subjectto such Transactions then in any Seller’s possession.

 

(d)                         Upon theoccurrence of an Event of Default, Buyer, without prior notice to any Seller,may (i) immediately sell on a servicing retained basis, in a recognizedmarket at such price or prices as Buyer may in its sole discretion deemsatisfactory, any or all Purchased Eligible Loans subject to such Transactionsand apply the proceeds thereof to the aggregate unpaid Repurchase Prices andany other amounts owing by Sellers hereunder or (ii) in its solediscretion elect, in lieu of selling all or a portion of such PurchasedEligible Loans, to give the relevant Seller credit for such Purchased EligibleLoans in an amount equal to the fair market value thereof on such date againstthe aggregate unpaid Repurchase Prices and any other amounts owing by Sellers hereunder.  Notwithstanding anything contained in thisAgreement or the other Transaction Documents to the contrary, each Seller andBuyer hereby recognize that it may not be possible to purchase or sell all ofthe Purchased Eligible Loans on a particular Business Day, or in a transactionwith the same purchaser, or in the same manner because the market for suchPurchased Eligible Loans may not be liquid at such time.  In view of the nature of the PurchasedEligible Loans, each Seller and Buyer hereby agree that the liquidation of aTransaction or the underlying Purchased Eligible Loans does not require publicpurchase or sale and that a good faith private purchase or sale shall not bedeemed to have been made in a commercially unreasonable manner solely as a resultof there not being a public sale. Accordingly, Buyer may elect the time and manner of liquidating anyPurchased Eligible Loan and nothing contained herein shall obligate Buyer toliquidate any Purchased Eligible Loan on the occurrence of an Event of Defaultor to liquidate all Purchased Eligible Loans in the same manner or on the sameBusiness Day and no such exercise of any right or remedy shall constitute awaiver of any other right or remedy of Buyer.

 

18

----

 

(e)                          Sellers shallbe liable, jointly and severally, to Buyer for (i) the amount of allreasonable legal or other costs and expenses incurred by Buyer in connectionwith or as a result of an Event of Default, (ii) damages in an amountequal to the cost (including without limitation all fees, expenses andcommissions) of entering into replacement transactions and entering into orterminating hedge transactions in connection with or as a result of an Event ofDefault and (iii) any other loss, damage, cost or expense directly arisingor resulting from the occurrence of an Event of Default in respect of aTransaction.

 

(f)                            To the extentpermitted by applicable law, Sellers shall be liable, jointly and severally, toBuyer for interest on any amounts owing by any Seller hereunder, from the dateany Seller becomes liable for such amounts hereunder until such amounts are(i) paid in full by Sellers or (ii) satisfied in full by the exerciseof Buyer’s rights hereunder.  Interest onany sum payable by Sellers to Buyer under this Paragraph 10(f) shallbe at a rate equal to the sum of four and one-half percent (4.50%) plus thegreater of the Pricing Rate for the relevant Transaction or the Prime Rate.

 

(g)                         Withoutlimiting Buyer’s rights under the Pledge Agreement and without notice toSellers (such notice being expressly waived), and without constituting aretention of any collateral in satisfaction of an obligation (within themeaning of the Uniform Commercial Code), set off and apply to the obligationsand indebtedness owed by Sellers to Buyer, in such order as Buyer shalldetermine, any and all balances and deposits of each Seller held by Buyer inthe Cash Collateral Account and the Settlement Accounts.  Notwithstanding anything contained herein tothe contrary, in no event shall Buyer have any right of offset or set off orany other claim to (i) balances and deposits of any Seller held by Buyerin any account other than the Cash Collateral Account and the SettlementAccounts, (ii) balances and deposits of Guarantor or any Affiliate ofGuarantor or any Seller and (iii) escrow balances and any other amountsthat are restricted or protected by any applicable law, rule orregulation.

 

(h)                         Buyer shallhave, in addition to its rights hereunder, any rights otherwise available to itunder any other agreement, applicable law or in equity.

 

**11.****                              ****Servicingof the Purchased Eligible Loans**

 

(a)                          Notwithstandingthat at any time Sellers are acting as Seller and/or Subservicer and servicingand/or subservicing the Purchased Eligible Loans, each Seller acknowledges andagrees that Buyer is the owner of the Servicing Rights and all servicing and/orsubservicing records, including but not limited to any and all servicing and/orsubservicing agreements, files, documents, records, data bases, computer tapes,copies of computer tapes, proof of insurance coverage, insurance policies,appraisals, other closing documentation, payment history records, and any otherrecords relating to or evidencing the servicing or subservicing of such MortgageLoans (the “Servicing Records”). Each Seller covenants to maintain or cause the servicing and/orsubservicing of the Purchased Eligible Loans to be maintained in conformitywith Accepted Servicing Practices and pursuant to the related underlyingservicing and/or subservicing agreement. In the event that the preceding language is interpreted as constitutingone or more servicing and/or subservicing contracts, each such servicing and/orsubservicing contract shall terminate automatically upon the earliest of(i) the termination thereof by Buyer pursuant to subparagraph (b) belowof this Paragraph 11, (ii) thirty (30) days after the 

 

19

----

 

Repurchase Date of such Purchased Eligible Loan,(iii) a Default or an Event of Default, (iv) the date on which allSellers’ obligations hereunder have been paid in full, or (v) the transferof servicing and/or subservicing to any entity approved by Buyer and theassumption thereof by such entity.  Uponany such termination, each Seller shall promptly deliver and turn over to thesuccessor servicer and/or subservicer all Servicing Records and the physicalservicing of each Purchased Eligible Loan.

 

(b)                         Buyer shallhave the right, exercisable at any time in its sole discretion, upon writtennotice, to terminate Sellers or any other Servicers as servicer and/orSubservicers as subservicer, and to terminate any related servicing and/orsubservicing agreement.  Upon any suchtermination, each Seller shall transfer or shall cause servicer and/orsubservicer to transfer such servicing and/or subservicing with respect to suchPurchased Eligible Loans to Buyer or its designee, (i) at no cost orexpense to Buyer if an Event of Default shall have occurred and be continuingor if any Seller or Subservicer has breached its servicing obligationshereunder and (ii) at the cost and expense of Buyer in any othercase.  Each Seller agrees to cooperatewith Buyer in connection with the transfer of servicing and/or subservicingrights (together with the Servicing Records).

 

(c)                          From thePurchase Date until the Repurchase Date, without the prior written consent ofBuyer, no Seller will have any right to modify or alter the terms of anyPurchased Eligible Loan or to consent to the modification or alteration of theterms of any Purchased Eligible Loan.  NoSeller will have any obligation or right to take possession of any PurchasedEligible Loan except as expressly allowed hereunder or by the CustodialAgreement.

 

(d)                         Subservicershall be entitled to compensation for servicing the Loans in accordance withthe terms of the written agreement between Subservicer and each Seller.  Each Seller shall retain any servicing incomeother than the compensation paid to Subservicer; provided that followingthe occurrence and during the continuance of an Event of Default Buyer maydirect Subservicer to pay all such servicing income over to Buyer.

 

**12.****                              ****SingleAgreement**

 

Buyerand each Seller acknowledge that, and have entered hereinto and will enter intoeach Transaction hereunder in consideration of and in reliance upon the factthat, all Transactions hereunder constitute a single business and contractualrelationship and have been made in consideration of each other.  Accordingly, each of Buyer and each Selleragrees (a) to perform all of its obligations in respect of eachTransaction hereunder, and that a default in the performance of any suchobligations shall constitute a default by it in respect of all Transactionshereunder, (b) that each of them shall be entitled to set off claims andapply property held by them in respect of any Transaction against obligationsowing to them in respect of any other Transactions hereunder and (c) thatpayments, deliveries and other transfers made by either of them in respect ofany 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 transfersmay be applied against each other and netted.

 

20

----

 

**13.****                              ****Noticesand Other Communications**

 

Exceptas otherwise expressly provided herein, all such notices, statements, demandsor other communications shall be in writing (including, without limitation,facsimile or e-mail communication) or confirmed in writing and such notices andother communications shall, when mailed, communicated by facsimile transmissionor e-mailed, be effective when received at the address for notices for theparty to whom such notice or communications is to be given as follows:

 

ifto Sellers:

 

SynergyCapital Mortgage Corp.Excel Mortgage Servicing, Inc.19500 Jamboree RoadIrvine, CA  92612Attention:  Kathy Hancock, Vice PresidentTreasuryTelephone:  949-475-3822Facsimile:  949-475-3969Email:  kathy.hancock@impaccompanies.com

 

witha copy to:

 

SynergyCapital Mortgage Corp.Excel Mortgage Servicing, Inc.19500 Jamboree RoadIrvine, CA  92612Attention:  Ron Morrison, Executive VicePresident and General CounselTelephone:  949-475-3942Facsimile:  949-706-6208Email:  ron.morrison@impaccompanies.com

 

ifto Buyer:

 

EastWest Bank135 N. Los Robles Avenue, Suite 600Pasadena, CA  91101Attention:  Robert Lo, Senior VicePresidentTelephone:  626-768-6689Facsimile:  626-817-8899Email:  robert.lo@eastwestbank.com

 

21

----

 

witha copy to:

 

EastWest Bank135 N. Los Robles Avenue, Suite 600Pasadena, CA  91101Attention:  Mary Kenney, Esq.,Senior Vice President and Senior Deputy General CounselTelephone:  626-768-6883Facsimile:  626-243-1275Email:  mary.kenney@eastwestbank.com

 

Notwithstandingthe foregoing, a facsimile transmission shall be deemed received whentransmitted so long as the transmitting machine has provided an electronicconfirmation of successful transmission, and an e-mail shall be deemed receivedwhen transmitted so long as a “read receipt” has been received by the sender toconfirm the recipient’s receipt.  Allfinancial statements delivered shall be hand-delivered or sent by overnightdelivery.  Either party may revise anyinformation relating to it by notice in writing to the other party, whichnotice shall be effective on the third business day following receipt thereof.

 

**14.****                              ****Paymentof Expenses**

 

EachSeller hereby covenants, jointly and severally, to pay on demand all reasonablecosts and expenses (including, without limitation, the costs and expenses forlegal services of any kind whatsoever) incurred by Buyer in connection withthis Agreement and the other Transaction Documents and the transactionscontemplated hereby and thereby, whether or not any Transactions are enteredinto hereunder, including, by way of illustration and not by way of limitation,the out-of-pocket costs and expenses incurred in connection with (i) thepreparation, reproduction and distribution of this Agreement and the otherTransaction Documents and any opinions of counsel, certificates of officers orother documents contemplated by the aforementioned agreements (provided,however, that the aggregate legal fees of Buyer for the preparation, negotiationand execution of this Agreement that Sellers are to reimburse shall not exceed$25,000) and (ii) any amendment to or waiver of any provision of thisAgreement requested by any Seller. Notwithstanding the foregoing, the costs and expenses of entering intoTransactions hereunder are included in the fees set forth on the Term Sheetand, provided no Event of Default has occurred and is continuing, Sellers shallnot be required to pay any other fees to Buyer in connection with Transactions.  The obligation of each Seller to pay suchfees and expenses incurred prior to or in connection with the termination ofthis Agreement or any Transaction Document shall survive the termination ofthis Agreement and such Transaction Documents.

 

**15.****                              ****Opinionsof Counsel**

 

EachSeller shall, upon the request of Buyer, cause to be delivered to Buyer, withreliance thereon permitted as to any Person that purchases the Eligible Loansfrom Buyer, a favorable opinion of counsel with respect to such matters asBuyer may request in form and substance acceptable to Buyer.

 

22

----

 

**16.****                              ****FurtherAssurances; Additional Information**

 

(a)                          At any time andfrom time to time, upon the request of Buyer and at the sole expense ofSellers, Sellers shall promptly provide such further assurances or agreementsas Buyer may reasonably request in order to effect the purposes of thisAgreement, including without limitation the assignment, conveyance and transferof all right, title and interest of each Purchased Eligible Loan from therelevant Seller to Buyer, or to otherwise obtain or preserve the benefits orrights granted under this Agreement.

 

(b)                         At anyreasonable time, each Seller shall permit Buyer, its agents or attorneys, atBuyer’s expense, to inspect and copy any and all documents and data in itspossession pertaining to each Purchased Eligible Loan that is the subject ofsuch Transaction.  Such inspection shalloccur upon the request of Buyer at a mutually agreeable location during regularbusiness hours and on a date not more than two (2) Business Days after thedate of such request.  Notwithstandingthe foregoing, if an Event of Default by any Seller shall have occurred and becontinuing, then Buyer, upon notice to Sellers, shall have an immediate rightto inspect and copy any and all documents and data in the possession of anySeller pertaining to each Purchased Eligible Loan that is the subject of suchTransaction and to the extent that such Seller does not have possession of therelevant loan information for such Purchased Eligible Loans, such Seller shallcause the applicable Servicer to provide Buyer with access and review of suchloan information.

 

(c)                          Each Selleragrees to provide Buyer or its agents, from time to time, with such informationconcerning such Seller of a financial or operational nature as Buyer mayreasonably request.

 

(d)                         Each Sellershall provide Buyer or its agents, with copies of (i) all filings made byor on behalf of such Seller or any entity that controls such Seller, with theSecurities and Exchange Commission pursuant to the Securities Exchange Act of1934, as amended, promptly upon making such filings, or (ii) if suchSeller is not required to make filings with the Securities and ExchangeCommission, such financial and other reports as may be required by the TermSheet.

 

**17.****                              ****Buyeras Attorney-in-Fact**

 

EachSeller hereby appoints Buyer as its attorney-in-fact for the purpose ofcarrying out the provisions of this Agreement and the other TransactionDocuments and taking any action and executing any instruments that Buyer maydeem necessary or advisable to accomplish the purposes hereof, whichappointment as attorney-in-fact is irrevocable and coupled with aninterest.  Without limiting thegenerality of the foregoing, Buyer shall have the right and power upon theoccurrence and during the continuation of any Event of Default to receive,endorse, collect and control all checks or instruments made payable to theorder of any Seller and all other forms of payment to any Seller that representany payment on account of the principal of or interest on or proceeds from anyof the Purchased Eligible Loans and to give full discharge for the same.

 

23

----

 

**18.****                              ****WireInstructions**

 

Anyamounts to be transferred by one party to the other shall be transferredaccording to the wire instructions contained in the Term Sheet.  Amounts received by Buyer after 1:00 p.m.,Los Angeles time, on any Business Day shall be deemed to have been paid andreceived on the next succeeding Business Day.

 

**19.****                              ****EntireAgreement; Severability; Term Sheet**

 

ThisAgreement and the other Transaction Documents shall supersede any existingagreements between the parties containing general terms and conditions forrepurchase transactions.  Each provisionand agreement herein shall be treated as separate and independent from anyother provision or agreement herein and shall be enforceable notwithstandingthe unenforceability of any such other provision or agreement; *provided, however*, that each Seller and Buyer herebyacknowledge and agree that the Servicing Rights are an integral part of thisAgreement and any and all provisions regarding such Servicing Rights shall notbe severable from the provisions regarding the Purchased Eligible Loans.  The execution and delivery of the Term Sheetand any other documents designated therein by each Seller is a condition to theeffectiveness of this Agreement.

 

**20.****                              ****Non-assignability;Termination**

 

(a)                          Except withrespect to any repurchase transaction, sale, transfer, pledge or hypothecationby Buyer pursuant to Paragraph 8 hereof, the rights and obligations of theparties under this Agreement, under the other Transaction Documents and underany Transaction shall not be assigned by either party without the prior writtenconsent of the other party and any such assignment without the prior writtenconsent of the other party shall be null and void.  Subject to the foregoing, this Agreement, theother Transaction Documents and any Transactions shall be binding upon andshall inure to the benefit of the parties and their respective successors andassigns.

 

(b)                         Subparagraph (a) ofthis Paragraph 20 shall not preclude a party from assigning, charging orotherwise dealing with all or any part of its interest in any sum payable to itunder Paragraph 10 hereof.

 

(c)                          This Agreement,the other Transaction Documents and all Transactions outstanding hereundershall terminate automatically without any requirement for notice on theTermination Date.  However, no suchtermination shall affect any Seller’s and Guarantor’s outstanding obligationsto Buyer at the time of such termination. All of each Seller’s payment obligations to Buyer, all of each Seller’sobligations to indemnify Buyer and all of Buyer’s rights and remedies by reasonof any Event of Default by Buyer pursuant to this Agreement and any of theother Transaction Documents shall survive such termination.

 

**21.****                              ****Counterparts**

 

ThisAgreement may be executed in any number of counterparts, each of which counterpartsshall be deemed to be an original, and such counterparts shall constitute butone and the same instrument.

 

24

----

 

**22.****                              ****GoverningLaw; Submission to Jurisdiction; Waivers**

 

(a)                          **THISAGREEMENT AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY THE LAWS OFTHE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLESTHEREOF.**

 

(b)                         **EACH OF BUYER AND EACH SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:**

 

(i)                                     **SUBMITSFOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THISAGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, OR FOR RECOGNITION ANDENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE PERSONALJURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA LOCATED IN LOS ANGELESCOUNTY, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE CENTRALDISTRICT OF CALIFORNIA, AND APPELLATE COURTS FROM ANY THEREOF;**

 

(ii)                                  **CONSENTS THAT ANY SUCH ACTION ORPROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BYLAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUEOF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION ORPROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD ORCLAIM THE SAME;**

 

(iii)                               **AGREES THAT SERVICE OF PROCESS INANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BYREGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL ORDELIVERY), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN PARAGRAPH 13 HEREIN ORAT SUCH OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE BEEN NOTIFIED; AND**

 

(iv)                              **AGREES THAT NOTHING HEREIN SHALLAFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BYLAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.**

 

(c)                          **BUYERAND EACH SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT ORTHE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.**

 

**23.****                              ****NoWaivers, Etc.**

 

Noexpress or implied waiver of any Event of Default by Buyer shall constitute awaiver of any other Event of Default and no exercise of any remedy hereunder byany party shall constitute a waiver of its right to exercise any other remedyhereunder.  No modification or 

 

25

----

 

waiverof any provision of this Agreement or any other Transaction Document and noconsent by any party to a departure herefrom or therefrom shall be effectiveunless and until such shall be in writing and duly executed by both of theparties hereto and then such amendment, waiver or consent shall be effectiveonly in the specific instance and for the specific purpose given.  Without limitation on any of the foregoing,the failure by Buyer to give a notice pursuant to any provision hereof will notconstitute a waiver of any right to do so at a later date.

 

**24.****                              ****Use ofEmployee Plan Assets**

 

(a)                          If assets of anemployee benefit plan subject to any provision of the Employee RetirementIncome Security Act of 1974 (“ERISA”) are intended to be used by eitherparty hereto (the “Plan Party”) in a Transaction, the Plan Party shallso notify the other party prior to the Transaction.  The Plan Party shall represent in writing tothe other party that the Transaction does not constitute a prohibitedtransaction under ERISA, and that the Eligible Loans that are the subject ofthe Transaction are not, and will not as a result of the Transaction become, “planassets” as that term is used in ERISA. The other party may proceed in reliance on such writing, but shall notbe required to so proceed.

 

(b)                         Subject to thelast sentence of subparagraph (a) of this Paragraph 24, any suchTransaction shall proceed only if the relevant Seller furnishes or hasfurnished to Buyer its most recent available audited statement of its financialcondition and its most recent subsequent unaudited statement of its financialcondition.

 

(c)                          By enteringinto a Transaction pursuant to this Paragraph 24, each Seller shall bedeemed (i) to represent to Buyer that since the date of such Seller’slatest such financial statements, there has been no material adverse change insuch Seller’s financial condition that such Seller has not disclosed to Buyer,and (ii) to agree to provide Buyer with future audited and unauditedstatements of its financial condition as they are issued, so long as it is aSeller in any outstanding Transaction involving a Plan Party.

 

**25.****                              ****Intent**

 

(a)                          The partiesintend and acknowledge that each Transaction is a “repurchase agreement” and a “masternetting agreement” as each such term is defined in Section 101 of Title 11of the United States Code, as amended (except insofar as the type of EligibleLoans subject to such Transaction or the term of such Transaction would rendersuch definition inapplicable), and a “securities contract” as that term isdefined 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 rendersuch definition inapplicable).

 

(b)                         The partiesunderstand that either party’s right to liquidate Eligible Loans delivered toit in connection with Transactions hereunder or to exercise any other remediespursuant to Paragraph 10 hereof, is a contractual right to liquidate,terminate or accelerate such Transaction as described in Sections 555, 559 and561 of Title 11 of the United States Code, as amended.

 

(c)                          The partiesagree and acknowledge that if a party hereto is an “insured depositoryinstitution,” as such term is defined in the Federal Deposit Insurance Act, asamended (“FDIA”), then each Transaction hereunder is a “qualified financialcontract,” as that term is defined in 

 

26

----

 

FDIA and any rules, orders or policy statementsthereunder (except insofar as the type of assets subject to such Transactionwould render such definition inapplicable).

 

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

 

**26.****                              ****Indemnity**

 

EachSeller agrees, jointly and severally, to hold Buyer and its affiliates andtheir respective officers, directors, employees, agents and advisors (each an “IndemnifiedParty”) harmless from and indemnify any Indemnified Party against all thirdparty liabilities, losses, damages, judgments, costs and expenses of any kindthat may be imposed on, incurred by or asserted against such Indemnified Party(collectively, “Costs”), relating to or arising out of this Agreement,any other Transaction Document or any transaction contemplated hereby orthereby, or any amendment, supplement or modification of, or any waiver orconsent under or in respect of, this Agreement, any other Transaction Documentor any transaction contemplated hereby or thereby, that, in each case, resultsfrom anything other than the Indemnified Party’s gross negligence or willfulmisconduct.  Without limiting thegenerality of the foregoing, each Seller agrees to hold any Indemnified Partyharmless from and indemnify such Indemnified Party against all Costs withrespect to all Mortgage Loans relating to or arising out of any taxes incurredor assessed in connection with the ownership of the Mortgage Loans, that, ineach case, results from anything other than the Indemnified Party’s grossnegligence or willful misconduct.  In anysuit, proceeding or action brought by an Indemnified Party in connection withany Mortgage Loan for any sum owing thereunder, or to enforce any provisions ofany Mortgage Loan, each Seller will save, indemnify and hold such IndemnifiedParty harmless from and against all expense, loss or damage suffered by reasonof any defense, set off, counterclaim, recoupment or reduction or liabilitywhatsoever of the account debtor or obligor thereunder, arising out of a breachby any Seller of any obligation thereunder or arising out of any otheragreement, indebtedness or liability at any time owing to or in favor of suchaccount debtor or obligor or its successors from any Seller.  Each Seller also agrees to reimburse anIndemnified Party as and when billed by such Indemnified Party for all theIndemnified Party’s costs and expenses incurred in connection with theenforcement or the preservation of Buyer’s rights under this Agreement, anyother Transaction Document or any transaction contemplated hereby or thereby,including without limitation the reasonable costs and expenses of its counsel.

 

**27.****                              ****FullRecourse**

 

Theobligations of each Seller from time to time to pay the Repurchase Price, thePrice Differential and all other amounts due under this Agreement or any otherTransaction Document shall be full recourse obligations of such Seller.

 

27

----

 

**28.****                              ****TaxTreatment**

 

Eachparty to this Agreement acknowledges that it is its intent for purposes of U.S.federal, state and local income and franchise taxes, to treat each Transactionas indebtedness of each Seller that is secured by all of the Purchased EligibleLoans and that the Purchased Eligible Loans purchased from each Seller areowned by such Seller in the absence of a default by such Seller.  All parties to this Agreement agree to suchtreatment and agree to take no action inconsistent with this treatment, unlessrequired by law.

 

**29.****                              ****DisclosureRelating to Certain Federal Protections**

 

Theparties acknowledge that they have been advised that in the case ofTransactions in which one of the parties is a financial institution, funds heldby the financial institution pursuant to a Transaction hereunder are not adeposit and therefore are not insured by the Federal Deposit InsuranceCorporation or the National Credit Union Administration, as applicable.

 

**30.****                              ****Timingof Payments and Actions**

 

Eachparty to this Agreement agrees that in the event any payment or action is dueon a day that is not a Business Day such payment or action shall be made ortaken on the next succeeding Business Day.

 

**31.****                              ****Jointand Several Obligations**

 

EachSeller hereby acknowledges and agrees that it shall be jointly and severallyliable to Buyer for all representations, warranties, covenants, obligations andindemnities of each Seller hereunder. Each Seller waives any and all notice of the creation, renewal,extension or accrual of any of such obligations and notice of or proof ofreliance by Buyer upon the obligations of such Seller set forth herein oracceptance of such obligations by such Seller hereunder.  Each Seller waives diligence, presentment,protest, demand for payment and notice of default or nonpayment to or upon eachother Seller with respect to such obligations. Each Seller’s obligations shall be construed as continuing, absolute andunconditional obligations without regard to (i) any defense, set-off or counterclaim (other than a defense ofpayment or performance) which may at any time be available to or be asserted byany Seller against the Buyer, or (ii) any other circumstance whatsoever(with or without notice to or knowledge of any Seller) that constitutes, ormight be construed to constitute, an equitable or legal discharge of suchSeller for any such obligations.  EachSeller hereby waives any defense arising by reason of, and any and all right toassert against the Buyer any claim or defense based upon, an election ofremedies by the Buyer that in any manner impairs, affects, reduces, releases,destroys and/or extinguishes such Seller’s subrogation rights, rights toproceed against such Seller or any other party for reimbursement orcontribution, and/or any other rights of such Seller to proceed against anyother Seller, against any other guarantor, or against any other person orsecurity.

 

**32.****                              ****Waiversby Sellers**

 

Tothe extent that any party constituting a Seller (a “Seller Entity”) is asurety or guarantor under applicable law, whether in respect of any otherSeller Entity’s obligations or otherwise, and whether under this Agreement, thePledge Agreement or any other Transaction 

 

28

----

 

Document,then each such Seller Entity, solely in such Seller Entity’s capacity as asurety or guarantor, waives any defenses such Seller Entity may have under thelaws or decisions of the State of California pertaining to the rights andremedies of sureties.  Without limitingthe foregoing, and to the extent permitted by law, each Seller Entity, solelyin such Seller Entity’s capacity as a surety or guarantor, hereby waives andagrees not to assert or take advantage of:

 

(a)                          Any right torequire Buyer to proceed against any Seller Entity or any other indemnitor,obligor or guarantor of the indebtedness and obligations evidenced hereby orany other person or entity or to proceed against or exhaust any security heldby Buyer at any time or to pursue any other remedy in Buyer’s power or underany other agreement before proceeding against any Seller Entity hereunder;

 

(b)                         Any defensethat may arise by reason of the incapacity, lack of authority, death ordisability of any other person or entity or the failure of Buyer to file orenforce a claim against the estate (in administration, bankruptcy or any otherproceeding) of any other person or entity;

 

(c)                          Demand,presentment for payment, notice of nonpayment, intent to accelerate,acceleration, protest, notice of protest and all other notices of any kind, orthe lack of any thereof, including, without limiting the generality of theforegoing, notice of the existence, creation or incurring of any new oradditional indebtedness or obligation or of any action or non-action on thepart of any Seller Entity, Buyer, any endorser or creditor of any Seller Entityor on the part of any other person or entity whomsoever under this or any otherinstrument in connection with any obligation or evidence of indebtedness heldby Buyer;

 

(d)                         (i) Anydefense based upon an election of remedies by Buyer, even though such electiondestroys or otherwise impairs the subrogation rights of any Seller Entity orthe right of any Seller Entity to proceed against any other Seller Entity forreimbursement, or both, and (ii) any and all rights or defenses any SellerEntity may have by reason of protection afforded to any other Seller Entitywith respect to any of the obligations of each Seller Entity under thisAgreement or other laws of the State of California limiting or discharging anySeller Entity’s indebtedness evidenced by this Agreement and secured, in part,by the Transaction Documents;

 

(e)                          Any right orclaim or right to cause a marshaling of the assets of any or all of the SellerEntities;

 

(f)                            Any principleor provision of law, statutory or otherwise, which is or might be in conflictwith the terms and provisions of this Agreement;

 

(g)                         Any duty on thepart of Buyer to disclose to any Seller Entity any facts Buyer may now orhereafter know about any other Seller Entity, Buyer’s security under thisAgreement or any other Transaction Document, regardless of whether Buyer hasreason to believe that any such facts materially increase the risk beyond thatwhich such Seller Entity intends to assume or Buyer has reason to believe thatsuch facts are unknown to such Seller Entity or have a reasonable opportunityto communicate such facts to such Seller Entity, it being understood and agreedthat each Seller Entity is fully responsible for being and keeping informed ofthe financial condition of any other Seller Entity, of any and allcircumstances bearing on the risk that liability may be incurred by such SellerEntity hereunder;

 

29

----

 

(h)                         Any lack ofnotice of disposition or of manner of disposition of any collateral;

 

(i)                             Anydeficiencies in the collateral or any deficiency in the ability of Buyer tocollect or to obtain performance from any persons or entities now or hereafterliable for the payment and performance of any obligation of this Agreement orany other Transaction Document;

 

(j)                             Any assertionor claim that the automatic stay provided by 11 U.S.C. §362 (arising upon thevoluntary or involuntary bankruptcy proceeding of any Seller Entity) or anyother stay provided under any other debtor relief law (whether statutory,common law, case law or otherwise) of any jurisdiction whatsoever, now orhereafter in effect, which may be or become applicable, shall operate or beinterpreted to stay, interdict, condition, reduce or inhibit the ability ofBuyer to enforce any of Buyer’s rights, whether now or hereafter required,which Buyer may have under this Agreement or any other Transaction Document;

 

(k)                          Anymodifications of the Transaction Documents or any obligation of any SellerEntity by operation of law or by action of any court, whether pursuant to theBankruptcy Reform Act of 1978, as amended, or any other debtor relief law(whether statutory, common law, case law or otherwise) of any jurisdictionwhatsoever, now or hereafter in effect, or otherwise;

 

(l)                             Any action,occurrence, event or matter consented to by any Seller Entity under Section 32(h) hereof,under any other provision hereof, or otherwise;

 

(m)                       Any and allbenefits and defenses under California Civil Code Section 2810;

 

(n)                         Any and allbenefits and defenses under California Civil Code Section 2809;

 

(o)                         All principlesor provisions of law, statutory or otherwise, which are or might be in conflictwith the terms of this Agreement.  Bydoing so, each Seller Entity agrees that such Seller Entity’s obligations shallnot be affected by any circumstances, whether or nor referred to in thisAgreement, which might otherwise constitute a legal or equitable discharge of asurety or a guarantor; and

 

(p)                         Any right ofdischarge under any and all statutes or other laws relating to guarantors orsureties and any other rights of sureties and guarantors thereunder.

 

EachSeller Entity understands that the exercise by Buyer of certain rights andremedies contained in the Transaction Documents may affect or eliminate suchSeller Entity’s right of subrogation against any other Seller Entity and thatsuch Seller Entity may therefore incur a partially or totally nonreimbursableliability under this Agreement. Nevertheless, such Seller Entity hereby authorizes and empowers Buyer toexercise, in its sole and absolute discretion, any right or remedy, or anycombination thereof, which may then be available.

 

Inaccordance with Section 2856 of the California Civil Code, such SellerEntity also waives any right or defense based upon an election of remedies byBuyer, even though such election destroys or otherwise impairs the subrogationrights of such Seller Entity or the rights of such Seller Entity (after paymentof the obligations guaranteed by such Seller Entity under this Agreement) toproceed against any other Seller Entity for reimbursement, or both.

 

30

----

 

Inaccordance with Section 2856 of the California Civil Code, each SellerEntity waives any and all other rights and defenses available to Seller Entityby reason of Sections 2787 through 2856, inclusive, of the CaliforniaCivil Code, including any and all rights or defenses such Seller Entity mayhave by reason of protection afforded to such Seller Entity with respect to anyof the obligations of such Seller Entity under this Agreement pursuant to theantideficiency or other laws of the State of California limiting or discharginga Seller Entity’s indebtedness. Likewise, each Seller Entity waives any and all rights and defensesavailable to Seller Entity under California Civil Code Sections 2899 and3433.

 

EachSeller Entity shall have no right of, and hereby waives any claim for,subrogation, reimbursement, indemnification, and contribution against any otherSeller Entity and against any general partner, member or other constituent ofany other Seller Entity, and against any other person or any collateral orsecurity for the indebtedness (including without limitation any such rightspursuant to Sections 2847 and 2848 of the California Civil Code), untilthe indebtedness has been indefeasibly paid and satisfied in full and alloutstanding obligations owed to Buyer under the Transaction Documents have beenfully performed.

 

[Signatures on next page]

 

31

----

 

INWITNESS WHEREOF, the parties hereto have caused to be duly executed anddelivered, as of the date first above written, this Agreement.

 
| BUYER:                              |                       |
|-------------------------------------|----------------------------|
|                                |                       |
| EAST WEST BANK                      |                       |
|                                |                       |   |
| By:                                 | /s/  Robert Lo             |   |
|                                |                       |   |
| Title:                              | Robert  Lo                 |   |
|                                |                       |   |
| Date:                               | 6/25/10                    |   |
|                                |                       |   |
|                                |                       |   |
| SELLERS:                            |                       |
|                                |                       |
| EXCEL MORTGAGE SERVICING, INC. |                       |
|                                |                       |   |
| By:                                 | /s/  William Ashmore       |   |
|                                |                       |   |
| Title:                              | William  Ashmore/President |   |
|                                |                       |   |
| Date:                               | 6-24-10                    |   |
|                                |                       |   |
| SYNERGY CAPITAL MORTGAGE CORP.      |                       |
|                                |                       |   |
| By:                                 | /s/  William Ashmore       |   |
|                                |                       |   |
| Title:                              | President                  |   |
|                                |                       |   |
| Date:                               | 6-24-10                    |   |

 

32

----

 

**ANNEX I**

 

**TERM SHEET**

 

Date:  June 24, 2010

 

Thisterm sheet (“Term Sheet”) is made and entered into as of the date set forthabove by and between East West Bank (“Buyer”), and Synergy Capital MortgageCorp. and Excel Mortgage Servicing, Inc. (each a “Seller” and,collectively, the “Sellers”) with respect to that certain Master RepurchaseAgreement dated as of June 24, 2010 (the “Agreement”).  Capitalized terms used but not defined hereinshall have the meanings set forth in the Agreement.  This Term Sheet supplements and forms a partof the Agreement and the execution and delivery hereof is a condition to theeffectiveness of the Agreement.  In theevent of any conflict between the terms hereof and the terms of the Agreement,this Term Sheet shall prevail.

 
| Buyer:  East West  Bank            | Sellers:                                           | Synergy  Capital Corp.               |
|----------------------------------------------|----------------------------------------------------|--------------------------------------|
|                                         |                                               | Excel  Mortgage Servicing, Inc. |
| Address:                                     | 135  N. Los Robles Avenue                          |                                 |   |
|                                         | Suite 600                                     | Address:                             | 19500  Jamboree Road |
|                                         | Pasadena,  California 91101                        |                                 | Irvine,  California 92612 |
|                                         |                                               |                                 |   |
| Attention:                                   | Robert  Lo                                         | Attention:                           | Kathy  Hancock |
|                                         | Senior  Vice President                             |                                 | Vice  President and Treasurer |
|                                         |                                               |                                 |   |
| Telephone:  626-768-6689           | Telephone:  949-475-3822                 |
|                                         |                                               |
| Facsimile:  626-817-8899           | Facsimile:  949-475-3969                 |
|                                         |                                               |
| Email:  robert.lo@eastwestbank.com | Email:  kathy.hancock@impaccompanies.com |
|                                              |                                                    |                                      |  |  |

 
| Maximum  Aggregate Purchase Price: |                                                                                                                                                                                                           | $10,000,000 |
|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
|                               |
| Sublimits:                         | Transactions  for which the dry funding documents have not been received in accordance with  Section 3(d) of the Agreement shall not at any time exceed 40% of  the Maximum Aggregate Purchase Price |
|                               |                                                                                                                                                                                                           |
| Initial  Pricing Rate:             | LIBOR  + 4.00%, but not less than 5.00%                                                                                                                                                                        |
|                               |                                                                                                                                                                                                           |
| Repurchase  Date:                  | 60  calendar days after Purchase Date (or the next Business Day if such day is  not a Business Day), subject to curtailment as set forth below for Aged Loans                                                  |
|                               |                                                                                                                                                                                                           |
| Transaction  Fees:                 | $75.00  for each Purchased Eligible Loan                                                                                                                                                                       |
|                               |                                                                                                                                                                                                           |
| Wire  Transfer Fee:                | $12.50                                                                                                                                                                                                         |
|                                    |                                                                                                                                                                                                                |             |  |

 

1

----

 
| Guarantor: | Integrated  Real Estate Service Corp. |
|------------|---------------------------------------|

 

AgedLoans:

 

·                                          Purchased Eligible Loans areconsidered stale/aged at thirty-one (31) calendar days after the Purchase Date,at which point:

 

1.                                       Each Sellershall, no later than five (5) Business Days after request from Buyer, payBuyer ten percent (10%) of the Purchase Price paid by Buyer to such Seller topurchase such Purchased Eligible Loan; and

 

2.                                       To the extentsuch Seller has not Repurchased a Purchased Eligible Loan on or before the datewhich is forty-one (41) days after the Purchase Date, such Seller shall, nolater than five (5) Business Days after request from Buyer, pay Buyer anadditional ten percent (10%) of the Purchase Price paid by Buyer to such Sellerto purchase such Purchased Eligible Loan, which ten percent (10%) of thePurchase Price shall be in addition to the ten percent (10%) of the PurchasePrice described in clause 1 immediately above (for an aggregate of twenty percent(20%) of the Purchase Price); and

 

3.                                       To the extent aSeller has not repurchased a Purchased Eligible Loan on or before the datewhich is sixty (60) days after the Purchase Date, such Seller shall on thesucceeding Business Day following the expiration of such sixty (60) day periodrepurchase the Purchased Eligible Loan from Buyer.

 

·                                          Buyer shall apply any suchpayments from a Seller to reduce the Purchase Price paid for the applicablePurchased Eligible Loan.

 

·                                          Notwithstandinganything contained in the Agreement or this Term Sheet to the contrary, eachSeller hereby acknowledges and agrees that such Seller shall in no event havethe right to use funds constituting that certain certificate of deposit held asaccount number CD #178038725 in the amount of $1,000,000 at East West Bank,which is the subject of the Pledge Agreement (the “Cash Collateral Account”),to pay any such payment to Buyer.  Atsuch time as Seller has outstanding Transactions with a Purchase Priceaggregating more than $5,000,000, Seller covenants and agrees to deposit anadditional $1,000,000 to the Cash Collateral Account.  The Cash Collateral Account shall thereafterbe maintained at not less than $2,000,000, regardless of whether theoutstanding Transactions at any time thereafter are less than $5,000,000.  The Cash Collateral Account shall be ablocked account.  Sellers shall not haveany right to withdraw or direct payment of funds from the Cash Collateral Account(including the additional $1,000,000) while any Transaction is unpaid oroutstanding or any commitment or obligation under this Agreement by the Buyerto purchase Eligible Loans is available or outstanding.

 

Sellers’Wire Instructions:

 
| Beneficiary  Name: (Required)           |   | [See  Below] |
|-----------------------------------------|--------|--------------|
| Beneficiary  Account Number: (Required) |   | [See  Below] |

 

2

----

 
| Bank  Routing Number: (Domestic Wires)            |   | 322070381                               |
|---------------------------------------------------|--------|-----------------------------------------|
| Bank  Routing/Swift Code: (Intl Wires)            |   | EWBKUS66XXX                             |
| Receiving  Bank Name:                             |   | East  West Bank                         |
| Receiving  Bank Address: (Branch Address)         |   | 135  N. Los Robles Ave., Suite 600 |
| Receiving  Bank Address (Branch City, State, Zip) |   | Pasadena,  CA 91101                     |

 

Fundsdue to a Seller shall be deposited in the appropriate account at East WestBank:

 

AccountName:  Excel Mortgage Servicing, Inc.]

AccountNo.:  8003001271 (the “Excel OperatingAccount”)

 

AccountName:  Synergy Capital Mortgage Corp.

AccountNo.:  8003001255 (the “SynergyOperating Account”)

 

TheExcel Operating Account and the Synergy Operating Account are sometimesreferred to individually as an “Operating Account” and, collectively, asthe “Operating Accounts”.

 

Buyer’sWire Instructions:

 

Anyamounts to be transferred by a Seller to Buyer hereunder, as well as allpayments by Approved Takeout Investors, shall be sent by wire transfer inimmediately available funds to the appropriate account of Buyer at East WestBank:

 

AccountName:  East West Bank in Trust for ExcelMortgage Servicing, Inc.

AccountNo.:  8003001313 (the “ExcelSettlement Account”)

 

AccountName:  East West Bank in Trust forSynergy Capital Mortgage Corp.

AccountNo.:  8003001248 (the “SynergySettlement Account”)

 

TheExcel Settlement Account and the Synergy Settlement Account are sometimesreferred to individually as a “Settlement Account” and, collectively, asthe “Settlement Accounts”.

 

TheSettlement Accounts shall be blocked accounts.

 

Fundsreceived in a Settlement Account by Buyer from an Approved Takeout Investorshall be applied to the Repurchase Price and any fees and charges due to EastWest Bank for the Purchased Eligible Loans to which the funds apply.  Buyer shall transfer all amounts receivedfrom the Approved Takeout Investor in excess of the Repurchase Price for thePurchased Eligible Loans to which the funds apply to the appropriate OperatingAccount.  If the funds are received by12:00 noon on a Business Day, the transfer to the Operating Account shall occuron the same Business Day.  If the fundsare received after 12:00 noon, the transfer shall occur on the followingBusiness Day.

 

FinancialCovenants:

 

1.                                       At all timesduring the term of the Agreement, the aggregate Tangible Net Worth of Sellersand Guarantor shall equal to or greater than Seventeen Million Dollars($17,000,000).

 

3

----

 

2.                                       At all timesduring the term of the Agreement, the aggregate amount of cash or cashequivalents (inclusive of the funds on deposit in the Cash Collateral Accountand the Operating Accounts) maintained or held on deposit by Sellers andGuarantor shall be equal to or greater than Five Million Dollars ($5,000,000).

 

OtherCovenants:

 

1.                                       Each Sellershall immediately notify Buyer prior to entering into a new warehouserelationship or an increase in existing facilities with other parties.

 

2.                                       Each Sellershall, with respect to any Seller, Guarantor and any of their respectiveaffiliates, immediately notify Buyer of any Material Adverse Effect.

 

3.                                       Each Sellershall immediately notify Buyer if such Seller becomes aware of anycircumstances constituting an occurrence of fraud in the origination of anyPurchased Eligible Loan.

 

4.                                       Each Sellershall maintain fidelity bond and errors and omissions insurance policies, eachwith a minimum coverage of $1,000,000. Such policies shall include right of action loss payee and warehouselender endorsements in favor of Buyer.

 

5.                                       Each Sellershall, not later than two (2) Business after the occurrence thereof,notify Buyer of any event of default under that certain Credit Agreement, datedas of October 30, 2009, by and among UBS Real Estate Securities, Inc.,as lender, and certain affiliates of the Sellers, as borrowers, or under anyother document evidencing, securing or otherwise entered into in connectionwith any other material liabilities of Sellers or Guarantor.

 

6.                                       At all timesduring the term of the Agreement, each Seller and their respective affiliatesshall maintain accounts at East West Bank (which accounts shall at all timesduring the term of the Agreement have a minimum balance of not less than TwentyMillion Dollars ($20,000,000), inclusive of the funds on deposit in the CashCollateral Account and the Operating Accounts).

 

7.                                       Each Sellershall (a) not later than forty five (45) days after the end of eachcalendar quarter (except the last calendar quarter of the fiscal year), deliverto Buyer Sellers’ financial statements certified by an officer of each Seller,and (b) not later than ninety (90) days after the end of each calendaryear, deliver to Buyer Sellers’ audited (by auditors acceptable to Buyer inBuyer’s sole but reasonable discretion) consolidated financial statements.

 

8.                                       Guarantor shall(a) not later than forty five (45) days after the end of each calendarquarter (except the last calendar quarter of the fiscal year), deliver to BuyerGuarantor’s financial statements certified by an officer of Guarantor, and (b) notlater than ten (10) days after filing, deliver to Buyer Guarantor’s taxreturns for the previous calendar year.

 

4

----

 

**EXHIBIT A-1**

 

**TRANSACTION REQUEST**

 

Theparties to this Transaction Request are the following:

 
| Seller: | [Synergy  or Excel] |
|---------|---------------------|
|    |                |
| Buyer:  | East  West Bank     |

 

MortgageLoans:

 

THEMORTGAGE LOAN(S) COVERED BY THIS TRANSACTION REQUEST IS(ARE)  LISTED AND DESCRIBED IN THE ATTACHED SCHEDULEOF MORTGAGE LOAN(S).

 

PurchasePrice:

 

Sale:                                                                                                                       For value received,Seller hereby conveys to the Buyer all rights, title and interest in and to thefollowing:

 

(a)                                  The Note andthe related Mortgage for each Mortgage Loan;

 

(b)                                 all rights topayment thereunder;

 

(c)                                  all rightsrelated thereto, such as financing statements, guaranties and insurancepolicies (issued by governmental agencies or otherwise), including(i) mortgage and title insurance policies, (ii) fire and extendedcoverage insurance policies (including the right, if any, to any return premiums),and (iii) if applicable, FHA insurance, VA guaranties, or private mortgageinsurance and all rights, if any, in escrow deposits consisting of impounds,insurance premiums, or other funds held in account thereof;

 

(d)                                 all right,title and interest of the owner of such loan in the real property, includingall improvements thereon, and the personal property (tangible and intangible)that are encumbered by such Mortgage Loan (or deed of trust) and/or securityagreements;

 

(e)                                  all ServicingRights and other rights to service, administer and/or collect such MortgageLoan and all rights to the payment of money on account of such servicing,administration and/or collection appraisals, computer programs, tapes, discs,cards, accounting records, and other books, records, information, and datarelating to such loan necessary to the administration or servicing of suchMortgage Loan (subject to Seller’s right to service set forth in the MasterRepurchase Agreement described herein); and

 

1

----

 

(f)                                    all accounts,contract rights (including rights under any applicable Purchase Commitment),and general intangibles constituting or relating to such loan.

 

Sellerhereby reaffirms the representations, warranties and covenants made in thatcertain Master Repurchase Agreement between Seller and Buyer with respect toSeller on and as of the date of such Agreement and with respect to the soldMortgage Loans on the Purchase Date.

 

Definitions:                                                                                  Terms used butnot defined herein shall have the meanings assigned to them in the abovereferenced Master Repurchase Agreement.

 

 
| **SELLER**                 |                 |
|----------------------------|----------------------|
|                       |                 |
| By                         | /s/  William Ashmore |   |
|                       |                 |   |
| Name:                      | William  Ashmore     |   |
|                       |                 |   |
| Title:                     | President            |   |
|                       |                 |   |
| Request  Date:             |                 |   |
|                       |                 |   |
| ** **                 |                 |
| **EAST WEST BANK**         |                 |
|                       |                 |   |
| By                         | /s/  Robert Lo       |   |
|                       |                 |   |
| Name:                      | Robert  Lo           |   |
|                       |                 |   |
| Title:                     | SVP                  |   |
|                       |                 |   |
| Approval  / Purchase Date: |                 |   |
|                            |                      |  |  |  |

 

2

----

 

**EXHIBIT A-2**

 

I.                                         DocumentsRequired to Purchase Dry Funded Mortgage Loans

 

·                                          Application from theMortgagor (1003)

·                                          Loan Approval and PurchaseCommitment from an Approved Takeout Investor

·                                          Credit Report for Mortgagor

·                                          Pages 1, 2, 3 &4 of Appraisal

·                                          Original Note

·                                          Original Assignment of Deedof Trust or Mortgage (if not registered with MERS)

·                                          Certified Copy of Deed ofTrust or Mortgage

·                                          Approved Takeout InvestorShipping Instructions

·                                          Copy of MERS registrationnaming East West Bank as the interim funder

·                                          Completed Wire RequestForm/Wiring Instructions

·                                          Transaction Request Form (Exhibit A-1)

·                                          Funding Request Form

·                                          FHA or VA Direct Endorsement

·                                          Mortgage Credit AnalysisWorksheet or Income Analysis as appropriate for FHA or VA

·                                          Copy of Title Commitment

·                                          Closing Protection Letterfrom Closing Agent

·                                          Copy of hazard insurancepolicy or binder of coverage

·                                          Flood certification

·                                          Uniform Underwriting andTransmittal Summary (conventional only)

·                                          Copy of Mortgage InsuranceCertificate (conventional over 80% LTV — only when indicated on investorapproval as an outstanding condition)

·                                          Approved Takeout InvestorShipping Instructions

 

II.                                     DocumentsRequired to Purchase Wet Funded Mortgage Loans

 

·                                          Application from theMortgagor (1003)

·                                          Loan Approval and PurchaseCommitment from an Approved Takeout Investor

·                                          Credit Report for Mortgagor

·                                          Pages 1, 2,3 &4 of Appraisal

·                                          Copy of Note

·                                          Completed Wire RequestForm/Wiring Instructions

·                                          Transaction Request Form (Exhibit A-1)

·                                          Funding Request Form

·                                          Copy of Title Commitment

·                                          Closing Protection Letterfrom Closing Agent

·                                          Copy of hazard insurancepolicy or binder of coverage

·                                          Flood certification

·                                          Uniform Underwriting andTransmittal Summary (conventional only)

 

1

----

 

·                                          Mortgage Credit AnalysisWorksheet (FHA only)

·                                          VA Loan Analysis (VA only)

·                                          Copy of Mortgage InsuranceCertificate (conventional over 80% LTV — only when indicated on investorapproval as an outstanding condition)

·                                          Approved Takeout InvestorShipping Instructions

 

2

----

 

**EXHIBIT B**

 

**REPRESENTATIONS AND WARRANTIESRELATING TO THE PURCHASED ELIGIBLE LOANS**

 

TransactionRequest.  The information with respectto each Purchased Eligible Loan set forth in the related Transaction Request istrue and correct as of the date specified in all material respects;

 

Documentsto Custodian; No Table Funding.  All documentation required to be delivered tothe Custodian under the Custodial Agreement has been so delivered; and thepurchase by Buyer of each Purchased Eligible Loan constitutes a secondarymarket transaction under the Real Estate Settlement Procedures Act (“RESPA”).  With respect to a Wet Funded Mortgage Loan,all documentation required for a Dry Funded Mortgage Loan shall have beendelivered to the Buyer within four (4) Business Days after theTransaction closes;

 

PurchaseCommitment from an Approved Takeout Investor.  Each Purchased Eligible Loan is subject to awritten and binding commitment to the relevant Seller from an Approved TakeoutInvestor requiring the Approved Takeout Investor to purchase such loan fromsuch Seller at a price at least equal to the Purchase Price;

 

Typeof Mortgage Loan.  EachPurchased Eligible Loan is a single family mortgage loan that consists of aNote secured by a Mortgage, and each related property securing the relatedMortgage is improved by a single (one-to-four) family residential dwelling; andeach Purchased Eligible Loan satisfies the respective requirements of therelevant Seller’s mortgage lending programs and Approved Take-Out Investor’smortgage lending programs;

 

MinimumFICO.  Each Purchased Eligible Loanhas a minimum FICO of at least 680, except with respect to those PurchasedEligible Loans that are either FHA insured or VA guaranteed;

 

CLTVand LTV.  Each Purchased Eligible Loanhas a maximum combined loan-to-value ratio at origination in accordance withthe standards of the Approved Take-Out Investor for such Purchased EligibleLoan, but not to exceed one hundred percent (100%);

 

Servicing.  Subservicer is servicing each PurchasedEligible Loan in accordance with the terms of this Agreement; the servicing andcollection practices used by the Subservicer with respect to each PurchasedEligible Loan have been in all respects legal, proper, prudent and customarywithin the industry for the servicing of similar single family mortgage loansand the servicing and collection practices used by any prior subservicers withrespect to each Purchased Eligible Loan have been in all respects legal;

 

InterestRate.  The Note related to eachPurchased Eligible Loan bears a fixed or adjustable interest rate; and if thePurchased Eligible Loan provides for an adjustable interest rate, then theterms of the related Note pertaining to interest rate adjustments, paymentadjustments and adjustments of the outstanding principal balance areenforceable and such adjustments will not affect the priority of the lien ofthe related Mortgage;

 

1

----

 

ValidLien.  Each Eligible Loan is a validand subsisting first lien of record (or is in the process of being recorded) onthe mortgaged property subject to the exceptions to title set forth in thetitle insurance policy, with respect to the related Eligible Loan, whichexceptions are generally acceptable to banking institutions in connection withtheir regular mortgage lending activities, and such other exceptions to whichsimilar properties are commonly subject and which do not individually, or inthe aggregate, materially and adversely affect the benefits of the securityintended to be provided by such Mortgage;

 

Titleand Ownership of Loans. Immediately prior to the transfer and assignment of the Eligible Loansby the relevant Seller to Buyer as contemplated by this Agreement, such Sellerheld good and indefeasible title to, and was the sole owner of, each EligibleLoan (including the related Note) conveyed by the relevant Seller subject to noliens, charges, mortgages, encumbrances or rights of others except as set forthin clause (ix) or other liens which will be released simultaneouslywith such transfer and assignment; and immediately upon the transfer of thePurchased Eligible Loans as contemplated in this Agreement, Buyer will be thesole owner of each Purchased Eligible Loan subject to no liens, charges,mortgages, encumbrances or rights of others except as set forth in Paragraph (ix) orother liens which will be released simultaneously with such transfer;

 

NoDelinquency.  NoPurchased Eligible Loan is thirty (30) days or more delinquent;

 

NoTax Lien or Damage.  There is nodelinquent tax or assessment lien on the property securing the relatedMortgage, and each mortgaged property is free of substantial damage or waste;

 

NoRescission, Set-off or Invalidity.  The Mortgage and the Note are not subject toany right of rescission, set-off, counterclaim or defense, including thedefense of usury, nor will the operation of any of the terms of the Mortgage orthe Note, or the exercise of any rights thereunder, render the Mortgage or theNote invalid or unenforceable, in whole or in part, or subject to any right ofrescission, set-off, counterclaim or defense, including the defense of usuryand no such right of rescission, set-off, counterclaim or defense has beenasserted with respect thereto;

 

NoMechanics’ Lien.  There is nomechanics’ lien or claim for work, labor or material affecting the propertysecuring the related Mortgage which is or may be a lien prior to, or equalwith, the lien of the related Mortgage except those which are insured againstby any title insurance policy referred to in Paragraph (xvi) below;

 

Compliancewith Laws.  EachPurchased Eligible Loan at the time it was made complied in all materialrespects with applicable state and federal laws and regulations, including,without limitation, the federal Truth-in-Lending Act and other consumerprotection laws, usury, equal credit opportunity, disclosure and recordinglaws;

 

TitleInsurance Policy.  Withrespect to each Purchased Eligible Loan a lender’s title insurance policy,issued in standard American Land Title Association form by a title insurancecompany authorized to transact business in the state in which the propertysecuring the related Mortgage is situated, in an amount at least equal to theoriginal balance of such Purchased

 

2

----

 

EligibleLoan insuring the mortgagee’s interest under the related Eligible Loan as theholder of a valid first mortgage lien of record on the real property describedin the related Mortgage, as the case may be, subject only to exceptions of thecharacter referred to in Paragraph (ix) above, was effective on the dateof the origination of such Eligible Loan, and such policy is valid andthereafter such policy shall continue in full force and effect;

 

HazardInsurance.  Theimprovements upon the property securing the related Mortgage are covered by avalid and existing hazard insurance policy with a carrier generally acceptableto the relevant Seller that provides for fire and extended coveragerepresenting coverage not less than the least of (A) the outstandingprincipal balance of the Mortgage Loan, (B) the minimum amount required tocompensate for damage or loss on a replacement cost basis or (C) the fullinsurable value of the property securing the related Mortgage, and in any eventwhich is not less than the amount necessary to avoid the operation of anyco-insurance provisions with respect to such property in the event of any lossless than the amount of the insurance coverage;

 

FloodInsurance.  If theproperty securing the related Mortgage is in an area identified in the FederalRegister by the Federal Emergency Management Agency as having special floodhazards, a flood insurance policy in a form meeting the requirements of thecurrent guidelines of the Flood Insurance Administration is in effect withrespect to such mortgaged property with a carrier generally acceptable to therelevant Seller in an amount representing coverage not less than the least of(A) the outstanding principal balance of the Mortgage Loan, (B) theminimum amount required to compensate for damage or loss on a replacement costbasis or (C) the maximum amount of insurance that is available under theFlood Disaster Protection Act of 1973;

 

Enforceabilityof Mortgage Loan.  EachMortgage and Note is the legal, valid and binding obligation of the makerthereof and is enforceable in accordance with its terms, except only as suchenforcement may be limited by bankruptcy, insolvency, reorganization, moratoriumor other similar laws affecting the enforcement of creditors’ rights generallyand by general principles of equity (whether considered in a proceeding oraction in equity or at law), and all parties to each Purchased Eligible Loanhad full legal capacity to execute all documents relating to such Eligible Loanand convey the estate therein purported to be conveyed;

 

InsuranceRights and Remedies.  Therelevant Seller has caused and will cause to be performed any and all actsrequired to be performed to preserve the rights and remedies of Buyer in anyinsurance policies applicable to any Purchased Eligible Loans transferred bysuch Seller including, without limitation, any necessary notifications ofinsurers, assignments of policies or interests therein, and establishments ofco-insured, joint loss payee and mortgagee rights in favor of Buyer;

 

Recordationof Mortgage.  Eachoriginal Mortgage was recorded or is in the process of being recorded, and ifthe Mortgage Loan was originated in the name of someone other than the relevantSeller, one or more assignments of Mortgage have been delivered for recordationor have been recorded in the appropriate jurisdictions wherein such recordationis necessary to reflect the transfer thereof from the original named mortgageeto the relevant Seller, and to perfect the lien thereof as against creditors ofor purchasers from the relevant Seller or, if the relevant Seller is registeredwith MERS, such MERS Mortgage has recorded in the name of 

 

3

----

 

MERS, or is in the process of being so recorded , and the ownership ofsuch MERS Mortgage by Buyer has been listed with MERS;

 

NoImpairment or Modification.  The terms of each Note and each Mortgage havenot been impaired, altered or modified in any respect other than as approved byBuyer, except by a written instrument which has been recorded, if necessary, toprotect the interest of Buyer and which has been delivered to theCustodian.  The substance of any suchalteration or modification is reflected on the related Transaction Request;

 

NoFuture Advances; All Improvements Completed.  The proceeds of each Purchased Eligible Loanhave been fully disbursed, and there is no obligation on the part of themortgagee to make future advances thereunder; any and all requirements as tocompletion of any on-site or off-site improvements and as to disbursements ofany escrow funds therefor have been complied with; all costs, fees and expensesincurred in making or closing or recording such Eligible Loans were paid;

 

NoOther Security.  The relatedNote is not and has not been secured by any collateral, pledged account orother security except the lien of the corresponding Mortgage;

 

NoShared Appreciation or Contingent Interest.  No Purchased Eligible Loan has a sharedappreciation feature, or other contingent interest feature;

 

StateLocation and Residential Dwelling.  Each property securing the related Mortgageis located in the state identified in the respective Transaction Request andconsists of one or more parcels of real property with a residential dwellingerected thereon;

 

Dueon Sale Clause.  EachMortgage contains a provision for the acceleration of the payment of the unpaidprincipal balance of the related Purchased Eligible Loan in the event theproperty securing the related Mortgage is sold without the prior consent of themortgagee thereunder;

 

ConsolidatedPrincipal Amount. Any advances made after the date of origination ofa Purchased Eligible Loan have been consolidated with the outstanding principalamount secured by the related Mortgage, and the secured principal amount, asconsolidated, bears a single interest rate and single repayment term reflectedon the respective Transaction Request; the consolidated principal amount doesnot exceed the original principal amount of the related Purchased EligibleLoan;

 

NoCondemnation.  There is noproceeding pending, currently occurring or threatened for the total or partialcondemnation of the property securing the related Mortgage;

 

Improvementswithin Boundaries; No Encroachment.  All of the improvements that were includedfor the purposes of determining the appraised value of the property securingthe related Mortgage lie wholly within the boundaries and building restrictionlines of such property, and no improvements on adjoining properties encroachupon such property, and are stated in the title insurance policy andaffirmatively insured;

 

4

----

 

Zoningand Occupancy Compliance.  Noimprovement located on or being part of the property securing the relatedMortgage is in violation of any applicable zoning law or regulation; allinspections, licenses and certificates required to be made or issued withrespect to all occupied portions of each such property and, with respect to theuse and occupancy of the same, including but not limited to certificates ofoccupancy and fire underwriting certificates, have been made or obtained fromthe appropriate authorities and such property is lawfully occupied under theapplicable law;

 

Deed of Trust Trustee.  With respect to each Mortgage constituting adeed of trust, a trustee, duly qualified under applicable law to serve as such,has been properly designated and currently so serves and is named in such Mortgage,and no fees or expenses are or will become payable by the owner of the EligibleLoan to the trustee under the deed of trust, except in connection with atrustee’s sale after default by the related Mortgagor;

 

Realization Against Property; No Homestead.  Each Mortgage contains customary andenforceable provisions which render the rights and remedies of the holderthereof adequate for the realization against the property securing the relatedMortgage of the benefits of the security, including (A) in the case of aMortgage designated as a deed of trust, by trustee’s sale and(B) otherwise by judicial foreclosure. There is no homestead or other exemption other than any applicableMortgagor redemption rights available to the related Mortgagor which wouldmaterially interfere with the right to sell the property securing the relatedMortgage at a trustee’s sale or the right to foreclose the related Mortgage;

 

No Mortgage Default or Acceleration.  There is no default, breach, violation orevent of acceleration existing under any Mortgage or the related Note and noevent which, with the passage of time or with notice and the expiration of anygrace or cure period, would constitute a default, breach, violation or event ofacceleration; and the relevant Seller has not waived any default, breach,violation or event of acceleration;

 

No Release or Waiver.  No instrument of release or waiver has beenexecuted in connection with any Purchased Eligible Loan, and neither therelated Mortgage nor the Mortgagor has been released, in whole or in part,except in connection with an assumption agreement which has been approved bythe primary mortgage guaranty insurer, if any, and which has been delivered tothe Custodian;

 

Appraisal.  EachPurchased Eligible Loan was originated based upon an appraisal which complieswith the requirements set forth in the FDIC Improvement Act of 1991.

 

No Hazardous Substances.  There do not exist any hazardous substances,hazard wastes or solid wastes, as such terms are defined in the ComprehensiveEnvironmental Response Compensation and Liability Act, the ResourceConservation and Recovery Act of 1976, or other federal, state or localenvironmental legislation on any mortgaged property that would give rise to acause of action under such legislation;

 

Seller Licensed.  Therelevant Seller was properly licensed or otherwise authorized, to the extentrequired by applicable law, to purchase and sell each Purchased Eligible Loan;and the consummation of the transactions herein contemplated, including,without limitation, the

 

5

----

 

ownershipof the Purchased Eligible Loans by the relevant Seller, will not violate suchlaws; and each other party that has had any interest in the Purchased EligibleLoan, whether as a lender, broker, servicer, mortgagee, assignee, pledgee orotherwise, is (or, during the period in which such party had such interest,was) (A) in compliance with all applicable licensing requirements of thelaws of the state where the property securing the related Mortgagee is located,and (B) (1) organized under the laws of such state, or(2) qualified to do business in such state, or (3) a federal savingsand loan association or national bank, or a Federal Home Loan Bank or a savingsbank having principal offices in such state, or (4) not doing business insuch state;

 

Ground Lease.  Withrespect to any property securing the related Mortgage which is subject to aground lease (i) the current ground lessor has been identified and allground rents which have previously become due and owing have been paid; (ii) theground lease term extends, or is automatically renewable, beyond the maturitydate of the related Purchased Eligible Loan; (iii) the ground lease hasbeen duly executed and recorded; (iv) the amount of the ground rent andany increases therein are clearly identified in the lease and are forpredetermined amounts at predetermined times; (v) the ground rent paymentis included in the mortgagor’s monthly payment as an expense item in determiningthe qualification of the mortgagor for such Eligible Loan; (vi) Buyer hasthe right to cure defaults on the ground lease; and (vii) the terms andconditions of the leasehold do not prevent the free and absolute marketabilityof the mortgaged property;

 

NoBuydown Loans.  NoPurchased Eligible Loan is subject to a temporary rate reduction pursuant to abuydown program;

 

InterestAccrual.  Each Purchased Eligible Loanaccrues interest based upon a year of 360 days with twelve 30-day months; and

 

NoHigh Cost or Predatory Loans.  None of the Eligible Loans are(a) Eligible Loans subject to 12 CFR Part 226.31, 12 CFR Part 226.32or 226.34 of Regulation Z, the regulation implementing TILA, which implementsthe Home Ownership and Equity Protection Act of 1994, as amended, or(b) classified and/or defined, as a “high cost”, “threshold”, “predatory”or “covered” loan (or a similarly classified loan using different terminologyunder a law imposing additional legal liability for mortgage loans having highinterest rates, points and/or fees) under any other applicable state, federalor local law, regulation or ordinance.

 

6

----

 

**EXHIBIT C**

 

**PLEDGE AGREEMENT**

 

ThisPLEDGE AGREEMENT (this “Pledge”) is executed as of June 24, 2010, by andbetween **SYNERGY CAPITAL MORTGAGE CORP.** and **EXCEL MORTGAGE SERVICING, INC.**(each a “Seller” and,collectively, the “Sellers”), and **EAST WEST BANK**(“Bank”).

 

**RECITALS**

 

A.                                   Bank has agreedwith Sellers pursuant to that certain Master Repurchase Agreement (the “Agreement”)dated****June 24, 2010, to purchase fromSellers certain Mortgage Loans defined as Eligible Loans, such terms beingdefined in the Agreement, whose other defined terms shall also apply to thisPledge.

 

B.                                     As partialconsideration for Bank entering into the Agreement and purchasing EligibleLoans, each Seller has agreed to assign and pledge to Bank and grant Bank asecurity interest in and to certain deposit accounts described herein.

 

NOW,THEREFORE, for and in consideration of the matters set forth above and othergood and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the parties hereto agree as follows:

 

EachSeller does hereby assign and pledge as collateral for the purpose of securingthe performance by Sellers of all of Seller’s obligations under the Agreementall right, title and interest of Sellers in and to the following depositaccounts maintained with Buyer: (a) an interest bearing account to satisfy Sellers’ obligation tomaintain on deposit with Buyer certain amounts required under the Agreement(the “Cash Collateral Account”), and (b) two non interest bearing accountsto receive the proceeds of any funds to which a Seller is entitled upon thesale by Seller of repurchased Eligible Loans to Approved Takeout Investors orotherwise to receive payments or other amounts due from any Seller to Buyer(the “Settlement Accounts”) (hereinafter collectively called the “Accounts”),which are more particularly described as follows:

 

(a)                                  Cash CollateralAccount — Bank account number: CD 178038725

(b)                                 ExcelSettlement Account—Bank account number: 8003001248

(c)                                  SynergySettlement Account—Bank account number: 8003001313

 

EachAccount will be a blocked account. Should an Event of Default occur under the Agreement then Bank mayenforce this Pledge in any manner provided by law and charge all or any portionof any sums owing under the Agreement for any reason as provided under theAgreement or herein, to the extent of the withdrawal value of said Accounts.  Should such Event of Default occur, Bank mayproceed against the Accounts without exhausting its remedies against anyparties liable under the Agreement or against any other security thereforwhether in court, by foreclosure, or otherwise, and this Pledge may be enforcedand all sums due under said Agreement or under the instruments executed inconnection therewith shall be charged to the

 

1

----

 

aforesaidwithdrawal value of such pledged Accounts to the extent thereof and the Sellersshall be jointly and severally liable for the excess, if any.

 

Sellersshall maintain said Accounts with Bank for the full term of this Pledge.

 

Nothingin the foregoing paragraph shall be construed as requiring Bank to enforce thisPledge.  Bank’s failure to do so on oneor more occasions shall not affect Bank’s right so to do; nor will enforcementof such Pledge for less than the full value of the said pledged Accounts impairthe effectiveness of the Pledge as to the remaining value thereof.  Bank may elect to enforce its right under theAgreement without resort to the remedies provided in this instrument; in suchevent the terms of the other documents alone referred to above shall becontrolling and no provision hereof shall be construed as requiring Bank toperform any condition precedent to the enforcement of the Agreement and thedocuments executed in connection therewith against any and all parties thereto.

 

However,Bank expressly agrees that at such times as the obligations of Sellers underthe Agreement have been performed and satisfied without the necessity of Bankexercising its rights hereunder or under the Agreement and any relateddocuments, and no defense against the obligations under the Agreement oradverse claims of ownership to any such security is being asserted, then theBank shall waive enforcement of this Pledge as to any amounts available in saidAccounts in excess of Sellers’ outstanding obligations to Buyer under theAgreement.

 

Fromand after the occurrence of an Event of Default under the Agreement or defaultunder any other documents executed in connection therewith, each Sellerauthorizes Bank, at Bank’s option, to collect and receipt for any and all sumsbecoming due upon the pledged Accounts, such sums to be held by Bank withoutliability for interest thereon and applied toward the performance of Sellers’obligations under the Agreement and any other documents executed in connectiontherewith hereby secured.  Bank shallhave the full control of the pledged Accounts until they are released inaccordance herewith.

 

Bank,in addition to the rights and remedies provided for in the precedingparagraphs, shall have all the rights and remedies of a secured party under theUniform Commercial Code of California and Bank shall be entitled to availitself of all such other rights and remedies as may now or hereafter exist atlaw or in equity for the performance of all obligations under the Agreement andthe foreclosure of the security interest created hereby and the resort to anyremedy provided hereunder or provided by the Uniform Commercial Code ofCalifornia, or by any other law of California, shall not prevent the concurrentemployment of any other appropriate remedy or remedies.

 

Bankmay remedy any Event of Default, without waiving same, or may waive any Eventof Default without waiving any prior or subsequent Event of Default.

 

Thesecurity interest herein created shall not be affected by or affect any othersecurity taken for the performance of obligations under the Agreement herebysecured, or any part thereof, and any extensions may be made for theperformance of such obligations without affecting the priority of this pledgeor the validity thereof with reference to any third party, and

 

2

----

 

Bankor its successors shall not be limited by any election of remedies if itchooses to foreclose this security interest by suit.

 

EachSeller further represents to and covenants and agrees with Bank that suchSeller will at any time or from time to time, upon the written request of Bank,execute and deliver such further documents and do such other acts and things asBank may specify for the purpose of further assurance and of effecting thepurposes of this Pledge, and otherwise do any and all things and actswhatsoever which Bank may request in order to perfect this Pledge.

 

Thelaw governing this Pledge shall be the Uniform Commercial Code as adopted inCalifornia and other applicable laws of the State of California, and this Pledgeshall be performable in Los Angeles County, California.  All terms used herein which are defined inthe Uniform Commercial Code of California shall have the same meaning herein asin said Code.

 

Ifany clause or provision of this Pledge is illegal, invalid, or unenforceable,under present or future laws effective during the term hereof, then it is theintention of the parties hereto that the remainder of this Pledge shall not beaffected thereby, and it is also the intention of the parties hereto that inlieu of each clause or provision that is illegal, invalid or unenforceable,there be added as a part of this Pledge a clause or provision as similar interms to such illegal, invalid or unenforceable clause or provision as may bepossible and be legal, valid and enforceable.

 

TheAccounts evidencing such Pledge are delivered herewith or are authorized to beheld by Bank.

 

Theterm of this Pledge shall begin on the date hereof and shall expire upon theoccurrence of (i) the termination of the Agreement, and (ii) the fulland final satisfaction of all obligations of Sellers under the Agreement.

 
| SELLER:                                  |                 |
|------------------------------------------|----------------------|
|                                     |                 |
| **SYNERGY CAPITAL MORTGAGE CORP.**       |                 |
|                                     |                 |   |
| By                                       | /s/  William Ashmore |   |
| Name:                                    | William  Ashmore     |   |
| Title:                                   | President            |   |
|                                     |                 |   |
| SELLER:                                  |                 |
|                                     |                 |
| **EXCEL MORTGAGE  SERVICING, INC.** |                 |
|                                     |                 |   |
| By                                       | /s/  William Ashmore |   |
| Name:                                    | William  Ashmore     |   |
| Title:                                   | President            |   |

 

3

----

 

ACCEPTEDAND AGREED TO:

 

**EASTWEST BANK**

 
| By     | /s/  Robert Lo |   |
|--------|----------------|--------|
| Name:  | Robert  Lo     |   |
| Title: | SVP            |   |
|        |                |        |  |  |

 

4

----

 

**EXHIBIT D**

 

**GUARANTY AGREEMENT**

 

1.             FOR VALUE RECEIVED, the undersignedINTEGRATED REAL ESTATE SERVICE CORP., a California corporation (hereinaftercalled “Guarantor”, whether one or more), hereby jointly and severally (if morethan one), unconditionally, absolutely and irrevocably guarantees the full andtimely payment and performance of each and every covenant, agreement,undertaking and obligation (collectively the “Obligations”) made by SYNERGYCAPITAL MORTGAGE CORP. and EXCEL MORTGAGE SERVICING, INC. (collectively,the “Obligor”) to or for the benefit of EAST WEST BANK (“Bank”), as set forthin that certain Master Repurchase Agreement (the “Agreement”), datedJune 24, 2010, executed by Obligor and Bank, relating to the purchase andrepurchase of interests in various mortgage loans, as said Agreement may beamended from time to time.

 

2.             Guarantor expressly waivesdiligence on the part of said Bank in the collection or enforcement of theObligations, whether fixed or contingent, and waives presentment, protest,notice of protest, dishonor, notice of acceptance of this Guaranty, notice ofnon-performance, demands for performance and approval of any modifications,renewals or extensions of the Obligations that may be granted to theObligor.  Bank shall be under noobligation to notify any of the Guarantors of its acceptance of this Guaranty,nor of any advances made or credit extended or participations purchased on thefaith hereof, nor of the failure of said Obligor to pay and perform theObligations, nor to use diligence in preserving the liability of any entity orperson on said Obligations whether fixed or contingent, nor in bringing suit toenforce collection or enforcement of the Obligations secured by this Guaranty,nor of notice of any instruments now or hereafter executed in favor of Bankevidencing or securing said indebtedness. Guarantor individually and severally further agrees to pay reasonableattorney’s fees and litigation costs and expenses should this Guaranty beplaced in the hands of an attorney for enforcement, or should it be enforcedthrough any court.

 

3.             Guarantor agrees that this is acontinuing Guaranty, but shall be limited to the Obligations as described inParagraph 1 above together with any modifications, revisions, extensions or anyexpenses incurred in connection therewith, and that it may be enforced by Bankwithout first resorting to or exhausting any security or collateral, or withoutfirst having exhausted other rights and remedies of Bank against Obligor.  Further, Bank shall not be required toexhaust its remedies against accommodation makers, sureties and endorsers orany other guarantors.  Pursuit by Bank ofany of its remedies shall not impair this Guaranty and shall not be deemed anelection of remedies.  To the extentpermitted by law, Guarantor waives the benefit of any statute of limitationaffecting Guarantor’s liability hereunder or the manner or mode of enforcementthereof.

 

4.             Guarantor consents, withoutaffecting Guarantor’s liability to Bank hereunder, that the Bank may, withoutnotice to or consent of Guarantor, upon such terms as it may deem advisable,(a) modify the Obligations by modification of the Agreement,(b) purchase Mortgage Loans pursuant to the Agreement, thus increasing theObligations, or (c) settle or compromise any claim of the Bank against theObligor, or against any other person, firm or corporation.

 

1

----

 

Guarantorhereby ratifies and affirms any such modification, participations, settlementor compromise; and waives all defenses, counterclaims or offsets which theGuarantor might have by reason thereof. Notwithstanding anything to the contrary contained herein, in any otherTransaction Document or in any other agreement between Guarantor and the Bank,the Bank shall not have a right of offset or set off or any other right toassert ownership of, or control or dominion over, any Guarantor balances ordeposits held by or deposited with the Bank or any Affiliate of the Bank.

 

5.             If any or all of the Obligationshereby guaranteed be secured, Guarantor agrees that the Bank may from time totime, at its discretion, with or without valuable consideration, allow release,surrender, substitution, exchange, subordination, loss or withdrawal ofsecurity or collateral, and should the Obligor execute in favor of said Bankany collateral agreement, the exercise by the Bank of any right conferred uponit in said agreement shall be wholly discretionary with the Bank, and suchexercise of, or failure to exercise such right shall in no way impair ordiminish the obligations of Guarantor hereunder.  Bank may, without in any manner impairing ordiminishing the obligations of the Guarantor hereunder, elect to pursue anyavailable remedy against Obligor or against any security held by Bank, whetheror not the exercise by Bank of any such remedy shall result in loss toGuarantor of any right of subrogation or right to proceed against Obligor forreimbursement.

 

6.             In the event Obligor is acorporation, joint stock association or partnership, or is hereafterincorporated; if the Obligations at any time hereafter exceed the amount permittedby law, if the Obligations are at any time hereafter deemed to be usurious, orObligor is not liable because the act of creating the Obligations are ultravires, or the officers or persons creating same acted in excess of theirauthority, and for these reasons the Obligations to the Bank which Guarantoragreed to pay cannot be enforced against Obligor, such facts shall in no manneraffect Guarantor’s liability hereunder, but Guarantor shall be liablehereunder, notwithstanding that Obligor is not liable for such Obligations, andto the same extent as Guarantor would have been if the Obligations of theObligor had been enforceable against it.

 

7.             Guarantor further agrees that thisGuaranty shall not be discharged, impaired or affected by (a) the transferby the Obligor of all or any portion of the Mortgage Loans contemplated by theAgreement, or (b) any defense (other than the full payment of theObligations hereby guaranteed in accordance with the terms hereof) that theGuarantor may or might have as to Guarantor’s respective undertakings,liabilities and obligations hereunder, each and every such defense being herebywaived by the undersigned Guarantor.

 

8.             Should the status of Obligorchange, this Guaranty shall continue and also cover the Obligations of Obligorunder the new status, according to the terms hereof guaranteeing theObligations of the original Obligor.

 

9.             Guarantor waives any defensearising by reason of any disability or other defense of the Obligor or byreason of the cessation from any cause whatsoever of the liability ofObligor.  Until all the Obligations ofthe Obligor to Bank shall have been paid in full, Guarantor shall have no rightof subrogation, and waives any right to enforce any remedy which Bank now hasor may hereafter have against the Obligor; and Guarantor waives any benefit of,and any right to participate in, any security now or hereafter held by Bank.

 

2

----

 

10.           This Guaranty shall remain andcontinue in full force and effect notwithstanding the institution by or againstthe Obligor of bankruptcy, reorganization, readjustment, receivership orinsolvency proceedings of any nature, or the disaffirmation of the saidObligations in any such proceedings, or otherwise.

 

11.           In the event any payment made byObligor to Bank with respect to the Obligations is held to constitute apreference under the U.S. Bankruptcy Code, or if for any other reason Bank isrequired to refund such payment or pay the amount thereof to any other party, sucha payment shall not constitute a release of Guarantor from any liabilityhereunder, but Guarantor agrees to pay such amount to Bank upon demand.

 

12.           In the event any or all of theGuarantors are corporations, each such Guarantor warrants and represents thatit has authority to execute and deliver this Guaranty and agrees that it willdo all things necessary to preserve and keep in full force and effect itsexistence, franchises, rights and privileges as a business or stock corporationunder the laws of the state of its incorporation.

 

13.           To the extent permitted by law,Guarantor expressly waives and relinquishes all rights and remedies ofsuretyship, including, but not limited to, all rights and remedies providedunder sections 2787 through 2856 of the Civil Code of the State of California.

 

14.           This Guaranty is for the benefit ofBank, its successors and assigns, and in the event of an assignment by theBank, its successors or assigns, of the Obligations, or any part thereof, therights and benefits hereunder shall be transferred with such Obligationswithout further act on the part of Bank and without notice to Guarantor.

 

15.           Suit may be brought against theGuarantor or against any other guarantor without impairing the rights of Bank,its successors or assigns, against any guarantor, and the Bank may compromiseor settle with any guarantor for such sum or sums as it may see fit and releasesuch guarantor from all further liability to Bank for the Obligations withoutimpairing the right of the Bank to demand and collect the balance of theObligations from other guarantors not so released; but it is agreed, however,that such compromise, settlement and release shall in no way impair the rightsof the guarantors as among themselves.

 

16.           In the event of the death of anyGuarantor hereunder, the obligation of the deceased shall continue in fullforce and effect against his or her estate or beneficiaries as to allObligations which shall have been created or incurred by the Obligor prior tothe time when the Bank shall have received notice, in writing, of such death;and this Guaranty shall from the date of such death as to all Obligationscreated, incurred or arising after such death remain and continue in full forceas a Guaranty by the surviving guarantors.

 

17.           Guarantor, individually andseverally, expressly agrees that this contract is performable in the LosAngeles County, California.

 

18.           The invalidity or unenforceability inany particular circumstances of any provision of this Guaranty shall not extendbeyond such provision or such circumstances, and no other provision of thisinstrument shall be affected thereby.

 

3

----

 

19.           Guarantor acknowledges and agreesthat Guarantor has received and reviewed a copy of the Agreement and all otherdocuments executed in connection with the Agreement.

 

20.           Any notice or demand requiredhereunder shall be deemed to be delivered when deposited in the United Statesmail, postage prepaid, certified mail, return receipt requested, addressed toGuarantor or Bank, as the case may be, at the address set out in the Agreementfor the Bank and as set forth below for Guarantor or at such other address assuch party may hereafter deliver in accordance herewith.  Any other method of delivery or demand shallbe effective only when actually received by the recipient thereof. If and whenincluded within the term “Guarantor” or “Bank” there are more than one person,all shall jointly arrange among themselves for their joint execution and deliveryof a notice to the other specifying some person at some specific address forthe receipt of all notices, demands, payments or other documents.  All persons included within the terms “Guarantor”or “Bank”, respectively, shall be bound by notices, demands, payments anddocuments given in accordance with the provisions of this Paragraph to the sameextent as if each had received such notice, demand, payment or document.

 

21.           To the extent permitted by law,Guarantor further hereby waives and agrees not to assert or take advantage of:

 

a.             Any right to require Bank toproceed against Obligor or (if Obligor is a limited liability company) anymembers of Obligor or any other indemnitor or guarantor of the indebtedness andobligations guaranteed hereby or any other person or to proceed against orexhaust any security held by Bank at any time or to pursue any other remedy inBank’s power or under any other agreement before proceeding against anyGuarantor hereunder;

 

b.             (i) any defense based upon anelection of remedies by Bank, even though such election destroys or otherwiseimpairs the subrogation rights of Guarantor or the right of Guarantor (afterpayment of the obligations guaranteed by Guarantor under this Guaranty) toproceed against Obligor for reimbursement, or both, and (ii) any and allrights or defenses Guarantor may have by reason of protection afforded toObligor with respect to any of the obligations of Guarantor under this Guarantypursuant to the antideficiency or other laws of the State of Californialimiting or discharging Obligor’s indebtedness;

 

c.             Any right or claim or right tocause a marshaling of the assets of Guarantor;

 

d.             Any duty on the part of Bank todisclose to Guarantor any facts Bank may now or hereafter know about Obligor,regardless of whether Bank has reason to believe that any such facts materiallyincrease the risk beyond that which Guarantor intended to assume or has reasonto believe that such facts are unknown to Guarantor or has a reasonableopportunity to communicate such facts to Guarantor, it being understood andagreed that Guarantor is fully responsible for being and keeping informed ofthe financial condition of Obligor and of any and all circumstances bearing onthe risk that liability may be incurred by Guarantor

 

e.             Any lack of notice of dispositionor of manner of disposition of any collateral;

 

4

----

 

f.              Any invalidity, irregularity orunenforceability, in whole or in part, of any one or more of the TransactionDocuments;

 

g.             Any deficiencies in the collateralor any deficiency in the ability of Bank to collect or to obtain performancefrom any persons or entities now or hereafter liable for the payment andperformance of any obligation hereby guaranteed;

 

h.             Any assertion or claim that theautomatic stay provided by 11 U.S.C. §362 (arising upon the voluntary orinvoluntary bankruptcy proceeding of Obligor) or any other stay provided underany other debtor relief law (whether statutory, common law, case law orotherwise) of any jurisdiction whatsoever, now or hereafter in effect, whichmay be or become applicable, shall operate or be interpreted to stay,interdict, condition, reduce or inhibit the ability of Bank to enforce any ofits rights, whether now or hereafter required, which Bank may have againstGuarantor or the collateral;

 

i.              Any modifications of theTransaction Documents or any obligation of Obligor by operation of law or byaction of any court, whether pursuant to the Bankruptcy Reform Act of 1978, asamended, or any other debtor relief law (whether statutory, common law, caselaw or otherwise) of any jurisdiction whatsoever, now or hereafter in effect,or otherwise;

 

j.              Any action, occurrence, event ormatter consented to by Guarantor under Section 20(d) hereof, underany other provision hereof, or otherwise;

 

k.             Any and all benefits and defensesunder California Civil Code Section 2810;

 

l.              Any and all benefits and defensesunder California Civil Code Section 2809;

 

m.            All principles or provisions of law,statutory or otherwise, which are or might be in conflict with the terms ofthis Guaranty.  By doing so, Guarantoragrees that Guarantor’s obligations shall not be affected by any circumstances,whether or not referred to in this Guaranty, which might otherwise constitute alegal or equitable discharge of a surety or guarantor; and

 

o.             Any right of discharge under anyand all statutes or other laws relating to guarantors or sureties and any otherrights of sureties and guarantors thereunder.

 

Guarantor understands that the exercise by Bank of certain rights andremedies contained in the Transaction Documents may affect or eliminateGuarantor’s right of subrogation against Obligor and that Guarantor maytherefore incur a partially or totally nonreimbursable liability under thisGuaranty.  Nevertheless, Guarantor herebyauthorizes and empowers Bank to exercise, in its sole and absolute discretion,any right or remedy, or any combination thereof, which may then be available,since it is the intent and purpose of Guarantor that the obligations under thisGuaranty shall be absolute, independent and unconditional under any and allcircumstances.

 

In accordance with Section 2856 of the California Civil Code,Guarantor also waives any right or defense based upon an election of remediesby Bank , even though

 

5

----

 

suchelection destroys or otherwise impairs the subrogation rights of Guarantor orthe rights of Guarantor (after payment of the obligations guaranteed byGuarantor under this Guaranty) to proceed against Obligor for reimbursement, orboth.

 

In accordance with Section 2856 of the California Civil Code,Guarantor waives any and all other rights and defenses available to Guarantorby reason of Sections 2787 through 2856, inclusive, of the CaliforniaCivil Code, including any and all rights or defenses Guarantor may have byreason of protection afforded to Obligor with respect to any of the obligationsof Guarantor under this Guaranty pursuant to the antideficiency or other laws ofthe State of California limiting or discharging Obligor’s indebtedness.  Likewise, Guarantor waives any and all rightsand defenses available to Guarantor under California Civil CodeSections 2899 and 3433

 

Guarantor shall have no right of, and hereby waives any claim for,subrogation, reimbursement, indemnification, and contribution against Obligorand against any general partner, member or other constituent of Obligor, andagainst any other person or any collateral or security for the indebtedness (includingwithout limitation any such rights pursuant to Sections 2847 and 2848 ofthe California Civil Code), until the indebtedness has been indefeasibly paidand satisfied in full and all outstanding obligations owed to Bank under theTransaction Documents have been fully performed.

 

EXECUTEDeffective as of the 24th day of June, 2010.

 

INTEGRATEDREAL ESTATE SERVICE CORP.

 
| By:    | /s/  William Ashmore |   |
|--------|----------------------|--------|
| Name:  | William  Ashmore     |   |
| Title: | President            |   |
|        |                      |        |  |  |

 

 

GUARANTORADDRESS FOR NOTICE

 

IntegratedReal Estate Service Corp.19500 Jamboree RoadIrvine, CA  92612Attention:  Ron Morrison, Executive VicePresident and General CounselTelephone:  949-475-3942Facsimile:  949-708-6208Email:  ron.morrison@impaccompanies.com

 

6

----

 

**ACKNOWLEDGMENT**

 

Stateof California

 

Countyof Orange

 

On                       ,before me,                                                                      ,personally appeared                           ,who proved to me on the basis of satisfactory evidence to be the person(s) whosename(s) is/are subscribed to the within instrument and acknowledged to methat he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s) on the instrument the person(s), orthe entity upon behalf of which the person(s) acted, executed theinstrument.

 

Icertify under PENALTY OF PERJURY under the laws of the State of California thatthe foregoing paragraph is true and correct.

 

WITNESSmy hand and official seal.

 
|                   |   | [SEAL] |
|------------------------|--------|--------|
| [Signature  of Notary] |   |

 

7

----

 

**EXHIBIT E**

 

Date:

 

NameAddressCity, StateAttention:  Correspondent Lending

 

Re:  Bailment Letter Agreement

 

DearSir or Madam:

 

Inconnection with the proposed acquisition by                    (“Purchaser”) of the mortgage loans identified on the mortgage loan scheduleattached hereto as Exhibit A (the “Mortgage Loans”),                    (“Bailee”) hereby acknowledges its receipt from East West Bank of mortgage loanfiles (each a “Mortgage Loan File”) with respect to each of the MortgageLoans.  Each Mortgage Loan File containsmortgage loan documents, including an original mortgage note endorsed in blankby the last holder of such mortgage note.

 

Baileehereby agrees to act, with respect to each of the Mortgage Loan Files, as thecustodian and bailee for East West Bank prior to the sale of the Mortgage Loansto the Purchaser, and to hold the Mortgage Loan Files solely for the purpose ofreviewing the Mortgage Loan Files on behalf of the Purchaser.

 

Uponthe written direction of East West Bank, if the Purchaser fails to purchase oneor more of the Mortgage Loans from East West Bank, Bailee shall promptlyredeliver the related Mortgage Loan Files to East West Bank.  Such redelivery shall be at the sole cost andexpense of the Purchaser.

 

Baileehereby agrees to indemnify East West Bank and hold it harmless against any andall losses, damages, penalties, fines forfeitures, reasonable and necessarylegal fees and related costs, judgments and other costs and expenses resultingfrom, the loss of, or damage to, any documents held under any Mortgage LoanFile during the period such Mortgage Loan file is held by Bailee or inconnection with the redelivery thereof by Bailee to East West Bank.

 

Uponits receipt of written confirmation from East West Bank that the Purchaser haspaid East West Bank the purchase price for the Mortgage Loans and that suchpurchase price is in an amount not less than$                  ,the Mortgage Loan files shall be released to Bailee for the benefit of thePurchaser and East West Bank’s security interest therein shall be deemedreleased.

 

Exceptto the extent specifically provided hereunder, prior to the payment of thepurchase price for the Mortgage Loans by the Purchaser, Bailee shall not honorany communications from any third party relating to the Mortgage Loan Files, ordeliver the Mortgage Loan Files to any third party, without the prior writtenconsent of East West Bank.

 

Pleasesend all loan proceeds in accordance with the following wire instructions:

 

1

----

 
| Bank:        |   |   |
|--------------|--------|--------|
| ABA:         |   |   |
| Acct.:       |   |   |
| Acct.  Name: |   |   |
| Attn.:       |   |   |

 

**REFERENCE**:

 

ContactInfo.:

 

Pleaseconfirm that the foregoing specifies the terms of our agreement by signing andfaxing the enclosed copy of this letter to East West Bank, facsimile number            .

 

Verytruly yours,

 

EastWest Bank

 
| By                        |   |   |
|---------------------------|--------|--------|
|                      |   |   |
| Name:                     |   |   |
|                      |   |   |
| Title:                    |   |   |
|                      |   |
|                      |   |
| Confirmed  and Agreed to: |   |
|                      |   |
| [BAILEE]                  |   |
|                      |   |
| By                        |   |   |
|                      |   |   |
| Name:                     |   |   |
|                      |   |   |
| Title:                    |   |   |
|                           |        |        |  |  |  |  |  |

 

2

----

 

**EXHIBIT A**

 

**MORTGAGE LOAN SCHEDULE**

 
| **Loan  Number** | ** ** | **Borrowers** | ** ** | **Loan Amount** | ** ** |
|------------------|------------|---------------|------------|-----------------|------------|
|             |       |          |       |            |       |
|             |       |          |       |            |       |
|             |       |          |       |            |       |

 

1

----

 

**PLEDGE AGREEMENT**

 

ThisPLEDGE AGREEMENT (this “Pledge”) is executed as of June 24, 2010, by andbetween **SYNERGY CAPITAL MORTGAGE CORP.** and **EXCEL MORTGAGE SERVICING, INC.**(each a “Seller” and,collectively, the “Sellers”), and **EAST WEST BANK**(“Bank”).

 

**RECITALS**

 

A.            Bank has agreed with Sellerspursuant to that certain Master Repurchase Agreement (the “Agreement”) dated****June 24, 2010, to purchase from Sellers certainMortgage Loans defined as Eligible Loans, such terms being defined in theAgreement, whose other defined terms shall also apply to this Pledge.

 

B.            As partial consideration forBank entering into the Agreement and purchasing Eligible Loans, each Seller hasagreed to assign and pledge to Bank and grant Bank a security interest in andto certain deposit accounts described herein.

 

NOW,THEREFORE, for and in consideration of the matters set forth above and othergood and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the parties hereto agree as follows:

 

EachSeller does hereby assign and pledge as collateral for the purpose of securingthe performance by Sellers of all of Seller’s obligations under the Agreementall right, title and interest of Sellers in and to the following depositaccounts maintained with Buyer: (a) an interest bearing account to satisfy Sellers’ obligation tomaintain on deposit with Buyer certain amounts required under the Agreement(the “Cash Collateral Account”), and (b) two non interest bearing accountsto receive the proceeds of any funds to which a Seller is entitled upon thesale by Seller of repurchased Eligible Loans to Approved Takeout Investors orotherwise to receive payments or other amounts due from any Seller to Buyer(the “Settlement Accounts”) (hereinafter collectively called the “Accounts”),which are more particularly described as follows:

 

(a)           Cash Collateral Account —Bank account number: CD 178038725

(b)           Excel SettlementAccount—Bank account number: 8003001248

(c)           Synergy SettlementAccount—Bank account number: 8003001313

 

EachAccount will be a blocked account. Should an Event of Default occur under the Agreement then Bank may enforcethis Pledge in any manner provided by law and charge all or any portion of anysums owing under the Agreement for any reason as provided under the Agreementor herein, to the extent of the withdrawal value of said Accounts.  Should such Event of Default occur, Bank mayproceed against the Accounts without exhausting its remedies against anyparties liable under the Agreement or against any other security thereforwhether in court, by foreclosure, or otherwise, and this Pledge may be enforcedand all sums due under said Agreement or under the instruments executed inconnection therewith shall be charged to the aforesaid withdrawal value of

 

1

----

 

suchpledged Accounts to the extent thereof and the Sellers shall be jointly andseverally liable for the excess, if any.

 

Sellersshall maintain said Accounts with Bank for the full term of this Pledge.

 

Nothingin the foregoing paragraph shall be construed as requiring Bank to enforce thisPledge.  Bank’s failure to do so on oneor more occasions shall not affect Bank’s right so to do; nor will enforcementof such Pledge for less than the full value of the said pledged Accounts impairthe effectiveness of the Pledge as to the remaining value thereof.  Bank may elect to enforce its right under theAgreement without resort to the remedies provided in this instrument; in suchevent the terms of the other documents alone referred to above shall becontrolling and no provision hereof shall be construed as requiring Bank toperform any condition precedent to the enforcement of the Agreement and thedocuments executed in connection therewith against any and all parties thereto.

 

However,Bank expressly agrees that at such times as the obligations of Sellers underthe Agreement have been performed and satisfied without the necessity of Bankexercising its rights hereunder or under the Agreement and any relateddocuments, and no defense against the obligations under the Agreement oradverse claims of ownership to any such security is being asserted, then theBank shall waive enforcement of this Pledge as to any amounts available in saidAccounts in excess of Sellers’ outstanding obligations to Buyer under theAgreement.

 

Fromand after the occurrence of an Event of Default under the Agreement or defaultunder any other documents executed in connection therewith, each Sellerauthorizes Bank, at Bank’s option, to collect and receipt for any and all sumsbecoming due upon the pledged Accounts, such sums to be held by Bank withoutliability for interest thereon and applied toward the performance of Sellers’obligations under the Agreement and any other documents executed in connectiontherewith hereby secured.  Bank shallhave the full control of the pledged Accounts until they are released inaccordance herewith.

 

Bank,in addition to the rights and remedies provided for in the precedingparagraphs, shall have all the rights and remedies of a secured party under theUniform Commercial Code of California and Bank shall be entitled to availitself of all such other rights and remedies as may now or hereafter exist atlaw or in equity for the performance of all obligations under the Agreement andthe foreclosure of the security interest created hereby and the resort to anyremedy provided hereunder or provided by the Uniform Commercial Code ofCalifornia, or by any other law of California, shall not prevent the concurrentemployment of any other appropriate remedy or remedies.

 

Bankmay remedy any Event of Default, without waiving same, or may waive any Eventof Default without waiving any prior or subsequent Event of Default.

 

Thesecurity interest herein created shall not be affected by or affect any othersecurity taken for the performance of obligations under the Agreement hereby secured,or any part thereof, and any extensions may be made for the performance of such

 

2

----

 

obligationswithout affecting the priority of this pledge or the validity thereof withreference to any third party, and Bank or its successors shall not be limitedby any election of remedies if it chooses to foreclose this security interestby suit.

 

EachSeller further represents to and covenants and agrees with Bank that suchSeller will at any time or from time to time, upon the written request of Bank,execute and deliver such further documents and do such other acts and things asBank may specify for the purpose of further assurance and of effecting thepurposes of this Pledge, and otherwise do any and all things and actswhatsoever which Bank may request in order to perfect this Pledge.

 

Thelaw governing this Pledge shall be the Uniform Commercial Code as adopted inCalifornia and other applicable laws of the State of California, and thisPledge shall be performable in Los Angeles County, California.  All terms used herein which are defined inthe Uniform Commercial Code of California shall have the same meaning herein asin said Code.

 

Ifany clause or provision of this Pledge is illegal, invalid, or unenforceable,under present or future laws effective during the term hereof, then it is theintention of the parties hereto that the remainder of this Pledge shall not beaffected thereby, and it is also the intention of the parties hereto that inlieu of each clause or provision that is illegal, invalid or unenforceable,there be added as a part of this Pledge a clause or provision as similar interms to such illegal, invalid or unenforceable clause or provision as may bepossible and be legal, valid and enforceable.

 

TheAccounts evidencing such Pledge are delivered herewith or are authorized to beheld by Bank.

 

Theterm of this Pledge shall begin on the date hereof and shall expire upon theoccurrence of (i) the termination of the Agreement, and (ii) the fulland final satisfaction of all obligations of Sellers under the Agreement.

 

SELLER:

 
| **SYNERGY  CAPITAL MORTGAGE CORP.**      |                 |
|------------------------------------------|----------------------|
|                                     |                 |
| By:                                      | /s/  William Ashmore |   |
| Name:                                    | William  Ashmore     |   |
| Title:                                   | President            |   |
|                                     |                 |
| SELLER:                                  |                 |
|                                     |                 |
| **EXCEL  MORTGAGE SERVICING, INC.** |                 |
|                                     |                 |
| By:                                      | /s/  William Ashmore |   |
| Name:                                    | William  Ashmore     |   |
| Title:                                   | President            |   |
|                                          |                      |  |  |  |  |  |  |

 

3

----

 

ACCEPTEDAND AGREED TO:

 
| **EAST  WEST BANK** |
|---------------------|
| By:                 | /s/  Robert Lo |   |
| Name:               | Robert  Lo |   |
| Title:              | SVP |   |
|                     |  |  |  |  |

 

4

----

 

**GUARANTY AGREEMENT**

 

1.             FOR VALUE RECEIVED, theundersigned INTEGRATED REAL ESTATE SERVICE CORP., a California corporation(hereinafter called “Guarantor”, whether one or more), hereby jointly andseverally (if more than one), unconditionally, absolutely and irrevocablyguarantees the full and timely payment and performance of each and everycovenant, agreement, undertaking and obligation (collectively the “Obligations”)made by SYNERGY CAPITAL MORTGAGE CORP. and EXCEL MORTGAGE SERVICING, INC.(collectively, the “Obligor”) to or for the benefit of EAST WEST BANK (“Bank”),as set forth in that certain Master Repurchase Agreement (the “Agreement”),dated June 24, 2010, executed by Obligor and Bank, relating to thepurchase and repurchase of interests in various mortgage loans, as saidAgreement may be amended from time to time.

 

2.             Guarantor expressly waivesdiligence on the part of said Bank in the collection or enforcement of theObligations, whether fixed or contingent, and waives presentment, protest,notice of protest, dishonor, notice of acceptance of this Guaranty, notice ofnon-performance, demands for performance and approval of any modifications,renewals or extensions of the Obligations that may be granted to theObligor.  Bank shall be under noobligation to notify any of the Guarantors of its acceptance of this Guaranty,nor of any advances made or credit extended or participations purchased on thefaith hereof, nor of the failure of said Obligor to pay and perform theObligations, nor to use diligence in preserving the liability of any entity orperson on said Obligations whether fixed or contingent, nor in bringing suit toenforce collection or enforcement of the Obligations secured by this Guaranty,nor of notice of any instruments now or hereafter executed in favor of Bankevidencing or securing said indebtedness. Guarantor individually and severally further agrees to pay reasonableattorney’s fees and litigation costs and expenses should this Guaranty beplaced in the hands of an attorney for enforcement, or should it be enforcedthrough any court.

 

3.             Guarantor agrees that thisis a continuing Guaranty, but shall be limited to the Obligations as describedin Paragraph 1 above together with any modifications, revisions, extensions orany expenses incurred in connection therewith, and that it may be enforced byBank without first resorting to or exhausting any security or collateral, orwithout first having exhausted other rights and remedies of Bank againstObligor.  Further, Bank shall not berequired to exhaust its remedies against accommodation makers, sureties andendorsers or any other guarantors. Pursuit by Bank of any of its remedies shall not impair this Guarantyand shall not be deemed an election of remedies.  To the extent permitted by law, Guarantorwaives the benefit of any statute of limitation affecting Guarantor’s liabilityhereunder or the manner or mode of enforcement thereof.

 

4.             Guarantor consents, withoutaffecting Guarantor’s liability to Bank hereunder, that the Bank may, withoutnotice to or consent of Guarantor, upon such terms as it may deem advisable,(a) modify the Obligations by modification of the Agreement,(b) purchase Mortgage Loans pursuant to the Agreement, thus increasing theObligations, or (c) settle or compromise any claim of the Bank against theObligor, or against any

 

1

----

 

otherperson, firm or corporation.  Guarantorhereby ratifies and affirms any such modification, participations, settlementor compromise; and waives all defenses, counterclaims or offsets which theGuarantor might have by reason thereof. Notwithstanding anything to the contrary contained herein, in any otherTransaction Document or in any other agreement between Guarantor and the Bank,the Bank shall not have a right of offset or set off or any other right toassert ownership of, or control or dominion over, any Guarantor balances ordeposits held by or deposited with the Bank or any Affiliate of the Bank.

 

5.             If any or all of theObligations hereby guaranteed be secured, Guarantor agrees that the Bank mayfrom time to time, at its discretion, with or without valuable consideration,allow release, surrender, substitution, exchange, subordination, loss orwithdrawal of security or collateral, and should the Obligor execute in favorof said Bank any collateral agreement, the exercise by the Bank of any rightconferred upon it in said agreement shall be wholly discretionary with theBank, and such exercise of, or failure to exercise such right shall in no way impairor diminish the obligations of Guarantor hereunder.  Bank may, without in any manner impairing ordiminishing the obligations of the Guarantor hereunder, elect to pursue anyavailable remedy against Obligor or against any security held by Bank, whetheror not the exercise by Bank of any such remedy shall result in loss toGuarantor of any right of subrogation or right to proceed against Obligor forreimbursement.

 

6.             In the event Obligor is acorporation, joint stock association or partnership, or is hereafterincorporated; if the Obligations at any time hereafter exceed the amountpermitted by law, if the Obligations are at any time hereafter deemed to beusurious, or Obligor is not liable because the act of creating the Obligationsare ultra vires, or the officers or persons creating same acted in excess oftheir authority, and for these reasons the Obligations to the Bank whichGuarantor agreed to pay cannot be enforced against Obligor, such facts shall inno manner affect Guarantor’s liability hereunder, but Guarantor shall be liablehereunder, notwithstanding that Obligor is not liable for such Obligations, andto the same extent as Guarantor would have been if the Obligations of theObligor had been enforceable against it.

 

7.             Guarantor further agreesthat this Guaranty shall not be discharged, impaired or affected by(a) the transfer by the Obligor of all or any portion of the MortgageLoans contemplated by the Agreement, or (b) any defense (other than thefull payment of the Obligations hereby guaranteed in accordance with the termshereof) that the Guarantor may or might have as to Guarantor’s respectiveundertakings, liabilities and obligations hereunder, each and every suchdefense being hereby waived by the undersigned Guarantor.

 

8.             Should the status of Obligorchange, this Guaranty shall continue and also cover the Obligations of Obligorunder the new status, according to the terms hereof guaranteeing theObligations of the original Obligor.

 

9.             Guarantor waives any defensearising by reason of any disability or other defense of the Obligor or byreason of the cessation from any cause whatsoever of the

 

2

----

 

liabilityof Obligor.  Until all the Obligations ofthe Obligor to Bank shall have been paid in full, Guarantor shall have no rightof subrogation, and waives any right to enforce any remedy which Bank now hasor may hereafter have against the Obligor; and Guarantor waives any benefit of,and any right to participate in, any security now or hereafter held by Bank.

 

10.           This Guaranty shall remainand continue in full force and effect notwithstanding the institution by oragainst the Obligor of bankruptcy, reorganization, readjustment, receivershipor insolvency proceedings of any nature, or the disaffirmation of the saidObligations in any such proceedings, or otherwise.

 

11.           In the event any paymentmade by Obligor to Bank with respect to the Obligations is held to constitute apreference under the U.S. Bankruptcy Code, or if for any other reason Bank isrequired to refund such payment or pay the amount thereof to any other party,such a payment shall not constitute a release of Guarantor from any liabilityhereunder, but Guarantor agrees to pay such amount to Bank upon demand.

 

12.           In the event any or all ofthe Guarantors are corporations, each such Guarantor warrants and representsthat it has authority to execute and deliver this Guaranty and agrees that itwill do all things necessary to preserve and keep in full force and effect itsexistence, franchises, rights and privileges as a business or stock corporationunder the laws of the state of its incorporation.

 

13.           To the extent permitted bylaw, Guarantor expressly waives and relinquishes all rights and remedies ofsuretyship, including, but not limited to, all rights and remedies providedunder sections 2787 through 2856 of the Civil Code of the State of California.

 

14.           This Guaranty is for thebenefit of Bank, its successors and assigns, and in the event of an assignmentby the Bank, its successors or assigns, of the Obligations, or any partthereof, the rights and benefits hereunder shall be transferred with suchObligations without further act on the part of Bank and without notice toGuarantor.

 

15.           Suit may be brought againstthe Guarantor or against any other guarantor without impairing the rights ofBank, its successors or assigns, against any guarantor, and the Bank maycompromise or settle with any guarantor for such sum or sums as it may see fitand release such guarantor from all further liability to Bank for theObligations without impairing the right of the Bank to demand and collect thebalance of the Obligations from other guarantors not so released; but it isagreed, however, that such compromise, settlement and release shall in no wayimpair the rights of the guarantors as among themselves.

 

16.           In the event of the death ofany Guarantor hereunder, the obligation of the deceased shall continue in fullforce and effect against his or her estate or beneficiaries as to allObligations which shall have been created or incurred by the Obligor prior tothe time when the Bank shall have received notice, in writing, of such death;and this Guaranty shall from the date of such death as to all Obligationscreated, incurred or

 

3

----

 

arisingafter such death remain and continue in full force as a Guaranty by thesurviving guarantors.

 

17.           Guarantor, individually andseverally, expressly agrees that this contract is performable in the LosAngeles County, California.

 

18.           The invalidity orunenforceability in any particular circumstances of any provision of thisGuaranty shall not extend beyond such provision or such circumstances, and noother provision of this instrument shall be affected thereby.

 

19.           Guarantor acknowledges andagrees that Guarantor has received and reviewed a copy of the Agreement and allother documents executed in connection with the Agreement.

 

20.           Any notice or demandrequired hereunder shall be deemed to be delivered when deposited in the UnitedStates mail, postage prepaid, certified mail, return receipt requested,addressed to Guarantor or Bank, as the case may be, at the address set out inthe Agreement for the Bank and as set forth below for Guarantor or at suchother address as such party may hereafter deliver in accordance herewith.  Any other method of delivery or demand shallbe effective only when actually received by the recipient thereof. If and whenincluded within the term “Guarantor” or “Bank” there are more than one person,all shall jointly arrange among themselves for their joint execution anddelivery of a notice to the other specifying some person at some specificaddress for the receipt of all notices, demands, payments or otherdocuments.  All persons included withinthe terms “Guarantor” or “Bank”, respectively, shall be bound by notices,demands, payments and documents given in accordance with the provisions of thisParagraph to the same extent as if each had received such notice, demand,payment or document.

 

21.           To the extent permitted bylaw, Guarantor further hereby waives and agrees not to assert or take advantageof:

 

a.             Any right to require Bank toproceed against Obligor or (if Obligor is a limited liability company) anymembers of Obligor or any other indemnitor or guarantor of the indebtedness andobligations guaranteed hereby or any other person or to proceed against orexhaust any security held by Bank at any time or to pursue any other remedy inBank’s power or under any other agreement before proceeding against anyGuarantor hereunder;

 

b.             (i) any defense basedupon an election of remedies by Bank, even though such election destroys orotherwise impairs the subrogation rights of Guarantor or the right of Guarantor(after payment of the obligations guaranteed by Guarantor under this Guaranty)to proceed against Obligor for reimbursement, or both, and (ii) any andall rights or defenses Guarantor may have by reason of protection afforded toObligor with respect to any of the obligations of Guarantor under this Guarantypursuant to the antideficiency or other laws of the State of Californialimiting or discharging Obligor’s indebtedness;

 

4

----

 

c.             Any right or claim or rightto cause a marshaling of the assets of Guarantor;

 

d.             Any duty on the part of Bankto disclose to Guarantor any facts Bank may now or hereafter know aboutObligor, regardless of whether Bank has reason to believe that any such factsmaterially increase the risk beyond that which Guarantor intended to assume orhas reason to believe that such facts are unknown to Guarantor or has areasonable opportunity to communicate such facts to Guarantor, it beingunderstood and agreed that Guarantor is fully responsible for being and keepinginformed of the financial condition of Obligor and of any and all circumstancesbearing on the risk that liability may be incurred by Guarantor

 

e.             Any lack of notice ofdisposition or of manner of disposition of any collateral;

 

f.              Any invalidity, irregularityor unenforceability, in whole or in part, of any one or more of the TransactionDocuments;

 

g.             Any deficiencies in thecollateral or any deficiency in the ability of Bank to collect or to obtainperformance from any persons or entities now or hereafter liable for thepayment and performance of any obligation hereby guaranteed;

 

h.             Any assertion or claim thatthe automatic stay provided by 11 U.S.C. §362 (arising upon the voluntary orinvoluntary bankruptcy proceeding of Obligor) or any other stay provided underany other debtor relief law (whether statutory, common law, case law orotherwise) of any jurisdiction whatsoever, now or hereafter in effect, whichmay be or become applicable, shall operate or be interpreted to stay,interdict, condition, reduce or inhibit the ability of Bank to enforce any ofits rights, whether now or hereafter required, which Bank may have againstGuarantor or the collateral;

 

i.              Any modifications of theTransaction Documents or any obligation of Obligor by operation of law or byaction of any court, whether pursuant to the Bankruptcy Reform Act of 1978, asamended, or any other debtor relief law (whether statutory, common law, caselaw or otherwise) of any jurisdiction whatsoever, now or hereafter in effect,or otherwise;

 

j.              Any action, occurrence,event or matter consented to by Guarantor under Section 20(d) hereof,under any other provision hereof, or otherwise;

 

k.             Any and all benefits anddefenses under California Civil Code Section 2810;

 

l.              Any and all benefits anddefenses under California Civil Code Section 2809;

 

5

----

 

m.            All principles or provisionsof law, statutory or otherwise, which are or might be in conflict with theterms of this Guaranty.  By doing so,Guarantor agrees that Guarantor’s obligations shall not be affected by anycircumstances, whether or not referred to in this Guaranty, which mightotherwise constitute a legal or equitable discharge of a surety or guarantor;and

 

o.             Any right of discharge underany and all statutes or other laws relating to guarantors or sureties and anyother rights of sureties and guarantors thereunder.

 

Guarantor understands that the exercise by Bank of certain rights andremedies contained in the Transaction Documents may affect or eliminateGuarantor’s right of subrogation against Obligor and that Guarantor maytherefore incur a partially or totally nonreimbursable liability under thisGuaranty.  Nevertheless, Guarantor herebyauthorizes and empowers Bank to exercise, in its sole and absolute discretion,any right or remedy, or any combination thereof, which may then be available,since it is the intent and purpose of Guarantor that the obligations under thisGuaranty shall be absolute, independent and unconditional under any and allcircumstances.

 

In accordance with Section 2856 of the California Civil Code,Guarantor also waives any right or defense based upon an election of remediesby Bank , even though such election destroys or otherwise impairs thesubrogation rights of Guarantor or the rights of Guarantor (after payment ofthe obligations guaranteed by Guarantor under this Guaranty) to proceed againstObligor for reimbursement, or both.

 

In accordance with Section 2856 of the California Civil Code,Guarantor waives any and all other rights and defenses available to Guarantorby reason of Sections 2787 through 2856, inclusive, of the CaliforniaCivil Code, including any and all rights or defenses Guarantor may have byreason of protection afforded to Obligor with respect to any of the obligationsof Guarantor under this Guaranty pursuant to the antideficiency or other lawsof the State of California limiting or discharging Obligor’s indebtedness.  Likewise, Guarantor waives any and all rightsand defenses available to Guarantor under California Civil CodeSections 2899 and 3433

 

Guarantor shall have no right of, and hereby waives any claim for,subrogation, reimbursement, indemnification, and contribution against Obligorand against any general partner, member or other constituent of Obligor, andagainst any other person or any collateral or security for the indebtedness(including without limitation any such rights pursuant to Sections 2847and 2848 of the California Civil Code), until the indebtedness has beenindefeasibly paid and satisfied in full and all outstanding obligations owed toBank under the Transaction Documents have been fully performed.

 

EXECUTEDeffective as of the 24th day of June, 2010.

 

6

----

 

INTEGRATEDREAL ESTATE SERVICE CORP.

 
| By:    | /s/  William Ashmore |   |
|--------|----------------------|--------|
| Name:  | William  Ashmore     |   |
| Title: | President            |   |
|        |                      |        |  |  |

 

 

GUARANTORADDRESS FOR NOTICE

 

IntegratedReal Estate Service Corp.19500 Jamboree RoadIrvine, CA  92612Attention:  Ron Morrison, Executive VicePresident and General CounselTelephone:  949-475-3942Facsimile:  949-706-6208Email:  ron.morrison@impaccompanies.com

 

7

----

 

**ACKNOWLEDGMENT**

 

Stateof California

 

Countyof Orange

 

On                                     ,before me,                                                                ,personally appeared                                           ,who proved to me on the basis of satisfactory evidence to be the person(s) whosename(s) is/are subscribed to the within instrument and acknowledged to methat he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s) on the instrument the person(s), orthe entity upon behalf of which the person(s) acted, executed theinstrument.

 

Icertify under PENALTY OF PERJURY under the laws of the State of California thatthe foregoing paragraph is true and correct.

 

WITNESSmy hand and official seal.

 
|                   |   | [SEAL] |
|------------------------|--------|--------|
| [Signature  of Notary] |   |

 

8

----