**Exhibit 10.1**

 

**AMENDED AND RESTATED MASTERREPURCHASE AGREEMENT**

 

**between**

 

**UBS REAL ESTATE SECURITIES INC. asBuyer,**

 

**IMPAC FUNDING CORPORATION, as aSeller and Servicer,**

 

**IMPAC MORTGAGE HOLDINGS, INC., asa Seller,**

 

**and**

 

**IMPAC WAREHOUSE LENDING GROUP,INC., as a Seller**

 

Dated as of September 11, 2008

 

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**TABLE OF CONTENTS**

 
| ** **                                   | **Page**                                                                             |
|----------------------------------------------|--------------------------------------------------------------------------------------|
|                                         |                                                                                 |
| ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS | 1                                                                                    |
|                                         |                                                                                 |
| Section 1.01                            | Definitions                                                                          | 1 |
| Section 1.02                            | Accounting Terms and Determinations                                                  | 17 |
|                                         |                                                                                 |   |
| ARTICLE II INITIATION; TERMINATION           | 17                                                                                   |
|                                         |                                                                                 |   |
| Section 2.01                            | Acknowledgement of Transfer                                                          | 17 |
| Section 2.02                            | Reserved                                                                             | 17 |
| Section 2.03                            | Conditions Precedent to Effectiveness of this Agreement  on Restatement Closing Date | 18 |
| Section 2.04                            | Reserved                                                                             | 18 |
| Section 2.05                            | Procedure for Transactions                                                           | 18 |
| Section 2.06                            | Confirmations; Transactions                                                          | 19 |
| Section 2.07                            | Termination                                                                          | 20 |
| Section 2.08                            | Early Terminations                                                                   | 20 |
| Section 2.09                            | Reserved                                                                             | 21 |
| Section 2.10                            | Extension Conditions                                                                 | 21 |
|                                         |                                                                                 |   |
| ARTICLE III [RESERVED]                       | 21                                                                                   |
| ARTICLE IV INCOME PAYMENTS                   | 21                                                                                   |
|                                         |                                                                                 |   |
| Section 4.01                            | Income Payments                                                                      | 21 |
| Section 4.02                            | Repurchase Price Adjustments                                                         | 22 |
|                                         |                                                                                 |   |
| ARTICLE V REQUIREMENTS OF LAW                | 22                                                                                   |
|                                         |                                                                                 |   |
| Section 5.01                            | Requirements of Law                                                                  | 22 |
| Section 5.02                            | Taxes; Tax Treatment                                                                 | 23 |
|                                         |                                                                                 |   |
| ARTICLE VI SECURITY INTEREST                 | 26                                                                                   |
|                                         |                                                                                 |   |
| Section 6.01                            | Purchased Items                                                                      | 26 |
| Section 6.02                            | Security Interest                                                                    | 26 |
| Section 6.03                            | Custodian of Purchased Items                                                         | 27 |
| Section 6.04                            | Further Documentation                                                                | 27 |
| Section 6.05                            | Proceeds                                                                             | 27 |
|                                         |                                                                                 |   |
| ARTICLE VII PAYMENT, TRANSFER AND CUSTODY    | 28                                                                                   |
|                                         |                                                                                 |   |
| Section 7.01                            | Payments to Buyer                                                                    | 28 |
| Section 7.02                            | Ownership of Purchased Assets                                                        | 28 |
| Section 7.03                            | Hypothecation or Pledge of Purchased Assets                                          | 29 |
| Section 7.04                            | UBS Cash Account                                                                     | 29 |
| Section 7.05                            | Takeout Commitments                                                                  | 30 |
|                                         |                                                                                 |   |
| ARTICLE VIII SELLERS’ REPRESENTATIONS   | 31                                                                                   |
|                                         |                                                                                 |   |
| Section 8.01                            | Nature of Transfers                                                                  | 31 |
| Section 8.02                            | No Broker                                                                            | 31 |
| Section 8.03                            | Ability to Perform                                                                   | 31 |
| Section 8.04                            | No Defaults                                                                          | 31 |
| Section 8.05                            | Legal Name; Existence                                                                | 31 |

 

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| Section 8.06               | Financial Condition                                   | 32 |
|---------------------------------|-------------------------------------------------------|----|
| Section 8.07               | Litigation                                            | 32 |
| Section 8.08               | No Breach                                             | 32 |
| Section 8.09               | Action                                                | 33 |
| Section 8.10               | Approvals                                             | 33 |
| Section 8.11               | Margin Regulations                                    | 33 |
| Section 8.12               | Taxes                                                 | 33 |
| Section 8.13               | Investment Company Act and Holding Company Compliance | 33 |
| Section 8.14               | Purchased Assets                                      | 33 |
| Section 8.15               | Location of Chief Executive Offices                   | 34 |
| Section 8.16               | Location of Books and Records                         | 34 |
| Section 8.17               | Other Financing Facilities                            | 34 |
| Section 8.18               | True and Complete Disclosure                          | 34 |
| Section 8.19               | Reserved                                              | 35 |
| Section 8.20               | ERISA                                                 | 35 |
| Section 8.21               | No Fraud                                              | 35 |
| Section 8.22               | Anti-Money Laundering Law                             | 35 |
| Section 8.23               | Consideration                                         | 35 |
| Section 8.24               | Reserved                                              | 35 |
| Section 8.25               | Reserved                                              | 35 |
| Section 8.26               | Closing Instruction Letter                            | 36 |
| Section 8.27               | No Adverse Selection                                  | 36 |
| Section 8.28               | Sellers’ Representations and Warranties          | 36 |
| Section 8.29               | UCC Financing Statements                              | 36 |
| Section 8.30               | Trade Names                                           | 36 |
| Section 8.31               | Merger or Acquisition                                 | 36 |
| Section 8.32               | Custodian                                             | 36 |
| Section 8.33               | Valid Sale and Conveyance                             | 36 |
| Section 8.34               | Valid Business Reasons                                | 36 |
| Section 8.35               | Reserved                                              | 36 |
| Section 8.36               | Servicing Capabilities                                | 37 |
| Section 8.37               | IMH’s Ownership of Sellers                       | 37 |
|                            |                                                  |
| ARTICLE IX COVENANTS OF SELLERS | 37                                                    |
|                            |                                                  |
| Section 9.01               | Financial Statements                                  | 37 |
| Section 9.02               | Litigation                                            | 39 |
| Section 9.03               | Existence, etc.                                       | 39 |
| Section 9.04               | Prohibition of Fundamental Changes                    | 40 |
| Section 9.05               | Reserved                                              | 40 |
| Section 9.06               | Notices                                               | 41 |
| Section 9.07               | Reserved                                              | 42 |
| Section 9.08               | Transactions with Affiliates                          | 42 |
| Section 9.09               | Limitation on Liens                                   | 42 |
| Section 9.10               | Limitation on Guarantees and Other Indebtedness       | 42 |
| Section 9.11               | Limitation on Distributions                           | 42 |
| Section 9.12               | Reserved                                              | 42 |
| Section 9.13               | Reserved                                              | 42 |

 

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| Section 9.14                     | Servicer                                           | 42 |
|---------------------------------------|----------------------------------------------------|----|
| Section 9.15                     | Reserved                                           | 42 |
| Section 9.16                     | Reserved                                           | 42 |
| Section 9.17                     | Required Filings                                   | 43 |
| Section 9.18                     | Reserved                                           | 43 |
| Section 9.19                     | Custodial Agreement                                | 43 |
| Section 9.20                     | Reserved                                           | 43 |
| Section 9.21                     | Inconsistent Agreements                            | 43 |
| Section 9.22                     | Escrow Imbalance                                   | 43 |
| Section 9.23                     | Servicing Termination Fees                         | 43 |
| Section 9.24                     | Delivery of Servicing Records                      | 43 |
| Section 9.25                     | Independence of Covenants                          | 43 |
| Section 9.26                     | Reserved                                           | 43 |
| Section 9.27                     | Closing Letter                                     | 44 |
| Section 9.28                     | Monthly Report                                     | 44 |
| Section 9.29                     | Remittance Report                                  | 44 |
| Section 9.30                     | Reserved                                           | 44 |
| Section 9.31                     | Preservation of Security Interest                  | 44 |
| Section 9.32                     | Compliance with Law                                | 45 |
| Section 9.33                     | Obligations with Respect to Purchased Assets       | 45 |
| Section 9.34                     | Conveyance of Purchased Assets; Security Interests | 45 |
| Section 9.35                     | Notification of Breach                             | 45 |
| Section 9.36                     | Further Assurances                                 | 45 |
| Section 9.37                     | Taxes                                              | 45 |
| Section 9.38                     | Taxes and Other Liabilities                        | 45 |
| Section 9.39                     | No Agency                                          | 46 |
| Section 9.40                     | Reserved                                           | 46 |
| Section 9.41                     | No Other Financing Facilities                      | 46 |
|                                  |                                               |
| ARTICLE X EVENTS OF DEFAULT; REMEDIES | 46                                                 |
|                                  |                                               |
| Section 10.01                    | Events of Default                                  | 46 |
| Section 10.02                    | Remedies Upon Default                              | 49 |
| Section 10.03                    | Remedies Cumulative                                | 53 |
| Section 10.04                    | Waiver of Defenses                                 | 53 |
| Section 10.05                    | Default Interest                                   | 53 |
|                                  |                                               |
| ARTICLE XI MISCELLANEOUS              | 53                                                 |
|                                  |                                               |
| Section 11.01                    | Indemnification                                    | 53 |
| Section 11.02                    | Single Agreement                                   | 55 |
| Section 11.03                    | Notices and Other Communications                   | 55 |
| Section 11.04                    | Entire Agreement; Severability                     | 56 |
| Section 11.05                    | Non-Assignability                                  | 56 |
| Section 11.06                    | Terminability                                      | 56 |
| Section 11.07                    | GOVERNING LAW                                      | 56 |
| Section 11.08                    | Submission To Jurisdiction; Waivers                | 57 |
| Section 11.09                    | No Waivers, Etc                                    | 57 |
| Section 11.10                    | Servicing                                          | 58 |
| Section 11.11                    | Intent                                             | 60 |

 

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| Section 11.12 | Periodic Due Diligence Review                      | 61 |
|--------------------|----------------------------------------------------|----|
| Section 11.13 | Buyer’s Appointment As Attorney-In-Fact       | 61 |
| Section 11.14 | Conflicts                                          | 63 |
| Section 11.15 | Counterparts                                       | 63 |
| Section 11.16 | Captions                                           | 63 |
| Section 11.17 | Acknowledgments                                    | 63 |
| Section 11.18 | Confidentiality                                    | 63 |
| Section 11.19 | Set-Off                                            | 64 |
| Section 11.20 | Disclosure Relating to Certain Federal Protections | 64 |
| Section 11.21 | Continuity                                         | 65 |

 

**EXHIBITS**

 
| SCHEDULE 1   |   | Representations and Warranties Re: Mortgage Loans             |
|--------------|--------|---------------------------------------------------------------|
| SCHEDULE 2   |   | List of Permitted Guarantees                                  |
| SCHEDULE 3   |   | Prior Names and Trade Names                                   |
| SCHEDULE 4   |   | Mortgage Related Collateral Schedule Delivery  Information    |
| SCHEDULE 5   |   | Material Litigation                                           |
| SCHEDULE 6   |   | Mergers and Acquisitions                                      |
| EXHIBIT I    |   | [Reserved]                                                    |
| EXHIBIT II   |   | [Reserved]                                                    |
| EXHIBIT III  |   | [Reserved]                                                    |
| EXHIBIT IV   |   | UCC Filing Jurisdictions                                      |
| EXHIBIT V-A  |   | [Reserved]                                                    |
| EXHIBIT V-B  |   | Form of Authorized Signatories of Seller                 |
| EXHIBIT V-C  |   | Form of Seller’s Officer’s Monthly Certificate |
| EXHIBIT VI-A |   | Form of Seller’s Release Letter                     |
| EXHIBIT VI-B |   | [Reserved]                                                    |
| EXHIBIT VII  |   | Form of UCC-1 Financing Statement                        |
| EXHIBIT VIII |   | Section 5.02 Certificate                                 |
| EXHIBIT IX   |   | Withdrawal/Deposit Notice                                     |
| EXHIBIT X    |   | UBS Cash Account Wire Instructions                            |
| EXHIBIT XI   |   | UBS Cash Account Adjustment Notice                            |
| EXHIBIT XII  |   | Notice of Transfer of Servicing Rights                        |
| EXHIBIT XIII |   | [Reserved]                                                    |
| EXHIBIT XIV  |   | [Reserved]                                                    |

 

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**AMENDED AND RESTATED MASTERREPURCHASE AGREEMENT**

 

AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated asof September 11, 2008 (as amended, supplemented or otherwise modified fromtime to time, this “Agreement”), between UBS REAL ESTATE SECURITIES INC.,a Delaware corporation (“Buyer”), IMPAC FUNDING CORPORATION, aCalifornia corporation, as a seller and as servicer (“IFC”), IMPACMORTGAGE HOLDINGS, INC. a Maryland corporation, as a seller (“IMH”) andIMPAC WAREHOUSE LENDING GROUP, INC., a California corporation, as a seller (“IWLG”and jointly and severally with IFC and IMH, the “Sellers”, and eachindividually, a “Seller”).

 

**RECITALS**

 

1.             Sellersand Buyer previously entered into a Master Repurchase Agreement, dated as of August 7,2007, as amended by the Amendment No. 1 thereto dated as of September 18,2007 (as so amended, the “Existing Agreement”).

 

2.             Sellersand Buyer now desire to amend and restate the Existing Agreement to provide forthe cessation of any purchases of additional Mortgage Loans by Buyer (otherthan Rollover Transactions in respect of Restatement Closing Date MortgageLoans), the cessation of certain margin requirements, the amendment ofprovisions of the Existing Agreement relating to the Final Repurchase Date forthe Transactions as well as in respect of servicing compensation, the removalof certain covenants imposed under the Existing Agreement on Sellers, and theother amendments and agreements provided for herein.

 

3.             Accordingly,Sellers and Buyer agree to amend and restate the Existing Agreement to read asfollows:

 

**ARTICLE IDEFINITIONS AND ACCOUNTING MATTERS**

 

Section 1.01           Definitions.  As used herein, the following terms shallhave the following meanings (all terms defined in this Section 1.01 or inother provisions of this Agreement in the singular to have the same meaningswhen used in the plural and vice versa). Terms otherwise not defined hereinshall have the meanings assigned thereto in the Custodial Agreement.

 

“Accepted Servicing Practices” shall mean, withrespect to each Mortgage Loan, such standards which comply with the applicablestandards and requirements under: (i) an applicable Agency Program andrelated provisions of the applicable Agency Guide pursuant to which the relatedMortgage Loan is intended to be purchased; (ii) any applicable FHA and/orVA program and related provisions of applicable FHA and/or VA servicingguidelines; and (iii) the terms of the related Mortgage Loan documents andapplicable law.

 

“Act of Insolvency” shall mean with respect to anyPerson:     (a) the commencement by such Personas debtor of any case or proceeding under any bankruptcy, insolvency,reorganization, liquidation, dissolution or similar law, or such Person seekingthe

 

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appointment of a receiver, trustee, custodian or similarofficial for such Person for any substantial part of its property, or suchPerson fails to controvert in a timely and appropriate manner, or acquiesce inwriting to, any petition filed against it in an involuntary case under theBankruptcy Code or takes any corporate or other action for the purpose ofeffecting any of the foregoing; (b) the commencement of any such case orproceeding against such Person or another’s seeking such appointment, or thefiling against such Person of an application for a protective decree which (1) isconsented to or not timely contested by such Person, (2) results in theentry of an order for relief, such an appointment, the issuance of such aprotective decree or the entry of an order having a similar effect, or (3) isnot dismissed within forty-five (45) days; (c) the making by such Personof a general assignment for the benefit of creditors; (d) the admission bysuch Person or any of its Subsidiaries that such Person or any of itsSubsidiaries is unable to pay its respective debts as they become due or thenonpayment generally by such Person or any of its Subsidiaries of itsrespective debts as they become due; or (e) with respect to a Seller orServicer only, any governmental authority or agency or any person, agency orentity acting or purporting to act under governmental authority shall havetaken any action to condemn, seize or appropriate, or to assume custody orcontrol of, all or any substantial part of the property of such Person or ofany of its Subsidiaries, or shall have taken any action to displace themanagement of such Person or of any of its Subsidiaries or to curtail itsauthority in the conduct of the business of such Person or of any of itsSubsidiaries.

 

“Additional Purchased Items” shall mean (i) U.S.Treasury obligations approved by Buyer; (ii) cash provided by Sellers toBuyer or its designee; (iii) REO Properties and (iv) to the extentpreviously approved by Buyer, other real property owned by Sellers as to whicha mortgage in form and substance satisfactory to Buyer has been executed andrecorded in favor of Buyer. For the avoidance of doubt, assets (other thanMortgage Loans) constituting “Additional Purchased Assets” within the meaningof such term under the Existing Agreement shall, without further action,constitute Additional Purchased Items under this Agreement as of theRestatement Closing Date.

 

“Affiliate” shall mean with respect to any Person,any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.

 

“Agency” shall mean Ginnie Mac, Fannie Mac, andFreddie Mac, as applicable.

 

“Agency Approvals” shall have the meaning set forthin Section 8.25 of this Agreement.

 

“Agency Guide” shall mean the Ginnie Mae MortgageBacked Securities Guide; the Fannie Mae Selling Guide and the Fannie MaeServicing Guide; the Freddie Mac Sellers’ and Servicers’ Guide; as applicable,in each case as such Agency Guide may be amended from time to time.

 

“Agency Program” shall mean the specific purchaseprogram under the relevant Agency Guide or as otherwise approved by the Agency.

 

“Agreement” has the meaning assigned such term inthe preamble paragraph above the Recitals hereto.

 

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“ALTA” shall mean the American Land TitleAssociation.

 

“Appraised Value” shall have the meaning specifiedin Schedule 1 hereto.

 

“Assignee” shall mean, with respect to thisAgreement and any Mortgage Loan, any assignee of Buyer pursuant to a sale,pledge or rehypothecation of the Mortgage Loan.

 

“Assignment of Mortgage” shall mean, with respectto any Mortgage, an assignment of the Mortgage, notice of transfer orequivalent instrument in recordable form, sufficient under the laws of thejurisdiction wherein the related Mortgaged Property is located to reflect theassignment of the Mortgage to Buyer.

 

“Authorized Signatory” shall mean an officer of therelated Seller who is authorized and empowered to request a purchase ofPurchased Assets by Buyer pursuant to a request for purchase, and is indicatedon the Authorized Signatories of the related Seller attached hereto as Exhibit V-B.

 

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

 

“Business Day” shall mean any day other than (i) aSaturday or Sunday; (ii) a day on which banks in the State of New York (orstate in which any of Custodian, any Seller or Buyer is located) is authorizedor obligated by law or executive order to be closed; or (iii) any day onwhich Buyer is closed for business.

 

“Buyer” shall mean UBS Real Estate Securities Inc.,a Delaware corporation, and its successors in interest and assigns.

 

“Capital Lease Obligations” shall mean, for anyPerson, all obligations of such Person to pay rent or other amounts under alease of (or other agreement conveying the right to use) Property to the extentsuch obligations are required to be classified and accounted for as a capitallease on a balance sheet of such Person under GAAP, and, for purposes of thisAgreement, the amount of such obligations shall be the capitalized amountthereof, determined in accordance with GAAP.

 

“Change in Control” means (i) with respect toany Seller that is a public company, acquisition by any Person, or two or morePersons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3of the Securities and Exchange Commission under the Securities Exchange Act of1934, as amended) of outstanding shares of voting equity interest of suchSeller at any time if after giving effect to such acquisition such Person orPersons owns fifty percent (50%) or more of such outstanding voting stock and (ii) withrespect to any other Seller, IMH ceases to own, directly or indirectly, onehundred percent (100%) of the voting equity interest of such Seller.

 

“Closing Date” shall mean August 2, 2007.

 

“Closing Instruction Letter” shall mean, withrespect to each Wet-Ink Mortgage Loan which is being originated in part by theproceeds of a Closing Transaction, the instruction

 

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letter of the related Seller with respect to suchorigination which is acknowledged by the Settlement Agent.

 

“Closing Instruction Letter Insert” shall mean aparagraph in the form of Exhibit XIV attached hereto which shall beinserted into the Closing Instruction Letter.

 

“Closing Loan Purchase Detail” shall mean a loanpurchase detail, prepared by a Seller and delivered by such Seller to Buyer viaElectronic Transmission containing all information specified on Exhibit XIII(as such information may be amended from time to time by notice from Buyer toany Seller) in a form acceptable to Buyer, regarding the characteristics of aMortgage Loan being offered for sale by such Seller to Buyer under a ClosingTransaction.

 

“Closing Transaction” shall mean any sale of aMortgage Loan by a Seller to Buyer, structured as either a Dry Funding or asale of a Wet-Ink Mortgage Loan, wherein Buyer purchases an Eligible Assetsubject to an obligation of the related Seller to repurchase such EligibleAsset pursuant to this Agreement. It is understood that a Rollover Transactionis not a Closing Transaction hereunder, and that, as contemplated in Section 2.05(f),no Closing Transactions shall occur hereunder on or after the RestatementClosing Date.

 

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

 

“Commonly Controlled Entity” shall mean an entity,whether or not incorporated, which is under common control with a Seller withinthe meaning of Section 4001 of ERISA or is part of a group which includesa Seller and which is treated as a single employer under Section 414 ofthe Code.

 

“Confirmation” shall have the meaning specified in Section 2.06(a).

 

“Costs” shall have the meaning specified in Section 11.01(a).

 

“Credit File” shall mean all papers and records ofwhatever kind or description, whether developed or originated by a Seller orothers, required to document or service the Mortgage Loan; *provided, however,* that such Mortgage Loanpapers, documents and records shall not include any Mortgage Loan papers,documents or records which are contained in the Mortgage File.

 

“Custodial Agreement” shall mean the CustodialAgreement relating to the Mortgage Loans, by and among Buyer, Sellers (or theirpredecessor entities) and Custodian, as the same shall be amended, modified,supplemented or amended and restated and in effect from time to time.

 

“Custodial Identification Certificate” shall havethe meaning specified in the Custodial Agreement.

 

“Custodian” shall mean Deutsche Bank National TrustCompany, a national banking association, and its successors in interest, ascustodian under the Custodial Agreement, and any successor custodian under theCustodial Agreement.

 

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“Default” shall mean an Event of Default or anevent, which, with the giving of notice or the passage of time or both, wouldconstitute an Event of Default.

 

“Disbursement Amount” shall mean, with respect to aMortgage Loan, the amount set forth on the related Closing Loan Purchase Detailas the “Requested Disbursement Amount”.

 

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

 

“Dry Funding” shall mean a Closing Transactioninitiated by the delivery by a Seller, via Electronic Transmission, to Buyer ofa Mortgage Loan Schedule and the receipt by Custodian of a Mortgage File priorto the closing of the Closing Transaction.

 

“Electronic Agent” shall mean MERSCORP, Inc.,and its successors and assigns.

 

“Electronic Tracking Agreement” shall mean thatcertain Electronic Tracking Agreement, if any, among Buyer, Sellers, ElectronicAgent and Mortgage Electronic Registration Systems, Inc.; *provided that*if no Mortgage Loans are orwill be MERS Designated Mortgage Loans, all references herein to the ElectronicTracking Agreement shall be disregarded.

 

“Electronic Transmission” shall mean (i) thedelivery of information in an electronic format acceptable to the applicablerecipient thereof or (ii) with respect to Buyer, the posting by Buyer ofinformation (including, but not limited to, reports and Confirmations) in anelectronic format on Buyer’s client website.

 

“Eligible Asset” shall mean a Mortgage Loan,including a Wet-Ink Mortgage Loan, which is secured by a Mortgage (i) asto which the representations and warranties in Schedule 1 attached hereto aretrue and correct and (ii) which is underwritten strictly in accordancewith the Underwriting Guidelines.

 

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

 

“ERISA Affiliate” shall mean, with respect to anySeller, any corporation or trade or business that is a member of any group oforganizations (i) described in Section 414(b) or (c) of theCode of which the related Seller, as applicable, is a member and (ii) solelyfor purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) ofthe Code, described in Section 414(m) or (o) of the Code ofwhich the related Seller is a member.

 

“Event of Default” has the meaning specified in Section 10.01.

 

“Executive” shall mean, with respect to any Seller,each of the Chief Executive Officer, the President, the Chief Operating Officerand the Chief Financial Officer of the related Seller, who are incumbent as ofthe date hereof.

 

“Existing Agreement” has the meaning assigned tosuch term in Recital 1 hereto.

 

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“Extension Conditions” shall have the meaningspecified in Section 2.10.

 

“Fannie Mae” shall mean the Federal NationalMortgage Association, and its successors in interest.

 

“Fatal Exception” shall mean the assignment by theCustodian of a Mortgage Loan Absentee Code or a Mortgage Loan Suspension Codeto a Mortgage Loan.

 

“Fee Letter” shall mean the letter agreement amongthe Sellers and Buyer, dated as of the Restatement Closing Date.

 

“FHA” shall mean the Federal Housing Administrationor any successor thereto.

 

“Final Repurchase Date” shall mean, with respect toeach Transaction, the earliest to occur of (a) the First Stated FinalRepurchase Date (or, if the applicable Extension Conditions in each case shallbe timely satisfied, then the First Stated Final Repurchase Date shall beextended to the Second Stated Final Repurchase Date, the Second Stated FinalRepurchase Date shall be extended to the Third Stated Final Repurchase Date,and the Third Stated Final Repurchase Date shall be extended to the FourthStated Final Repurchase Date); and (b) any date determined to constitutethe Final Repurchase Date by application of Sections 2.06 or 10.02,as applicable; *provided that* theFinal Repurchase Date for any Purchased Asset will not be later than 364 daysafter the most recent Purchase Date with respect to such Purchased Asset.

 

“First Stated Final Repurchase Date” shall mean 364days following the Restatement Closing Date (or if such date is not a BusinessDay, then the immediately preceding Business Day).

 

“Fourth Stated Final Repurchase Date” shall meanthe date that is 180 days following the Third Stated Final Repurchase Date (orif such date is not a Business Day, then the immediately preceding BusinessDay).

 

“Freddie Mac” shall mean the Federal Home LoanMortgage Corporation, and its successors in interest.

 

“GAAP” shall mean generally accepted accountingprinciples as in effect from time to time in the United States.

 

“Ginnie Mae” shall mean the Government NationalMortgage Association or any successor thereto.

 

“Governmental Authority” shall mean any nation orgovernment, any state or other political subdivision thereof, any entityexercising executive, legislative, judicial, regulatory or administrativefunctions of or pertaining to government and any court or arbitrator havingjurisdiction over Sellers, or any of their respective Subsidiaries, or any oftheir properties.

 

“Guarantee” shall mean, as to any Person, anyobligation of such Person directly or indirectly guaranteeing any Indebtednessof any other Person or in any manner providing for the payment of anyIndebtedness of any other Person or otherwise protecting the holder of such

 

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Indebtedness against loss (whether by virtue ofpartnership arrangements, by agreement to keep-well another Person, to purchaseassets, goods, securities or services, or to agree to take-or-pay arrangementor otherwise); *provided that* theterm “Guarantee” shall not include (i) endorsements for collection ordeposit in the ordinary course of business or (ii) obligations to makeservicing advances for delinquent taxes and insurance, or other obligations inrespect of a Mortgaged Property, or other principal and interest advances madein the ordinary course of servicing the Mortgage Loans. The amount of anyGuarantee of a Person shall be deemed to be an amount equal to the stated ordeterminable amount of the primary obligation in respect of which suchGuarantee is made or, if not stated or determinable, the maximum reasonablyanticipated liability in respect thereof as determined by such Person in goodfaith. The terms “Guarantee” and “Guaranteed” used as verbs shall havecorrelative meanings.

 

“HUD” shall mean the United States Department ofHousing and Urban Development or any successor thereto.

 

“IMH” shall have the meaning assigned such term inthe paragraph preceding the Recitals to this Agreement.

 

“Income” shall mean, with respect to any PurchasedAsset at any time, all collections and proceeds on or in respect of suchPurchased Asset, including, without limitation, any principal in respect of aMortgage Loan then payable and all interest or other distributions payablethereon (less any Interim Servicer Fee payable to Servicer, unless a Defaultshall have occurred and be continuing).

 

“Interim Servicer Fee” shall have the meaningassigned to such term in Section 11.10(j).

 

“Interim Servicer Fee Rate” shall have the meaningassigned to such term in the Fee Letter.

 

“Interest-Only Mortgage Loan” means a Mortgage Loanthat conforms to the guidelines for interest-only loans set forth in theUnderwriting Guidelines.

 

“Indebtedness” shall mean, for any Person: (a) obligationscreated, issued or incurred by such Person for borrowed money (whether by loan,the issuance and sale of debt securities or the sale of Property to anotherPerson subject to an understanding or agreement, contingent or otherwise, torepurchase such Property from such Person); (b) obligations of such Personto pay the deferred purchase or acquisition price of Property or services,other than trade accounts payable (other than for borrowed money) arising, andaccrued expenses incurred, in the ordinary course of business so long as suchtrade accounts payable are payable within ninety (90) days of the date therespective goods are delivered or the respective services are rendered; (c) Indebtednessof others secured by a Lien on the Property of such Person, whether or not therespective Indebtedness so secured has been assumed by such Person; (d) obligations(contingent or otherwise) of such Person in respect of letters of credit orsimilar instruments issued or accepted by banks and other financialinstitutions for account of such Person; (e) obligations of such Personunder hedging and/or derivative agreements and other hedging arrangements,including Interest Rate Protection Agreements; (f) obligations of suchPerson under repurchase

 

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agreements, sale/buy-back agreements or like arrangements;(g) Indebtedness of others Guaranteed by such Person; (h) allobligations of such Person incurred in connection with the acquisition orcarrying of fixed assets by such Person; (i) Indebtedness of generalpartnerships of which such Person is a general partner or is secondarily orcontingently liable (other than by endorsement of instruments in the course ofcollection), whether by reason of any agreement to acquire such indebtedness tosupply or advance sums or otherwise; and (j) Capital Lease Obligations ofsuch Person.

 

“Interest Rate Protection Agreement” shall mean,with respect to any or all of the Mortgage Loans, any short sale of U.S.Treasury securities, or futures contracts, or options related contracts, orinterest rate swap, cap or collar agreement or similar arrangement providingfor protection against fluctuations in interest rates or the exchange of nominalinterest obligations either generally or under specific contingencies andacceptable to Buyer.

 

“Late Payment Fee” has the meaning specified in Section 2.06(g).

 

“LIBOR” shall mean, with respect to each day aTransaction is outstanding, the rate per annum equal to the rate appearing at page 5of the Telerate Screen as one-month LIBOR at or about 9:00 a.m., New YorkCity time, on such date and if such rate shall not be so quoted, the rate perannum at which the Reference Bank is offered Dollar deposits at or about 9:00 A.M.,New York City time, on such date by prime banks in the London interbankeurodollar market for delivery on such day for a period of thirty (30) days andin an amount comparable to the amount of the Transactions to be outstanding onsuch day. LIBOR shall be reset daily by Buyer and Buyer’s determination ofLIBOR shall be conclusive upon the parties absent manifest error on the part ofBuyer.

 

“Lien” shall mean any mortgage, lien, pledge,charge, security interest or similar encumbrance.

 

“Loan-to-Value Ratio” or “LTV” shall meanwith respect to any Mortgage Loan, the ratio of the original outstandingprincipal amount of the Mortgage Loan calculated as of the time of originationof such Mortgage Loan to the lesser of (a) the Appraised Value of theMortgaged Property at origination or (b) if the Mortgaged Property waspurchased within twelve months prior to the origination of the Mortgage Loan,the purchase price of the Mortgaged Property.

 

“Material Adverse Effect” shall mean a materialadverse effect on (a) the Property, business, operations, financialcondition or prospects of Sellers or any of their Subsidiaries or Servicer orany of its Subsidiaries; (b) the ability of a Seller or Servicer toperform their obligations under any of the Repurchase Documents to which it isa party; (c) the validity or enforceability of any of the RepurchaseDocuments; (d) the rights and remedies of Buyer under any of theRepurchase Documents; (e) the timely payment of any amounts payable underthe Repurchase Documents; (f) Buyer’s ownership or security interest inthe Purchased Assets; or (g) the Purchased Assets as a whole.

 

“MERS” means Mortgage Electronic RegistrationSystems, Inc., a corporation organized and existing under the laws of theState of Delaware, or any successor thereto.

 

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“MERS Designated Mortgage Loan” shallmean Mortgage Loans for which (a) the related Seller has designated orwill designate MERS as, and has taken or will take such action as is necessaryto cause MERS to be, the mortgagee of record, as nominee for such Seller, inaccordance with the MERS Procedure Manual and (b) the related Seller hasdesignated or will designate Buyer as the Investor and Interim Funder on theMERS System.

 

“MERS Procedure Manual” shall mean theMERS Procedures Manual attached as Exhibit B to the Electronic TrackingAgreement, as it may be amended, supplemented or otherwise modified from timeto time.

 

“MERS Report” shall mean the schedulelisting MERS Designated Mortgage Loans and other information prepared by theElectronic Agent pursuant to the Electronic Tracking Agreement.

 

“MERS® System” shall mean MERS’mortgage electronic registry system, as more particularly described in the MERSProcedures Manual.

 

“Mortgage” shall mean with respect toa Mortgage Loan, the mortgage, deed of trust or other instrument securing aMortgage Note, which creates a first or second Lien on a fee simple ResidentialDwelling securing the Mortgage Note or a leasehold estate with respect to realproperty located in jurisdictions in which the use of leasehold estates forresidential properties is a widely accepted practice.

 

“Mortgage File” shall have the meaningassigned thereto in the Custodial Agreement.

 

“Mortgage Loan” shall mean a mortgageloan which Custodian has been instructed to hold for Buyer pursuant to theCustodial Agreement, and which Mortgage Loan includes, without limitation, (i) aMortgage Note and related Mortgage (together with the related Mortgage File,Servicing File and Servicing Records); (ii) all right, title and interestof the related Seller in and to the Mortgaged Property covered by or related tosuch Mortgage; and (iii) all Servicing Rights related to such mortgageloan.

 

“Mortgage Loan Schedule” shall havethe meaning assigned thereto in the Custodial Agreement.

 

“Mortgage Loan Schedule and ExceptionReport” shall have the meaning assigned thereto in the Custodial Agreement.

 

“Mortgage Note” shall mean theoriginal executed promissory note or other evidence of the indebtedness of aMortgagor with respect to a Mortgage Loan.

 

“Mortgaged Property” shall mean, withrespect to a Mortgage Loan, a fee simple interest in, or a leasehold estate (tothe extent the use of leasehold estates for residential properties in suchjurisdictions is a widely accepted practice) with respect to, the real property(including all improvements, buildings, fixtures, building equipment andpersonal property thereon and all additions, alterations and replacements madeat any time with respect to the

 

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foregoing) and all other collateral andsupporting obligations securing or supporting repayment of the debt evidencedby a Mortgage Note.

 

“Mortgagee” shall mean the recordholder of a Mortgage Note secured by a Mortgage.

 

“Mortgagor” shall mean the obligor orobligors on a Mortgage Note, including any person who has assumed or guaranteedthe obligations of the obligor thereunder.

 

“Multiemployer Plan” shall mean amultiemployer plan defined as such in Section 3(37) of ERISA to whichcontributions have been or are required to be made by Sellers or any of theirERISA Affiliates and that is covered by Title IV of ERISA.

 

“Other Financing Facilities” shallmean any credit facilities structured as loan and security agreements,repurchase agreements, gestation repurchase agreements, and any otheragreements establishing warehouse finance facilities involving any Seller orany of its Subsidiaries or any similar arrangements now or hereafter existing,including, without limitation, any arrangements under which such Seller or anyof its Subsidiaries are required to repurchase mortgage-backed securities ormortgage loans from any lender or other counterparty.

 

“PBGC” shall mean the Pension BenefitGuaranty Corporation or any entity succeeding to any or all of its functionsunder ERISA.

 

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

 

“Plan” shall mean an employee benefitor other plan established or maintained by Sellers or any ERISA Affiliate andcovered by Title IV of ERISA, other than a Multiemployer Plan.

 

“Platform” shall mean the mortgageloan servicing division within UBS AG known as the “SSG” division, togetherwith any successors or assigns of such division or all or a substantial portionof its assets, as the case may be.

 

“Platform Servicer Fee” shall have themeaning assigned to such term in Section 11.10(j).

 

“Platform Servicer Fee Rate” shallhave the meaning assigned to such term in the Fee Letter.

 

“Platform Servicing Agreement” shallmean the servicing agreement, if any, between Servicer (or an affiliatethereof) and Buyer, entered into in connection with a sale of the Platform byUBS AG to the Servicer or such affiliate, should such sale occur following theRestatement Closing Date.

 

“Post-Default Rate” shall mean, inrespect of any day that any Transaction is outstanding or any other amountunder this Agreement or any other Repurchase Document that is

 

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not paid when due to Buyer on the relevantRepurchase Date, Final Repurchase Date or otherwise when due (a “Post-DefaultDay”), a rate per annum on a 360 day per year basis during the period fromand including the due date to but excluding the date on which such amount ispaid in full equal to the Post-Default Spread plus the Pricing Rate on suchPost-Default Day.

 

“Post-Default Spread” shall have themeaning assigned to such term in the Fee Letter.

 

“Price Differential” means, withrespect to any Transaction hereunder as of any date, the aggregate amountobtained by daily application of the Pricing Rate for such Transaction to thePurchase Price for such Transaction on a 360 day per year basis for the actualnumber of days during the period commencing on (and including) the relevantPurchase Date for such Transaction and ending on (but excluding) the RepurchaseDate or the Final Repurchase Date (reduced by any amount of such PriceDifferential previously paid by the related Seller to Buyer with respect tosuch Transaction).

 

“Pricing Rate” shall mean, withrespect to any Purchased Assets and any date of determination, a rate per annumequal to the sum of (a) LIBOR for such date plus (b) the Spread FeeRate applicable to such Purchased Assets.

 

“Prime Rate” shall mean the prime rateannounced to be in effect from time to time, as published as the average ratein The Wall Street Journal.

 

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

 

“Purchase Date” shall mean, withrespect to each Transaction, the date on which Purchased Assets are sold by therelated Seller to Buyer hereunder (including in respect of a RolloverTransaction).

 

“Purchase Price” shall mean on eachPurchase Date, the price at which the related Seller conveys Purchased Assetsto Buyer or its designee (including Custodian) hereunder, which shall equal withrespect to Restatement Closing Date Mortgage Loans, the Purchase Price asdetermined and then in effect for such Restatement Closing Date Mortgage Loanspursuant to the Existing Agreement as of the Restatement Closing Date, reducedby amounts actually collected and received by Buyer after the RestatementClosing Date in respect of the repayment of outstanding principal balance ofsuch Restatement Closing Date Mortgage Loans.

 

“Purchased Assets” shall mean theMortgage Loans sold by the related Seller to Buyer in a Transaction. For theavoidance of doubt, Mortgage Loans sold pursuant to the Existing Agreementshall constitute, without further action, Purchased Assets under this Agreementas of the Restatement Closing Date.

 

“Purchased Items” has the meaningspecified in Section 6.01.

 

“Reference Bank” shall mean theprincipal office in London, England, of UBS AG.

 

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

 

“REO Property” shall mean realproperty acquired by Servicer in respect of a defaulted mortgage loan,including a Mortgaged Property acquired through foreclosure of such a MortgageLoan or by deed in lieu of such foreclosure.

 

“Reportable Event” shall mean any ofthe events set forth in Section 4043(b) of ERISA or a successorprovision thereof, other than those events as to which the thirty day noticeperiod is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.§ 2615 or one or more successor provisions thereof.

 

“Repurchase Date” shall mean the dateoccurring on (i) the tenth (10th) Business Day of each month following therelated Purchase Date; (ii) any other Business Day set forth in therelated Confirmation; or (iii) any date determined to constitute aRepurchase Date by application of Sections 2.06 or 10.02, as applicable.

 

“Repurchase Documents” shall mean thisAgreement, the Custodial Agreement, the Fee Letter, the Electronic TrackingAgreement, and any other agreement entered into between Sellers and Buyer inconnection herewith.

 

“Repurchase Obligations” shall havethe meaning specified in Section 6.02.

 

“Repurchase Price” means the price atwhich Purchased Assets are to be reconveyed from Buyer or its designee(including Custodian) to the related Seller upon termination of a Transaction,which will be determined in each case (including Transactions terminable upon demand)as the sum of the Purchase Price and the Price Differential due and owing as ofthe date of such determination.

 

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

 

“Residential Dwelling” shall mean anyone of the following: (i) a detached single family dwelling; (ii) atwo-to-four family dwelling; (iii) a unit in a condominium project; (iv) adetached single family dwelling in a planned unit development; or (v) alog home underwritten in accordance with Fannie Mae and Freddie Macrequirements; *provided that*Residential Dwellings are not any of the following: (a) earthen homes; (b) undergroundhomes; (c) mobile homes or manufactured housing units; or (d) co-operativeunits.

 

“Responsible Officer” shall mean, asto any Person, the chief executive officer, the chief financial officer, thepresident, the treasurer or the chief operating officer of such Person.

 

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“Restatement Closing Date” shall meanthe date as of which this Agreement is dated as first set forth above.

 

“Restatement Closing Date Mortgage Loans”shall mean the Mortgage Loans constituting Purchased Assets under the ExistingAgreement, immediately prior to the effectiveness of this Agreement as anamendment and restatement of the Existing Agreement on the Restatement ClosingDate.

 

“RESPA” means the Real EstateSettlement Procedures Act, as amended from time to time.

 

“Rollover Transaction” shall have themeaning assigned to such term in Section 2.06(g).

 

“Second Stated Final Repurchase Date”shall mean the date that is 180 days following the First Stated FinalRepurchase Date (or if such date is not a Business Day, then the immediatelypreceding Business Day).

 

“Second Mortgage Loan” shall mean aMortgage Loan that constitutes a second priority mortgage lien with respect tothe related Mortgaged Property.

 

“Security Agreement” shall mean withrespect to any Mortgage Loan, any contract, instrument or other documentrelated to security for repayment thereof (other than the related Mortgage orMortgage Note), executed by the Mortgagor and/or others in connection with suchMortgage Loan, including, without limitation, any security agreement, guaranty,title insurance policy, hazard insurance policy, chattel mortgage, letter ofcredit or certificate of deposit or other pledged accounts, and any otherdocuments and records relating to any of the foregoing.

 

“Seller’s Cash Component” shall mean,in respect of any payment of a Repurchase Price when due and payable hereunder,the portion of accrued and unpaid Price Differential of such Repurchase Pricerepresented by applying a Pricing Rate determined using the Seller’s CashComponent Spread Fee Rate as the “Spread Fee Rate” applicable thereto, insteadof the Spread Fee Rate as defined herein (i.e., as set forth in the FeeLetter).

 

“Seller’s Cash Component Spread Fee Rate”shall have the meaning assigned such term in the Fee Letter.

 

“Sellers” shall have the meaningprovided in the first paragraph of this Agreement.

 

“Seller-Related Obligations” shallmean any obligations, other than those obligations of Seller under the PlatformServicing Agreement as they strictly relate to the servicing of the MortgageLoans, of Sellers hereunder and under any other arrangement between one or moreSellers or any Affiliate of any Seller on the one hand and Buyer or anyAffiliate of Buyer on the other hand, including, without limitation, anyInterest Rate Protection Agreements between any such parties.

 

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“Seller’s Release Letter” shall mean aletter in the form of Exhibit VI-A, delivered by a Seller when noWarehouse Lender has an interest in a Mortgage Loan, conditionally releasingall of such Seller’s interest in a Mortgage Loan upon receipt of payment bysuch Seller.

 

“Servicer” shall mean Impac FundingCorporation, a California corporation, as interim servicer for the PurchasedAssets for the benefit of Buyer pursuant to Section 11.10, or anyother entity selected by Sellers having demonstrated competence in servicingloans similar to the Mortgage Loans and which is acceptable to Buyer in itssole discretion.

 

“Servicing File” shall mean withrespect to each Mortgage Loan, the file retained by Servicer or its designeeconsisting of originals of all documents in the Mortgage File that are notdelivered to a Custodian and copies of all documents in the Mortgage File setforth in the Custodial Agreement.

 

“Servicing Records” shall mean any andall servicing agreements, files, documents, records, databases, 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 of such Mortgage Loans.

 

“Servicing Rights” shall mean any andall of the following: (a) any and all rights to service the MortgageLoans; (b) any payments to or monies received by Servicer or any otherPerson for servicing the Mortgage Loans; (c) any late fees, penalties orsimilar payments with respect to the Mortgage Loans; (d) all agreements ordocuments creating, defining or evidencing any such servicing rights to theextent they relate to such servicing rights and all rights of Servicer or anyother Person thereunder; (e) escrow payments or other similar paymentswith respect to the Mortgage Loans and any amounts actually collected bySellers or any other Person with respect thereto; and (f) all accounts andother rights to payment related to the Mortgage Loans.

 

“Settlement Agent” shall mean, withrespect to any Closing Transaction, the entity approved by Buyer, in its solediscretion, which shall be a title company, escrow company or attorney inaccordance with local law and practice in the jurisdiction where the relatedWet-Ink Mortgage Loan is being originated, to which the proceeds of suchClosing Transaction are to be wired pursuant to Section 2.05(d).

 

“Settlement Agent Standing WireInstructions” shall mean the wire instructions of Settlement Agent setforth in the applicable Closing Loan Purchase Detail, from a Seller to Buyerfor use when Buyer wires Disbursement Amounts for Wet-Ink Mortgage Loans andDry Fundings structured as Closing Transactions.

 

“Spread Fee Rate” shall have themeaning set forth in the most-recently delivered Confirmation; provided, thatfor each date of determination occurring on and after the Restatement ClosingDate, “Spread Fee Rate” shall have the meaning set forth in the Fee Letter.

 

“Stated Final Repurchase Date” shallmean any of the First Stated Final Repurchase Date, the Second Stated FinalRepurchase Date, the Third Stated Final Repurchase Date, or the Fourth StatedFinal Repurchase Date.

 

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“Sub-Servicer” shall mean anysubservicer appointed as such pursuant to a Sub-Servicing Agreement, if everany.

 

“Sub-Servicing Agreement” shall meanan agreement between Sellers, Servicer and any Sub-Servicer with respect to theservicing of the Purchased Assets, if ever applicable, which agreement shall bein form and substance satisfactory to Buyer.

 

“Subsidiary” shall mean, with respectto any Person, any corporation, partnership, limited liability company or otherentity of which at least a majority of the securities or other ownershipinterests having by the terms thereof ordinary voting power to elect a majorityof the board of directors or other persons performing similar functions of suchcorporation, partnership, limited liability company or other entity(irrespective of whether or not at the time securities or other ownershipinterests of any other class or classes of such corporation, partnership orother entity shall have or might have voting power by reason of the happeningof any contingency) is at the time directly or indirectly owned or controlledby such Person or one or more Subsidiaries of such Person or by such Person andone or more Subsidiaries of such Person.

 

“Successor Servicer” shall mean anentity designated by Buyer, in conformity with Section 11.10, toreplace Servicer as interim servicer for Buyer.

 

“Supplemental Amount” shall mean, withrespect to each Mortgage Loan, an amount equal to the Disbursement Amount lessthe Purchase Price.

 

“Takeout Commitment” shall mean awritten agreement between Sellers and an approved investor as the purchaser,governing the terms of the resale of one or more Mortgage Loans from therelated Seller to such purchaser, together with a copy of any related agreementbetween the purchaser and any other person that has entered into an agreementto purchase such Mortgage Loans from the purchaser.

 

“Third Stated Final Repurchase Date”shall mean the date that is 180 days following the Second Stated FinalRepurchase Date (or if such date is not a Business Day, then the immediatelypreceding Business Day).

 

“Transaction” has the meaningspecified in the Recitals hereto.

 

“Trust Receipt” shall mean a trustreceipt issued by Custodian to Buyer confirming Custodian’s possession ofcertain Mortgage Files that are held by Custodian for the benefit of Buyer orthe registered holder of such trust receipt.

 

“UBS Cash Account” shall mean aseparate cash account established and maintained by Buyer for Sellers under theconditions set forth in Section 7.04. Such cash account shall be anon-segregated ledger account and it is understood that funds credited theretowill be commingled with Buyer’s funds.

 

“UBS Cash Account Adjustment” shallmean an adjustment to the UBS Cash Account Balance pursuant to a UBS CashAccount Adjustment Notice.

 

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“UBS Cash Account Adjustment Notice”shall mean the cash account adjustment notice, in the form of Exhibit XIannexed hereto, which is to be used by Buyer to notify Sellers of anyadjustments to the UBS Cash Account Balance.

 

“UBS Cash Account Balance” shall mean,as of any date, the net amount of funds credited to the UBS Cash Account onsuch date.

 

“UBS Cash Account Interest Accrual”shall mean the simple interest calculation posted on the last Business Day ofeach month resulting from the product of each Business Day’s UBS Cash AccountBalance and the UBS Cash Account Interest Rate.

 

“UBS Cash Account Interest Rate” shallmean, with respect to each month, the average opening federal funds rate forsuch month or such other rate agreed to by Sellers and Buyer. For the UBS CashAccount, the opening federal funds rate on a Business Day shall be counted asthe UBS Cash Account Interest Rate until the next Business Day. Notwithstandingthe foregoing, on and after the Restatement Closing Date, the UBS Cash AccountInterest Rate for any date of determination shall be the same interest rate perannum as the Pricing Rate.

 

“UBS Cash Account Wire Instructions”shall mean the wire instructions, set forth in a letter in the form of Exhibit Xannexed hereto, to be used for the payment of funds to Sellers in respect ofClosing Transactions hereunder (it being understood that no such ClosingTransactions shall occur on or after the Restatement Closing Date).

 

“Underwriting Guidelines” shall meanthe underwriting guidelines attached hereto as Exhibit II and delivered bySellers to Buyer on or prior to the date hereof and as may be modified orsupplemented from time to time thereafter in accordance with the terms hereof.

 

“Uniform Commercial Code” or “UCC”shall mean the Uniform Commercial Code as enacted in each applicable state asin effect on the date hereof.

 

“VA” shall mean the U.S. Department ofVeterans Affairs, an agency of the United States of America, or any successorthereto.

 

“Warehouse Lender” shall mean anylender, including, without limitation, Buyer, providing financing to any Sellerin any fractional amount for the purpose of originating or purchasing MortgageLoans, which lender, prior to the Purchase Date, has a security interest insuch Mortgage Loans as collateral for the obligations of such Seller to suchlender.

 

“Warehouse Lender’s Release Letter”shall mean a letter, substantially in the form of Exhibit VI-B annexedhereto (or such other form acceptable to Buyer), from a Warehouse Lender toBuyer, conditionally releasing all of such Warehouse Lender’s right, title andinterest in certain Mortgage Loans identified therein upon receipt of paymentby such Warehouse Lender.

 

“Wet-Ink Funding Schedule” shall havethe meaning specified in Section 2.05(d)(i).

 

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“Wet-Ink Mortgage Loan” shall mean anEligible Asset which is sold to Buyer simultaneously with the origination thereofby the related Seller, which is funded in part or in whole, with proceeds ofthe sale of the Eligible Asset to Buyer remitted directly to a SettlementAgent; *provided, however*, that anEligible Asset will cease to be a Wet-Ink Mortgage Loan at such time as therelated Seller delivers the related Mortgage File to the Custodian pursuant tothe Custodial Agreement and the Custodian provides the related Seller aMortgage Loan Schedule and Exception Report with respect thereto that indicatesthat such Mortgage Loan has no Fatal Exceptions.

 

“Wire” shall mean a wire transfer madeas described in Section 2.05(d)(ii) hereof.

 

“Wire Fee” shall mean, for eachdisbursement relating to a Closing Transaction, a fee payable to Buyer by therelated Seller as set forth in the Confirmation.

 

“Withdrawal/Deposit Notice” shall meana notice, substantially in the form of Exhibit IX annexed hereto,delivered by a Seller to Buyer, from time to time, in connection withwithdrawals from and deposits to the UBS Cash Account (it being understood thaton and after the Restatement Closing Date, no withdrawals or withdrawal noticesshall be permitted or given in respect of the UBS Cash Account).

 

Section 1.02           Accounting Terms and Determinations.  Except as otherwise expressly provided herein,all accounting terms used herein shall be interpreted, and all financialstatements and certificates and reports as to financial matters required to bedelivered to Buyer hereunder shall be prepared, in accordance with GAAP.

 

**ARTICLE IIINITIATION; TERMINATION**

 

Section 2.01           Acknowledgement of Transfer.  The parties acknowledge and agree that allMortgage Loans subject to the Mortgage Loan Repurchase Agreement, dated as of November 30,1995, among UBS Real Estate Securities Inc. (f/k/a Paine Webber Real EstateSecurities Inc.), Imperial Credit Mortgage Holdings, Inc., ICI FundingCorp. and Imperial Warehouse Lending Group, Inc. (as amended, the “OldRepurchase Agreement”) as of the Closing Date were deemed repurchased bythe sellers under the Old Repurchase Agreement and purchased by Buyer fromSellers under the Existing Agreement as of the Closing Date and, to the extentstill constituting Purchased Assets as of the Restatement Closing Date, will besubject to this Agreement; *provided, that*as long as such Mortgage Loans are subject to this Agreement, any referencesherein to “Schedule 1” with respect to such Mortgage Loans shall be deemed tobe references to the representations and warranties in Section 12(b) ofthe Old Repurchase Agreement and such representations and warranties shall bedeemed initially made as of the date first made thereunder. The parties alsoacknowledge and agree that any references in the Custodial Agreement to the“Mortgage Loan Repurchase Agreement” shall be deemed to be references to thisAgreement.

 

Section 2.02           Reserved.

 

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Section 2.03           Conditions Precedent to Effectiveness of this Agreementon Restatement Closing Date.  Thefollowing shall be conditions precedent to the effectiveness of this Agreementon the Restatement Closing Date:

 

(a)           all of the following documents shall have been received byBuyer, each of which shall be satisfactory in form and substance to Buyer andits counsel:

 

(i)            The following Repurchase Documents:

 

A                                      Amended and Restated Master Repurchase Agreement. This Agreement duly completed and executed by theparties thereto;

 

B                                        Fee Letter. The Fee Letter duly completed and executed by the parties thereto;

 

C                                        Custodial Agreement. The Custodial Agreement (as the same may beamended as of the Restatement Closing Date), duly executed and delivered byeach party thereto;

 

D                                       Electronic Tracking Agreement. An Electronic Tracking Agreement, duly executedand delivered by the parties thereto; and

 

E                                         Consents and Waivers. Any and all consents and waivers required underany Other Financing Facilities.

 

(ii)           UCC Financing Statements.Evidence that all other actions necessary or, in the opinion of Buyer,desirable to perfect and protect Buyer’s interest in the Purchased Items havebeen taken, including, without limitation, filed UCC Financing Statementsnaming Sellers as Debtors and Buyer as Secured Party and describing thePurchased Items.

 

(iii)          Other Documents. Such otherdocuments as Buyer may reasonably request, in form and substance reasonablyacceptable to Buyer.

 

Section 2.04           Reserved.

 

Section 2.05           Procedure for Transactions.

 

(a)           For all Transactionsoccurring on and after the Restatement Closing Date, which must only constituteRollover Transactions, Buyer shall not have any discretion to refuse to enterinto such Rollover Transactions unless an Event of Default shall have occurred.

 

(b)           In no event shall aTransaction other than a Rollover Transaction in respect of Restatement ClosingDate Mortgage Loans be entered into on or after the Restatement Closing Date.

 

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Section 2.06           Confirmations; Transactions.

 

(a)           In connection with Buyer’s purchase of Purchased Assets oneach Purchase Date, Buyer shall forward to Sellers a confirmation (a “Confirmation”)by Electronic Transmission setting forth with respect to each Transactionfunded on such date, (1) the mortgage loan number; (2) the PurchasePrice for such Purchased Assets; (3) the outstanding principal amount of therelated Mortgage Loans; (4) the Repurchase Date and applicable StatedFinal Repurchase Date; (5) the Pricing Rate; and (6) the Spread FeeRate. Buyer shall forward to the related Seller a revised Confirmation byElectronic Transmission notifying such Seller as to any changes made by Buyerin the Repurchase Date or Final Repurchase Date pursuant to the terms hereof.

 

(b)           [Reserved].

 

(c)           In the event any Seller disagrees with any terms of anyConfirmation, such Seller shall notify Buyer in writing of such disagreementwithin one (1) Business Day after receipt of such Confirmation unlessBuyer sends a corrected Confirmation. An objection sent by such Seller muststate specifically that it is an objection, must specify the provision(s) beingobjected to by such Seller, must set forth such provision(s) in the mannerthat such Seller believes they should be stated, and must be received by Buyerno more than one (1) Business Day after the Confirmation was received bysuch Seller. Notwithstanding the foregoing, no Seller shall be entitled tonotify Buyer of an objection to a Confirmation delivered in respect of aRollover Transaction relating to a Restatement Closing Date Mortgage Loan aslong as the information set forth in such Confirmation is consistent with theterms of this Agreement and the other Repurchase Documents.

 

(d)           Any Confirmation by Buyer shall be deemed to have beenreceived by Sellers on the date actually received by any Seller, or, ifdelivered by Electronic Transmission, on the date such Confirmation becomesavailable on Buyer’s client website.

 

(e)           Except as set forth in Section 2.06(c), eachConfirmation, together with this Agreement, shall constitute conclusiveevidence of the terms agreed between Buyer and Sellers with respect to theTransaction to which the Confirmation relates, and Sellers’ acceptance of therelated proceeds (or, if applicable, acceptance of the benefits of aTransaction constituting a Rollover Transaction) shall constitute Sellers’agreement to the terms of such Confirmation. It is the intention of the partiesthat each Confirmation shall not be separate from this Agreement but shall bemade a part of this Agreement.

 

(f)            Sellers shall be obligated, jointly and severally, torepurchase the Purchased Assets from Buyer on each related Repurchase Date andthe Final Repurchase Date (with any performance rendered by a Seller that isnot the same Seller that originally sold such Purchased Asset hereunder, to bedeemed rendered on behalf of such original Seller). Each obligation to repurchaseexists without regard to any prior or intervening liquidation or foreclosurewith respect to any Purchased Asset. Sellers are obligated to obtain thePurchased Assets from Buyer or its designee (including Custodian) at Sellers’expense on (or after) the related Final Repurchase Date.

 

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(g)           Unless Buyer is otherwise notified by Sellers at least two(2) Business Days prior to any Repurchase Date, Sellers shall be deemed tohave requested that each Purchased Asset that is repurchased by Sellers on suchRepurchase Date shall become subject to a new Transaction; *provided that*if the Repurchase Date sodetermined is later than the Final Repurchase Date, the Repurchase Date forsuch Transaction shall automatically reset to the Final Repurchase Date, andthe provisions of this sentence as it might relate to a new Transaction shallexpire on such date. For each such new Transaction (a “Rollover Transaction”),unless otherwise specified by Buyer, (y) the amount that represents thepositive difference between the Repurchase Price payable by Sellers on theRepurchase Date and the Purchase Price payable by the Purchaser on such newPurchase Date shall be settled in immediately available funds by one net wireon the related Repurchase Date, and (z) the Pricing Rate shall be as setforth in this Agreement (and shall be reflected in the related Confirmation).LIBOR shall be reset daily by Buyer. If Sellers fail to send the wire describedin clause (y) by 5:00 p.m., New York City time on the relatedRepurchase Date, Sellers shall be obligated to pay to Buyer (in addition to,and together with, such payment) interest on the unpaid amount due at a rateper annum equal to the Post-Default Rate (the “Late Payment Fee”) untilthe overdue wire is received in full by Buyer.

 

(h)           All purchases by Buyer of Mortgage Loans hereunder shallbe on a “servicing-released” basis, that is, such purchases shall include thepurchase by Buyer of related Servicing Rights. Buyer shall agree, however, tothe delegation of its servicing responsibilities to Servicer as and to the extentcontemplated in Section 11.10.

 

Section 2.07           Termination.  On the Final Repurchase Date, termination ofall Transactions will be effected by transfer and conveyance by Buyer to theapplicable Seller or its designee of the Purchased Assets, Servicing Rights andAdditional Purchased Items. Such conveyance will be in consideration of, andwill be conditioned upon, payment to Buyer in immediately available funds ofthe related Repurchase Price on such date, together with all other obligationsof the Sellers then outstanding hereunder. Such conveyance shall include anyIncome in respect of the related Purchased Assets received by Buyer and notpreviously credited or transferred to, or applied to the obligations of,Sellers pursuant to Section 4.01. Notwithstanding the foregoing, (i) tothe extent such unapplied Income amounts are equal to or less than theRepurchase Price and other obligations payable to Buyer on such date, suchIncome amounts shall be applied to such obligations (first to unpaid fee,expense and indemnity obligations then payable, then to accrued PriceDifferential, and then to outstanding Purchase Price) and the Sellers shall paythe remaining net amount in immediately available funds on the Final RepurchaseDate, and (ii) to the extent such unapplied Income amounts are greaterthan the Repurchase Price and other obligations payable to Buyer on such date,such Income amounts shall be applied to the satisfaction of such obligations toBuyer in full, and Buyer shall remit the excess remaining after suchapplication to the applicable Seller or its designee. Sellers are obligated toobtain the Mortgage Files from Buyer or its designee (including Custodian) atSellers’ expense on the Final Repurchase Date.

 

Section 2.08           Early Terminations.  Sellers may repurchase Purchased Assetswithout penalty or premium, but subject to the last sentence of this Section 2.08,on any date in consideration of the payment to Buyer of the applicableRepurchase Price on such date. The

 

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Repurchase Price payable for the repurchaseof any such Purchased Asset shall be reduced as provided in Section 4.02.If Sellers intend to make such a repurchase, Sellers shall give three (3) BusinessDays’ prior written notice (or such other time as the parties may agree)thereof to Buyer, designating the Purchased Assets to be repurchased. If suchnotice is given, an amount equal to the Repurchase Price for such PurchasedAssets shall be due and payable on the date of repurchase specified therein,and, on receipt, such amount shall be applied to the Repurchase Price for thedesignated Purchased Assets.

 

Section 2.09           Reserved.

 

Section 2.10           Extension Conditions.  As contemplated in the definition of FinalRepurchase Date, and subject in each case to the satisfaction of each of theapplicable conditions set forth below (the “Extension Conditions”),Buyer agrees that (a) the First Stated Final Repurchase Date shall beextended to the Second Stated Final Repurchase Date, (b) the Second StatedFinal Repurchase Date shall be extended to the Third Stated Final RepurchaseDate, and (c) the Third Stated Final Repurchase Date shall be extended tothe Fourth Stated Final Repurchase Date. Such extensions, if occurring, will bedeemed to occur and take effect as of the last day of the term being soextended. Such extensions shall only occur, however, if (i) as of theeffective date of each such extension, no unwaived Event of Default shall haveoccurred, (ii) with respect to an extension to the Third Stated FinalRepurchase Date, as of the effective date of each such extension, (A) theaggregate Repurchase Price in respect of all Purchased Assets does not exceed$100,000,000, and (B) the aggregate Repurchase Price in respect of allPurchased Assets does not exceed 65% of the outstanding principal balance ofPurchased Assets consisting of Mortgage Loans that are Eligible Assets, (iii) withrespect to an extension to the Fourth Stated Final Repurchase Date, as of theeffective date of each such extension, (A) the aggregate Repurchase Pricein respect of all Purchased Assets does not exceed $50,000,000, and (B) theaggregate Repurchase Price in respect of all Purchased Assets does not exceed55% of the outstanding principal balance of Purchased Assets consisting ofMortgage Loans that are Eligible Assets; and (iv) Sellers shall not havedelivered a written notice to Buyer stating that it is the intention of Sellersthat such extension shall not occur. The failure of the Sellers to deliver suchwritten notice of non-extension shall be deemed to constitute, as of theeffective date of the intended extension, a representation and warranty of theSellers to Buyer that each applicable Extension Condition has been satisfied asof such date.

 

**ARTICLE III[RESERVED]**

 

**ARTICLE IVINCOME PAYMENTS**

 

Section 4.01           Income Payments.

 

(a)           Where a particular Transaction’s term extends over a dateon which Income is received with respect to the Purchased Assets related tothat Transaction, such Income shall be the property of Buyer. Sellers shallremit or cause to be remitted to

 

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Buyer, within one (1) Business Day ofreceipt by the applicable Seller or (if applicable) the Servicer (or receiptfrom the Sub-Servicer, if applicable), all Income, including, withoutlimitation, all Income received by or on behalf of Sellers with respect to suchPurchased Assets, for application in accordance with Section 4.02. Forso long as Servicer acts as interim servicer with respect to the PurchasedAssets pursuant to Section 11.10, Servicer shall (or shall ifapplicable, cause the Sub-Servicer to), deposit or cause to be deposited allcollections received by Servicer (or the Sub-Servicer, if applicable)constituting Income to the account maintained by the Platform for such purposeas of the Restatement Closing Date (or to such other account as may bedesignated by Buyer). For purposes hereof, Income shall include, but not belimited to, all principal and interest payments, all prepayments and payoffs,sale proceeds, insurance claims, condemnation awards, real estate owned rentsand any other income and all other amounts received with respect to thePurchased Assets. Prior to Sellers’ or Servicer’s (if applicable) remittance toBuyer of such Income, all such Income shall be held in trust for Buyer, shallconstitute the property of Buyer and shall not be commingled with otherproperty of Sellers, any Affiliates of Sellers or Servicer except as expresslypermitted above.

 

(b)           Notwithstanding the foregoing, all funds in the collectionand custodial account maintained by Buyer (whether through the Platform orotherwise) constituting Purchased Items may be withdrawn by Buyer and appliedin accordance with Section 10.02.

 

Section 4.02           Repurchase Price Adjustments.  Buyer shall apply as a reduction to theRepurchase Price of each Transaction in the order of, first, PriceDifferential, and then second, Purchase Price (but in respect of PurchasePrice, only to the extent of principal balance repayments on the relatedMortgage Loans actually collected and received by Buyer, as contemplated in thedefinition of Purchase Price hereunder), all Income and Price Differentialpayments actually received by Buyer for such Transaction pursuant to Sections4.01 and 2.06(g) as of the applicable Repurchase Date, respectively,but only after payment from such Income of Platform Servicer Fees and any otherobligations due and payable to Buyer hereunder (to the extent such otherobligations are not satisfied by Buyer’s debiting of the UBS Cash Account), andexcluding any Late Payment Fees paid pursuant to Section 2.06(g);it being understood that the Late Payment Fees are properties of Buyer that arenot to be applied in reduction of the Repurchase Price. Any such Incomereceived by Buyer and not so applied shall be credited by Buyer to the UBS CashAccount as an increase in the UBS Cash Account Balance.

 

**ARTICLE VREQUIREMENTS OF LAW**

 

Section 5.01           Requirements of Law.

 

(a)           If any Requirement of Law (other than with respect to any amendmentmade to Buyer’s certificate of incorporation and by-laws or otherorganizational or governing documents) or any change in the interpretation orapplication thereof or compliance by Buyer with any request or directive(whether or not having the force of law) from any central bank or otherGovernmental Authority made subsequent to the date

 

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hereof (for the original Buyer) or the dateof Buyer’s acquisition of an interest in the rights under this Agreement (forany transferee or assignee):

 

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

 

(ii)           shall impose onBuyer any other condition;

 

and the result of any of the foregoing is toincrease the cost to Buyer, by an amount which Buyer deems to be material, ofentering, continuing or maintaining any Transaction or to reduce any amount dueor owing hereunder in respect thereof, then, in any such case, Sellers shallpromptly pay Buyer such additional amount or amounts as calculated by Buyer ingood faith as will compensate Buyer for such increased cost or reduced amountreceivable.

 

(b)           If Buyer shall have determined that the adoption of or anychange in any Requirement of Law (other than with respect to any amendment madeto Buyer’s certificate of incorporation and by-laws or other organizational orgoverning documents) regarding capital adequacy or in the interpretation orapplication thereof or compliance by Buyer or any corporation controlling Buyerwith any request or directive regarding capital adequacy (whether or not havingthe force of law) from any Governmental Authority made subsequent to the datehereof shall have the effect of reducing the rate of return on Buyer’s or suchcorporation’s capital as a consequence of its obligations hereunder to a levelbelow that which Buyer or such corporation could have achieved but for suchadoption, change or compliance (taking into consideration Buyer’s or suchcorporation’s policies with respect to capital adequacy) by an amount deemed byBuyer to be material, then from time to time, Sellers shall promptly pay toBuyer such additional amount or amounts as will compensate Buyer for suchreduction.

 

Section 5.02           Taxes; Tax Treatment.

 

(a)           All payments made by Sellers under this Agreement shall bemade free and clear of, and without deduction or withholding for or on accountof, any present or future taxes, levies, imposts, deductions, charges orwithholdings, and all liabilities (including penalties, interest and additionsto tax) with respect thereto imposed by any Governmental Authority thereof ortherein, excluding income taxes, branch profits taxes, franchise taxes or anyother tax imposed on the net income by the United States, a state or a foreignjurisdiction under the laws of which Buyer is organized or of its applicablelending office, or any political subdivision thereof (collectively, “Non-ExcludedTaxes”), all of which shall be paid by Sellers for their own account notlater than the date when due. If Sellers are required by law or regulation todeduct or withhold any Non-Excluded Taxes from or in respect of any amountpayable hereunder, they shall: (a) make such deduction or withholding; (b) paythe amount so deducted or withheld to the appropriate Governmental Authoritynot later than the date when due; (c) deliver to Buyer, promptly,

 

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original tax receipts and other evidencesatisfactory to Buyer of the payment when due of the full amount of suchNon-Excluded Taxes; and (d) pay to Buyer such additional amounts as may benecessary so that Buyer receives, free and clear of all Non-Excluded Taxes, anet amount equal to the amount it would have received under this Agreement, asif no such deduction or withholding had been made.

 

(b)           In addition, each Seller agrees to pay to the relevantGovernmental Authority in accordance with applicable law any current or futurestamp or documentary taxes or any other excise or property taxes, charges orsimilar levies (including, without limitation, mortgage recording taxes,transfer taxes and similar fees) imposed by the United States or any taxingauthority thereof or therein that arise from any payment made hereunder or fromthe execution, delivery or registration of, or otherwise with respect to, thisAgreement (“Other Taxes”).

 

(c)           Each Seller agrees, jointly and severally, to indemnifyBuyer for the full amount of Non-Excluded Taxes (including additional amountswith respect thereto) and Other Taxes, and any liability (including penalties,interest and expenses) arising therefrom or with respect thereto, *provided that* Buyer shall have providedSellers with evidence, reasonably satisfactory to Sellers, of payment ofNon-Excluded Taxes or Other Taxes, as the case may be.

 

(d)           If either (i) Buyer is not incorporated under thelaws of the United States, any State thereof, or the District of Columbia or (ii) Buyer’sname does not include “Incorporated,” “Inc.,” “Corporation,” “Corp.,” “P.C.,” “insurancecompany,” or “assurance company” (a “Non-Exempt Buyer”), then Buyershall deliver or cause to be delivered to Sellers the following properlycompleted and duly executed documents:

 

A                                      a complete and executed (x) U.S. InternalRevenue Form W-8BEN with Part II completed in which Buyer claims thebenefits of a tax treaty with the United States providing for a zero rate ofwithholding (or any successor forms thereto), including all appropriateattachments or (y) U.S. Internal Revenue Service Form W-8ECI (or anysuccessor forms thereto); or

 

B                                        in the case of an individual, (x) a completeand executed U.S. Internal Revenue Service Form W-8BEN and a certificatesubstantially in the form of Exhibit VIII (a “Section 5.02Certificate”) or U.S. Internal Revenue Service Form W-9 (or anysuccessor forms thereto); or

 

C                                        in the case of a Non-Exempt Lender that isorganized under the laws of the United States, any State thereof, or theDistrict of Columbia, (x) a complete and executed Internal Revenue ServiceForm W-9 (or any successor thereto), including all appropriate attachmentsand (y) if such Non-U.S. Corporate Lender is disregarded for federalincome

 

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tax purposes, the documents that would berequired by clause (1), (2), (3), (4) or (5) with respect to itsbeneficial owner if such beneficial owner were Buyer; or

 

D                                       in the case of a Non-Exempt Lender that (i) isnot organized under the laws of the United States, any State thereof, or theDistrict of Columbia and (ii) is treated as a corporation for U.S. federalincome tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN(or any successor forms thereto) and a Section 5.02 Certificate; or

 

E                                         in the case of a Non-Exempt Lender that (A) istreated as a partnership or other non-corporate entity, or is disregarded forU.S. federal income tax purposes or is an intermediary as defined in Treas.Reg. Sec. 1.1441-1(c)(13) and (B) is not organized under the laws of theUnited States, any State thereof, or the District of Columbia, a (x) Section 5.02Certificate and (y) with respect to each of its beneficial owners and thebeneficial owners of such beneficial owners looking through chains of owners toindividuals or entities that are treated as corporations for U.S. federalincome tax purposes (all such owners, “beneficial owners”), thedocuments that would be required by clause (1), (2), (3), (4) or thisclause (5) with respect to each such beneficial owner if such beneficialowner were Buyer, provided, however, that no such documents will be requiredwith respect to a beneficial owner to the extent Buyer provides the applicabledocumentation that it is a qualified intermediary that has accepted withholdingresponsibility or is a withholding foreign partnership, as each is defined inTreas. Reg. Sec. 1.1441-1 through –8.

 

Sellers shall have no obligations under this Section 5.02if Buyer fails to deliver the required document as set forth in this Section 5.02.For the purposes of this Section  5.02(d), “U.S. Taxes” shallmean the tax imposed under Section 871(a) or Section 881 of theCode or their successor sections.

 

(e)           Without prejudice to the survival of any other agreementof Sellers hereunder, the agreements and obligations of Sellers contained inthis Article V shall survive the termination of this Agreement. Nothingcontained in this Section 5.02 shall require a Buyer to makeavailable any of its tax returns or other information that it deems to beconfidential or proprietary.

 

(f)            Each party to this Agreement acknowledges that it is itsintent for purposes of U.S. federal, state and local income and franchise taxesto treat each Transaction as indebtedness of the related Seller that is securedby the Purchased Assets

 

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and that the Purchased Assets are owned bythe related Seller in the absence of an Event of Default by such Seller. Allparties to this Agreement agree to such treatment and agree to take no actioninconsistent with this treatment, unless required by law.

 

**ARTICLE VISECURITY INTEREST**

 

Section 6.01           Purchased Items.  Each of the following items or types ofproperty, whether now owned or hereafter acquired, now existing or hereaftercreated and wherever located, is hereinafter referred to as the “PurchasedItems”: all Mortgage Loans, all Mortgage Files, including, withoutlimitation, all promissory notes, all Mortgage Notes, all Mortgages, allServicing Records relating to the Mortgage Loans, all Credit Files, all ofSellers’ rights as the owners of the Mortgage Loans under any Sub-ServicingAgreements relating to the Mortgage Loans and any other collateral pledged orotherwise relating to such Mortgage Loans, together with all files, documents,instruments, surveys, certificates, correspondence, appraisals, computerprograms, computer storage media, accounting records and other books andrecords relating thereto, all mortgage guaranties and insurance (issued bygovernmental agencies or otherwise) and any mortgage insurance certificate orother document evidencing such mortgage guaranties or insurance relating to anyMortgage Loan and all claims and payments thereunder, all other insurancepolicies and insurance proceeds relating to any Mortgage Loan or the relatedMortgaged Property, all Income, all Servicing Rights, all servicing fees towhich the Servicer is entitled and servicing and other rights of Sellersrelating to the Mortgage Loans, all Additional Purchased Items, all InterestRate Protection Agreements relating to or constituting any and all of theforegoing (*provided, however*,that Buyer’s priority with regard to Interest Rate Protection Agreements is *pari passu* with those rights of buyers inOther Financing Facilities; *providedfurther, however*, that Buyer has a first priority interest in all InterestRate Protection Agreements which Sellers enter into to hedge specifically, anyPurchased Assets), all of Sellers’ rights as the owner of the Mortgage Loansunder any other agreements or contracts relating to, constituting, or otherwisegoverning, any or all of the foregoing to the extent they relate to thePurchased Assets including the right to receive principal and interest paymentswith respect to the Purchased Assets and the right to enforce such payments,the collection and custodial accounts maintained by the Servicer and all moniesfrom time to time on deposit in such accounts, the UBS Cash Account and allmonies from time to time on deposit in or credited to the UBS Cash Account, allcontract rights and all “general intangibles”, “accounts”, “chattel paper”, “depositaccounts” and “investment property” as defined in the Uniform Commercial Codeas in effect from time to time relating to or constituting any and all of theforegoing, and any and all replacements, substitutions, distributions on orproceeds of any and all of the foregoing.

 

Section 6.02           Security Interest.  Buyer and Sellers intend that the Transactionshereunder be sales to Buyer of the Purchased Assets and not loans from Buyer toSellers secured by the Purchased Assets. However, in order to preserve Buyer’srights under this Agreement in the event that a court or other forum were torecharacterize the Transactions hereunder as loans, and in any event (whetheror not such recharacterization ever were to occur) as security for the performanceby Sellers of all of Sellers’ obligations to Buyer hereunder and theTransactions entered into hereunder (“Repurchase Obligations”) andSeller-Related Obligations, each Seller hereby assigns, pledges and grants afirst priority security interest in all of its right, title and interest in, toand under the Purchased Items and the Purchased Assets to Buyer to secure the

 

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Repurchase Obligations and Seller-RelatedObligations, including, without limitation, the repayment of all amounts owingto Buyer hereunder. The assignment, pledge and grant of security interestcontained herein shall be, and each Seller hereby represents and warrants toBuyer that it is, a first priority perfected security interest. Each Selleragrees to mark its computer records and tapes to evidence the interests grantedto Buyer hereunder. All Purchased Items shall secure the payment of allobligations of Sellers now or hereafter existing under this Agreement as wellas Seller-Related Obligations, including, without limitation, Sellers’obligation to repurchase Purchased Assets, or if such obligation is sorecharacterized as a loan, to repay such loan, for the Repurchase Price and topay any and all other amounts owing to Buyer hereunder.

 

Section 6.03           Custodian of Purchased Items.  Pursuant to the Custodial Agreement, Custodianshall hold the Mortgage Files as exclusive bailee and agent for Buyer pursuantto the terms of the Custodial Agreement and shall deliver to Buyer Trust Receiptseach to the effect that Custodian has reviewed each Mortgage File in the mannerand to the extent required by the Custodial Agreement and identifying anydeficiencies in each such Mortgage File as so reviewed.

 

Section 6.04           Further Documentation.  At any time and from time to time, upon thewritten request of Buyer (which it may make in its sole discretion), and at thesole expense of Sellers, Sellers will promptly and duly execute and deliver, orwill promptly cause to be executed and delivered, such further instruments anddocuments and take such further action as Buyer may reasonably request for thepurpose of obtaining or preserving the full benefits of this Agreement and ofthe rights and powers herein granted, including, without limitation, the filingof any financing or continuation statements under the Uniform Commercial Codein effect in any jurisdiction with respect to the Liens created hereby. EachSeller also hereby authorizes Buyer to file any such financing or continuationstatement without the signature of any Seller to the extent permitted byapplicable law. A carbon, photographic or other reproduction of this Agreementshall be sufficient as a financing statement for filing in any jurisdiction.

 

Section 6.05           Proceeds.  (a) Allproceeds of Purchased Items received by Sellers consisting of cash, checks andsimilar items shall be deposited by Sellers into the collection and custodialaccounts maintained by [TBD] and held in trust, for the benefit of Buyer,segregated from other funds of Sellers, and shall forthwith upon receipt bySellers be turned over to Buyer for allocation by it as provided herein in theexact form received by Sellers (duly endorsed by Sellers to Buyer) and (b) anyand all such proceeds received by Buyer (whether from Sellers or otherwise)will be held by Buyer as collateral security for the Repurchase Obligations(whether matured or unmatured), such application to be in the order of priorityspecified in Section 10.02(f). For purposes hereof, proceeds shallinclude, but not be limited to, all principal and interest payments, allprepayments and payoffs, insurance claims, condemnation awards, sale proceeds,real estate owned rents and any other income and all other amounts receivedwith respect to the Purchased Items.

 

Any amounts received by Buyer as proceeds inexcess of amounts then due and owing to Buyer shall be applied as contemplatedin Article IV hereof.

 

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**ARTICLE VIIPAYMENT, TRANSFER AND CUSTODY**

 

Section 7.01           Payments to Buyer.  Unless otherwise mutually agreed in writing,all transfers of funds to be made by Sellers hereunder shall be made inDollars, in immediately available funds, without deduction, set-off orcounterclaim, to Buyer at the following account maintained by Buyer:

 
| BANK:               | The Bank of New York                                                  |
|---------------------|-----------------------------------------------------------------------|
| ABA:                | 021000018                                                             |
| For credit to:      | 890-0653-000                                                          |
| Account Name:       | THE BANK OF NEW YORK AS COLL AGT FOR UBS  REAL ESTATE SECURITIES INC. |
| Details of Payment: | Seller Name/Loan Number                                               |

 

not later than 4:00 p.m., New York Citytime, on the date on which such payment shall become due (and each such paymentmade after such time shall be deemed to have been made on the next succeedingBusiness Day). Each Seller acknowledges that it has no rights of withdrawalfrom the foregoing account.

 

Section 7.02           Ownership of Purchased Assets.

 

(a)           On the Purchase Date for each Transaction, ownership ofthe Purchased Assets shall be transferred to Buyer or its designee (includingCustodian) against the simultaneous transfer of the Purchase Price as set forthin the Custodial Agreement not later than 6:00 p.m., New York City time,simultaneously with the delivery to Custodian of the Purchased Assets (otherthan the related Mortgage Files for each Wet-Ink Mortgage Loan, which shall bedelivered no later than the fifth (5th) Business Day following the PurchaseDate) relating to each Transaction. Each Seller hereby sells, transfers,conveys and assigns to Buyer or its designee (including Custodian) all theright, title and interest of the related Seller in and to the Purchased Assetstogether with all right, title and interest in and to the proceeds of anyrelated Purchased Items. Notwithstanding the foregoing, the provisions of Section 2.06(g) shallgovern Rollover Transactions and shall apply in respect of any inconsistencybetween such provisions and the foregoing, and it is understood that no new oradditional deliveries or redeliveries to the Custodian shall be required inconnection with such Rollover Transactions (*provided*that this sentence shall not relieve Sellers of any obligation to comply withany unsatisfied or supplemental delivery obligations that otherwise may existin respect of Restatement Closing Date Mortgage Loans).

 

(b)           In connection with such sale, transfer, conveyance andassignment, in accordance with the requirements set forth in the CustodialAgreement, and subject to the last sentence of subsection (a) of this Section 7.02above, Sellers shall deliver or cause to be delivered and released to Buyer orits designee (including Custodian) (i) the Custodial IdentificationCertificate and (ii) the documents identified in the Custodial Agreement.

 

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(c)           Any Mortgage Files not delivered to Buyer or its designee(including Custodian) are and shall be held in trust by the related Seller orits designee for the benefit of Buyer as the owner thereof. Each Seller or itsdesignee shall maintain a copy of the Mortgage File and the originals of theMortgage File not delivered to Buyer or its designee (including Custodian). Thepossession of the Mortgage File by a Seller or its designee is at the will ofBuyer for the sole purpose of servicing the related Purchased Asset, and suchretention and possession by such Seller or its designee is in a custodialcapacity only. Each Mortgage File retained or held by a Seller or its designeeshall be segregated on such Seller’s books and records from the other assets ofsuch Seller or its designee and the books and records of such Seller shall bemarked appropriately to reflect clearly the sale of the related Purchased Assetto Buyer. Each Seller or its designee shall release its custody of the MortgageFile only in accordance with written instructions from Buyer, unless suchrelease is required as incidental to the servicing of the Purchased Assets oris in connection with a repurchase of any Purchased Asset by such Seller.

 

Section 7.03           Hypothecation or Pledge ofPurchased Assets.  Title to allPurchased Assets and Purchased Items shall pass to Buyer and Buyer shall havefree and unrestricted use of all Purchased Assets and Purchased Items, subjectto Sellers’ right to repurchase the Purchased Assets upon payment of theRepurchase Price and any other amounts due hereunder with respect thereto.Buyer may, in its sole discretion and without the consent of Sellers, engage inrepurchase transactions with the Purchased Assets or otherwise pledge,repledge, transfer, hypothecate, rehypothecate, or assign all of its right,title and interest or grant a security interest in any Purchased Assets sold bySellers hereunder and all rights of Buyer under this Agreement, the ElectronicTracking Agreement and/or the Custodial Agreement, in respect of such PurchasedAssets to Assignee. It is anticipated that such assignment to Assignee will bemade by Buyer, and each Seller hereby irrevocably consents to such assignment.No notice of such assignment shall be given by Buyer to Sellers. Nothingcontained in this Agreement shall obligate Buyer to segregate any PurchasedAssets delivered to Buyer by Sellers. In the event Buyer engages in arepurchase transaction with any of the Purchased Assets or otherwise pledges orhypothecates any of the Purchased Assets, Buyer shall have the right to assignto Buyer’s counterparty any of the applicable representations or warranties inSchedule 1 to this Agreement and the remedies for breach thereof, as theyrelate to the Purchased Assets that are subject to such repurchase transaction.

 

Section 7.04           UBS Cash Account.

 

(a)           Sellers hereby authorize and direct Buyer to create theUBS Cash Account. The UBS Cash Account shall be maintained by Buyer subject tothe terms and conditions of this Agreement. Buyer shall notify Sellers, viaelectronic or facsimile transmission, of the UBS Cash Account Balance on eachBusiness Day on which a Transaction occurs hereunder. Buyer’s provision toSellers of a computer link or similar electronic access to a website, databaseor analogous electronic data file or presentation that contains suchinformation shall be deemed to constitute compliance by Buyer with thenotification requirement of the preceding sentence.

 

(b)           Buyer shall credit the UBS Cash Account for (i) anydeposits therein by a Seller upon such Seller’s written direction pursuant to aWithdrawal/Deposit Notice; (ii)

 

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any Supplemental Amount for any Mortgage Loanupon the refunding to Buyer of the Disbursement Amount for such Mortgage Loanby the Settlement Agent upon any failure to apply the Disbursement Amount inconnection with the proposed funding of a Mortgage Loan; (iii) any creditpursuant to a UBS Cash Account Adjustment; and (iv) any UBS Cash AccountInterest Accruals.

 

(c)           Buyer shall debit the UBS Cash Account (but in no eventshall such debit result in a UBS Cash Account Balance of less than zero) for (i) anywithdrawals therefrom by a Seller upon such Seller’s written direction pursuantto a Withdrawal/Deposit Notice (*provided*,that no such withdrawals by a Seller shall be permitted on and after theRestatement Closing Date); (ii) in Buyer’s discretion, any amounts(including fees, expenses or indemnity amounts) due Buyer and payable bySellers under any Repurchase Document; (iii) the Supplemental Amount forany Mortgage Loan upon payment of the Disbursement Amount for such MortgageLoan to Settlement Agent; and (iv) any debit pursuant to a UBS CashAccount Adjustment.

 

(d)           So long as an Event of Default shall not have occurred andbe continuing hereunder, Buyer agrees to debit the UBS Cash Account pursuant toa UBS Cash Account Adjustment in the event that available Income that shall beapplied for such purpose pursuant to the terms hereof, plus any additionalamounts paid by Seller to Buyer for such purpose, shall be insufficient to paythe Repurchase Price for any terminating Transaction (net of any Purchase Priceowed by Buyer for any new Transaction) when such amounts become due and payablehereunder, with such debit to be in the amount of such insufficiency. Seller’sentitlement to such debit, to the extent sufficient UBS Cash Account Balance isavailable in respect thereof, shall be treated as satisfaction of acorresponding amount of Repurchase Price payable by Seller when due hereunder.

 

(e)           Upon termination of this Agreement and payment in full ofall obligations owing by Sellers hereunder and under the Repurchase Documents,Buyer shall remit to Sellers the UBS Cash Account Balance.

 

(f)            Each Seller hereby confirms and agrees that to secureSellers’ obligations under this Agreement, it hereby grants to Buyer a firstpriority continuing security interest in and to the UBS Cash Account and allproceeds (as defined in the UCC) of such account. Each Seller further agreesthat Buyer may issue “entitlement orders” (within the meaning of Section 8-102(a)(8) ofthe UCC) or other instructions from Buyer, including, without limitation,directing the transfer or redemption of any financial asset credited to, or thedisposition of funds held in, the UBS Cash Account for application against anyobligations in such order as Buyer shall determine in its sole discretion. Itis hereby acknowledged and agreed that Buyer is exercising exclusive controlover the UBS Cash Account.

 

Section 7.05           Takeout Commitments.  In connection with any sales by Sellers of MortgageLoans pursuant to Takeout Commitments, in connection with the formation of amortgage pool supporting a mortgage-backed security, or otherwise, Sellersshall cause there to be remitted to Buyer, on the date of such sale, the entireprincipal balance, interest and premium portion of the purchase price paid bythe buyers under such Takeout Commitments or otherwise

 

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so generated by the sale, which shall be paiddirectly by such buyer to Buyer. Buyer shall credit to the UBS Cash Account asan increase in the UBS Cash Account Balance, any excess in the amount soreceived over the amount then due Buyer, and shall release its right, interestand title in such Mortgage Loans and the outstanding principal balance of theMortgage Loan(s) shall be adjusted accordingly.

 

**ARTICLE VIIISELLERS’ REPRESENTATIONS**

 

Each Sellerrepresents and warrants to Buyer that as of each Purchase Date for the purchaseof any Purchased Assets by Buyer from Sellers and as of the date of thisAgreement and any Transaction hereunder and at all times while the RepurchaseDocuments and any Transaction hereunder is in full force and effect (and ineach case subject to matters described and addressed in a certain letteragreement among the parties executed as of the Restatement Closing Date):

 

Section 8.01           Nature of Transfers.  Neither the Repurchase Documents nor anyTransaction thereunder are entered into in contemplation of insolvency or withintent to hinder, delay or defraud any of Sellers’ creditors. The transfer ofthe Mortgage Loans subject hereto and the obligation to repurchase suchMortgage Loans is not undertaken with the intent to hinder, delay or defraudany of Sellers’ creditors.

 

Section 8.02           No Broker.  NoSeller has dealt with any broker, investment banker, agent, or other person,except for Buyer, who may be entitled to any commission or compensation inconnection with the sale of Purchased Assets pursuant to this Agreement.

 

Section 8.03           Ability to Perform.  No Seller believes, nor does it have anyreason or cause to believe, that it cannot perform each and every covenantcontained in the Repurchase Documents applicable to it to which it is a party.

 

Section 8.04           No Defaults.  Except as described and addressed in a certainletter agreement among the parties executed as of the Restatement Closing Date,no Default has occurred and is continuing hereunder and no Event of Default hasoccurred hereunder.

 

Section 8.05           Legal Name; Existence.  The legal name of each Seller is as set forthin the signature line of this Agreement. All names of each Seller since itsincorporation and all trade names, fictitious names, assumed names or “doingbusiness as” names that each Seller has used are as set forth in Schedule 3 tothis Agreement; and each of the Sellers (a) is a corporation dulyorganized, validly existing and in good standing under the laws of thejurisdiction of its organization; (b) has all requisite corporate or otherpower, and has all governmental licenses, authorizations, consents andapprovals necessary to own its assets and carry on its business as now being oras proposed to be conducted, except where the lack of such licenses,authorizations, consents and approvals would not be reasonably likely to have aMaterial Adverse Effect; and (c) is qualified to do business and is ingood standing in all other jurisdictions in which the nature of the businessconducted by it makes such qualification necessary, except where failure so toqualify would not be reasonably likely (either individually or in theaggregate) to have a Material Adverse Effect.

 

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Section 8.06           FinancialCondition.  Each Seller hasheretofore furnished to Buyer a copy of the most recent financial statements ofeach Seller. All such financial statements are complete and correct and fairlypresent, in all material respects, the financial condition of each Seller, andthe results of their respective operations as at the dates and for such periodsas are referenced therein, all in accordance with GAAP applied on a consistentbasis. Since the date of such financial statements no Material Adverse Effecthas occurred with respect to the business, operations or financial condition ofany Seller taken as a whole from that set forth in the applicable financialstatements.

 

Section 8.07           Litigation. Other than as disclosed on Schedule 5hereto, there are no actions, suits, arbitrations, investigations (including,without limitation, to the best of Sellers’ knowledge, any of the foregoingwhich are pending or threatened) or other legal or arbitral proceedings(individually and collectively, whether pending or threatened, “Disputes”)affecting any Seller or any of their respective Subsidiaries or affecting anyof their Property before any Governmental Authority that question or challengethe validity or enforceability of any of the Repurchase Documents or any actionto be taken in connection with the transactions contemplated hereby (in theevent any Seller is a publicly held company) which requires filing with theSecurities and Exchange Commission in accordance with the 1934 Act or any rules thereunder.In addition, there is no Dispute affecting any Seller that (i) is of akind not referred to in the preceding sentence; (ii) has arisen other thanin the ordinary course of business of such Seller and is reasonably likely tobe determined adversely to such Seller; and (iii) if so determined, wouldbe reasonably likely, either individually or together with any other Disputecovered by clauses (i) through (ii) of this sentence, to have aMaterial Adverse Effect on the ability of any such Subsidiary to perform any ofits obligations under any of the Repurchase Documents. Neither Sellers nor anyof their respective Subsidiaries are (i) in violation of any applicablelaw which violation materially, adversely affects or may reasonably be expectedto materially, adversely affect the business, operations, properties, assets orcondition (financial or otherwise) of any Seller or such Subsidiary, or (ii) subjectto or in default with respect to any final judgment, writ, injunction, decree, rule orregulation of any court or federal, state, municipal or other governmentaldepartment, commission, board, bureau, agency or instrumentality, domestic orforeign, which would have a Material Adverse Effect on the business,operations, properties, assets or condition (financial or otherwise) of anySeller or such Subsidiary.

 

Section 8.08           NoBreach.  Neither (a) theexecution and delivery of the Repurchase Documents nor (b) theconsummation of the transactions therein contemplated in compliance with theterms and provisions thereof will (i) conflict with or result in a breachof the charter or by-laws of any Seller, or any applicable law, rule orregulation, or any order, writ, injunction or decree of any GovernmentalAuthority, or any Sub-Servicing Agreement or other material agreement orinstrument to which any Seller, or any of their Subsidiaries is a party or bywhich any of them or any of their Property is bound or to which any of them issubject; (ii) constitute a default under any such material agreement orinstrument or result in the creation or imposition of any Lien upon anyProperty of a Seller, or any of their Subsidiaries pursuant to the terms of anysuch agreement or instrument; or (iii) constitute an event of default oran event which, solely with the passage of time and which is not amenable tocure, would constitute an event of default under (x) any other FinancingFacilities or (y) any other agreement, the breach of which would likelyhave a Material Adverse Effect.

 

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Section 8.09           Action. Each Seller has all necessary corporateor other power, authority and legal right to execute, deliver and perform itsobligations under each of the Repurchase Documents; the execution, delivery andperformance by each Seller of each of the Repurchase Documents have been dulyauthorized by all necessary corporate or other action on its part; and eachRepurchase Document has been duly and validly executed and delivered by eachSeller, as applicable and constitutes a legal, valid and binding obligation ofsuch Seller, as applicable enforceable against such party in accordance withits terms, subject as to enforceability to applicable bankruptcy,reorganization, insolvency, moratorium or other laws affecting creditors’rights generally and to general principles of equity (regardless of whetherenforcement is sought in a proceeding in equity or at law).

 

Section 8.10           Approvals. No authorizations, approvals or consentsof, and no filings or registrations with any Governmental Authority or anysecurities exchange are necessary for the execution, delivery or performance bySellers of the Repurchase Documents or for the legality, validity orenforceability thereof, including, without limitation, any approvals orconsents from the Office of Thrift Supervision, the National Credit UnionAdministration, the Federal Deposit Insurance Corporation or other federalagency, except for filings and recordings in respect of the Liens createdpursuant to the Repurchase Documents. The transfers, assignments andconveyances provided for herein and therein are not subject to the bulktransfer or any similar statutory provisions in effect in any applicablejurisdiction.

 

Section 8.11           MarginRegulations.  Neither any Transactionhereunder, nor the use of the proceeds thereof, will violate or be inconsistentwith the provisions of Regulation T, U or X.

 

Section 8.12           Taxes. Each Seller and its respectiveSubsidiaries have filed all Federal income tax returns and all other materialtax returns that are required to be filed by them and have paid all taxes duepursuant to such returns or pursuant to any assessment received by it or itsSubsidiaries, except for any such taxes as are being appropriately contested ingood faith by appropriate proceedings diligently conducted and with respect towhich adequate reserves have been established in accordance with GAAP. Thecharges, accruals and reserves on the books of each Seller and its Subsidiariesin respect of taxes and other governmental charges are, in the opinion of suchSeller, adequate.

 

Section 8.13           InvestmentCompany Act and Holding Company Compliance.  None of the Sellers nor any of theirSubsidiaries is (a) an “investment company”, or a company “controlled” byan “investment company,” within the meaning of the Investment Company Act of1940, as amended, or (b) is a “holding company” as defined in, or subjectto recognition under the Public Utility Holding Company Act of 1935.

 

Section 8.14           PurchasedAssets.

 

(a)           NoSeller has assigned, pledged, or otherwise conveyed or encumbered any MortgageLoan or any Purchased Items to any other Person, and immediately prior to thesale of such Mortgage Loan or any other Purchased Items to Buyer, the relatedSeller was the sole owner of such Mortgage Loan or such other Purchased Itemsand had good and marketable title thereto, free and clear of all Liens, in eachcase except for Liens to

 

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be released simultaneously with the sale to Buyerhereunder. In no event has any Wet-Ink Mortgage Loan been subject to a priorLien;

 

(b)           Theprovisions of this Agreement are effective to either constitute a sale ofPurchased Items to Buyer or to create in favor of Buyer a valid securityinterest in all right, title and interest of Sellers in, to and under thePurchased Items;

 

(c)           Uponreceipt by Custodian of each Mortgage Note, endorsed in blank in accordancewith the provisions of the Custodial Agreement, either a purchase shall havebeen completed by Buyer of such Mortgage Note on or prior to such date or Buyershall have a valid and fully perfected first priority security interest in suchMortgage Note and in such Seller’s interest in the related Mortgaged Property;

 

(d)           Uponthe filing of financing statements on Form UCC-1 naming Buyer as “SecuredParty”, each Seller as a “Debtor” and describing the Purchased Items, in thejurisdictions and recording offices listed on Exhibit IV attached hereto,the security interests granted hereunder in the Purchased Items will constitutefully perfected security interests under the Uniform Commercial Code in allright, title and interest of Sellers in, to and under such Purchased Items,which can be perfected by filing under the Uniform Commercial Code;

 

(e)           Uponexecution and delivery of the Repurchase Documents, Buyer shall either be theowner of, or have a valid and fully perfected first priority security interestin, all funds in the collection and custodial accounts.

 

Section 8.15           Location of Chief ExecutiveOffices.  The chief executive officesof IFC are located at 19500 Jamboree Road, Irvine, California 92612; the chiefexecutive offices of IMH are located at 19500 Jamboree Road, Irvine, California92612; and the chief executive offices of IWLG are located at 19500 JamboreeRoad, Irvine, California 92612.

 

Section 8.16           Location of Books and Records. The location where each Seller keeps itsbooks and records, including all computer tapes and records related to thePurchased Items, are its respective chief executive offices.

 

Section 8.17           Other Financing Facilities.  No defaults or events of default exist underany Other Financing Facilities. No additional Other Financing Facilities havebeen entered into on or after the Restatement Closing Date without the priorconsent of Buyer (not to be unreasonably withheld).

 

Section 8.18           True and Complete Disclosure.  The information, reports, financialstatements, exhibits and schedules furnished in writing by or on behalf ofSellers as applicable to Buyer in connection with the negotiation, preparationor delivery of this Agreement and the other Repurchase Documents or includedherein or therein or delivered pursuant hereto or thereto, do not and will notcontain any untrue statement of material fact or omit to state any materialfact necessary to make the statements herein or therein, in light of thecircumstances under which they were made, not misleading. All writteninformation furnished after the date hereof by or on behalf of each Seller toBuyer in connection with this Agreement and the other Repurchase Documents andthe transactions contemplated hereby and thereby will be true, complete and

 

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accurate in every material respect, or (in the case ofprojections) based on reasonable estimates, on the date as of which suchinformation is stated or certified. There is no fact known to a ResponsibleOfficer of any of the Sellers, after due inquiry, that could reasonably beexpected to have a Material Adverse Effect that has been disclosed herein, inthe other Repurchase Documents or in a report, financial statement, exhibit,schedule, disclosure letter or other writing furnished to Buyer for use inconnection with the transactions contemplated hereby or thereby. Since thefurnishing of such documents or information, there has been no change, nor anydevelopment or event involving a prospective change that would render any ofsuch documents or information untrue or misleading in any material respect.

 

Section 8.19           Reserved.

 

Section 8.20           ERISA.  Each Plan to which any Seller or any of theirrespective Subsidiaries make direct contributions, and, to the knowledge ofeach of the Sellers, each other Plan and each Multiemployer Plan, is incompliance in all material respects with, and has been administered in all materialrespects in compliance with, the applicable provisions of ERISA, the Code andany other Federal or State law. No event or condition has occurred and iscontinuing as to which any Seller would be under an obligation to furnish areport to Buyer under Section 9.01(f).

 

Section 8.21           No Fraud.  The Repurchase Documents and each sale of aMortgage Loan have not been and will not be entered into fraudulently bySellers, or with the intent to hinder, delay or defraud any of Sellers’creditors or Buyer.

 

Section 8.22           Anti-Money Laundering Law.  Sellers have complied with all applicableanti-money laundering laws and regulations, including, without limitation, theUSA Patriot Act of 2001 (collectively, the “Anti-Money Laundering Laws”);each Seller has established an anti-money laundering compliance program asrequired by the Anti-Money Laundering Laws, have conducted the requisite duediligence in connection with the origination of each Mortgage Loan for purposesof the Anti-Money Laundering Laws, including with respect to the legitimacy ofthe applicable Mortgagor and the origin of the assets used by the saidMortgagor to purchase the property in question, and maintain, and willmaintain, sufficient information to identify the applicable Mortgagor for purposesof the Anti-Money Laundering Laws. No Mortgage Loan is subject to nullificationpursuant to Executive Order 13224 (the “Executive Order”) or theregulations promulgated by the Office of Foreign Assets Control of the UnitedStates Department of the Treasury (the “OFAC Regulations”) or inviolation of the Executive Order or the OFAC Regulations, and no Mortgagor issubject to the provisions of such Executive Order or the OFAC Regulations norlisted as a “blocked person” for purposes of the OFAC Regulations.

 

Section 8.23           Consideration.  The consideration received by Sellers upon thesale of each Mortgage Loan will constitute reasonably equivalent value and fairconsideration for the ownership interest in each Mortgage Loan.

 

Section 8.24           Reserved.

 

Section 8.25           Reserved.

 

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Section 8.26           ClosingInstruction Letter.  As of eachPurchase Date in respect of a Closing Transaction, (i) with respect to theSettlement Agent Wire Instructions, the related Seller received suchinstructions on the letterhead of the Settlement Agent and such instructionsare true and correct and (ii) the related Seller has inserted the ClosingInstruction Letter Insert in each Closing Instruction Letter for all Wet-InkMortgage Loans and Dry Fundings structured as Closing Transactions.

 

Section 8.27           NoAdverse Selection.  No Seller hasselected the Purchased Assets in a manner so as to adversely affect theinterests of Buyer.

 

Section 8.28           Sellers’Representations and Warranties.  Allrepresentations and warranties made and all information (including, withoutlimitation, any financial information concerning Sellers) and documents orcopies of documents furnished by Sellers to Buyer pursuant to or in connectionwith this Agreement are and will be true and correct at the time when made andat all times thereafter or, if limited to a specific date, as of the date towhich they refer.

 

Section 8.29           UCCFinancing Statements.  Upon thefiling of financing statements on Form UCC-1 naming Buyer as “SecuredParty”, each Seller as a “Debtor” and describing the Mortgage Loans, in thejurisdictions and recording offices listed on Exhibit VII attached hereto,the security interests granted hereunder in the Mortgage Loans will constitutefully perfected security interests under the Uniform Commercial Code in allright, title and interest of each Seller in, to and under such Mortgage Loans,which can be perfected by filing under the Uniform Commercial Code.

 

Section 8.30           TradeNames.  No Seller has used any tradename or assumed name, except as provided in Schedule 3.

 

Section 8.31           Mergeror Acquisition.  Except for theacquisition of certain of the assets of Pinnacle Financial Corporation, noSeller has merged with, or acquired all or substantially all of the assets of,any other person or entity within the immediately preceding 12 months.

 

Section 8.32           Custodian. Custodian is an eligible custodian underthe Agency Guide and Agency Program.

 

Section 8.33           ValidSale and Conveyance.  This Agreementconstitutes a valid sale, assignment, transfer and conveyance to Buyer of allright, title, and interest of Sellers in, to and under the Purchased Assetsenforceable against all creditors of and purchasers from Sellers, and thePurchased Assets will be held by Buyer free and clear of any Lien of any Personclaiming through or under Sellers, except for Liens permitted under, or to becreated by this Agreement.

 

Section 8.34           ValidBusiness Reasons.  Each Seller hasvalid business reasons for selling its interests in the Purchased Assets ratherthan obtaining a loan with the Purchased Assets as collateral.

 

Section 8.35           Reserved.

 

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Section 8.36           Servicing Capabilities.  Each Seller (and Servicer) has adequatefinancial standing, servicing facilities, procedures and experienced personnelnecessary for the sound servicing of mortgage loans of the same types as mayfrom time to time constitute Mortgage Loans and in accordance with AcceptedServicing Practices.

 

Section 8.37           IMH’s Ownership of Sellers.  As of the Closing Date and the RestatementClosing Date of this Agreement, IMH owns, either directly or indirectly, onehundred percent (100%) of the voting equity interest of IFC and IWLG.

 

The representations andwarranties of Sellers in this Article VIII and Schedule 1 are unaffectedby and supersede any provision in any endorsement of any Mortgage Loan or inany assignment with respect to such Mortgage Loan to the effect that suchendorsement or assignment is without recourse or without representation orwarranty.

 

**ARTICLE IXCOVENANTS OF SELLERS**

 

On and as of the Closing Date,the Restatement Closing Date and each Purchase Date and until this Agreement isno longer in force with respect to any Transaction, each Seller covenants thatit will (and in each case subject to matters described and addressed in acertain letter agreement among the parties executed as of the RestatementClosing Date):

 

Section 9.01           Financial Statements.  Sellers shall deliver to Buyer:

 

(a)           assoon as available and in any event within forty-five (45) calendar days afterthe end of each quarter, the unaudited quarterly consolidated balance sheets ofIMH and its consolidated Subsidiaries, as at the end of such period and therelated unaudited consolidated statements of income and retained earnings andof cash flows for IMH and its consolidated Subsidiaries for such month and theportion of the fiscal year through the end of such month, setting forth, ineach case, in comparative form the figures for the previous year or month,accompanied by a certificate of a Responsible Officer of IMH, which certificateshall state that said consolidated financial statements fairly present in allmaterial respects the consolidated financial condition and results of operationsof Sellers and their respective consolidated Subsidiaries in accordance withGAAP, consistently applied, as of the end of, and for, such quarter (subject tonormal year-end audit adjustments);

 

(b)           assoon as available and in any event within ninety (90) days after the end ofeach fiscal year of IMH, the consolidated balance sheets of IMH and itsconsolidated Subsidiaries as at the end of such fiscal year and the relatedconsolidated statements of income and retained earnings and of cash flows forIMH and its consolidated Subsidiaries for such year, setting forth, in eachcase, in comparative form the figures for the previous year, accompanied by anopinion thereon of independent certified public accountants of recognizednational standing, which opinion shall not be qualified as to scope of audit orgoing concern and shall state that said consolidated financial statementsfairly present in all material respects the consolidated financial conditionand results of operations of IMH and its consolidated Subsidiaries as at theend of, and for, such fiscal year in accordance

 

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with GAAP, and a certificate of such accountants statingthat, in making the examination necessary for their opinion, they obtained no knowledge,except as specifically stated, of any Default or Event of Default;

 

(c)           onthe last Business Day of each fiscal quarter (or at any time upon Buyer’srequest), a report, in a form acceptable to Buyer, detailing the Interest RateProtection Agreements entered into by Sellers (if any). Additionally, withintwenty (20) days after the end of each month, together with the reportdescribed above, Sellers shall deliver to Buyer (i) a certification froman officer and financial officer of each Seller in the form attached hereto as Exhibit V-C(which may be provided jointly for any other agreements entered into betweenBuyer and Sellers), (ii) monthly unaudited consolidated financialstatements and balance sheets, and (iii) if requested by Buyer, a pipelinereport and/or a hedge position report;

 

(d)           promptlyupon receipt thereof, a copy of each other report submitted to each Seller byits independent public accountants in connection with any annual, interim orspecial audit of each Seller;

 

(e)           fromtime to time such other information regarding the financial condition,operations, or business of each Seller as Buyer may reasonably request; and

 

(f)            assoon as reasonably possible, and in any event within thirty (30) days after aResponsible Officer of a Seller knows, or with respect to any Plan orMultiemployer Plan to which a Seller or any of its respective Subsidiariesmakes direct contributions, has reason to believe, that any of the events orconditions specified below with respect to any Plan or Multiemployer Plan hasoccurred or exists, a statement signed by a senior financial officer of suchSeller setting forth details respecting such event or condition and the action,if any, that such Seller or its ERISA Affiliate, as applicable proposes to takewith respect thereto (and a copy of any report or notice required to be filedwith or given to PBGC by such Seller, as applicable or an ERISA Affiliate withrespect to such event or condition):

 

(i)            any reportable event, as defined in Section 4043(c) ofERISA or any successor provision thereof and the regulations issued thereunder,with respect to a Plan, as to which PBGC has not by regulation waived therequirement of Section 4043(a) of ERISA that it be notified withinthirty (30) days of the occurrence of such event (provided that a failure tomeet the minimum funding standard of Section 412 of the Code or Section 302of ERISA or any successor provision thereof, including, without limitation, thefailure to make on or before its due date a required installment under Section 412(m) ofthe Code or Section 302(e) of ERISA or any successor provisionthereof, shall be a reportable event regardless of the issuance of any waiversin accordance with Section 412(d) of the Code or any successorprovision thereof); and any request for a waiver under Section 412(d) ofthe Code or any successor provision thereof for any Plan;

 

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(ii)           the distribution under Section 4041(c) of ERISAor any successor provision thereof of a notice of intent to terminate any Planor any action taken by any Seller or an ERISA Affiliate to terminate any Plan;

 

(iii)          the institution by PBGC of proceedings under Section 4042of ERISA or any successor provision thereof for the termination of, or theappointment of a trustee to administer, any Plan, or the receipt by any Selleror any ERISA Affiliate of a notice from a Multiemployer Plan that such actionhas been taken by PBGC with respect to such Multiemployer Plan;

 

(iv)          the complete or partial withdrawal from a MultiemployerPlan by any Seller or any ERISA Affiliate that results in liability under Section 4201or 4204 of ERISA or any successor provision thereof (including the obligationto satisfy secondary liability as a result of a purchaser default) or thereceipt by any Seller or any ERISA Affiliate of notice from a MultiemployerPlan that it is in reorganization or insolvency pursuant to Section 4241or 4245 of ERISA or any successor provision thereof that it intends toterminate or has terminated under Section 4041A of ERISA or any successorprovision thereof;

 

(v)           the institution of a proceeding by a fiduciary of anyMultiemployer Plan against any Seller or any ERISA Affiliate to enforce Section 515of ERISA or any successor provision thereof, which proceeding is not dismissedwithin 30 days; and

 

(vi)          the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29)of the Code or Section 307 of ERISA or any successor provision thereof,would result in the loss of tax-exempt status of the trust of which such Planis a part if any Seller or an ERISA Affiliate fails to provide timely securityto such Plan in accordance with the provisions of said Sections.

 

Section 9.02           Litigation.  Each Seller will promptly, and in any eventwithin thirty (30) days after service of process on any of the following, giveto Buyer notice of all litigation, actions, suits, arbitrations, investigations(including, without limitation, any of the foregoing which are pending orthreatened) or other legal or arbitral proceedings affecting Sellers or any oftheir respective Subsidiaries or any of their respective Property before anyGovernmental Authority that (i) questions or challenges the validity orenforceability of any of the Repurchase Documents or any action to be taken inconnection with the transactions contemplated hereby or thereby; (ii) makesa claim or claims in an aggregate amount greater than $1,000,000; and (iii) which,individually or in the aggregate is reasonably likely to be determinedadversely to any Seller, or any of their Subsidiaries and, if so determined,would be reasonably likely to have a Material Adverse Effect, or (iv) requiresfiling with the Securities and Exchange Commission in accordance with the 1934Act and any rules thereunder.

 

Section 9.03           Existence,etc.  Each Seller will:

 

(a)           preserveand maintain its legal existence and all of its material rights, privileges,licenses and franchises necessary for the operation of its business (provided

 

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that nothing in this Section 9.03 shall prohibit anytransaction expressly permitted under Section 9.08);

 

(b)           complywith the requirements of all applicable laws, rules, regulations and orders ofGovernmental Authorities (including, without limitation, all environmentallaws) if failure to comply with such requirements could be reasonably likely(either individually or in the aggregate) to have a Material Adverse Effect;

 

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

 

(d)           not(i) move its chief executive office from the address referred to in Section 8.15,(ii) cause or permit any change to be made in its name, identity orcorporate structure, each as described in Section 8.05 or (iii) changeits name, jurisdiction of organization, unless it shall have provided Buyerthirty (30) days’ prior written notice of such change and shall have firsttaken all action required by Buyer for the purpose of perfecting or protectingthe lien and security interest of Buyer established hereunder;

 

(e)           payand discharge all taxes, assessments and governmental charges or levies imposedon it or on its income or profits or on any of its Property prior to the dateon which penalties attach thereto, except for any such tax, assessment, chargeor levy the payment of which is being contested in good faith and by properproceedings and against which adequate reserves are being maintained inconformity with GAAP; *provided that*this shall not include the payment of any Mortgagor or Mortgaged Propertytaxes, assessments, governmental charges or levies; and

 

(f)            permitrepresentatives of Buyer, upon reasonable notice (unless a Default shall haveoccurred and is continuing, in which case, no prior notice shall be required),during normal business hours, to examine, copy and make extracts from its booksand records, to inspect any of its Properties, and to discuss its business andaffairs with its officers, all to the extent reasonably requested by Buyer.

 

Section 9.04           Prohibitionof Fundamental ChangesWithout the prior written consent of Buyer, whichshall not be unreasonably withheld, no Seller and no Subsidiary or affiliate ofany Seller (any, a “Seller Entity”) shall (a) liquidate, wind up or dissolveitself (or suffer any liquidation, winding up or dissolution); (b) sell,assign, convey, transfer or otherwise dispose of (whether in one transaction ora series of transactions) all or any substantial part of such Seller Entity’sbusiness or assets, whether now owned or acquired after the date of thisAgreement without the prior written consent of Buyer, excluding sales ofmortgage loans or securities in the ordinary course of such Seller Entity’sbusiness; (c) cease to actively engage in the business of originating,acquiring or servicing Mortgage Loans or any other material change in thenature or scope of the business in which such Seller Entity is engaged as ofthe Restatement Closing Date.

 

Section 9.05           Reserved.

 

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Section 9.06           Notices. Each Seller shall give notice to Buyer:

 

(a)           promptlyupon receipt of notice or knowledge of the occurrence of any Default or Eventof Default;

 

(b)           withrespect to any Purchased Asset hereunder, promptly upon receipt of notice orknowledge that the underlying Mortgaged Property has been damaged by waste,fire, earthquake or earth movement, windstorm, flood, tornado or othercasualty, or otherwise damaged so as to materially adversely affect the valueof such Purchased Asset;

 

(c)           promptlyupon receipt of notice or knowledge of (i) any default related to anyPurchased Item, (ii) any Lien or security interest on, or claim assertedagainst, any Purchased Item or (iii) any event or change in circumstanceswhich could reasonably be expected to have a Material Adverse Effect;

 

(d)           promptlyupon any material change with respect to any Seller’s business operations,assets or financial condition, which could reasonably be expected to have aMaterial Adverse Effect;

 

(e)           promptlyupon the loss of real estate investment trust (“REIT”) or real estatemortgage investment conduit (“REMIC”) status of any Seller or anySubsidiary of any Seller that is a REIT or a REMIC;

 

(f)            promptlyupon the occurrence of any event of default under any Other Financing Facility;

 

(g)           upon(i) each Seller’s dismissal of any of its Executives, or (ii) anyExecutives’ departure from the employ of any Seller for any other reasonwhatsoever, or (iii) any termination, or material (determined in Buyer’s reasonablecommercial judgment) diminution or variance (which diminution or variancesubstantially reduces the time the Executives can allot to the related Seller’smortgage sale and/or finance program) by such Seller of any Executive’s currentmanagerial capacities or responsibilities; in addition, Sellers shall keepBuyer reasonably well-informed as to the identity of other personnel involvedin Sellers’ warehouse borrowing, secondary marketing, and servicing functions;and

 

(h)           uponany material amendment to any Other Financing Facility, any decrease in thegross amount available to be borrowed thereunder, or any change in custodian orcustodial arrangements relating thereto. Notwithstanding anything to thecontrary contained herein, in no event shall Sellers be required to discloseinformation that Sellers deem confidential in connection with this requirement(including, without limitation, information relating to pricing, fees, advancerates and sub-limits, but excluding the identity of the counterparty, facilitylimit and any amendment to financial covenants).

 

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Each notice pursuant to this Section shall beaccompanied by a statement of a Responsible Officer of the related Sellersetting forth details of the occurrence referred to therein and stating whataction such Seller has taken or proposes to take with respect thereto.

 

Section 9.07           Reserved.

 

Section 9.08           Transactionswith Affiliates.  No Seller willenter into any transaction, including, without limitation, any purchase, sale,lease or exchange of Property or the rendering of any service, with anyAffiliate unless such transaction is (a) otherwise permitted under thisAgreement or the other Repurchase Documents; (b) in the ordinary course ofsuch Seller’s business; and (c) upon fair and reasonable terms no lessfavorable to such Seller than it would obtain in a comparable arm’s lengthtransaction with a Person which is not an Affiliate, or make a payment that isnot otherwise permitted by this paragraph to any Affiliate.

 

Section 9.09           Limitationon Liens.  Immediately upon notice ofa Lien or any circumstance which could give rise to a Lien on the PurchasedItems, Sellers will defend the Purchased Items against, and will take suchother action as is necessary to remove, any Lien, security interest or claim onor to the Purchased Items (other than any security interest created orpermitted under this Agreement), and Sellers will defend the right, title andinterest of Buyer in and to any of the Purchased Items against the claims anddemands of all persons whomsoever.

 

Section 9.10           Limitationon Guarantees and Other Indebtedness.  No Seller shall create, incur, assume orsuffer to exist any Guarantees by any of them of the obligations of others, inexcess of $100,000 in the aggregate, except as otherwise listed on Schedule 2hereto. As used in this Section, a “Guarantee” shall not include a guarantee byone or more Sellers of an obligation (including a capitalized lease obligation)of one or more other Sellers or any of their respective Subsidiaries.

 

Section 9.11           Limitationon Distributions.  Sellers shall notmake any payment on account of, or set apart assets for, a sinking or otheranalogous fund for the purchase, redemption, defeasance, retirement or otheracquisition of any equity interest of any Seller, whether now or hereafteroutstanding, or make any other distribution or pay any dividends in respectthereof, either directly or indirectly, whether in cash or property or inobligations of such Seller, except when no Event of Default exists or wouldresult from such distribution.

 

Section 9.12           Reserved.

 

Section 9.13           Reserved.

 

Section 9.14           Servicer. Sellers shall not cause the MortgageLoans to be interim serviced by any servicer other than the Servicer or aSub-Servicer or other servicer expressly approved in writing by Buyer.

 

Section 9.15           Reserved.

 

Section 9.16           Reserved.

 

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Section 9.17           Required Filings.  Sellers shall promptly provide Buyer with copiesof all documents which Sellers, or any of their respective Affiliates, isrequired to file with the Securities and Exchange Commission or anyGovernmental Authority which may be substituted therefor in accordance with theSecurities and Exchange Act of 1934 or any rules thereunder; *provided that* Sellers shall not berequired to provide Buyer with filings of a standard nature relating to theissuance of securities under a REMIC or similar pass-through trust.

 

Section 9.18           Reserved.

 

Section 9.19           Custodial Agreement.  Sellers shall maintain the CustodialAgreement in full force and effect and shall neither amend or modify suchagreements nor waive compliance with any provisions thereunder without theprior written consent of Buyer.

 

Section 9.20           Reserved.

 

Section 9.21           Inconsistent Agreements.  Sellers shall not, nor permit any of theirSubsidiaries to, directly or indirectly, enter into any agreement containingany provision which would be violated or breached by any Transaction hereunderor by the performance by Sellers of their obligations under any RepurchaseDocument.

 

Section 9.22           Escrow Imbalance.  Sellers shall, no later than five (5) BusinessDays after learning (from any source) of any material imbalance in any escrowaccount, notify Buyer of such imbalance and upon request of Buyer will delivera copy of the monthly report with respect to escrow balances to Buyer.

 

Section 9.23           Servicing Termination Fees.  Upon any exercise of Buyer’s right toterminate the Servicer of Purchased Assets following an Event of Default,Sellers shall pay any and all fees and expenses (including reasonable attorneysfees and expenses) required to terminate the Servicer and to effectuate thetransfer of servicing to the designee of Buyer.

 

Section 9.24           Delivery of Servicing Records. With respect to the Servicing Records ofeach Mortgage Loan, Sellers shall deliver or shall cause the Servicer todeliver such Servicing Records to the designee of Buyer, within thirty (30)days of a Purchase Date, unless otherwise stated in writing by Buyer; *provided that* on each Repurchase Date forwhich a Mortgage Loan is subject to a new Transaction, such deliveryrequirement is deemed restated for such new Transaction (and the immediatelypreceding delivery requirement is deemed to be rescinded) in the absence ofdirections to the contrary from Buyer, and a new 30-day period is deemed tocommence as of such Repurchase Date. Sellers’ transfer of the Servicing Recordsunder this Section shall be in accordance with customary standards in theindustry.

 

Section 9.25           Independence of Covenants.  All covenants hereunder shall be givenindependent effect so that if a particular action or condition is not permittedby any of such covenants, the fact that it would be permitted by an exceptionto, or be otherwise within the limitations of, another covenant shall not avoidthe occurrence of an Event of Default or Default if such action is taken orcondition exists.

 

Section 9.26           Reserved.

 

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Section 9.27           ClosingLetter.  Sellers shall, with respectto each Mortgage Loan, cause the paragraphs set forth on Exhibit XIVannexed hereto to be inserted into each closing letter or other similaragreement with the Settlement Agent for such Mortgage Loan, and shall, upon therequest of Buyer, fax a copy of such closing letter to Buyer prior to theclosing of such Mortgage Loan.

 

Section 9.28           MonthlyReport.  Upon request, Sellers shallprovide Buyer with a monthly report, which report shall include, among otheritems, a summary of Sellers’ delinquency and loss experience with respect tomortgage loans serviced by Sellers, Servicer or any designee of either, withrespect to any MERS Designated Mortgage Loan, MERS Reports, any Interest RateProtection Agreements entered into by Sellers, plus any such additional reportsas Buyer may reasonably request with respect to Sellers or Servicer’s servicingportfolio or pending originations of mortgage loans.

 

Section 9.29           RemittanceReport.  On the second (2nd) BusinessDay of each month, Sellers shall furnish to Buyer or shall cause Servicer tofurnish to Buyer, a remittance report, in hard copy and electronic formatacceptable to Buyer, containing information regarding funds collected duringthe prior calendar month. This report shall contain the following information:

 

(a)           MortgageLoan number;

 

(b)           MortgageNote Rate;

 

(c)           Remittancesallocable to principal and interest, escrow and taxes;

 

(d)           Paidthrough date;

 

(e)           MortgageLoan balance;

 

(f)            Delinquencystatus;

 

(g)           Whetherthe Mortgaged Property is in foreclosure or has become an REO Property;

 

(h)           Whetherany Mortgagor is the subject of any bankruptcy action; and

 

(i)            Any other information that Buyer may reasonably request.

 

Section 9.30           Reserved.

 

Section 9.31           Preservation of Security Interest. Sellers shall execute and file suchfinancing statements and cause to be executed and filed such continuationstatements, all in such manner and in such places as may be required by lawfully to preserve, maintain, and protect the respective right, title andinterest of Buyer in the Mortgage Loans. Sellers shall deliver (or cause to bedelivered) to the Custodian file-stamped copies of, or filing receipts for, anydocument filed as provided above, as soon as available following such filing.

 

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Section 9.32           Compliancewith Law.  Each Seller will comply,in all material respects, with all laws, acts, rules, requisitions, orders,decrees and directions of any Governmental Authority applicable to its businessand to the Mortgage Loans or any part thereof; *provided,however*, that such Seller may contest any law, act, regulation,order, decree or direction in any reasonable manner which shall not materiallyand adversely affect the rights or interests of Buyer in the Purchased Assets.

 

Section 9.33           Obligationswith Respect to Purchased Assets.  EachSeller and Servicer will duly fulfill all obligations on its respective part tobe fulfilled under or in connection with each Mortgage Loan or other PurchasedAsset, and will do nothing to impair the rights of Buyer in any of the MortgageLoans or other Purchased Assets.

 

Section 9.34           Conveyanceof Purchased Assets; Security Interests.  Except for the transfers and conveyances underor permitted in this Agreement or any other Repurchase Document, no Seller willsell, pledge, assign or transfer to any other Person, or grant, create, incur,assume or suffer to exist any Lien, on any Purchased Asset, or any interesttherein and each Seller shall defend the right, title, and interest of Buyerand its respective successors and assigns in, to, and under the PurchasedAssets, against all claims of third parties claiming, through or under Sellers;*provided, however*, that nothingin this Section shall prevent or be deemed to prohibit Sellers fromsuffering to exist upon any of the Purchased Assets any Liens for municipal orother local taxes if such taxes shall not at the time be due and payable or ifSellers shall concurrently be contesting the validity thereof in good faith byappropriate proceedings and shall have set aside on its books adequate reserveswith respect thereto and such contests pose no risk of forfeiture.

 

Section 9.35           Notificationof Breach.  Each Seller will notifyBuyer and the Custodian promptly, in reasonable detail, upon discovery of theoccurrence of any breach by (i) any Seller (or the Servicer) of any of itsrepresentations, warranties or covenants contained herein or (ii) by anySeller or any Affiliate thereof of any of its representations, warranties orcovenants contained in any Other Financing Document.

 

Section 9.36           FurtherAssurances.  Each Seller will make,execute or endorse, acknowledge and file or deliver to Buyer and Custodian fromtime to time such schedules, confirmatory assignments, conveyances, transfers,endorsements, powers of attorney, certificates, reports and other assurances orinstruments and take such further steps relating to the Purchased Assets andother rights covered by this Agreement, as Buyer or Custodian may request andreasonably require.

 

Section 9.37           Taxes. Sellers shall promptly pay allapplicable taxes required to be paid in connection with the assignment of thePurchased Assets and acknowledges that Buyer shall have no responsibility withrespect thereto.

 

Section 9.38           Taxesand Other Liabilities.  Sellers shallpromptly pay and discharge all material taxes, assessments, fees, claims andother governmental charges when due and payable by Sellers except (i) suchas may be paid thereafter without penalty or (ii) such as may be contestedin good faith by appropriate proceedings and for which an adequate reserve hasbeen established and is maintained in accordance with GAAP. Sellers shallpromptly notify

 

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Buyer of any material challenge, contest or proceedingpending by or against Sellers or any of their Subsidiaries before any taxingauthority.

 

Section 9.39           NoAgency.  No Seller will act as anagent of Buyer in any capacity except to the limited extent provided in theRepurchase Documents, but instead will present itself to the public as acorporation separate from Buyer.

 

Section 9.40           Reserved.

 

Section 9.41           NoOther Financing Facilities.  NoSeller will enter into any additional Other Financing Facility on or after theRestatement Closing Date (other than unsecured debt that is subordinate toobligations owed to Buyer under this Agreement) without the prior writtenconsent of Buyer (such consent not to be unreasonably withheld).

 

**ARTICLE XEVENTS OF DEFAULT; REMEDIES**

 

Section 10.01         Eventsof Default.  If any of the followingevents (each, an “Event of Default”) occur, Sellers and Buyer shall havethe rights set forth in Section 10.02, as applicable:

 

(a)           anySeller shall default in the payment of, or shall admit its inability orintention not to pay, any Repurchase Price due or any amount under Article IVor Section 3.01 when due and payable (whether at stated maturity orother due date, upon acceleration or at mandatory or optional prepayment) orany amount specified as being payable by Sellers or any Seller (including IMHindividually) in the Fee Letter when due and payable (with respect to anyRollover Transaction, if Income collections paid to Buyer, plus any additionalcash payments from Seller to Buyer, are insufficient to pay the RepurchasePrice due on such Repurchase Date (net of any Purchase Price owed by Buyer forany such Transaction), an Event of Default shall not occur if both (i) availableIncome or other funds provided by Seller to Buyer cover the Seller’s CashComponent of such net amount, and (ii) Buyer is able to withdrawsufficient cash from the UBS Cash Account under Section 7.04(d) suchthat the entire Repurchase Price due on such Repurchase Date (net of anyPurchase Price owed by Buyer for any such Transaction) is paid in full; or

 

(b)           anySeller shall default in the payment of any other amount payable by it hereunderor under any other Repurchase Document after notification by Buyer of suchdefault, and such default shall have continued unremedied for one (1) BusinessDay; or

 

(c)           anyrepresentation, warranty or certification made or deemed made herein or in anyother Repurchase Document by any Seller or any certificate furnished to Buyerpursuant to the provisions hereof or thereof or any information with respect tothe Mortgage Loans furnished in writing by or on behalf of any Seller shallprove to have been false or misleading in any material respect as of the timemade or furnished (other than the representations and warranties set forth inSchedule 1); or

 

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(d)           anySeller shall (i) fail to comply with the covenant set forth at Section 9.41hereof; or (ii) admit in writing its inability or intention not to complywith, any of the other covenants and requirements of this Agreement; or (iii) exceptas otherwise set forth in paragraphs (a), (b) or (c) above, fail toobserve or perform any other covenant or agreement contained in this Agreementor any other Repurchase Document and such failure to observe or performdescribed in this clause (iii) shall continue unremedied for a period offive (5) Business Days; or

 

(e)           afinal judgment or judgments for the payment of money (i) in any amountshall be rendered against any Seller or (ii) in excess of the greater of (x) $500,000or (y) any greater level applicable to such judgments as may cause an “eventof default” under any Other Financing Facility, but in no event greater than$1,000,000 in the aggregate shall be rendered against any Seller or any oftheir respective Subsidiaries by one or more courts, administrative tribunalsor other bodies having jurisdiction and the same shall not be satisfied,discharged (or provision shall not be made for such discharge) or bonded, or astay of execution thereof shall not be procured, within thirty (30) days fromthe date of entry thereof; or such other date as set forth therein, and suchSeller or any of its Subsidiaries shall not, within said period of thirty (30)days, or such longer period during which execution of the same shall have beenstayed or bonded, appeal therefrom and cause the execution thereof to be stayedduring such appeal; or

 

(f)            anySeller shall admit in writing its inability to pay its debts as such debtsbecome due; or

 

(g)           anySeller or any of their respective Subsidiaries shall (i) apply for orconsent to the appointment of, or the taking of possession by, a receiver,custodian, trustee, examiner or liquidator or the like of itself or of all or asubstantial part of its property, (ii) make a general assignment for thebenefit of its creditors, (iii) commence a voluntary case under theBankruptcy Code, (iv) file a petition seeking to take advantage of anyother law relating to bankruptcy, insolvency, reorganization, liquidation,dissolution, arrangement or winding-up, or composition or readjustment ofdebts, (v) fail to controvert in a timely and appropriate manner, oracquiesce in writing to, any petition filed against it in an involuntary caseunder the Bankruptcy Code or (vi) take any corporate or other action forthe purpose of effecting any of the foregoing; or

 

(h)           aproceeding or case shall be commenced, without the application or consent ofSellers or any of their Subsidiaries in any court of competent jurisdiction,seeking (i) the reorganization, liquidation, dissolution, arrangement orwinding-up, or the composition or readjustment of Sellers’ or any of theirSubsidiaries’ debts, (ii) the appointment of, or the taking of possessionby, a receiver, custodian, trustee, examiner, liquidator or the like ofSellers, or any of their Subsidiaries or of all or any substantial part of itsproperty, or (iii) similar relief in respect of Sellers, or any of theirSubsidiaries under any law relating to bankruptcy, insolvency, reorganization,liquidation, dissolution, arrangement or winding-up, or composition oradjustment of debts, and, in the case of Sellers, or any of their Subsidiaries,such proceeding or case shall continue undismissed, or an order, judgment ordecree approving or ordering any of the foregoing shall be entered and continueunstayed and in effect, for a period of forty-five (45) or more days;

 

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or an order for relief against Sellers or any of theirSubsidiaries shall be entered in an involuntary case under the Bankruptcy Code;or

 

(i)            theCustodial Agreement or any Repurchase Document shall for whatever reason beterminated without the prior signed written consent of Buyer or cease to be infull force and effect, or the enforceability thereof shall be contested by anySeller; or

 

(j)            anySeller shall grant, or suffer to exist, any Lien on any Purchased Item (exceptany Lien in favor of Buyer); or the Purchased Items shall not have been sold toBuyer, or the Liens contemplated hereby shall cease or fail to be firstpriority perfected Liens on any Purchased Items in favor of Buyer or shall beLiens in favor of any Person other than Buyer; or

 

(k)           anySeller or any of their respective Subsidiaries shall be in default under (i) anyobligations relating to borrowed money or swap agreement or (ii) any othercontract including, without limitation, leases and contracts with tradecreditors, in each case, to which it is a party, which default permits theacceleration of the maturity of obligations for borrowed money, or, in the caseof any swap agreement or other contract, permits its early termination,close-out or liquidation, by any other party to or beneficiary of suchobligation for borrowed money, swap agreement or other contract, in any case ifthe aggregate amount of the obligations accelerated or capable of beingaccelerated or due or that may become due as a result of the occurrence of suchdefault, early termination, close-out or liquidation on any date under any oneor more of such obligation for borrowed money, swap agreement or other contractexceeds (in the aggregate) (x) $500,000 with respect to clause (i) and/or(y) $3,000,000 with respect to clause (ii); or

 

(l)            [Reserved];or

 

(m)          aChange in Control of any Seller, an execution of a binding commitment letter orsimilar agreement in anticipation of a Change of Control or a material changein the Executives of any Seller resulting in inadequate management capability(as determined by Buyer in its sole discretion) shall have occurred which hasnot been approved by Buyer; or

 

(n)           withrespect to any MERS Designated Mortgage Loans, the Electronic TrackingAgreement has for whatever reason been terminated or ceases to be in full forceand effect and Buyer (or Custodian as its designee) shall not have receivedwith ten (10) Business Days following such termination an assignment ofmortgage with respect to such MERS Designated Mortgage Loan, in blank, inrecordable form, but unrecorded; or

 

(o)           (i) anyPerson shall engage in any “prohibited transaction” (as defined in Section 406of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulatedfunding deficiency” (as defined in Section 302 of ERISA), whether or notwaived, shall exist with respect to any Plan or any Lien in favor of the PBGCor a Plan shall arise on the assets of any Seller or any Commonly ControlledEntity, (iii) a Reportable Event shall occur with respect to, orproceedings shall commence to have a

 

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trustee appointed, or a trustee shall be appointed, toadminister or to terminate, any Plan, which Reportable Event or commencement ofproceedings or appointment of a trustee is, in the reasonable opinion of Buyer,likely to result in the termination of such Plan for purposes of Title IV ofERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA,and, in the case of a Reportable Event, the continuance of such ReportableEvent unremedied for ten (10) days after notice of such Reportable Eventpursuant to Section 4043(a), (c) or (d) or ERISA is given or thecontinuance of such proceedings for ten (10) days after commencementthereof, as the case may be, (v) any Seller or any Commonly ControlledEntity shall, or in the reasonable opinion of Buyer is likely to, incur anyliability in connection with a withdrawal from, or the insolvency orreorganization of, a Multiemployer Plan or (vi) any other event orcondition shall occur or exist with respect to a Plan; and in each case inclauses (i) through (vi) above, such event or condition, togetherwith all other such events or conditions, if any, is likely to subject Sellersor any of their Subsidiaries to any tax, penalty or other liabilities in theaggregate material in relation to the business, operations, property orfinancial or other condition of Sellers, or any of their Subsidiaries; or couldreasonably be expected to have a Material Adverse Effect; or

 

(p)           any “event of default” or comparable event shall have occurred under anyOther Financing Facility; or

 

(q)           [Reserved]; or

 

(r)            the occurrence under the Platform Servicing Agreement, if ever any, ofany servicer default, termination event or analogous event (which event,whether with the giving of notice, lapse of time, or both, would entitle thebeneficiary of such Platform Servicing Agreement to terminate or replace theexisting servicer as servicer thereunder, provided that such servicer is theServicer or an affiliate thereof) taking into account any applicable cureperiod thereunder; or

 

(s)           any Seller shall commit any fraud or malfeasance in connection with thisAgreement or the transactions contemplated hereby.

 

Section 10.02         Remedies Upon Default.  If an Event of Default occurs, the followingrights and remedies are available to Buyer; *providedthat* an Event of Default shall be deemed to be continuing unlessexpressly waived by Buyer in writing.

 

(a)           Each Seller hereby acknowledges, admits and agrees that Sellers’obligations under this Agreement are joint and several recourse obligations ofSellers to which each Seller pledges its full faith and credit. In addition toits rights hereunder, Buyer shall have the right to proceed against any ofSellers’ assets (including, but not limited to, the UBS Cash Account) which maybe in the possession of Buyer, any of Buyer’s Affiliates or any of Buyer’sdesignee(s) (including Custodian), including the right to liquidate suchassets and to set-off the proceeds against monies owed by Sellers to Buyerpursuant to this Agreement. Buyer may set off cash, the proceeds of theliquidation of the Purchased Assets and Additional Purchased Assets, any otherPurchased Items or its proceeds and all other sums or obligations owed by Buyerto

 

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Sellers against all of Sellers’ obligations to Buyer,whether under this Agreement, under a Transaction, or under any other agreementbetween the parties, or otherwise, whether or not such obligations are thendue, without prejudice to Buyer’s right to recover any deficiency.

 

(b)           Atthe option of Buyer, exercised by written notice to Sellers (which option shallbe deemed to have been exercised, even if no notice is given, immediately uponthe occurrence of an Act of Insolvency of any Seller), the Final Repurchase Datefor each Transaction hereunder, if it has not already occurred, shall be deemedimmediately to occur.

 

(c)           IfBuyer exercises or is deemed to have exercised the option referred to inparagraph (b) of this Section 10.02,

 

(i)              Sellers’ obligations in such Transactions to repurchaseall Purchased Assets, at the Repurchase Price therefor on the Final RepurchaseDate, (1) shall thereupon become immediately due and payable, (2) allIncome paid after such exercise or deemed exercise, including, without limitation,all amounts in respect thereof then or thereafter held in any collection orcustodial accounts maintained by the Servicer on behalf of Buyer, shall beretained by Buyer and applied to the aggregate unpaid Repurchase Price and anyother amounts owed by Sellers hereunder, and (3) Sellers shall immediatelydeliver to Buyer any Purchased Assets subject to such Transactions then inSellers’ possession or control;

 

(ii)             to the extent permitted by applicable law, theRepurchase Price with respect to each such Transaction shall be increased bythe aggregate amount obtained by daily application of, on a 360 day per yearbasis for the actual number of days during the period from and including thedate of the exercise or deemed exercise of such option to but excluding thedate of payment of the Repurchase Price, (x) the Post-Default Rate to (y) theRepurchase Price for such Transaction as of the Final Repurchase Date(decreased as of any day by (i) any amounts actually in the possession ofBuyer pursuant to clause (c) of this subsection, (ii) any proceedsfrom the sale of Purchased Assets applied to the Repurchase Price pursuant tosubsection (d) of this Section 10.02, and (iii) anyamounts applied to the Repurchase Price pursuant to subsection (e) of thisSection 10.02); and

 

(iii)            all Income actually received by Buyer pursuant to Section 4.01(excluding any Late Payment Fees paid pursuant to Section 2.06(g)),including, without limitation, all amounts then or thereafter held in thecollection and custodial accounts maintained by the Servicer shall be appliedto the aggregate unpaid Repurchase Price and other obligations owed by Sellers(in the order of, first, unpaid fee, expense and indemnity obligations thenpayable, then to accrued Price Differential, and then to outstanding PurchasePrice).

 

(d)           Uponthe occurrence of one or more Events of Default, Buyer shall have the right toobtain physical possession of the Servicing Records (subject to the provisions

 

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of the Custodial Agreement), Mortgage Files, Credit Filesand all other files of Sellers relating to the Purchased Assets and alldocuments relating to the Purchased Assets which are then or may thereaftercome into the possession of Sellers or any third party acting for Sellers andSellers shall deliver to Buyer such assignments as Buyer shall request and,subject to any existing servicing agreements, Buyer shall have the right toappoint any Person to service the Purchased Assets. Buyer shall be entitled (i) toinvoke any and all rights it may have under any Repurchase Document withrespect to any amounts then or thereafter held in the collection and custodialaccounts maintained by the Servicer and (ii) to specific performance ofall agreements of Sellers contained in the Repurchase Documents.

 

(e)           Allamounts then or thereafter held in the collection and custodial accountsmaintained by Servicer shall be retained by Buyer and applied to the aggregateunpaid Repurchase Price owed by Sellers and to any other amounts owing bySellers hereunder or under the Custodial Agreement.

 

(f)            Atany time on or after the Business Day following the occurrence of an Event ofDefault, Buyer may (A) immediately sell, on a servicing-released basis,without demand or further notice of any kind, at a public or private sale andat such price or prices as Buyer may deem satisfactory, any or all PurchasedAssets and Purchased Items and apply the proceeds thereof to the aggregateunpaid Repurchase Price and any other amounts owing by Sellers under theRepurchase Documents or (B) in its sole discretion elect, in lieu ofselling all or a portion of such Purchased Assets and Purchased Items, to giveSellers credit for such Purchased Assets and Purchased Items in an amount equalto the fair market value of the Purchased Assets and Purchased Items (asdetermined by Buyer in its sole discretion, acting in good faith) against theaggregate unpaid Repurchase Price and any other amounts owing by Sellers underthe Repurchase Documents. The Sellers acknowledge that at the time of Buyer’sdetermination of such market value pursuant to clause (B) above, noestablished or currently operating active market for the Purchased Assets orPurchased Items may then exist. Sellers shall remain jointly and severallyliable to Buyer for any aggregate unpaid Repurchase Price and other amountsthat remain owing and unpaid to Buyer following a sale or credit under theforegoing provisions. The proceeds of any disposition of Purchased Assets (orcrediting of amounts, in the case of clause (B) above) shall be appliedfirst, to the costs and expenses incurred by Buyer in connection with Sellers’default; second, to the Repurchase Price; third, after an Event of Default, tocosts of related covering and/or related hedging transactions; and fourth, toany other outstanding obligation of Sellers to Buyer or any of its Affiliates.

 

(g)           NeitherBuyer nor any of its Affiliates shall incur any liability as a result of thesale of any of the Purchased Items at any private sale. Each Seller herebywaives (a) any claims against Buyer or any of its Affiliates arisingbecause the price at which the Purchased Items may have been sold at a privatesale was less than the price that might have been obtained at a public sale orwas less than the aggregate amount of the Repurchase Obligations, even if Buyeraccepts the first offer received and does not offer the Purchased Items to morethan one offeree and (b) all rights of redemption, stay, or

 

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appraisal which it has under any rule of law or (tothe extent permitted) statute whether now existing or hereafter adopted.

 

(h)           Theparties recognize that it may not be possible to purchase or sell all of thePurchased Assets on a particular Business Day, or in a transaction with thesame purchaser, or in the same manner because the market for such PurchasedAssets may not be liquid. In view of the nature of the Purchased Assets, theparties agree that liquidation of a Transaction or the underlying PurchasedAssets does not require a public purchase or sale and that a good faith privatepurchase or sale shall be deemed to have been made in a commercially reasonablemanner. Accordingly, Buyer may elect the time and manner of liquidating anyPurchased Assets and nothing contained herein shall obligate Buyer to liquidateany Purchased Assets on the occurrence of an Event of Default or to liquidateall Purchased Assets in the same manner or on the same Business Day orconstitute a waiver of any right or remedy of Buyer. Notwithstanding theforegoing, the parties to this Agreement agree that the Transactions have beenentered into in consideration of and in reliance upon the fact that allTransactions hereunder constitute a single business and contractual obligationand that each Transaction has been entered into in consideration of the otherTransactions.

 

(i)            Sellersagree that Buyer may obtain an injunction or an order of specific performanceto compel Sellers to fulfill their obligations as set forth in Section 10.02(d),if a Seller fails or refuses to perform its obligations as set forth therein.

 

(j)            Sellersshall be jointly and severally liable to Buyer, payable as and when incurred byBuyer, for (A) the amount of all actual reasonable out-of-pocket expenses,including legal or other expenses incurred by Buyer in connection with or as aconsequence of an Event of Default and (B) after an Event of Default, allcosts incurred in connection with covering and/or hedging transactions.

 

(k)           EachSeller agrees to indemnify (jointly and severally with the other Sellers) andhold Buyer and its assignees harmless for and against all Costs (as hereinafterdefined) resulting from or relating to any Event of Default.

 

(l)            Buyershall, without regard to the adequacy of the security for the RepurchaseObligations, be entitled to the appointment of a receiver by any court havingjurisdiction, without notice, to take possession of and protect, collect,manage, liquidate, and sell the Purchased Assets and any other Purchased Itemsor any portion thereof, collect the payments due with respect to the PurchasedAssets and any other Purchased Items or any portion thereof, and do anythingthat Buyer is authorized hereunder to do. Sellers shall pay, jointly andseverally, all costs and expenses incurred by Buyer in connection with theappointment and activities of such receiver.

 

(m)          Buyermay, at its option, enter into one or more hedge instruments covering all or aportion of the Purchased Assets, and Sellers shall be responsible, jointly andseverally, for all damages, judgments, costs and expenses of any kind which maybe imposed on, incurred by or asserted against Buyer relating to or arising outof such hedge

 

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instruments; including without limitation any lossesresulting from such hedge instruments.

 

(n)           Noelection by Buyer pursuant to this Section shall relieve Sellers ofresponsibility or liability for any breach of or under this Agreement.

 

(o)           Buyershall have, in addition to its rights hereunder, any rights otherwise availableto it under any other agreement or applicable law, whether existing at law, inequity or by statute, including, without limitation, all rights and remediesavailable to a purchaser/secured party under the Uniform Commercial Code.

 

(p)           Exceptas otherwise expressly provided in this Agreement, Buyer shall have the rightto exercise any of its rights and/or remedies without presentment, demand,protest or further notice of any kind other than as expressly set forth herein,all of which are hereby expressly waived by Sellers.

 

Section 10.03         RemediesCumulative.  Buyer may exercise oneor more of the remedies available to Buyer immediately upon the occurrence ofan Event of Default and, except to the extent provided in paragraphs (a) and(d) of Section 10.02, at any time thereafter without notice toSellers. All rights and remedies arising under this Agreement as amended fromtime to time hereunder are cumulative and not exclusive of any other rights orremedies which Buyer may have.

 

Section 10.04         Waiverof Defenses.  Buyer may enforce itsrights and remedies hereunder without prior judicial process or hearing, andSellers hereby expressly waive any defenses Sellers might otherwise have torequire Buyer to enforce its rights by judicial process. Sellers also waive anydefense (other than a defense of payment or performance) Sellers mightotherwise have arising from the use of non-judicial process, enforcement andsale of all or any portion of the Purchased Items, or from any other electionof remedies. Sellers recognize that non-judicial remedies are consistent withthe usages of the trade, are responsive to commercial necessity and are theresult of a bargain at arm’s-length.

 

Section 10.05         DefaultInterest.  To the extent permitted byapplicable law, Sellers shall be liable, jointly and severally, to Buyer forinterest on any amounts owing by Sellers hereunder, from the date any Sellerbecomes liable for such amounts hereunder until such amounts are (i) paidin full by Sellers or (ii) satisfied in full by the exercise of Buyer’srights hereunder. Interest on any sum payable by Sellers to Buyer under this Section 10.05shall be at a rate equal to the Post-Default Rate.

 

**ARTICLE XIMISCELLANEOUS**

 

Section 11.01         Indemnification.

 

(a)           Sellersagree, jointly and severally, to hold Buyer and its Affiliates and theirpresent and former respective officers, directors, employees, agents, advisorsand other representatives (each, an “Indemnified Party”) harmless fromand indemnify any Indemnified Party against all liabilities, losses, damages,judgments, costs and expenses

 

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of any kind which may be imposed on, incurred by orasserted against such Indemnified Party (including reasonable counsel’s feesand disbursements) (collectively, “Costs”), relating to or arising outof a third-party claim involving this Agreement, any other Repurchase Documentor any transaction contemplated hereby or thereby, or any breach or inaccuracyof any representation or warranty, or noncompliance with any covenant under,this Agreement or any other Repurchase Document, or relating to or arising inrespect of any amendment, supplement or modification of, or any waiver orconsent under or in respect of, this Agreement, any other Repurchase Documentor any transaction contemplated hereby or thereby. 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 violation oralleged violation of any environmental law, rule or regulation, anyconsumer credit laws, including, without limitation, the federal Truth inLending Act and/or the federal Real Estate Settlement Procedures Act, or anyapplicable securities laws. In any suit, proceeding or action brought by anIndemnified Party in connection with any Mortgage Loan for any sum owingthereunder, or to enforce any provisions of any Mortgage Loan, Sellers, jointlyand severally, will save, indemnify and hold such Indemnified Party harmlessfrom and against all expense, loss or damage suffered by reason of any defense,set-off, counterclaim, recoupment or reduction of liability whatsoever of theaccount debtor or obligor thereunder, arising out of a breach by any Seller ofany obligation thereunder or arising out of any other agreement, indebtednessor liability at any time owing to or in favor of such account debtor or obligoror its successors from any Seller.

 

(b)           Sellersalso agree, jointly and severally, to reimburse an Indemnified Party as andwhen billed by such Indemnified Party for all the Indemnified Party’s costs andexpenses incurred in connection with the enforcement or the preservation ofBuyer’s rights under this Agreement, any other Repurchase Document or anytransaction contemplated hereby or thereby, including, without limitation, thereasonable fees and disbursements of its counsel. Sellers may offer to assumethe defense of any action brought against any Indemnified Party, provided thatthe counsel proposed to handle the defense be satisfactory to such IndemnifiedParty in its sole discretion. If the Indemnified Party agrees to such anarrangement, then Sellers will not be liable for any separate counsel for suchIndemnified Party. In no event will an Indemnified Party be liable for asettlement effected without its prior consent.

 

(c)           Sellersagree, jointly and severally, to pay on demand all of the reasonable out-of-pocketcosts and expenses (including reasonable legal fees) (i) incurred by Buyerin connection with any amendment, supplement or modification to, thisAgreement, any other Repurchase Document or any other documents prepared inconnection therewith, and (ii) all costs and expenses of Buyer inconnection with the enforcement of this Agreement (including any waivers) orany other Repurchase Document, whether in any action, suit or litigation, anybankruptcy, insolvency or other similar proceeding affecting creditors’ rightsgenerally (including, without limitation, the reasonable fees and expenses ofcounsel for Buyer) whether or not the transactions contemplated hereby areconsummated. Subject to the limitations set forth in Section 11.12,Sellers agree, jointly and severally, to pay Buyer all reasonable out of pocketdue diligence, inspection, testing

 

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and review costs and expenses incurred by Buyer withrespect to Mortgage Loans submitted by Sellers for purchase under thisAgreement, including, but not limited to, those reasonable out of pocket costsand expenses incurred by Buyer pursuant to Sections 11.10 and 11.12.

 

(d)           Withoutprejudice to the survival of any other agreement of Sellers hereunder, the covenantsand obligations of Sellers contained in this Section shall survive thepayment in full of the Repurchase Price and all other amounts payable hereunderand delivery of the Purchased Assets by Buyer against full payment therefor.THE INDEMNIFICATION OBLIGATIONS OF SELLERS PURSUANT TO THE PRECEDING PARAGRAPHSSHALL APPLY REGARDLESS OF ANY NEGLIGENCE OR OTHER FAULT (EXCLUDING GROSSNEGLIGENCE OR WILLFUL MISCONDUCT) ON THE PART OF BUYER, THE SERVICER, THECUSTODIAN OR ANY OF THEIR RESPECTIVE OFFICERS EMPLOYEES, TRUSTEES OR AGENTSEXCEPT AS EXPRESSLY STATED.

 

Section 11.02         SingleAgreement.

 

Buyer and Sellers acknowledge that, and have enteredhereinto and will enter into each Transaction hereunder in consideration of andin reliance upon the fact that, all Transactions hereunder constitute a singlebusiness and contractual relationship and that each has been entered into inconsideration of the other Transactions. Accordingly, Buyer and Sellers agree (i) toperform all of its obligations in respect of each Transaction hereunder, andthat a default in the performance of any such obligations shall constitute adefault by it in respect of all Transactions hereunder; (ii) that each ofthem shall be entitled to set off claims and apply property held by them in respectof any Transaction against obligations owing to them in respect of any otherTransaction hereunder; (iii) that payments, deliveries, and othertransfers made by either of them in respect of any Transaction shall be deemedto have been made in consideration of payments, deliveries, and other transfersin respect of any other Transactions hereunder, and the obligations to make anysuch payments, deliveries, and other transfers may be applied against eachother and netted; and (iv) to promptly provide notice to the other afterany such set-off or application.

 

Section 11.03         Noticesand Other Communications.

 

Except as otherwise expressly permitted by this Agreement,all notices, requests and other communications provided for herein and underthe Custodial Agreement (including, without limitation, any modifications of,or waivers, requests or consents under, this Agreement) shall be given or madein writing (including, without limitation, by email, telex or telecopy)delivered to the intended recipient at the “Address for Notices” specifiedbelow its name on the signature pages hereof or thereof); or, as to anyparty, at such other address as shall be designated by such party in a writtennotice to each other party. Except as otherwise provided in this Agreement andexcept for notices given under Section 3.01 (which shall beeffective only on receipt), all such communications shall be deemed to havebeen duly given when transmitted by telecopy or personally delivered or, in thecase of a mailed notice, upon receipt. Any notices, requests or othercommunications delivered to any Seller pursuant to this Section shall bedeemed delivered to all Sellers.

 

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Section 11.04         Entire Agreement; Severability.

 

This Agreement together with the other RepurchaseDocuments constitute the entire understanding between Buyer and Sellers withrespect to the subject matter it covers and shall supersede any existingagreements between the parties containing general terms and conditions forrepurchase transactions involving Purchased Assets. By acceptance of thisAgreement, Buyer and Sellers acknowledge that they have not made, and are notrelying upon, any statements, representations, promises or undertakings notcontained in this Agreement. Each provision and agreement herein shall betreated as separate and independent from any other provision or agreementherein and shall be enforceable notwithstanding the unenforceability of anysuch other provision or agreement.

 

Section 11.05         Non-Assignability.

 

The rights and obligations of the parties under thisAgreement and under any Transaction shall not be assigned by Sellers withoutthe prior written consent of Buyer, and any attempted assignment without suchconsent shall be null and void. Buyer, in its sole discretion, may at any timeassign all or a portion of its rights and obligations under this Agreement andthe Repurchase Documents. Subject to the foregoing, this Agreement and anyTransactions shall be binding upon and shall inure to the benefit of theparties and their respective successors and assigns. Nothing in this Agreement,express or implied, shall give to any person, other than the parties to thisAgreement and their successors hereunder, any benefit of any legal or equitableright, power, remedy or claim under this Agreement.

 

Section 11.06         Terminability.

 

This Agreement shall continue in effect until terminatedas to future transactions by written instruction signed by Buyer and deliveredto Sellers, provided that no termination will affect the obligations hereunderas to any outstanding Transaction. Each representation and warranty made ordeemed to be made by entering into a Transaction, herein or pursuant hereto shallsurvive the making of such representation and warranty, and Buyer shall not bedeemed to have waived any Default that may arise because any suchrepresentation or warranty shall have proved to be false or misleading,notwithstanding that Buyer may have had notice or knowledge or reason tobelieve that such representation or warranty was false or misleading at thetime the Transaction was made. Notwithstanding any such termination or theoccurrence of an Event of Default, all of the representations and warrantiesand covenants hereunder shall continue and survive. The obligations of Sellersunder Section 11.01 shallsurvive the termination of this Agreement.

 

Section 11.07         GOVERNING LAW.

 

**THIS AGREEMENT SHALL BE GOVERNEDAND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUTREGARD TO THE CONFLICTS OF LAW PRINCIPLES.**

 

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Section 11.08         SubmissionTo Jurisdiction; Waivers.

 

EACH SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

(a)             SUBMITS FOR ITSELF AND ITS PROPERTYIN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHERREPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT INRESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THESTATE OF NEW YORK LOCATED WITHIN THE COUNTY OF NEW YORK, THE FEDERAL COURTS OFTHE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, ANDAPPELLATE COURTS FROM ANY THEREOF;

 

(b)             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;

 

(c)             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),POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCHOTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED;

 

(d)             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; AND

 

(e)             WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGALPROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER REPURCHASEDOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

Section 11.09         NoWaivers, Etc.

 

No failure on the part of Buyer to exercise and no delayin exercising, and no course of dealing with respect to, any right, power orprivilege under any Repurchase Document shall operate as a waiver thereof, norshall any single or partial exercise of any right, power or privilege under anyRepurchase Document preclude any other or further exercise thereof or theexercise of any other right, power or privilege. The remedies provided hereinare cumulative and not exclusive of any remedies provided by law. An Event ofDefault shall be deemed to be continuing unless expressly waived by Buyer inwriting.

 

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Section 11.10         Servicing.

 

(a)           It isexpressly acknowledged that the Servicing Rights relating to the Mortgage Loanspurchased by Buyer hereunder have been sold, assigned, and transferred bySellers to Buyer along with the Mortgage Loans, and that as of the RestatementClosing Date, such Servicing Rights are being exercised under the control ofthe Buyer through the Buyer’s servicing arrangements with the Platform.Notwithstanding the foregoing, Buyer may in its sole discretion, whetherfollowing a sale of the Platform to IMH or an affiliate thereof or otherwise(and regardless of whether or not such a sale shall occur), by delivery ofreasonable prior written notice to Servicer, delegate to Servicer as asubservicer of Buyer in respect of Buyer’s Servicing Rights, all or a portionof the responsibilities in respect of servicing and administering (or shalleffect such delegation to a Sub-Servicer engaged by Servicer and approved byBuyer, if applicable, to service and administer, pursuant to the applicableSub-Servicing Agreement) the Mortgage Loans on behalf of Buyer on an interimbasis in accordance with Accepted Servicing Practices for the same type ofmortgage loans as the Mortgage Loans and in a manner at least equal in qualityto the servicing Servicer provides for mortgage loans which it owns for its ownaccount, *provided* that Servicershall at all times comply with applicable law and the requirements of anyapplicable insurer or guarantor so that the insurance and any applicableguarantee in respect of any Mortgage Loan is not voided or reduced, and *provided further*, that unless otherwiseagreed by Seller, Servicer shall comply with the same servicing obligations andstandards that apply to mortgage loans serviced pursuant to the PlatformServicing Agreement, if ever any. Unless the context shall otherwise require oras otherwise expressly stated, the covenants and undertakings of the Servicerunder this Section 11.10 shall apply to the Servicer only if Buyer hasdelegated servicing responsibilities to the Servicer as described above.

 

(b)           Servicershall at all times maintain accurate and complete records of its servicing ofthe Mortgage Loans, and Buyer may, at any time during Servicer’s businesshours, on reasonable notice, examine and make copies of such records. On thesecond (2nd) Business Day of each calendar month, or at any other time uponBuyer’s request, Servicer shall deliver to Buyer reports regarding the statusof the Mortgage Loans in accordance with Sections 9.28 and 9.29, which shallinclude, with respect to any MERS Designated Mortgage Loan, MERS Reports, andany circumstances that could materially adversely affect the Mortgage Loans,Buyer’s ownership of the Mortgage Loans or the collateral securing the MortgageLoans.

 

(c)           Servicer’srights to interim service the Mortgage Loans as provided in this Agreement,shall terminate on the earlier of the related Repurchase Date or the date whichis thirty (30) days following the related Purchase Date; *provided* that, on each Repurchase Date forwhich a Mortgage Loan is subject to a new Transaction such 30-day interimservicing period is deemed renewed for such new Transaction, and a new 30-dayperiod is deemed to commence as of such Repurchase Date, unless otherwisestated in writing by Buyer. If an Act of Insolvency of Servicer or any defaulthereunder by Servicer occurs at any time, Servicer’s rights and obligations toservice the Mortgage Loan(s), as provided in this Agreement, shall terminateimmediately, without any notice or action by Buyer. Servicer agrees andacknowledges that Buyer may also, at any time, terminate the interim servicingof the Mortgage Loans by Servicer and transfer servicing to the Platform(regardless of whether or not the Platform is acquired by Servicer or anaffiliate thereof) or to another Person on such date as Buyer may determine inits sole discretion. In the event that anything in this Agreement isinterpreted as constituting one or

 

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more interim servicing contracts, each such servicingcontract shall terminate automatically upon the earliest of (i) an Eventof Default; (ii) the repurchase of a Mortgage Loan by a Seller; or (iii) Buyer’snotice to Servicer directing Servicer to transfer servicing (*provided*, that the Servicer’s obligationsas set forth herein to cooperate in the transfer of such servicing shall notterminate until such servicing has actually been transferred in full). Inconnection with any termination of the Servicer, Sellers shall, at their ownexpense, transfer servicing of the Mortgage Loans to a Successor Servicerdesignated by Buyer.

 

(d)           Withintwo (2) Business Days after notice from Buyer, or immediately upon noticeif an Event of Default has occurred:

 

(i)           Servicer shall comply with the provisions of Section 4.01hereof; and

 

(ii)          at Buyer’s sole option, upon written notice from Buyer,Servicer shall transfer servicing of the Mortgage Loans to a Successor Servicerdesignated by Buyer.

 

(e)           Followingthe occurrence of an Event of Default, in connection with the transfer ofservicing from Servicer to Successor Servicer, Successor Servicer or Buyer,pursuant to Section 3500.21(d) of the Real Estate SettlementProcedures Act (12 U.S.C. 2605), shall deliver a notice of transfer to theMortgagors, which notice shall not require the signature or approval ofServicer. Such notice of transfer shall be in substantially the same form as Exhibit XIIattached hereto.

 

(f)            ImpacFunding Corporation, or any Affiliate, in its capacity as Servicer, shallpermit (or shall cause any Sub-Servicer, if applicable, to permit) Buyer toinspect Servicer’s or its Affiliate’s or Sub-Servicer’s servicing facilities,as the case may be, for the purpose of satisfying Buyer that Servicer or itsAffiliate or Sub-Servicer, as the case may be, has the ability to service theMortgage Loans as provided in this Agreement.

 

(g)           Ifthe servicer of the Mortgage Loans is Impac Funding Corporation or an Affiliateof Impac Funding Corporation, Servicer shall provide to Buyer a letter fromServicer or such Affiliate, as the case may be, to the effect that upon one (1) day’snotice from Buyer or immediately upon the occurrence of an Event of Default,Servicer’s rights and obligations to service the Mortgage Loans shall terminateimmediately, without any further notice or action by Buyer and Servicer shall transferservicing to Buyer’s designee, at no cost or expense to Buyer, it being agreedthat Servicer will pay any and all fees required to terminate Servicer and toeffectuate the transfer of servicing to the designee of Buyer.

 

(h)           Withrespect to the Mortgage Loans that are serviced by Servicer, Servicer agreesthat Buyer is the owner of all Servicing Records. Servicer covenants tosafeguard such Servicing Records and to deliver them promptly to Buyer or itsdesignee (including Custodian) at Buyer’s request.

 

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(i)            If Servicer services the MortgageLoans through a sub-servicer, Servicer agrees that it shall ensure that anysuch sub-servicer complies in all material respects with all provisionscontained in this Section 11.10.

 

(j)            In consideration of its agreement toprovide interim servicing for the benefit of Buyer hereunder (and regardless ofwhether or not Buyer ever actually designates the Servicer to perform delegatedservicing functions hereunder), Servicer shall be entitled to receive, payablesolely from the Income on the Purchased Assets, an interim servicer fee (the “InterimServicer Fee”) equal to [the Interim Servicing Fee Rate accruing from timeto time on the daily average of the outstanding principal balance of MortgageLoans constituting Purchased Assets that are Eligible Assets hereunder], butpayable solely from the portion of available Income representing interestcollected in respect of the Mortgage Loans. Servicer, if then performing delegatedservicing responsibilities that include the processing and remittance ofcollections of Income, may obtain such payment by withholding such amount fromsuch Income prior to transferring such Income to Buyer; *provided*, that following the occurrence andduring the continuance of a Default, such amount shall only be payable toServicer from such Income that remains available after repayment of allOutstanding Repurchase Price and satisfaction of all other obligations owing toBuyer hereunder; and *provided further*,that the Interim Servicing Fee shall continue to accrue for the benefit of theServicer only for so long as the Servicer has not been terminated by the Buyeras interim servicer hereunder. In addition, Buyer agrees to pay to the Platformin consideration of the Platform’s provision of servicing advice andconsultation to Buyer from time to time, a Platform servicer fee (the “PlatformServicer Fee”) equal to [the Platform Servicing Fee Rate accruing from timeto time on the daily average of the outstanding principal balance of MortgageLoans constituting Purchased Assets that are Eligible Assets hereunder], butpayable solely from Income received by Buyer hereunder.

 

Section 11.11         Intent.

 

(a)           The parties recognize that eachTransaction is a “repurchase agreement” as that term is defined in Section 101of Title 11 of the United States Code, as amended and a “securities contract”as that term is defined in Section 741 of Title 11 of the United StatesCode, as amended.

 

(b)           It is understood that either party’sright to liquidate Purchased Assets delivered to it in connection withTransactions hereunder or to exercise any other remedies pursuant to Section 10.02hereof is a contractual right to liquidate such Transaction as described inSections 555 and 559 of Title 11 of the United States Code, as amended.

 

(c)           The parties agree and acknowledgethat if a party hereto is an “insured depository institution,” as such term isdefined in the Federal Deposit Insurance Act, as amended (“FDIA”), theneach Transaction hereunder is a “qualified financial contract,” as that term isdefined in FDIA and any rules, orders or policy statements thereunder.

 

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(d)           It is understood that this Agreementconstitutes a “netting contract” as defined in and subject to Title IV of theFederal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”)and each payment entitlement and payment obligation under any Transactionhereunder shall constitute a “covered contractual payment entitlement” or “coveredcontractual payment obligation”, respectively, as defined in and subject toFDICIA (except insofar as one or both of the parties is not a “financialinstitution” as that term is defined in FDICIA or regulations promulgated thereunder).

 

Section 11.12         PeriodicDue Diligence Review.

 

Sellers acknowledge that Buyer has the right to performcontinuing due diligence reviews with respect to the Mortgage Loans, forpurposes of verifying compliance with the representations, warranties andspecifications made hereunder, or otherwise, and Sellers agree that uponreasonable (but not less than one (1) Business Day) prior notice unless anEvent of Default shall have occurred, in which case no notice is required, toSellers, Buyer or its authorized representatives will be permitted duringnormal business hours to examine, inspect, and make copies and extracts of, theMortgage Files and any and all documents, records, agreements, instruments orinformation relating to such Mortgage Loans in the possession or under thecontrol of Sellers and/or Custodian. Sellers also shall make available to Buyera knowledgeable financial or accounting officer for the purpose of answeringquestions respecting the Mortgage Files and the Mortgage Loans. Without limitingthe generality of the foregoing, Sellers acknowledge that Buyer may purchaseMortgage Loans from Sellers based solely upon the information provided bySellers to Buyer in the Mortgage Loan Schedule and the representations,warranties and covenants contained herein, and that Buyer, at its option, hasthe right at any time to conduct a partial or complete due diligence review onsome or all of the Mortgage Loans purchased in a Transaction, including,without limitation, ordering new credit reports and new appraisals on therelated Mortgaged Properties and otherwise re-generating the information usedto originate such Mortgage Loan. Buyer may underwrite such Mortgage Loansitself or engage a mutually agreed upon third party underwriter to perform suchunderwriting. Sellers agree to cooperate with Buyer and any third partyunderwriter in connection with such underwriting, including, but not limitedto, providing Buyer and any third party underwriter with access to any and alldocuments, records, agreements, instruments or information relating to suchMortgage Loans in the possession, or under the control, of Sellers. All suchdue diligence conducted in accordance with this Section shall be at theexpense of Sellers and Sellers shall, jointly and severally, reimburse Buyer asand when billed for any reasonable out-of-pocket costs and expenses incurred byBuyer in connection with its activities pursuant to this Section 11.12(up to a limit of $40,000 per annum, unless a Default or an Event of Defaultshall have occurred, in which case there shall be no such limit), within thirty(30) days of receipt of an invoice therefor.

 

Section 11.13         Buyer’sAppointment As Attorney-In-Fact.

 

Sellers hereby irrevocably constitute and appoint Buyerand any officer or agent thereof, with full power of substitution, as theirtrue and lawful attorney-in-fact with full irrevocable power and authority inthe place and stead of Sellers and in the name of Sellers or in its own name,from time to time in Buyer’s discretion, for the purpose of carrying out theterms

 

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of this Agreement, to take any and all appropriate actionand to execute any and all documents and instruments which may be reasonablynecessary or desirable to accomplish the purposes of this Agreement, to filesuch financing statement or statements relating to the Purchased Assets and thePurchased Items without any Seller’s signature thereon as Buyer at its optionmay deem appropriate, and, without limiting the generality of the foregoing,Sellers hereby give Buyer the power and right, on behalf of Sellers, withoutconsent of, but with notice to, Sellers, to do the following:

 

(a)           in the name of Sellers, or in its ownname, or otherwise, to take possession of and endorse and collect any checks,drafts, notes, acceptances or other instruments for the payment of moneys dueunder any mortgage insurance or with respect to any other Purchased Items andto file any claim or to take any other action or proceeding in any court of lawor equity or otherwise deemed appropriate by Buyer for the purpose ofcollecting any and all such moneys due under any such mortgage insurance orwith respect to any other Purchased Items whenever payable;

 

(b)           to pay or discharge taxes and Lienslevied or placed on or threatened against the Purchased Items;

 

(c)           (A) to direct any party liablefor any payment under any Purchased Items to make payment of any and all moneysdue or to become due thereunder directly to Buyer or as Buyer shall directincluding, but without limitation, the delivery of a “Goodbye Letter” in theform of Exhibit XII hereto; (B) to ask or demand for, collect,receive payment of and receipt for, any and all moneys, claims and otheramounts due or to become due at any time in respect of or arising out of anyPurchased Items; (C) to sign and endorse any invoices, assignments,verifications, notices and other documents in connection with any PurchasedItems; (D) to commence and prosecute any suits, actions or proceedings atlaw or in equity in any court of competent jurisdiction to collect thePurchased Items or any proceeds thereof and to enforce any other right inrespect of any Purchased Items; (E) to defend any suit, action orproceeding brought against any Seller with respect to any Purchased Items; (F) tosettle, compromise or adjust any suit, action or proceeding described in clause(E) above and, in connection therewith, to give such discharges orreleases as Buyer may deem appropriate; and (G) generally, to sell,transfer, pledge and make any agreement with respect to or otherwise deal withany Purchased Items as fully and completely as though Buyer were the absoluteowner thereof for all purposes, and to do, at Buyer’s option and Sellers’expense, at any time, and from time to time, all acts and things which Buyerdeems necessary to protect, preserve or realize upon the Purchased Items andBuyer’s Liens thereon and to effect the intent of this Agreement, all as fullyand effectively as Sellers might do;

 

(d)           to direct the actions of theCustodian with respect to the Purchased Items under the Custodial Agreement;and

 

(e)           to execute, from time to time, inconnection with any sale provided for in Section 10.02, anyendorsements, assignments or other instruments of conveyance or transfer withrespect to the Purchased Items.

 

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Each Seller hereby ratifies all that said attorneys shalllawfully do or cause to be done by virtue hereof. This power of attorney is apower coupled with an interest and shall be irrevocable.

 

The powers conferred on Buyer hereunder are solely toprotect Buyer’s interests in the Purchased Items and Purchase Assets and shallnot impose any duty upon it to exercise any such powers. Buyer shall beaccountable only for amounts that it actually receives as a result of theexercise of such powers, and neither it nor any of its officers, directors,employees or agents shall be responsible to Sellers for any act or failure toact hereunder, except for its or their own gross negligence or willfulmisconduct.

 

Section 11.14         Conflicts.If there is any conflict between the terms of this Agreement or any Transactionentered into hereunder and the Custodial Agreement, this Agreement shallprevail. In the event of any conflict between the terms of this Agreement, anyother Repurchase Document and any Confirmation, the documents shall control inthe following order of priority: first, the terms of the Confirmation shallprevail, then the terms of this Agreement shall prevail, and then the terms ofthe other Repurchase Documents shall prevail.

 

Section 11.15         Counterparts.This Agreement may be executed in any number of counterparts, all of whichtaken together shall constitute one and the same instrument, and any of theparties hereto may execute this Agreement by signing any such counterpart.

 

Section 11.16         Captions.The captions and headings appearing herein are for included solely forconvenience of reference and are not intended to affect the interpretation ofany provision of this Agreement.

 

Section 11.17         Acknowledgments.Each Seller hereby acknowledges that:

 

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

 

(b)           Buyer has no fiduciary relationshipto Sellers; and

 

(c)           no joint venture exists between Buyerand Sellers.

 

Section 11.18         Confidentiality.

 

Each Seller hereby acknowledges and agrees that (i) allwritten or computer-readable information provided by Buyer to Sellers regardingBuyer and (ii) the terms of this Agreement or any Repurchase Documents(the “Buyer Confidential Information”), shall be kept confidential andeach of their respective contents will not be divulged to any party withoutBuyer’s consent except to the extent that (i) Sellers deem appropriate todo so in working with legal counsel, auditors, taxing authorities or othergovernmental agencies or regulatory bodies or in order to comply with anyapplicable federal or state laws; (ii) any portion of Buyer ConfidentialInformation is in the public domain other than due to a breach of thiscovenant; or (iii) Sellers deem appropriate in connection with exercisingany or all of Sellers’ rights or remedies or complying with any obligationsunder this Agreement, provided that Sellers shall not disclose any pricinginformation without the prior written consent of Buyer; *provided, however*,

 

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that, Buyer Confidential Information does not precludeSellers from filing this Agreement with the Securities and Exchange Commissionas required under federal securities regulations. Any Confirmation shall onlybe filed with the Securities and Exchange Commission if applicable law requiressuch filing; Sellers shall give written notice to Buyer of determination thatsuch filing of the Confirmation is so required. The provisions set forth inthis Section shall survive the termination of this Agreement.

 

Buyer acknowledges that, in connection with its enteringinto and ongoing performance of this facility, it may from time to time comeinto possession of material, nonpublic information concerning the affairs ofSellers (the “Seller Confidential Information”). Buyer agrees to holdall such Seller Confidential Information confidential and such Seller ConfidentialInformation will not be divulged to any party without Sellers’ consent exceptto the extent that (i) Buyer deems appropriate to do so in working withlegal counsel, auditors, taxing authorities or other governmental agencies orregulatory bodies or in order to comply with any applicable federal or statelaws, (ii) any portion of Seller Confidential Information is in the publicdomain other than due to a breach of this covenant, or (iii) Buyer deemsappropriate in connection with exercising any or all of Buyer’s rights orremedies or complying with any obligations under this Agreement.

 

Section 11.19         Set-Off.

 

In addition to any rights and remedies of Buyer providedby this Agreement and by law, Buyer shall have the right, without prior noticeto Sellers, any such notice being expressly waived by Sellers to the extentpermitted by applicable law, to set-off and appropriate and apply against anyamount due and payable by Sellers hereunder any and all property and deposits(general or special, time or demand, provisional or final), in any currency,and any other credits, indebtedness or claims, in any currency, in each casewhether direct or indirect, absolute or contingent, matured or unmatured, atany time held or owing by Buyer or any Affiliate thereof to or for the creditor the account of Sellers. Buyer may also set-off cash and all other sums orobligations owed by Buyer or its Affiliates to Sellers (whether under thisAgreement or under any other agreement between the parties or between Sellersand any Affiliate of Buyer) against all of Sellers’ obligations to Buyer or itsAffiliates (whether under this Agreement or under any other agreement betweenthe parties or between Sellers and any Affiliate of Buyer), whether or not suchobligations are then due. Buyer agrees promptly to notify Sellers after anysuch set-off and application made by it; *provided*that the failure to give such notice shall not affect the validityof such set-off and application. The exercise of any such right of set-offshall be without prejudice to Buyer’s or its Affiliate’s right to recover anydeficiency.

 

Section 11.20         DisclosureRelating to Certain Federal Protections.

 

The parties acknowledge that they have been advised in thecase of Transactions in which one of the parties is an “insured depositoryinstitution” as that term is defined in Section 1813(c)(2) of Title12 of the United States Code, as amended, funds held by the financialinstitution pursuant to a Transaction hereunder are not a deposit and thereforeare not insured by the Federal Deposit Insurance Corporation, the SavingsAssociation Insurance Fund or Bank Insurance Fund, as applicable.

 

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Section 11.21         Continuity.

 

The parties hereto each agree and confirm that theTransactions and related security interests granted and conveyed under theExisting Agreement as to Purchased Assets or Purchased Items or othercollateral as any such assets or collateral exists as of the RestatementClosing Date but prior to giving effect to the amendment and restatement of theExisting Agreement being accomplished pursuant to this Agreement, shallcontinue without interruption in such assets and collateral after giving effectto the amendment and restatement being accomplished pursuant to and uponeffectiveness of this Agreement. References in any Repurchase Document to theExisting Agreement, after the effectiveness of this amendment and restatement,shall be deemed to refer to this Agreement, *i.e.*, the Existing Agreementas amended and restated hereby. Except as reflected in any changes to the termsof the Existing Agreement effected hereby, and except as and to the extentdescribed and addressed in a certain letter agreement among the partiesexecuted as of the Restatement Closing Date, the entry into this Agreement andthe occurrence of the Restatement Closing Date shall not be deemed toconstitute a waiver by the Buyer of any noncompliance by any Seller with theprovisions hereof or of the Existing Agreement, or of any Default or of anyright or remedy available in connection therewith.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have duly entered intothis Agreement as of the date set forth above.

 

**BUYER****:**

 

**UBS REAL ESTATE SECURITIES INC.**

 

 
| By:    |          /s/  Robert Carpenter     |   |
|--------|---------------------------------------------------------------------------------|--------|
|   | Name: Robert Carpenter                                                          |   |
|   | Title: Executive Director                                                       |   |
|   |                                                                            |   |
| By:    |           /s/  Jonathan Banks |   |
|   | Name: Jonathan Banks                                                            |   |
|   | Title: Executive Director                                                       |   |

 

Buyer’s Address for Notices:

 

1251 Avenue of the Americas New York, NY 10020 Attn: Robert Carpenter Telecopier No.:  (212) 882-3597 Telephone No.:  (212) 882-3749

 

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| SELLER AND SERVICER:                            |                                   | SELLER:                            |
|-------------------------------------------------|----------------------------------------|------------------------------------|
|                                            |                                   |                               |
| **IMPAC FUNDING CORPORATION**                   | ** **                             | **IMPAC MORTGAGE HOLDINGS, INC.**  |
|                                            |                                   |                               |
|                                            |                                   |                               |
| By:                                             | /s/  Ronald Morrison                   |                               | By: | /s/  Ronald Morrison |
|                                            | Name:  Ronald  Morrison           |                               |   | Name:  Ronald  Morrison |
|                                            | Title:  Executive  Vice President |                               |   | Title:  Executive  Vice President |
|                                            |                                   |                               |
| Seller and Servicer’s Address for Notices: |                                   | Seller’s Address for Notices: |
|                                            |                                   |                               |
| 19500 Jamboree Road                             |                                   | 19500 Jamboree Road                |
| Irvine, California 92612                        |                                   | Irvine, California 92612           |
| Attn: Ronald Morrison, Esq.                |                                   | Attn: Ronald Morrison, Esq.   |
| Telecopier No.: (949) 706-6208                  |                                   | Telecopier No.: (949) 706-6208     |
| Telephone No.: (949) 475-3942                   |                                   | Telephone No.: (949) 475-3942      |

 

SELLER:

 

**IMPAC WAREHOUSE LENDINGGROUP, INC.**

 

 
| By:    | /s/  Ronald Morrison                   |   |
|--------|----------------------------------------|--------|
|   | Name:  Ronald  Morrison           |   |
|   | Title:  Executive  Vice President |   |

 

Seller’s Address for Notices:

 

19500 Jamboree Road Irvine, California 92612 Attn: Ronald Morrison, Esq. Telecopier No.: (949) 706-6208

Telephone No.: (949) 475-3942

 

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SCHEDULE 1

 

**REPRESENTATIONS AND WARRANTIESRE: MORTGAGE LOANS**

 

Part I: Residential Mortgage Loans

 

Each Seller, jointly and severally, shall be deemed tomake the following representations and warranties to Buyer, with respect toeach Mortgage Loan, as of the Purchase Date for the purchase of any PurchasedAssets by Buyer from Sellers and as of the date of this Agreement and anyTransaction hereunder and at all times while the Repurchase Documents and anyTransaction hereunder is in full force and effect. Certain defined terms usedherein and not otherwise defined in this Agreement appear in Part II tothis Schedule 1.

 

(1)          MortgageLoans as Described. The information set forth in the Mortgage Loan Schedulewith respect to the Mortgage Loan is, and the representations and warrantiesset forth herein are, complete, true and correct in all respects;

 

(2)          PaymentsCurrent. No Mortgage Loan is thirty (30) days or more delinquent as of thedate such Mortgage Loan was first included in the Purchased Assets, nor willany Mortgage Loan, as of the date when such Mortgage Loan was first included inthe Borrowing Base, have been thirty (30) or more days delinquent more thanonce since origination. At any time when such Mortgage Loan is owned by Buyer,no payment required under the Mortgage Loan will be more than fifty-nine (59)days delinquent nor such Mortgage Loan have been thirty (30) or more daysdelinquent more than once since origination.

 

(3)          NoOutstanding Charges. There are no defaults in complying with the terms ofthe Mortgage securing the Mortgage Loan, and all taxes, governmentalassessments, insurance premiums, water, sewer and municipal charges, leaseholdpayments or ground rents which previously became due and owing have been paid,provided that, in the instance of taxes and/or insurance premiums, thisrepresentation will be considered satisfied to the extent that an escrow offunds has been established in an amount sufficient to pay for every such itemwhich remains unpaid and which has been assessed but is not yet due andpayable. No Person, including any Seller, has advanced funds, or induced,solicited or knowingly received any advance of funds by a party other than theMortgagor, directly or indirectly, for the payment of any amount required underthe Mortgage Loan, except for interest accruing from the date of the MortgageNote or date of disbursement of the Mortgage Loan proceeds, whichever isearlier, to the day which precedes by one month the Due Date of the firstinstallment of principal and interest thereunder;

 

(4)          OriginalTerms Unmodified. The terms of the Mortgage Note and Mortgage have not beenimpaired, waived, altered or modified in any respect from the date oforigination; except by a written instrument which has been recorded, ifnecessary to protect the interests of Buyer and which has been delivered toCustodian and the terms of which are reflected in the Mortgage Loan Schedule.The substance of any such waiver, alteration or modification has been approvedby the title insurer, to the extent required, and its terms are reflected onthe Mortgage Loan Schedule. No Mortgagor has been released, in whole or inpart, except in connection with an assumption agreement approved by the titleinsurer, to the extent required by the policy, and

 

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which assumption agreement is part of the Mortgage Filedelivered to Custodian and the terms of which are reflected in the MortgageLoan Schedule;

 

(5)          NoDefenses. The Mortgage Loan is not subject to any right of rescission,reformation, set-off, counterclaim or defense, including, without limitation,the defense of usury, nor will the operation of any of the terms of theMortgage Note or the Mortgage, or the exercise of any right thereunder, rendereither the Mortgage Note or the Mortgage unenforceable, in whole or in part,and no such right of rescission, reformation, set-off, counterclaim or defensehas been asserted with respect thereto, and no Mortgagor was a debtor in anystate or federal bankruptcy or insolvency proceeding at, or subsequent to, thetime the Mortgage Loan was originated;

 

(6)          HazardInsurance. Pursuant to the terms of the Mortgage, all buildings or otherimprovements upon the Mortgaged Property are insured by a Qualified Insureracceptable to Fannie Mae and Freddie Mac against loss by fire, hazards ofextended coverage and such other hazards as are customary in the area where theMortgaged Property is located and, as of the date of origination, consistentwith the Underwriting Guidelines, against other risks insured against byPersons operating like properties in the locality of the Mortgaged Property,pursuant to insurance policies conforming to the requirements of Fannie Mae andFreddie Mac in an amount not less than the greatest of (i) 100% of thereplacement cost of all improvements to the Mortgaged Property; (ii) either(a) the outstanding principal balance of the Mortgage Loan with respect toeach first lien Mortgage Loan or (b) with respect to each Second MortgageLoan, the sum of the outstanding principal balance of the related first lienmortgage loan and the outstanding principal balance of the Second MortgageLoan; or (iii) the amount necessary to avoid the operation of anyco-insurance provisions with respect to the Mortgaged Property except aslimited by applicable law, and consistent with the amount that would have beenrequired as of the date of origination in accordance with the UnderwritingGuidelines and Fannie Mae and Freddie Mac requirements. If any portion of theMortgaged Property is in an area identified on a Flood Hazard Map or FloodInsurance Rate Map by the Federal Emergency Management Agency as having specialflood hazards (and such flood insurance has been made available), a floodinsurance policy meeting the requirements of the current guidelines of theFederal Flood Insurance Administration is in effect with a generally acceptableinsurance carrier, in an amount representing coverage not less than the leastof (1) either (A) the outstanding principal balance of the MortgageLoan with respect to each first lien Mortgage Loan or (b) with respect toeach Second Mortgage Loan, the sum of the outstanding principal balance of therelated first lien mortgage loan and the outstanding principal balance of theSecond Mortgage Loan,, (2) the full insurable value of the MortgagedProperty, on a replacement cost basis and (3) the maximum amount ofinsurance available under the Flood Disaster Protection Act of 1973, asamended. Sellers shall have obtained a paid in full, life of loan, transferableflood certification contract for each Mortgage Loan and shall assign all suchcontracts to Buyer. All such insurance policies (collectively, the “hazardinsurance policy”) conform to the requirements of Fannie Mae and Freddie Macand contain a standard mortgagee clause naming the related Seller and itssuccessors and assigns (including, without limitation, subsequent owners of theMortgage Loan) as mortgagee, and may not be reduced, terminated or cancelledwithout thirty (30) days’ prior written notice to the mortgagee. No such noticehas been received by any Seller. All premiums on such insurance policypreviously coming due have been paid. Subject to applicable law, the relatedMortgage obligates the Mortgagor thereunder to maintain the hazard insurancepolicy at the Mortgagor’s

 

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cost and expense, and on the Mortgagor’s failure to do so,authorizes the holder of the Mortgage to obtain and maintain such insurance atsuch Mortgagor’s cost and expense, and to seek reimbursement therefor from suchMortgagor. Where required by state law or regulation, the Mortgagor has beengiven an opportunity to choose the carrier of the required hazard insurance,provided the policy is not a “master” or “blanket” hazard insurance policycovering a condominium, or any hazard insurance policy covering the commonfacilities of a planned unit development. The hazard insurance policy is thevalid and binding obligation of the insurer, is in full force and effect, andwill be in full force and effect and inure to the benefit of Buyer upon theconsummation of the transactions contemplated by this Agreement. No Seller hasengaged in, and has no knowledge of the Mortgagor’s or Servicer’s or any priorservicer’s having engaged in, any act or omission which would impair thecoverage of any such policy, the benefits of the endorsement provided fortherein, or the validity and binding effect of either, including, withoutlimitation, no unlawful fee, commission, kickback or other unlawfulcompensation or value of any kind has been or will be received, retained orrealized by any attorney, firm or other Person or entity, and no such unlawfulitems have been received, retained or realized by any Seller;

 

(7)          Compliancewith Applicable Laws. Any and all requirements of any federal, state orlocal law including, without limitation, usury, truth-in-lending, real estatesettlement procedures, consumer credit protection, equal credit opportunity,fair housing, predatory and abusive lending laws, or disclosure laws applicableto the Mortgage Loan have been complied with, the consummation of thetransactions contemplated hereby will not involve the violation of any suchlaws or regulations, and each Seller shall maintain or cause to be maintainedin its possession, available for Buyer’s inspection, and shall deliver toBuyer, upon demand, evidence of compliance with all such requirements;

 

(8)          NoSatisfaction of Mortgage. The Mortgage has not been satisfied, canceled,subordinated or rescinded, in whole or in part, and the Mortgaged Property hasnot been released from the lien of the Mortgage, in whole or in part, nor hasany instrument been executed that would effect any such release, cancellation,subordination or rescission. No Seller has waived the performance by theMortgagor of any action, if the Mortgagor’s failure to perform such actionwould cause the Mortgage Loan to be in default, nor has any Seller waived anydefault resulting from any action or inaction by the Mortgagor. With respect toeach Second Mortgage Loan (i) the related first lien is in full force andeffect, (ii) there is no default, breach, violation or event ofacceleration existing under the related first lien mortgage or the mortgagenote related to such first lien mortgage, (iii) either no consent for theMortgage Loan is required by the holder of the first lien or such consent hasbeen obtained and is contained in the Mortgage File, (iv) no event which,with the passage of time or with notice and the expiration of any grace or cureperiod, would constitute a default, breach, violation or event of accelerationunder the related first lien mortgage loan, and either (A) the relatedfirst lien mortgage contains a provision which allows or (B) applicablelaw requires, the mortgagee under the Second Mortgage Loan to receive noticeof, and affords such mortgagee an opportunity to cure any default by payment infull or otherwise under the related first lien mortgage, and (v) suchSecond Mortgage Loan is secured by a one- to four-family residence that was (orwould be) the principal residence of the Mortgagor upon the origination of theSecond Mortgage Loan;

 

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(9)          Locationand Type of Mortgaged Property. The Mortgaged Property is a single parcelof fee simple property or a leasehold estate with respect to real propertylocated in jurisdictions in which the use of leasehold estates for residentialproperties is a widely accepted practice. The Mortgaged Property consists of a singleparcel of real property with a detached single family residence erectedthereon, or a two- to four-family dwelling, or an individual residentialcondominium unit in a low-rise condominium project, or an individual unit in aplanned unit development or a *de minimis*planned unit development and shall conform with the Underwriting Guidelines. Noresidence or dwelling is a mobile home or a manufactured home. No portion ofthe Mortgaged Property is used for commercial purposes; *provided that* Mortgaged Properties whichcontain a home office shall not be considered as being used for commercialpurposes as long as the Mortgaged Property has not been altered for commercialpurposes and is not storing any chemicals or raw materials other than thosecommonly used for homeowner repair, maintenance and/or household purposes;

 

(10)        ValidFirst or Second Lien. The Mortgage is a valid, subsisting, enforceable andperfected (A) first lien and first priority security interest with respectto each Mortgage Loan which is indicated by Sellers to be a First MortgageLoan, or (B) second lien and second priority security interest withrespect to each Mortgage Loan which is indicated by Sellers to be a SecondMortgage Loan, in either case, on the real property included in the MortgagedProperty, including all buildings on the Mortgaged Property and all fixtures,installations and mechanical, electrical, plumbing, heating andair-conditioning systems located in or annexed to such buildings, and alladditions, alterations and replacements made at any time with respect to theforegoing. The lien of the Mortgage is subject only to:

 

(A)            the lien of current real propertytaxes and assessments not yet due and payable;

 

(B)            covenants, conditions andrestrictions, rights of way, easements and other matters of the public recordas of the date of recording acceptable to sub-prime mortgage lendinginstitutions generally and specifically referred to in the lender’s titleinsurance policy delivered to the originator of the Mortgage Loan and (i) referredto or otherwise considered in the appraisal made for the originator of theMortgage Loan or (ii) which do not adversely affect the Appraised Value ofthe Mortgaged Property set forth in such appraisal;

 

(C)            other matters to which likeproperties are commonly subject which do not materially interfere with thebenefits of the security intended to be provided by the Mortgage or the use,enjoyment, value or marketability of the related Mortgaged Property;

 

(D)            with respect to each Second MortgageLoan, a prior mortgage lien on the Mortgaged Property.

 

Any Security Agreement, chattel mortgage or equivalentdocument related to and delivered in connection with the Mortgage Loanestablishes and creates a valid, subsisting and enforceable (A) first lienand first priority perfected security interest with respect to each first lienMortgage Loan, or (B) second lien and second priority perfected securityinterest with

 

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respect to each Second Mortgage Loan, in either case, onthe property described therein and the applicable Seller has full right to selland assign the same to Buyer. The Mortgaged Property was not, as of the date oforigination of the Mortgage Loan, subject to a mortgage, deed of trust, deed tosecure debt or other security instrument creating a lien subordinate to thelien of the Mortgage, which subordinate lien was not taken into account in thedetermining of such Mortgage Loan’s Combined Loan-to-Value Ratio, as disclosedto Buyer;

 

(11)        Validityof Mortgage Loan Documents. The Mortgage Note, the Mortgage and any otheragreement executed and delivered by a Mortgagor or guarantor, if applicable, inconnection with the Mortgage Loan are genuine, and each is the legal, valid andbinding obligation of the maker thereof enforceable in accordance with itsterms. All parties to the Mortgage Note, the Mortgage and any other relatedagreement had legal capacity to enter into the Mortgage Loan and to execute anddeliver the Mortgage Note, the Mortgage and any other related agreement, andthe Mortgage Note, the Mortgage and any other related agreement have been dulyand properly executed by such parties. The documents, instruments andagreements submitted for loan underwriting were not falsified and contain nountrue statement of material fact or omit to state a material fact required tobe stated therein or necessary to make the information and statements thereinnot misleading.     No fraud, error, negligence,misrepresentation or omission of fact or similar malfeasance with respect to aMortgage Loan has taken place on the part of any Person, including, withoutlimitation, any Seller, the Mortgagor, any appraiser, any builder or developer,or any other party involved in the origination or servicing of the MortgageLoan or in the application of any insurance in relation to such Mortgage Loan.Sellers have reviewed all of the documents constituting the Servicing File andhave made such inquiries as they deem necessary to make and confirm theaccuracy of the representations set forth herein;

 

(12)        FullDisbursement of Proceeds. The Mortgage Loan has been closed and theproceeds of such Mortgage Loan have been fully disbursed and there is nofurther requirement for future advances thereunder, and any and all requirementsunder the Mortgage Loan as to completion of any on-site or off-site improvementand any disbursements of any escrow funds therefor have been complied with. Allcosts, fees and expenses incurred in making or closing the Mortgage Loan andthe recording of the Mortgage were paid, and the Mortgagor is not entitled toany refund of any amounts paid or due under the Mortgage Note or Mortgage;

 

(13)        Ownership.Immediately prior to the sale of the Mortgage Loan to Buyer, the related Selleris the sole legal, beneficial and equitable owner of record and, except withrespect to MERS Designed Mortgage Loans, holder of the Mortgage Loan. TheMortgage Loan is not assigned or pledged, and the related Seller has good,indefeasible and marketable title thereto, and has full right to transfer,convey, assign and sell the Mortgage Loan therein to Buyer free and clear ofany encumbrance, equity, participation interest, lien, pledge, charge, claim orsecurity interest, and has full right and authority subject to no interest orparticipation of, or agreement with, any other party, to sell and assign eachMortgage Loan pursuant to this Agreement and following the sale of eachMortgage Loan, Buyer will own such Mortgage Loan free and clear of anyencumbrance, equity, participation interest, lien, pledge, charge, claim orsecurity interest except any such security interest created pursuant to theterms of this Agreement;

 

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(14)        DoingBusiness. All parties which have had any interest in the Mortgage Loan,whether as mortgagee, assignee, pledgee or otherwise, are (or, during theperiod in which they held and disposed of such interest, were) (1) incompliance with any and all applicable licensing requirements of the laws of thestate wherein the Mortgaged Property is located, and (2) organized underthe laws of such state, or (3) qualified to do business in such state, or (4) federalsavings and loan associations or national banks having principal offices insuch state, or (5) not doing business in such state;

 

(15)        LTV.No Mortgage Loan has an LTV greater than 100%. No Second Mortgage Loan has aCLTV greater than 100%;

 

(16)        TitleInsurance. The Mortgage Loan is covered by an ALTA lender’s title insurancepolicy (which, in the case of an Adjustable Rate Loan has an adjustable ratemortgage endorsement in the form of ALTA 6.0 or 6.1) or other generallyacceptable form of policy or insurance acceptable to Fannie Mae or Freddie Mac,issued by a title insurer acceptable to Fannie Mae or Freddie Mac and licensedand qualified to do business in the jurisdiction where the Mortgaged Propertyis located, insuring the related Seller, its successors and assigns, as to thefirst (or second, if the Mortgage Loan is a Second Mortgage Loan) priority lienof the Mortgage in the original principal amount of the Mortgage Loan, andagainst any loss by reason of the invalidity or unenforceability of the lienresulting from the provisions of the Mortgage providing for adjustment in theMortgage Interest Rate and Monthly Payment, subject only to the exceptionscontained in clauses (A), (B), and (C), and with respect to each SecondMortgage Loan, clause (D) of Paragraph (10) of this Schedule 1. Whererequired by state law or regulation, the Mortgagor has been given theopportunity to choose the carrier of the required mortgage title insurance.Additionally, such lender’s title insurance policy affirmatively insuresingress and egress, and against encroachments by or upon the Mortgaged Propertyor any interest therein. The title policy does not contain any specialexceptions (other than the standard exclusions) for zoning and uses and hasbeen marked to delete the standard survey exception or to replace the standardsurvey exception with a specific survey reading. The related Seller, itssuccessors and assigns are the sole insureds of such lender’s title insurancepolicy, and such lender’s title insurance policy is valid and remains in fullforce and effect and will be in force and effect upon the consummation of thetransactions contemplated by this Agreement. No claims have been made undersuch lender’s title insurance policy, and no prior holder or servicer of theMortgage, including the related Seller, has done, by act or omission, anythingwhich would impair the coverage of such lender’s title insurance policy,including, without limitation, no unlawful fee, commission, kickback or otherunlawful compensation or value of any kind has been or will be received,retained or realized by any attorney, firm or other Person, and no suchunlawful items have been received, retained or realized by the related Seller;

 

(17)        NoDefaults. There is no default, breach, violation or event of accelerationexisting under the Mortgage or the Mortgage Note and no event which, with thepassage of time or with notice and the expiration of any grace or cure period,would constitute a default, breach, violation or event of acceleration, andneither Sellers nor any predecessors to any of the Sellers has waived anydefault, breach, violation or event of acceleration. With respect to eachSecond Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii) thereis no default, breach, violation or event of acceleration existing under suchprior mortgage or the related mortgage note, (iii) no event which, withthe passage of time or with notice and the expiration of any grace

 

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or cure period, would constitute a default, breach,violation or event of acceleration thereunder, and either (A) the priormortgage contains a provision which allows or (B) applicable law requires,the mortgagee under the Second Mortgage Loan to receive notice of, and affordssuch mortgagee an opportunity to cure any default by payment in full or otherwiseunder the prior mortgage;

 

(18)        NoMechanics’ Liens. There are no mechanics’ or similar liens or claims whichhave been filed for work, labor or material (and no rights are outstanding thatunder the law could give rise to such liens) affecting the related MortgagedProperty which are or may be liens prior to, or equal or coordinate with, thelien of the related Mortgage;

 

(19)        Locationof Improvements; No Encroachments. All improvements which were consideredin determining the Appraised Value of the Mortgaged Property lie wholly withinthe boundaries and building restriction lines of the Mortgaged Property and noimprovements on adjoining properties encroach upon the Mortgaged Property. Noimprovement located on or being part of the Mortgaged Property is in violationof any applicable zoning and building law, ordinance or regulation;

 

(20)        Origination:Payment Terms. The Mortgage Loan was originated by or in connection with aSeller or by a mortgagee approved by the Secretary of Housing and Urban Developmentpursuant to Sections 203B and 211 of the National Housing Act or a savings andloan association, a savings bank, a commercial bank, credit union, insurancecompany or similar banking institution which is supervised and examined by afederal or state authority. Other than with respect to Interest-Only Loans,principal payments on the Mortgage Loan commenced no more than 60 days afterfunds were disbursed in connection with the Mortgage Loan. The MortgageInterest Rate is adjusted, with respect to the Adjustable Rate Mortgage Loans,on each Interest Rate Adjustment Date to equal the applicable index plus theGross Margin (rounded up or down to nearest 0.125%), subject to the MaximumMortgage Interest Rate. Other than with respect to Interest Only Loans, theMortgage Note is payable on the first day of each month in equal monthlyinstallments of principal and interest, which installments of interest, withrespect to Adjustable Rate Mortgage Loans, are subject to change due to theadjustments to the Mortgage Interest Rate on each Interest Rate AdjustmentDate, with interest calculated and payable in arrears, sufficient to amortizethe Mortgage Loan fully by the stated maturity date, over an original term ofnot more than forty (40) years from commencement of amortization. The MortgageNote has the terms identified in the applicable Mortgage Loan Schedule. The duedate of the first payment under the Mortgage Note is no more than sixty (60)days from the date of the Mortgage Note. No Mortgage Loan is a ConvertibleMortgage Loan. The Mortgage Loan shall pay installments of interest at theMortgage Interest Rate. In the case of a Balloon Loan, monthly payments arebased on a fifteen (15) or thirty (30) year amortization schedule, as set forthin the related Mortgage Note, and a final monthly payment substantially greaterthan the preceding monthly payment which is sufficient to amortize theremaining principal balance of the Balloon Loan and to pay interest at therelated Mortgage Interest Rate;

 

(21)        CustomaryProvisions. The Mortgage Note has a stated maturity. The Mortgage containscustomary and enforceable provisions such as to render the rights and remediesof the holder thereof adequate for the realization against the MortgagedProperty of the benefits of the security provided thereby, including, (i) inthe case of a Mortgage designated as a deed of trust,

 

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by trustee’s sale, and (ii) otherwise by judicialforeclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on,or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures,the holder of the Mortgage Loan will be able to deliver good and merchantabletitle to the Mortgaged Property. There is no homestead or other exemptionavailable to the Mortgagor which would interfere with the right to sell theMortgaged Property at a trustee’s sale or the right to foreclose the Mortgagesubject to applicable federal and state laws and judicial precedent withrespect to bankruptcy and right of redemption;

 

(22)        Conformancewith Underwriting Guidelines and Agency Standards. The Mortgage Loan wasunderwritten in accordance with the Underwriting Guidelines in the formapproved by Buyer; the Mortgage Loan was underwritten either (i) in accordancewith the Underwriting Guidelines as of the date of this Agreement or (ii) inaccordance with a subsequent modification of the Underwriting Guidelinespreviously affirmatively approved by Buyer. The Mortgage Note and Mortgage areon forms acceptable to Fannie Mae or Freddie Mac and no Seller has made anyrepresentations to a Mortgagor that are inconsistent with the mortgageinstruments used;

 

(23)         Occupancyof the Mortgaged Property. The Mortgaged Property is lawfully occupiedunder applicable law. All inspections, licenses and certificates required to bemade or issued with respect to all occupied portions of the Mortgaged Propertyand, with respect to the use and occupancy of the same, including but notlimited to certificates of occupancy and fire underwriting certificates, havebeen made or obtained from the appropriate authorities. No Seller has receivednotification from any Governmental Authority that the Mortgaged Property is inmaterial non-compliance with such laws or regulations, is being used, operatedor occupied unlawfully or has failed to have or obtain such inspection,licenses or certificates, as the case may be. No Seller has received notice ofany violation or failure to conform with any such law, ordinance, regulation,standard, license or certificate. Except as otherwise disclosed on the MortgageLoan Schedule, the Mortgagor represented at the time of origination of theMortgage Loan that the Mortgagor would occupy the Mortgaged Property as theMortgagor’s primary residence;

 

(24)        NoAdditional Collateral. The Mortgage Note is not and has not been secured byany collateral except the lien of the corresponding Mortgage and the securityinterest of any applicable Security Agreement or chattel mortgage referred toin Paragraph (10) above;

 

(25)         Deedsof Trust. In the event the Mortgage constitutes a deed of trust, a trustee,authorized and duly qualified under applicable law to serve as such, has beenproperly designated and currently so serves and is named in the Mortgage, andno fees or expenses are or will become payable by Custodian or Buyer to thetrustee under the deed of trust, except in connection with a trustee’s saleafter default by the Mortgagor;

 

(26)        Deliveryof Mortgage Loan Documents. Other than with respect to Wet-Ink MortgageLoans, the Mortgage Note, the Mortgage, the Assignment of Mortgage or if suchMortgage has been originated in the name of MERS and registered under the MERS®system, evidence satisfactory to Buyer that Buyer has been identified as the “interimfunder” on the MERS® System, and any other documents required to be deliveredby Sellers under this Agreement have been delivered to Buyer or Custodian.Sellers are in possession of a complete,

 

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true and accurate Mortgage File in compliance with theCustodial Agreement, except for such documents the originals of which have beendelivered to Buyer or Custodian;

 

(27)        Transferof Mortgage Loans. With respect to Mortgage Loans which have not beenregistered under the MERS® system, the Assignment of Mortgage is in recordableform (excepting therefrom the name of the assignee and mortgage recordationinformation not yet returned from the applicable recording office) and isacceptable for recording under the laws of the jurisdiction in which theMortgaged Property is located;

 

(28)        Due-OnSale. Except as may otherwise be limited by applicable law, the Mortgagecontains an enforceable provision for the acceleration of the payment of theunpaid principal balance of the Mortgage Loan in the event that the MortgagedProperty is sold or transferred without the prior written consent of theMortgagee thereunder;

 

(29)        NoBuydown Provisions; No Graduated Payments or Contingent Interests. TheMortgage Loan does not contain provisions pursuant to which Monthly Paymentsare paid or partially paid with funds deposited in any separate accountestablished by Sellers, the Mortgagor or anyone on behalf of the Mortgagor, orpaid by any source other than the Mortgagor nor does it contain any othersimilar provisions which may constitute a “buydown” provision. The MortgageLoan is not a graduated payment mortgage loan and the Mortgage Loan does nothave a shared appreciation or other contingent interest feature;

 

(30)        Consolidationof Future Advances. Any future advances made to the Mortgagor prior to therelated Purchase Date have been consolidated with the outstanding principalamount secured by the Mortgage, and the secured principal amount, asconsolidated, bears a single interest rate and single repayment term. The lienof the Mortgage securing the consolidated principal amount is expressly insuredas having (A) first lien priority with respect to each Mortgage Loan whichis indicated by Sellers to be a first Mortgage Loan, or (B) second lienpriority with respect to each Mortgage Loan which is indicated by Sellers to bea Second Mortgage Loan, in either case, by a title insurance policy, anendorsement to the policy insuring the mortgagee’s consolidated interest or byother title evidence conforming to Accepted Origination Practices andacceptable to Fannie Mae and Freddie Mac. The consolidated principal amountdoes not exceed the original principal amount of the Mortgage Loan;

 

(31)         MortgagedProperty Undamaged. There is no proceeding pending or threatened for thetotal or partial condemnation of the Mortgaged Property. The Mortgaged Propertyis free of damage and waste that may affect adversely the value of theMortgaged Property as security for the Mortgage Loan or the use for which the premiseswere intended and each Mortgaged Property is in good repair. There have notbeen any condemnation proceedings with respect to the Mortgaged Property andthe applicable Seller has no knowledge of any such proceedings scheduled tocommence at a future date;

 

(32)        CollectionPractices; Escrow Deposits; Adjustable Rate Mortgage Loan Adjustments. Theorigination and collection practices used by the related Seller, the originatorand each servicer of the Mortgage Loan with respect to the Mortgage Loan havebeen in accordance with Accepted Servicing Practices and in all respects incompliance with all applicable laws and regulations, and have been in allrespects legal, prudent and consistent with

 

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industry standards for mortgage loans of the same type asthe Mortgage Loan. With respect to escrow deposits and escrow payments (otherthan with respect to Second Mortgage Loans for which the mortgagee under theprior mortgage lien is collecting Escrow Payments), all such payments are inthe possession of, or under the control of, the related Seller or Servicer andthere exist no deficiencies in connection therewith for which customaryarrangements for repayment thereof have not been made. All Escrow Payments havebeen collected in full compliance with federal, state and local law, rules andregulations. An escrow of funds is not prohibited by applicable law, rules andregulations and, if required by the terms of the Mortgage Loan Documents orrequested by the Mortgagor, has been established in an amount sufficient to payfor every item which remains unpaid and which has been assessed but is not yetdue and payable. No escrow deposits or Escrow Payments or other charges orpayments due Sellers have been capitalized under the Mortgage or the MortgageNote. Each Mortgage Loan is covered by a life of loan tax service contract. AllMortgage Interest Rate adjustments have been made in strict compliance withstate and federal laws and the terms of the related Mortgage Note. Any interestrequired to be paid pursuant to state, federal and local laws has been properlypaid and credited;

 

(33)        NoDenial of Insurance. No action, inaction, or event has occurred and nostate of fact exists or has existed that has resulted or will result in theexclusion from, denial of, or defense to coverage under any applicable poolinsurance policy, special hazard insurance policy, PMI Policy or bankruptcybond, irrespective of the cause of such failure of coverage. In connection withthe placement of any such insurance, no commission, fee, or other compensationhas been or will be received by the related Seller or by any of such Seller’sofficers, directors, or employees or by any of such Seller’s designees or anycorporation in which such Seller or any officer, director, or employee had afinancial interest at the time of placement of such insurance;

 

(34)        Servicemembers’Civil Relief Act. The Mortgagor has not notified the related Seller, andsuch Seller has no knowledge, of any relief requested or allowed to theMortgagor under the Servicemembers’ Civil Relief Act;

 

(35)        Appraisal.The Mortgage File contains an appraisal of the related Mortgaged Property whichis on appraisal form 1004 or form 2055 with an interior inspection or, withrespect to any Second Lien Mortgage Loan, is on appraisal form 704, 2065 or2055 with an exterior inspection only. If requested by Buyer, the relatedSeller has delivered to Buyer an appraisal of the Mortgaged Property signedprior to the approval of the Mortgage application by an appraiser qualifiedunder Fannie Mae and Freddie Mac guidelines who (i) is licensed in thestate where the Mortgaged Property is located, (ii) has no interest,direct or indirect, in the Mortgaged Property or in any Mortgage Loan or thesecurity therefore, and (iii) does not receive compensation that isaffected by the approval or disapproval of the Mortgage Loan. The appraisalshall have been made within one hundred and eighty (180) days before theorigination of the Mortgage Loan, and shall have been completed in compliancewith the Uniform Standards of Professional Appraisal Practice, and allapplicable federal, state and local laws and regulations, including but notlimited to the relevant provisions of the Financial Institutions Reform,Recovery, and Enforcement Act of 1989. If the appraisal was made more than onehundred and twenty (120) days before the origination of the Mortgage Loan, suchSeller shall have received and delivered to Buyer a recertification of theappraisal;

 

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(36)        Disclosure Materials. TheMortgagor has executed a statement to the effect that the Mortgagor hasreceived all disclosure materials required by applicable law with respect tothe making of adjustable rate mortgage loans in the case of Adjustable RateMortgage Loans and fixed rate mortgage loans in the case of Fixed Rate MortgageLoans. Sellers shall maintain such statement in the Mortgage File;

 

(37)        No Defense to Insurance Coverage.No action has been taken or failed to be taken, no event has occurred and nostate of facts exists or has existed on or prior to the Purchase Date (whetheror not known to any Seller on or prior to such date) which has resulted or willresult in an exclusion from, denial of, or defense to coverage under anyprivate mortgage insurance, pool insurance, special hazard policy or bankruptcybond (including, without limitation, any exclusions, denials or defenses whichwould limit or reduce the availability of the timely payment of the full amountof the loss otherwise due thereunder to the insured) whether arising out ofactions, representations, errors, omissions, negligence, or fraud of Sellers,the related Mortgagor or any party involved in the application for suchcoverage, including the appraisal, plans and specifications and other exhibitsor documents submitted therewith to the insurer under such insurance policy, orfor any other reason under such coverage, but not including the failure of suchinsurer to pay by reason of such insurer’s breach of such insurance policy or suchinsurer’s financial inability to pay; in connection with the placement of anysuch insurance, no commission, fee, or other compensation has been or will bereceived by the related Seller or by any of such Seller’s officers, directors,or employees or by any of such Seller’s designees or any corporation in whichsuch Seller or any officer, director, or employee had a financial interest atthe time of placement of such insurance;

 

(38)        Construction or Rehabilitation ofMortgaged Property. No Mortgage Loan was made in connection with theconstruction or rehabilitation of a Mortgaged Property or facilitating thetrade-in or exchange of a Mortgaged Property. For purposes of this section, aMortgage Loan with an escrow holdback is not considered to be a construction orrehabilitation loan;

 

(39)        Capitalization of Interest. TheMortgage Note does not by its terms provide for the capitalization orforbearance of interest. None of the Mortgage Loans provides for NegativeAmortization and each Mortgage Loan provides for payments of principal andinterest sufficient to amortize the Mortgage Loan fully by the stated maturitydate. With respect to each Second Mortgage Loan, the related first lien doesnot provide for Negative Amortization;

 

(40)        No Equity Participation. Nodocument relating to the Mortgage Loan provides for any contingent oradditional interest in the form of participation in the cash flow of theMortgaged Property or a sharing in the appreciation of the value of theMortgaged Property. The indebtedness evidenced by the Mortgage Note is notconvertible to an ownership interest in the Mortgaged Property or the Mortgagorand the related Seller has not financed nor does it own directly or indirectly,any equity of any form in the Mortgaged Property or the Mortgagor;

 

(41)        [Reserved].

 

(42)        Withdrawn Mortgage Loans. If theMortgage Loan has been released to the related Seller, on behalf of Buyer,pursuant to a Request for Release as permitted under the

 

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Custodial Agreement, thenthe promissory note relating to the Mortgage Loan was returned to the Custodianwithin five (5) Business Days;

 

(43)        Origination Date. The OriginationDate is no earlier than two (2) months prior to the date the Mortgage Loanis first purchased by Buyer;

 

(44)        No Exception. The Custodian hasnot noted any material exceptions on a Mortgage Loan Schedule and ExceptionReport with respect to the Mortgage Loan which would materially adverselyaffect the Mortgage Loan or Buyer’s ownership or security interest in theMortgage Loan, unless consented to by Buyer;

 

(45)        Mortgage Submitted for Recordation.The Mortgage either has been or will promptly be submitted for recordation inthe appropriate governmental recording office of the jurisdiction where theMortgaged Property is located;

 

(46)        Ground Leases. The Mortgage Loanis not secured by the Mortgagor’s interest in a Ground Lease except to theextent permitted pursuant to representation (9) above, and if suchMortgage Loan is secured by the Mortgagor’s interest in a Ground Lease:

 

(A)          TheGround Lease or a memorandum thereof has been duly recorded, the Ground Leasepermits the interest of the lessee thereunder to be encumbered by the relatedMortgage, does not restrict the use of the Mortgaged Property by the lessee orits successors and assigns in a manner that would adversely affect the securityprovided by the related Mortgage, and there has not been a material change inthe terms of the Ground Lease since its recordation, with the exception ofwritten instruments which are part of the related mortgage file;

 

(B)           TheGround Lease is not subject to any liens or encumbrances superior to, or ofequal priority with, the related Mortgage, other than the related ground lessor’srelated fee interest;

 

(C)           TheGround Lease either (i) has a term which extends not less than five yearsbeyond the maturity date of the related Mortgage Loan or (ii) grants thelessee the option to extend the term of the lease for a period (in theaggregate) which exceeds five years beyond the maturity date of the relatedMortgage Loan;

 

(D)          TheGround Lease is valid, in good standing, and in full force and effect;

 

(E)           Thelessee is not in default under any provision of the lease;

 

(F)           Themortgagee under the Mortgage Loan is given at least 30 days’ notice of anydefault and an opportunity to cure any defaults under the Ground Lease or totake over the Mortgagor’s rights under the Ground Lease;

 

(G)           TheGround Lease does not contain any default provisions that could give rise toforfeiture or termination of the Ground Lease except for the nonpayment of theGround lease rents; and

 

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(H)          TheGround Lease provides that the leasehold can be transferred, mortgaged and subletan unlimited number of times either without restriction or on payment of areasonable fee and delivery of reasonable documentation to the lessor;

 

(47)         Section 32 Loans. TheMortgage Loan is not a “High Rate, High Cost” loan or Section 226.32 loanas described in Regulation Z of the Truth in Lending Act, or a loan which ischaracterized as a “high cost mortgage loan” under applicable state or locallaw, rules or regulations;

 

(48)         Predatory Lending Regulations; HighCost Loans. None of the Mortgage Loans are (a) subject to, covered byor in violation of the Home Ownership and Equity Protection Act of 1994 (“HOEPA”)or (b) classified as a “high cost,” “threshold,” “covered,” “high risk,” “threshold,”or “predatory” loans (excluding a “covered home loan” as defined in clause (1) ofthe definition of such term under the New Jersey Home Ownership Security Act of2002) under any other applicable state, federal or local law, including anypredatory or abusive lending laws, (including, without limitation, any regulationor ordinance) (or a similarly classified loan using different terminology undera law imposing heightened regulatory scrutiny or additional legal liability forresidential mortgage loans having high interest rates, points and/or fees) or (c) inviolation of any state law or ordinance comparable to HOEPA or (d) aMortgage Loan categorized as “High Cost” or “Covered,” as applicable, pursuantto Appendix E of the Standard & Poor’s LEVELS® Glossary Revised,Appendix E or (e) no Mortgage Loan originated on or after October 1,2002 through March 6, 2003 is governed by the Georgia Fair Lending Act;

 

(49)         Endorsements. Each Mortgage Notehas been endorsed by the related Seller for its own account and not as afiduciary, trustee, trustor or beneficiary under a trust agreement;

 

(50)         Accuracy of Information. Allinformation provided to Buyer by Sellers with respect to the Purchased Assetsis accurate in all material respects;

 

(51)         Credit Insurance. No Mortgagorwas offered or required to purchase credit insurance in connection with theorigination of the related Mortgage Loan;

 

(52)         Minimum FICO. Except forMortgage Loans falling within the Sub-Limit applicable thereto (within themeaning of the Existing Agreement), no Mortgagor had a FICO score below 520 atthe time of origination of the related Mortgage Loan;

 

(53)         Original Issue Discount. TheMortgage Loan was originated free of any “original issue discount” with respectto which the owner of the Mortgage Loan could be deemed to have income pursuantto Sections 1271 et seq. of the Code;

 

(54)         Acceptable Investment. TheMortgagor is not in bankruptcy or insolvent and the related Seller has noknowledge of any circumstances or conditions with respect to the Mortgage, theMortgaged Property, the Mortgagor or the Mortgagor’s credit standing that canreasonably be expected to cause the Mortgage Loan to be an unacceptableinvestment, cause the Mortgage Loan to become delinquent, or adversely affectthe value or marketability of the Mortgage Loan. As used herein, “knowledge”shall be deemed to include (A) knowledge of facts or conditions of whichSellers (including, without limitation, any of their directors, officers,agents or employees) either are actually aware or should have been aware underthe circumstances with the exercise of

 

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reasonable care, duediligence and competence in discharging such Seller’s duties, (B) allmatters of public record, and (C) the making of any representation orwarranty that is inaccurate or incomplete. The term “due diligence” means thecare which a Seller would exercise in obtaining and verifying information for aloan in which such Seller would be entirely dependent on the property securingsuch loan and on the borrower’s creditworthiness as security to protect itsinvestment;

 

(55)         No Construction Loans. NoMortgage Loan was made in connection with (a) facilitating the trade-in orexchange of a Mortgaged Property or (b) the construction or rehabilitationof a Mortgaged Property;

 

(56)         Environmental Matters. TheMortgaged Property is free from any and all toxic or hazardous substances,hazardous wastes or solid wastes as such terms are defined in the ComprehensiveEnvironmental Response Compensation and Liability Act and the ResourcesConservation and Recovery Act of 1976, including, without limitation, asbestos,and there exists no violation of any local, state or federal environmental law,rule or regulation. There is no pending action or proceeding directlyinvolving any Mortgaged Property of which Sellers are aware in which compliancewith any environmental law, rule or regulation is an issue; and to thebest of Sellers’ knowledge, nothing further remains to be done to satisfy infull all requirements of each such law, rule or regulation constituting aprerequisite to use and enjoyment of said property;

 

(57)         Value of Mortgage Property. NoSeller has knowledge of any circumstances or conditions existing with respectto the Mortgage Loan, Mortgaged Property or Mortgagor’s credit standing thatshould reasonably be expected to adversely affect the value or themarketability of the Mortgaged Property or the Mortgage Loan or to cause theMortgage Loan to prepay during any period materially faster or slower than theMortgage Loans originated by Sellers generally;

 

(58)         Servicing Agreement. Noservicing agreement has been entered into with respect to the Mortgage Loan, orany such servicing agreement has been terminated (without any termination fee)and there are no restrictions, contractual or governmental, which would impairthe ability of Buyer or Buyer’s designees from servicing the Mortgage Loan;

 

(59)         LTV; PMI Policy. No MortgageLoan has an LTV greater than 100%. With respect to “prime” Mortgage Loans (asdefined in the Underwriting Guidelines), each such Mortgage Loan with an LTV inexcess of 80% is and will be insured as to payment defaults by a PMI Policyacceptable to Fannie Mae and in an amount of coverage meeting the requirementsset forth with respect to such insurance policies in the Fannie Mae Guidesuntil such Mortgage Loan is no longer required under the terms of the FannieMae Guides to be so insured. All provisions of such PMI Policy have been andare being complied with, such policy is valid and remains in full force and effect,and all premiums due thereunder have been paid. No action, inaction, or eventhas occurred and no state of facts exists that has, or will result in theexclusion from, denial of, or defense to coverage by the PMI Policy. AnyMortgage Loan subject to a PMI Policy obligates the Mortgagor thereunder tomaintain the PMI Policy and to pay all premiums and charges in connectiontherewith. The Mortgage Interest Rate for each Mortgage Loan as set forth onthe mortgage loan schedule is net of any such insurance premium;

 

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(60)         Regarding the Mortgagor. TheMortgagor is one or more natural persons and/or trustees for an Illinois landtrust or a trustee under a “living trust” and such “living trust” is in compliancewith Fannie Mae guidelines for such trusts;

 

(61)         Qualified Mortgage. The MortgageLoan is a “qualified mortgage” within the meaning of Section 860G(a)(3) orany successor provision thereof of the Code;

 

(62)         Insurance. Sellers have causedor will cause to be performed any and all acts required to preserve the rightsand remedies of Buyer in any insurance policies applicable to the MortgageLoans including, without limitation, any necessary notifications of insurers,assignments of policies or interests therein, and establishments of coinsured,joint loss payee and mortgagee rights in favor of Buyer;

 

(63)         Simple Interest Mortgage Loans.None of the Mortgage Loans are simple interest Mortgage Loans;

 

(64)         Prepayment Fee. Except as setforth on the related Mortgage Loan Schedule, none of the Mortgage Loans aresubject to a prepayment fee. With respect to each Mortgage Loan that has aprepayment fee feature, each such prepayment fee is enforceable and will beenforced by Sellers for the benefit of Buyer, and each prepayment fee ispermitted pursuant to federal, state and local law and, with respect to anyAgency Eligible Mortgage Loan, is only payable (i) with respect to aMortgage Loan originated prior to October 1, 2002, during the first 5years of the term of the Mortgage Loan, and (ii) with respect to aMortgage Loan originated on or after October 1, 2002, during the first 3years of the term of the Mortgage Loan. Each such prepayment fee is in anamount not greater than the maximum amount permitted under applicable law. Withrespect to any Mortgage Loan that contains a provision permitting imposition ofa prepayment fee upon a prepayment prior to maturity: (i) prior to theloan’s origination, the Mortgagor agreed to such prepayment fee in exchange fora monetary benefit, including but not limited to a rate or fee reduction, (ii) withrespect to any Agency Eligible Mortgage Loan, prior to the loan’s origination,the Mortgagor was offered the option of obtaining a Mortgage Loan that did notrequire payment of such a prepayment fee, (iii) the prepayment fee isdisclosed to the Mortgagor in the loan documents pursuant to applicable stateand federal law, and (iv) notwithstanding any state or federal law to thecontrary, Sellers shall not impose such prepayment fee in any instance when themortgage debt is accelerated as the result of the Mortgagor’s default in makingthe loan payments;

 

(65)         Accuracy of Information. Allinformation provided to Buyer by Sellers with respect to the Mortgage Loans isaccurate in all material respects;

 

(66)         Single Premium Credit Insurance.No Mortgagor is offered or required to purchase single premium credit insurancein connection with the origination of the related Mortgage Loan. No Mortgagorobtained a prepaid single premium credit life, disability, unemployment,mortgage, accident or health insurance policy in connection with theorigination of the Mortgage Loan. None of the proceeds of the Mortgage Loanwere used to purchase or finance single-premium insurance policies or debt cancellationagreements as part of the origination of or as a condition to closing, suchMortgage Loan;

 

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(67)         MIP Insurance. With respect toeach Mortgage Loan insured by HUD or the VA, all insurance premiums (“MIP”)payable to HUD or the VA, as applicable, in connection with such Mortgage Loanwere paid within the timeframe required by such Agency to avoid the impositionof any late fees or penalty fees;

 

(68)         MIP Insurance Certificate. Withrespect to each Mortgage Loan insured by HUD or the VA, Sellers have receivedthe related insurance certificate from the applicable agency evidencing suchinsurance within 60 days of the origination date of such Mortgage Loan;

 

(69)         MIP Documents. With respect toeach Mortgage Loan insured by HUD or the VA, Sellers have submitted alldocuments required by the applicable Agency to insure such Mortgage Loan(regardless of whether such documents are required to be contained in therelated Document File) within 30 days of the origination date of such MortgageLoan;

 

(70)         MIP Access. With respect to eachMortgage Loan insured by HUD or the VA, Sellers have provided access to Buyerto the lender number, password or any other information that may be required bythe applicable Agency or otherwise for Buyer to verify that the related MIPpayments have been made;

 

(71)         Borrower Credit Files. Withrespect to each Mortgage Loan, Sellers have fully and accurately furnishedcomplete information on the related borrower credit files to Equifax, Experianand TransUnion Credit Information Company, in accordance with the Fair CreditReporting Act and its implementing regulations, on a monthly basis and Sellers,for each Mortgage Loan, will furnish, in accordance with the Fair Credit ReportingAct and its implementing regulations, accurate and complete information on itsborrower credit files to Equifax, Experian, and TransUnion Credit InformationCompany, on a monthly basis;

 

(72)         Lending Practices. No predatoryor deceptive lending practices, including but not limited to, the extension ofcredit to the applicable Mortgagor without regard for said Mortgagor’s abilityto repay the Mortgage Loan and the extension of credit to said Mortgagor whichhas no apparent benefit to said Mortgagor, were employed by the originator ofthe Mortgage Loan in connection with the origination of the Mortgage Loan. Withrespect to any Agency Eligible Mortgage Loan, such Mortgage Loan is incompliance with the anti-predatory lending eligibility for purchase requirementsof the Fannie Mae Guides;

 

(73)         Loan Products. With respect toany Agency Eligible Mortgage Loan, no Mortgagor was encouraged or required toselect a Mortgage Loan product offered by the Mortgage Loan’s originator whichis a higher cost product designed for less creditworthy borrowers, unless atthe time of the Mortgage Loan’s origination, such Mortgagor did not qualifytaking into account credit history and debt to income ratios for a lower costcredit product then offered by the Mortgage Loan’s originator or any affiliateof the Mortgage Loan’s originator. If, at the time of loan application, theMortgagor may have qualified for a lower cost credit product then offered byany mortgage lending affiliate of the Mortgage Loan’s originator, the Mortgage Loan’soriginator referred the Mortgagor’s application to such affiliate forunderwriting consideration;

 

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(74)         Underwriting Methodology. Withrespect to any Agency Eligible Mortgage Loan, the methodology used inunderwriting the extension of credit for each Mortgage Loan employs objectivemathematical principles which relate the Mortgagor’s income, assets andliabilities to the proposed payment and such underwriting methodology does notrely on the extent of the Mortgagor’s equity in the collateral as the principaldetermining factor in approving such credit extension. Such underwritingmethodology confirmed that at the time of origination (application/approval),the Mortgagor had a reasonable ability to make timely payments on the MortgageLoan;

 

(75)         Disclosure of Fees. All fees andcharges (including finance charges) and whether or not financed, assessed,collected or to be collected in connection with the origination and servicingof each Mortgage Loan, have been disclosed in writing to the Mortgagor inaccordance with applicable state and federal laws and regulations;

 

(76)         Disclosure of Points. Allpoints, fees and charges (including finance charges) related to each MortgageLoan and whether or not financed, assessed, collected or to be collected inconnection with the origination and servicing of each Mortgage Loan weredisclosed in writing to the related Mortgagor in accordance with applicablestate and federal law and regulation. Except in the case of a Mortgage Loan inan original principal amount of less than $60,000 which would have resulted inan unprofitable origination, no related Mortgagor was charged “points and fees”(whether or not financed) in an amount greater than five percent (5%) of theprincipal amount of such loan, and with respect to any Agency Eligible MortgageLoan, such 5% limitation is calculated in accordance with Fannie Mae’santi-predatory lending requirements as set forth in the Fannie Mae Guides. NoMortgagor was charged “points and fees” in an amount greater than (a) $1,000or (b) 5% of the principal amount of the related Mortgage Loan, whicheveris greater. For purposes of this representation, “points and fees” (x) includeorigination, underwriting, broker and finder’s fees and charges that the lenderimposed as a condition of making the Mortgage Loan, whether they are paid tothe lender or to a third party; and (y) exclude bona fide discount points,fees paid for actual services rendered in connection with the origination ofthe Mortgage (such as attorneys’ fees, notaries fees and fees paid for propertyappraisals, credit reports, surveys, title examinations and extracts, flood andtax certifications, and home inspections), the cost of mortgage insurance orcredit-risk price adjustments, the costs of title, hazard, and flood insurancepolicies, state and local transfer taxes or fees, escrow deposits for thefuture payment of taxes and insurance premiums and other miscellaneous fees andcharges that, in total, do not exceed 0.25 percent of the loan amount;

 

(77)         Consent. Either (a) noconsent for the Second Mortgage Loan is required by the holder of the relatedfirst lien or (b) such consent has been obtained and is contained in themortgage file;

 

(78)         Arbitration. No Mortgagor agreedto submit to arbitration to resolve any dispute arising out of or relating inany way to the Mortgage Loan transaction;

 

(79)         MERS Designated Mortgage Loans.With respect to each MERS Designated Mortgage Loan, a Mortgage IdentificationNumber has been assigned by MERS and such Mortgage Identification Number isaccurately provided on the Mortgage Loan Schedule. The related Assignment ofMortgage to MERS has been duly and properly recorded. With respect to

 

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each MERS Mortgage Loan,no Mortgagor has received any notice of liens or legal actions with respect tosuch Mortgage Loan and no such notices have been electronically posted by MERS;

 

(80)         Agency Eligible Mortgage Loan.If the investor with respect to any Takeout Commitment is an Agency, eachMortgage Loan is an Agency Eligible Mortgage Loan;

 

(81)         Agency Representations. If theinvestor with respect to any Takeout Commitment is an Agency, all of therepresentations and warranties made or deemed made with respect to eachMortgage Loan contained in (or incorporated by reference therein) the relevantAgency Guide provisions and Agency Program (collectively, the “Standard AgencyMortgage Loan Representations”) are (and shall be as of all relevant dates)true and correct in all material respects; and except as may be expressly andpreviously disclosed to Buyer, Sellers have not negotiated with the Agency anyexceptions or modifications to such Standard Agency Mortgage LoanRepresentations;

 

(82)         Takeout Requirements. TheMortgage Loan conforms in all respects to the requirements of this Agreement,the Takeout Commitment and all other requirements of Takeout Investor;

 

(83)         Georgia Fair Lending Act. NoMortgage Loan is a “High Cost Home Loan” as defined in the Georgia Fair LendingAct, as amended (the “Georgia Act”). No Mortgage Loan secured by real propertyor a manufactured home located in the State of Georgia was originated (ormodified) on or after October 1, 2002 through and including March 6,2003;

 

(84)         New York “high-cost home loans”.No Mortgage Loan (a) is secured by property located in the State of NewYork; (b) had an unpaid principal balance at origination of $300,000 orless, and (c) has an application date on or after April 1, 2003, theterms of which Mortgage Loan equal or exceed either the APR or the points andfees threshold for “high-cost home loans”, as defined in Section 6-L ofthe New York State Banking Law;

 

(85)         Arkansas Home Loan Protection Act.No Mortgage Loan is a “High Cost Home Loan” as defined in the Arkansas HomeLoan Protection Act effective July 16, 2003 (Act 1340 or 2003);

 

(86)         Kentucky “High Cost Home Loan”.No Mortgage Loan is a “High Cost Home Loan” as defined in the Kentuckyhigh-cost loan statute effective June 24, 2003 (Ky. Rev. Stat. Section 360.100);

 

(87)         Nevada “home loan”. No MortgageLoan secured by property located in the State of Nevada is a “home loan” asdefined in the Nevada Assembly Bill No. 284;

 

(88)         Oklahoma Home Ownership and EquityProtection Act. No Mortgage Loan is a subsection 10 mortgage under theOklahoma Home Ownership and Equity Protection Act;

 

(89)         Illinois High Risk Home Loan Act.No Mortgage Loan is a “High-Risk Home Loan” (as defined in the Illinois HighRisk Home Loan Act 93-561);

 

1-18

----

 

(90)         New Jersey Home Ownership SecurityAct. No Mortgage Loan is a “High-Cost Home Loan” under the New Jersey HomeOwnership Security Act of 2002 (the “NJ Act”); and each Mortgage Loan subjectto the NJ Act is considered under the NJ Act as, either, a (1) purchasemoney Home Loan, (2) purchase money Covered Loan, or (3) rate/termrefinance Home Loan;

 

(91)         New Mexico Home Loan Protection Act.No Mortgage Loan is a “High-Cost Home Loan” as defined in the New Mexico HomeLoan Protection Act effective January 1, 2004 (N.M. Stat. Ann. §§ 58-21A-1et seq.);

 

(92)         Maine Home Loans. No MortgageLoan that is secured by property located within the State of Maine meets thedefinition of a (i) “high-rate, high-fee” mortgage loan under Article VIII,Title 9-A of the Maine Consumer Credit Code or (ii) “High-Cost Home Loan”as defined under the Maine House Bill 383 L.D. 494, effective as of September 13,2003; and

 

(93)         Massachusetts Loans. No MortgageLoan secured by a Mortgaged Property located in the Commonwealth ofMassachusetts was made to pay off or refinance an existing loan or other debtof the related borrower (as the term “borrower” is defined in the regulationspromulgated by the Massachusetts Secretary of State in connection withMassachusetts House Bill 4880 (2004)) unless (a) the related MortgageInterest Rate (that would be effective once the introductory rate expires, withrespect to Adjustable Rate Mortgage Loans) did or would not exceed by more than2.25% the yield on United States Treasury securities having comparable periodsof maturity to the maturity of the related Mortgage Loan as of the fifteenthday of the month immediately preceding the month in which the application forthe extension of credit was received by the related lender or (b) theMortgage Loan is an “open-ended home loan” (as such term is used in theMassachusetts House Bill 4880 (2004)) and the related Mortgage Note providesthat the related Mortgage Interest Rate may not exceed at any time the Primerate index as published in the Wall Street Journal plus a margin of onepercent;

 

(94)         Tennessee Loans. No MortgageLoan is a “High-Cost Home Loan” as defined in the Tennessee Home LoanProtection Act of 2006 effective January 1, 2007 (Tenn. Code Ann. §§45-20-101 et seq.);

 

(95)         Rhode Island Loans. No MortgageLoan is a “High-Cost Home Loan” as defined in the Rhode Island Home LoanProtection Act of 2006 effective January 1, 2007 (R.I. Gen. Laws §§34-25.2-1 et seq.);

 

1-19

----

 

Part II: Defined Terms

 

Inaddition to terms defined elsewhere in the Master Repurchase Agreement, thefollowing terms shall have the following meanings when used in this Schedule 1:

 

“AcceptedOrigination Practices” shall mean, with respect to any Mortgage Loan, thosereasonable and customary mortgage origination practices of mortgage lendinginstitutions which originate mortgage loans of the same type as such MortgageLoans in the jurisdiction where the related Mortgaged Property is located, andwhich practices, in all cases, comply fully with all applicable requirements offederal, state and local law, rules and regulations.

 

“AcceptedServicing Practices” shall mean, with respect to any Mortgage Loan, thosereasonable and customary mortgage servicing practices of mortgage lendinginstitutions which service mortgage loans of the same type as such MortgageLoans in the jurisdiction where the related Mortgaged Property is located.

 

“AdjustableRate Mortgage Loan” shall mean an Adjustable Rate Mortgage Loan purchasedpursuant to this Agreement.

 

“AgencyEligible Mortgage Loan” shall mean a mortgage loan that is in strict compliancewith the eligibility requirements for swap or purchase by the designatedAgency, under the applicable Agency Guide and/or applicable Agency Program.

 

“AgencyGuide” shall mean the Ginnie Mae Mortgage-Backed Securities Guide, the FannieMae Selling Guide and the Fannie Mae Servicing Guide, the Freddie Mac Sellers’and Servicers’ Guide, as applicable, in each case as such Agency Guide may beamended from time to time.

 

“AgencyProgram” shall mean the specific purchase program under the relevant AgencyGuide or as otherwise approved by the Agency.

 

“AppraisedValue” shall mean (i) with respect to any first Mortgage Loan, the valueof the related Mortgaged Property based upon the appraisal made, if any, forthe originator at the time of origination of the Mortgage Loan or the salesprice of the Mortgaged Property at such time of origination, whichever is less;*provided, however*, that in thecase of a refinanced Mortgage Loan, such value is based solely upon theappraisal made, if any, at the time of origination of such refinanced MortgageLoan, and (ii) with respect to any Second Mortgage Loan, the value,determined pursuant to the Sellers’ underwriting guidelines, of the relatedMortgaged Property as of the origination date of the Second Mortgage Loan..

 

“Assignmentof Mortgage” shall mean an assignment of the Mortgage, notice of transfer orequivalent instrument in recordable form, sufficient under the laws of thejurisdiction wherein the related Mortgaged Property is located to reflect thetransfer of the Mortgage.

 

“BalloonLoan” shall mean a Mortgage Loan identified on the related Loan Purchase Detailas a balloon mortgage loan.

 

1-20

----

 

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

 

“CombinedLoan-to-Value Ratio” or “CLTV” shall mean with respect to any Second MortgageLoan, the sum of the original principal balance of such Mortgage Loan and theoutstanding principal balance of any related first lien as of the date oforigination of the Mortgage Loan, divided by the lesser of the Appraised Valueof the Mortgage Property as of the origination date or the purchase price ofthe Mortgaged Property.

 

“ConvertibleMortgage Loan” shall mean a Mortgage Loan that by its terms and subject tocertain conditions contained in the related Mortgage or Mortgage Note allowsthe Mortgagor to convert the adjustable Mortgage Interest Rate on such MortgageLoan to a fixed Mortgage Interest Rate.

 

“DueDate” shall mean the day of the month on which the Monthly Payment is due on aMortgage Loan, exclusive of any days of grace.

 

“EscrowPayments” shall mean with respect to any Mortgage Loan, the amountsconstituting ground rents, taxes, assessments, water charges, sewer rents,municipal charges, mortgage insurance premiums, fire and hazard insurancepremiums, condominium charges, and other payments as may be required to beescrowed by the Mortgagor with the Mortgagee pursuant to the terms of anyMortgage Note, Mortgage or any other document.

 

“FannieMae Guides” shall mean the Fannie Mae Sellers’ Guide and the Fannie MaeServicers’ Guide and all amendments or additions thereto.

 

“FirstMortgage Loan” shall mean a Mortgage Loan secured by a first lien mortgage onthe related Mortgage Property.

 

“FixedRate Mortgage Loan” shall mean a fixed rate Mortgage Loan purchased pursuant tothis Master Repurchase Agreement.

 

“GrossMargin” shall mean, with respect to each Adjustable Rate Mortgage Loan, thefixed percentage amount set forth in the related Mortgage Note which amount isadded to the Index in accordance with the terms of the related Mortgage Note todetermine on each Interest Rate Adjustment Date the Mortgage Interest Rate forsuch Mortgage Loan.

 

“GroundLease” shall mean the original executed instrument evidencing a leaseholdestate with respect to a Mortgaged Property.

 

“Index”means with respect to each adjustable rate Mortgage Loan, the index set forthin the related Mortgage Note for the purpose of calculating the interest ratethereon.

 

“InterestRate Adjustment Date” shall mean with respect to each Adjustable Rate MortgageLoan, the date set forth in the related Mortgage Note on which the MortgageInterest Rate on the Mortgage Loan is adjusted in accordance with the terms ofthe Mortgage Note.

 

1-21

----

 

“Maximum Mortgage Interest Rate” shall mean with respectto each Adjustable Rate Mortgage Loan, a rate that is set forth on the relatedMortgage Loan Schedule and in the related Mortgage Note and is the maximuminterest rate to which the Mortgage Interest Rate on such Mortgage Loan may beincreased on any Interest Rate Adjustment Date.

 

“Monthly Payment” shall mean with respect to any MortgageLoan, the scheduled combined payment of principal and interest payable by aMortgagor under the related Mortgage Note on each Due Date.

 

“Mortgage Interest Rate” shall mean with respect to eachMortgage Loan, the annual rate at which interest accrues on such Mortgage Loanfrom time to time in accordance with the provisions of the related MortgageNote.

 

“Mortgagee” shall mean the related Seller or anysubsequent holder of a Mortgage Loan.

 

“Negative Amortization” shall mean a gradual increase inthe mortgage debt that occurs when the monthly fixed installment is notsufficient for full application to both principal and interest. The interestshortage is added to the unpaid principal balance to create “negative”amortization.

 

“Origination Date” shall mean, with respect to eachMortgage Loan, the date of the Mortgage Note relating to such Mortgage Loan,unless such date is not provided by such Seller with respect to such MortgageLoan, in which case the Origination Date shall be deemed to be the date that isno earlier than two (2) months prior to the date the Mortgage Loan isfirst purchased by Buyer.]

 

“PMI Policy” or “Primary Mortgage Insurance Policy” shallmean a policy of primary mortgage guaranty insurance issued by a QualifiedInsurer.

 

“Qualified Insurer” shall mean an insurance company dulyqualified as such under the laws of the state in which the Mortgaged Propertyis located, duly authorized and licensed in such state to transact theapplicable insurance business and to write the insurance provided and whoseclaims paying ability is rated in one of the two highest rating categories byany of the rating agencies with respect to primary mortgage insurance and inone of the two highest rating categories by A.M. Best with respect tohazard and flood insurance.

 

“Second Mortgage Loan” shall mean a Mortgage Loan securedby a second lien Mortgage on the related Mortgaged Property.

 

1-22

----

 

SCHEDULE 2

 

LIST OF PERMITTED GUARANTEES

 

**[*IMPAC TO PROVIDE*]**

 

2-1

----

 

SCHEDULE 3

 

PRIOR NAMES AND TRADE NAMES

 

[***IMPAC TO PROVIDE***]

 

**Sellers’ Former Names and Currentor Former Trade Names, Fictitious Names,**

**Assumed Names and or “DoingBusiness As” Names**

 

1.               Impac FundingCorporation

 

a.               Prior Name: ICI FundingCorp.

 

b.              Trade Name:[                                            ].

 

2.               Impac MortgageHoldings, Inc.

 

a.               Prior Name: Imperial CreditMortgage Holdings, Inc.

 

b.              Trade Name:[                                            ].

 

3.               Impac WarehouseLending Group, Inc.

 

a.               Prior Name: ImperialWarehouse Lending Group, Inc.

 

b.              Trade Name: [                                              ].

 

3-1

----

 

SCHEDULE 4

 

MORTGAGE RELATED COLLATERAL SCHEDULE DELIVERYINFORMATION

 

For each Mortgage Loan, Sellers shall provide thefollowing information:

 
| (a)    | MORTGAGE LOAN IDENTIFYING NUMBER                                           |
|--------|----------------------------------------------------------------------------|
|   |                                                                       |
| (b)    | MORTGAGOR NAME;                                                            |
|   |                                                                       |
| (c)    | MORTGAGE PROPERTY’S STREET ADDRESS, CITY, STATE, COUNTY  AND ZIP CODE |
|   |                                                                       |
| (d)    | THE PROPERTY TYPE                                                          |
|   |                                                                       |
| (e)    | ORIGINAL COUPON                                                            |
|   |                                                                       |
| (f)    | CURRENT COUPON                                                             |
|   |                                                                       |
| (g)    | ORIGINAL BALANCE                                                           |
|   |                                                                       |
| (h)    | CURRENT BALANCE                                                            |
|   |                                                                       |
| (i)    | ORIGINAL P&I                                                           |
|   |                                                                       |
| (j)    | CURRENT P&I                                                            |
|   |                                                                       |
| (k)    | ORIGINATION DATE                                                           |
|   |                                                                       |
| (l)    | FIRST PAYMENT DATE                                                         |
|   |                                                                       |
| (m)    | DATE OF PROMISSORY NOTE                                                    |
|   |                                                                       |
| (n)    | MATURITY DATE                                                              |
|   |                                                                       |
| (o)    | DATE PAID THRU OR DATE NEXT DUE                                            |
|   |                                                                       |
| (p)    | ORIGINAL TERM                                                              |
|   |                                                                       |
| (q)    | REMAINING TERM                                                             |
|   |                                                                       |
| (r)    | DATE SHIPPED                                                               |
|   |                                                                       |
| (s)    | ADVANCE AMOUNT                                                             |
|   |                                                                       |
| (t)    | COMMITTED STATUS (Y or N)                                                  |
|   |                                                                       |
| (u)    | STATE ABBREVIATION                                                         |

 

4-1

----

 
| (v)    | ACQUISITION PRICE (as a percentage) |
|--------|-------------------------------------|
|   |                                |
| (w)    | PRODUCT TYPE                        |
|   |                                |
| (x)    | LIEN STATUS                         |
|   |                                |
| (y)    | LOAN PURPOSE                        |
|   |                                |
| (z)    | ORIGINAL LTV                        |
|   |                                |
| (aa)   | ORIGINAL CLTV                       |
|   |                                |
| (bb)   | CURRENT LTV                         |
|   |                                |
| (cc)   | INDEX TYPE                          |
|   |                                |
| (dd)   | ROUNDING FACTOR                     |
|   |                                |
| (ee)   | CONVERTIBILITY                      |
|   |                                |
| (ff)   | PERIODIC PAYMENT CAP                |
|   |                                |
| (gg)   | MARGIN                              |
|   |                                |
| (hh)   | MAXIMUM LIFE RATE                   |
|   |                                |
| (ii)   | MINIMUM LIFE RATE                   |
|   |                                |
| (jj)   | COUPON PERIODIC CAP                 |
|   |                                |
| (kk)   | COUPON PERIODIC FLOOR               |
|   |                                |
| (ll)   | INITIAL PERIODIC CAP                |
|   |                                |
| (mm)   | INITIAL PERIODIC FLOOR              |
|   |                                |
| (nn)   | SUBSEQUENT PERIODIC CAP             |
|   |                                |
| (oo)   | FIRST RATE ADJUSTMENT DATE          |
|   |                                |
| (pp)   | FIRST PAYMENT ADJUSTMENT DATE       |
|   |                                |
| (qq)   | FREQUENCY ADJUSTMENTS RATE          |
|   |                                |
| (rr)   | FREQUENCY ADJUSTMENTS PAYMENT       |
|   |                                |
| (ss)   | WIRING INFORMATION                  |

 

4-2

----

 

SCHEDULE 5

 

MATERIAL LITIGATION

 

**[*IMPAC TO PROVIDE*]**

 

5-1

----

 

SCHEDULE 6

 

MERGERS AND ACQUISITIONS

 

**[*IMPACTO PROVIDE*]**

 

6-1

----

 

EXHIBIT I

 

[Reserved]

 

I-1

----

 

EXHIBIT II

 

**[RESERVED]**

 

II-1

----

 

EXHIBIT III

 

[RESERVED]

 

III-1

----

 

EXHIBIT IV

 

**UCC FILING JURISDICTIONS**

 

**[*Impacto Update*]**

 

Secretary of State of Maryland

 

Secretary of the Sate of California

 

IV-1

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EXHIBIT V-A

 

[RESERVED]

 

V-A-2

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EXHIBIT V-B

 

FORM OF

AUTHORIZED SIGNATURES OF SELLER

 

I,                                  , hereby certify that I am the duly elected [Vice] President of [Seller], a [                        ](the “Company”) and each person listed below who, as an officer orrepresentative of the Company, signed (a) the Master Repurchase Agreement,dated as of [          ],2007, between the Company, [Sellers] and UBS Real Estate Securities Inc., (b) theCustodial Agreement and (c) any other document delivered or on the datehereof in connection with any purchase described in the agreements set forthabove was, at the respective times of such signing and delivery, and is now, aduly elected or appointed, qualified and acting officer or representative ofthe Company, who holds the office set forth opposite his or her name, and thesignatures of such persons appearing on such documents are their genuinesignatures and that each of such person is, and until further notice will be,duly elected or appointed, qualified and acting officer or representative ofthe Company authorized to sign any Requests for Purchase.

 
|           |   |   |
|----------------|--------|--------|
| Name and Title |   |   |
|           |   |   |
| Name and Title |   |   |
|           |   |   |
| Name and Title |   |   |
|           |   |   |
| Name and Title |   |   |
|           |   |   |
| Name and Title |   |   |
|           |   |   |

 

 

IN WITNESS WHEREOF, I have hereunto signed myname and affixed the seal of the Company.

 
| Dated: |   |                    | By: |   |
|--------|--------|-------------------------|-----|--------|
|   |   | Name:                   |
| [Seal] |   | Title: [Vice] President |

 

I,                                               ,an [Assistant] Secretary of [Seller], hereby certify that                       isthe duly elected, qualified and acting [Vice] President of the Company and thatthe signature appearing above is [her] [his] genuine signature.

 

IN WITNESS WHEREOF, I have hereunto signed myname on behalf of Seller.

 
| Dated: |   |   | By:                          |   |
|--------|--------|--------|------------------------------|--------|
|   |   |   | Name:                        |
|   |   |   | Title: [Assistant] Secretary |

 

V-B-1

----

 

EXHIBIT V-C

 

FORM OF

OFFICER’S MONTHLY CERTIFICATE

 

Each of                   and                   ,hereby certify that they are the duly elected               and                     ,respectively, of [Seller] (the “Seller”), a [                     ],and further certify as follows:

 

1.             Thisofficer’s certificate is made to UBS Real Estate Securities Inc. (the “Buyer”)in connection with the Amended and Restated Master Repurchase Agreement, datedas of [              ],2008, among Seller, [Sellers] and Buyer (the “Repurchase Agreement”).

 

2.             Therehas been no change in the articles of incorporation and by-laws of Seller sincethe date such documents were provided to Buyer and such documents are in fullforce and effect on the date hereof.

 

3.             Noevent has occurred since the date of the last good standing certificate ofSeller provided to Buyer which has affected the good standing of Seller underthe laws of the State of California.

 

4.             Allof the representations and warranties of Seller contained in the Repurchase Documentsto which it is a party were true and correct in all material respects as of thedate of the Repurchase Agreement and are true and correct in all materialrespects as of the date hereof and Seller has complied with all of theRepurchase Documents to which it is a party and satisfied all of the conditionson its part to be performed or satisfied at or prior to the date hereof.

 

5.             Sellerhas performed all of its duties and has satisfied all the material conditionson its part to be performed or satisfied pursuant to the Repurchase Documentson or prior to the date hereof.

 

6.             Thereare no actions, suits or proceedings pending or, to my knowledge, threatened, againstor affecting Seller which, if adversely determined either individually or inthe aggregate, would adversely affect Seller’s obligations under the RepurchaseDocuments to which it is a party.

 

7.             Noproceedings that could result in the liquidation or dissolution of Seller arepending or contemplated.

 

8.             Tothe best of my knowledge after due inquiry and investigation, no Event ofDefault has occurred prior to the date hereof or is occurring on the datehereof.

 

[9.            Theattached report details Seller’s complete inventory of mortgage loans that arein the application, locked and closed stages (the “Pipeline”) togetherwith the Interest Rate Protection Agreements entered into by Seller associatedwith the Pipeline — report to be provided if requested by Buyer.]

 

V-C-1

----

 

[10.          Theattached report (including the mark-to-market calculations included therein) isa complete, true and accurate representation which fairly presents such hedgingarrangements, and with respect to all reports delivered to Buyer following thedate of the most recently delivered officer’s certificate from Seller (prior tothis one), such reports (including the mark-to-market calculations includedtherein) were complete, true and accurate representations which fairlypresented such hedging arrangements as of the date thereof — report to beprovided if requested by Buyer.]

 

11.           Theexecution by the undersigned evidences each such officer’s determination thatsuch hedging agreements adequately protect Seller from interest ratefluctuations.

 

All capitalized terms used herein and nototherwise defined shall have the meaning assigned to them in the RepurchaseAgreement.

 

[signature follows]

 

V-C-2

----

 

IN WITNESS WHEREOF, I have hereunto signed myname on behalf of Seller.

 

Dated:                          ,     

 

 
|   | [SELLER] |
|--------|----------|
|   |     |
|   |     |
|   | By:      |   |
|   |     | Name: |
|   |     | Title: |

 

V-C-3

----

 

I,                                              ,[Assistant] Secretary of [Seller] hereby certify that                                  and                                       are the duly elected, qualified and acting [                  ]and [Chief Financial Officer], respectively, of [                                  ]and that the signature appearing above is the genuine signature of such person.

 

IN WITNESS WHEREOF, I have hereunto signed myname on behalf of Seller.

 

Dated:                          ,     

 

 
|   | [SELLER] |
|--------|----------|
|   |     |
|   |     |
|   | By:      |   |
|   |     | Name: |
|   |     | Title: |

 

V-C-4

----

 

EXHIBIT VI-A

 

**[FORM OF SELLER’S RELEASE LETTER]**

 

[Date]

 

UBS Real Estate Securities Inc.

1251 Avenue of the Americas

New York, NY 10020

 
| Re: |   | Master Repurchase Agreement, dated as of [                      ],  2007 (the “Repurchase Agreement”), by and between Impac Funding  Corporation, Impac Mortgage Holdings, Inc., Impac Warehouse Lending  Group, Inc. and UBS Real Estate Securities Inc. (the “Buyer”) |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Ladies and Gentlemen:

 

With respect to the mortgage loans describedin the attached Schedule A (the “Mortgage Loans”) (a) we herebycertify to you that the Mortgage Loans are not subject to a lien of any thirdparty and (b) we hereby release all right, interest or claim of any kindwith respect to such Mortgage Loans, such release to be effective automaticallywithout further action by any party upon payment from UBS Real EstateSecurities Inc., of the amount of the Purchase Price contemplated under theRepurchase Agreement (calculated in accordance with the terms thereof) inaccordance with the wiring instructions set forth in the Repurchase Agreement.

 
|   | Very truly yours, |
|--------|-------------------|
|   |              |
|   | [SELLER]          |
|   |              |
|   | By:               |   |
|   | Name:             |
|   | Title:            |

 

VI-A-1

----

 

EXHIBIT VI-B

 

[Reserved]

 

VI-B-1

----

 

EXHIBIT VII

 

UCC-1 FINANCING STATEMENT

 

ATTACHED TO AND MADE PART OFUNIFORM COMMERCIAL CODE (“UCC”)FINANCING STATEMENT, FORM UCC-1

 
| Debtor:        |   | [Seller]                                                      |
|----------------|--------|---------------------------------------------------------------|
|           |   | [Address]                                                     |
|           |   | Attention: General Counsel                                    |
|           |   |                                                          |
| Secured Party: |   | UBS Real Estate Securities Inc.                               |
|           |   | 1251 Avenue of the Americas, 22nd  Floor   New York, NY 10020 |
|           |   | Attention: Robert Carpenter                                   |
|           |   |                                                          | George A. Mangiaracina |

 

**This FinancingStatement is filed for precautionary purposes only.**

 

The parties intend that the transactionsunder the Agreement constitute absolute assignments. The UCC FinancingStatement, Form UCC- 1, to which this Annex 1 is attached and forms apart, covers all of Debtors’ right, title and interest in, to and under thePurchased Items (as defined below), whether now owned or hereafter acquired,now existing or hereafter created and wherever located.

 

As used herein, the following terms shallhave the following meanings:

 

“Additional Purchased Items”:  U.S.Treasury obligations approved by the Secured Party, cash provided by Debtor toSecured Party or its designee, REO Properties or other real estate approved bythe Secured Party in its sole discretion, in each case provided pursuant to anyapplicable provisions of the Agreement and which are acceptable to SecuredParty in its sole discretion.

 

“Agreement”:  The Amendedand Restated Master Repurchase Agreement, dated as of [        ],2008, amending and restating the Master Repurchase Agreement, dated as of August 2,2007, in each case between the Secured Party and Debtors.

 

“Credit File”:  All papersand records of whatever kind or description, whether developed or originated byDebtor or others, required to document or service the Mortgage Loan; *provided however*, that such Mortgage Loanpapers, documents and records shall not include any Mortgage Loan papers,documents or records which are contained in the Mortgage File.

 

“Custodial Agreement”:  TheCustodial Agreement, dated as of the date hereof, by and among the SecuredParty, Debtor and Custodian, as the same shall be modified and supplemented andin effect from time to time.

 

VII-1

----

 

“Custodian”:  Deutsche BankNational Trust Company, a national banking association, and its successors ininterest, as custodian under the Custodial Agreement, and any successorcustodian under the Custodial Agreement.

 

“Fannie Mae”:  The FederalNational Mortgage Association, and its successors in interest.

 

“Freddie Mac”:  The FederalHome Loan Mortgage Corporation, and its successors in interest.

 

“Income”:  With respect toany Mortgage Loan at any time, all collections and proceeds on or in respect ofthe Mortgage Loans, including, without limitation, any principal thereof thenpayable and all interest or other distributions payable thereon less anyrelated servicing fee(s) charged by Servicer.

 

“Interest Rate Protection Agreement”:  Withrespect to any or all of the Mortgage Loans, any short sale of U.S. Treasurysecurities, or futures contracts, or options related contracts, or interestrate swap, cap or collar agreement or similar arrangement providing forprotection against fluctuations in interest rates or the exchange of nominal interestobligations either generally or under specific contingencies and acceptable toSecured Party.

 

“Lien”:  Any mortgage, lien,pledge, charge, security interest or similar encumbrance.

 

“Mortgage”:  With respect toa Mortgage Loan, the mortgage, deed of trust or other instrument securing aMortgage Note, which creates a first or second Lien on a fee simple ResidentialDwelling securing the Mortgage Note or a leasehold estate with respect to realproperty located in jurisdictions in which the use of leasehold estates forresidential properties is a widely accepted practice.

 

“Mortgage File”:  hasthe meaning assigned thereto in the Custodial Agreement.

 

“Mortgage Loan”:  A mortgageloan originated in accordance with the Underwriting Guidelines which Custodianhas been instructed to hold for Secured Party pursuant to the CustodialAgreement, and which Mortgage Loan includes, without limitation, (i) aMortgage Note and related Mortgage, and (ii) all right, title and interestof Debtor in and to the Mortgaged Property covered by such Mortgage.

 

“Mortgage Note”:  Theoriginal executed promissory note or other evidence of the indebtedness of aMortgagor with respect to a Mortgage Loan.

 

“Mortgaged Property”:  Withrespect to a Mortgage Loan, a fee simple interest in, or a leasehold estate (tothe extent the use of leasehold estates for residential properties in suchjurisdictions is a widely accepted practice) with respect to, the real property(including all improvements, buildings, fixtures, building equipment andpersonal property thereon and all additions, alterations and replacements madeat any time with respect to the foregoing) and all other collateral securingrepayment of the debt evidenced by a Mortgage Note.

 

VII-2

----

 

“Mortgagor”:  The obligor orobligors on a Mortgage Note, including any person who has assumed or guaranteedthe obligations of the obligor thereunder.

 

“Person”:  Anyindividual, corporation, company, voluntary association, partnership, jointventure, limited liability company, trust, unincorporated association orgovernment (or any agency, instrumentality or political subdivision thereof).

 

“Purchased Assets”:  TheMortgage Loans sold by Debtor to Secured Party in a Transaction, and any AdditionalPurchased Assets.

 

“Purchased Items”:  Each ofthe following items or types of property, whether now owned or hereafteracquired, now existing or hereafter created and wherever located: all MortgageLoans, all Mortgage Files, including without limitation all promissory notes,all Mortgage Notes, all Mortgages, all Servicing Records relating to theMortgage Loans, all Credit Files, all of Debtor’s rights as the owner of theMortgage Loans under any Sub-Servicing Agreements relating to the Mortgage Loansand any other collateral pledged or otherwise relating to such Mortgage Loans,together with all files, documents, instruments, surveys, certificates,correspondence, appraisals, computer programs, computer storage media,accounting records and other books and records relating thereto, all mortgageguaranties and insurance (issued by governmental agencies or otherwise) and anymortgage insurance certificate or other document evidencing such mortgageguaranties or insurance relating to any Mortgage Loan and all claims andpayments thereunder, all other insurance policies and insurance proceedsrelating to any Mortgage Loan or the related Mortgaged Property, all Income,all Servicing Rights, all servicing fees to which such Debtor is entitled andservicing and other rights of Debtor relating to the Mortgage Loans, allInterest Rate Protection Agreements relating to or constituting any and all ofthe foregoing, all of Debtor’s rights as the owner of the Mortgage Loans underany other agreements or contracts relating to, constituting, or otherwisegoverning, any or all of the foregoing to the extent they relate to thePurchased Assets including the right to receive principal and interest paymentswith respect to the Purchased Assets and the right to enforce such payments,the collection and custodial accounts maintained by the Servicer and all moniesfrom time to time on deposit in such accounts, the UBS Cash Account and allmonies from time to time on deposit in or credited to the UBS Cash Account, allcontract rights and all “general intangibles”, “accounts”, “chattel paper”,“deposit accounts” and “investment property” as defined in the UniformCommercial Code as in effect from time to time relating to or constituting anyand all of the foregoing, and any and all replacements, substitutions,distributions on or proceeds of any and all of the foregoing.

 

“Residential Dwelling”:  Anyone of the following: (i) a detached single family dwelling, (ii) atwo-to-four family dwelling, (iii) a unit in a condominium project, (iv) adetached single family dwelling in a planned unit development, or (v) alog home underwritten in accordance with Fannie Mae and Freddie Macrequirements; *provided that*Residential Dwellings are not any of the following: (a) earthen homes, (b) undergroundhomes, (c) mobile homes or manufactured housing units or (d) co-operativeunits.

 

“Servicer”:  Impac FundingCorporation, or any other entity having demonstrated competence in servicingloans similar to the Mortgage Loans and which is reasonably acceptable to theSecured Party.

 

VII-3

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“Servicing Records”:  Any and allservicing 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 of such Mortgage Loans.

 

“Servicing Rights”:  Any and all of thefollowing: (a) any and all rights to service the Mortgage Loans; (b) anypayments to or monies received by Debtor or any other Person for servicing theMortgage Loans; (c) any late fees, penalties or similar payments withrespect to the Mortgage Loans; (d) all agreements or documents creating,defining or evidencing any such servicing rights to the extent they relate tosuch servicing rights and all rights of Debtor or any other Person thereunder; (e) escrowpayments or other similar payments with respect to the Mortgage Loans and anyamounts actually collected by Debtor or any other Person with respect thereto;and (f) all accounts and other rights to payment related to the MortgageLoans.

 

“Sub-Servicing Agreement”:  an agreementbetween Seller and a sub-servicer with respect to the servicing of thePurchased Assets, if applicable.

 

“Transaction”:  has the meaning set forthin the Agreement.

 

“UBS Cash Account”:  has the meaning setforth in the Agreement.

 

“Underwriting Guidelines”:  Theunderwriting guidelines delivered by Debtor to Secured Party on or prior to thedate hereof and as may be modified or supplemented from time to time thereafteras approved by Secured Party in its sole discretion attached to the Agreementas Exhibit II.

 

“Uniform Commercial Code” or “UCC”:  TheUniform Commercial Code as enacted in each applicable state as in effect on thedate of the Agreement.

 

Filing Office(s) [Jurisdiction(s)]

 

VII-4

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EXHIBIT VIII

 

**SECTION 5.02 CERTIFICATE**

 

Reference is hereby made to the Master RepurchaseAgreement dated as of [], 2007 (the “Agreement”), between UBS REALESTATE SECURITIES INC., a Delaware corporation (the “Buyer”) and[SELLER], a [] (the “Seller”). Pursuant to the provisions of Section 5.02of the Agreement, the undersigned hereby certifies that:

 

1.                                       It is a        natural individual person,         treated as a corporation forU.S. federal income tax purposes,         disregarded for federal incometax purposes (in which case a copy of this Section 5.02 Certificate isattached in respect of its sole beneficial owner), or         treated as a partnership forU.S. federal income tax purposes (one must be checked).

 

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

 

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

 

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

 

4.                                       Amounts paid are not effectively connected with its conduct of a trade orbusiness in the United States.

 

 
|   | [SELLER] |
|--------|----------|
|   |     |
|   | By:      |
|   |     |
|   |     |
|   | Title:   |
|   |     |

 

Date:                              ,

 

VIII-1

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EXHIBIT IX

 

WITHDRAWAL/DEPOSIT NOTICE: UBS CASH ACCOUNT (ONSELLER’S LETTERHEAD)

 

Please process a wire transfer representing a: (Pleasecheck appropriate box)**

 
|   | WITHDRAWAL | o      |
|--------|------------|--------|
|   |       |   |
|   | DEPOSIT    | o      |

 

From/To our UBS Cash Account in the amount of $ on[Date].

 

The funds should be transferred in accordance with thefollowing instructions:

 
| Bank Name:    |   |
|---------------|--------|
| City, State:  |   |
| ABA #:        |   |
| Account #:    |   |
| Account Name: |   |
| Ref: [Seller] |   |

 

Deposits only require “Bank Name” and “City, State”information to be completed.

 
| [SELLER] |
|----------|
|     |   |
| By:      | Name: |   |   |
|     | Title: |   |   |
|          |  |  |  |  |

 

----

*The authorized officer ofSeller executing this letter must also have executed the Cash Account WireInstructions.

 

** Only deposits are permitted on and after the RestatementClosing Date.

 

IX-1

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EXHIBITX

 

UBS CASH ACCOUNT WIRE INSTRUCTIONS (ON SELLER’SLETTERHEAD)

 

[Date]

 

UBS Real Estate Securities Inc.

1251 Avenue of the Americas

New York, New York 10020

 

Re: Mortgage Loan RepurchaseProgram

 

Ladies and Gentlemen:

 

Set forth below are [Seller’s] wire instructionsapplicable to the above referenced Mortgage Loan Repurchase Program with ImpacFunding Corporation, Impac Mortgage Holdings, Inc. and Impac WarehouseLending Group, Inc.

 

Wire Instructions:

 
| **Wire location No. 1** | ** ** | **Wire location No. 2** |
|------------------------------|------------|------------------------------|
|                         |       |                         |
| Bank Name:                   |       | Bank Name:                   |
|                         |       |                         |
| City, State:                 |       | City, State:                 |
|                         |       |                         |
| ABA #:                  |       | ABA #:                  |
|                         |       |                         |
| Account #:              |       | Account #:              |
|                         |       |                         |
| Account Name:                |       | Account Name:                |
|                         |       |                         |
| Ref:                         |       | Ref:                         |

 

Please acknowledge receipt of this letter in the spaceprovided below. This letter supersedes and replaces any prior notice specifyingour UBS Cash Account Wire Instructions for the Mortgage Loan Repurchase Programand shall remain in effect until superseded and replaced by a letter, in theform of this letter, executed by us and acknowledged by you.

 

X-1

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|   | Very truly yours,               |
|--------|---------------------------------|
|   |                            |
|   | [SELLER]*                       |
|   |                            |
|   | By:                             |   |
|   | Name:                           |   |
|   | Title:                          |   |
|   |                            |
|   | Receipt acknowledged by:        |
|   |                            |
|   | UBS REAL ESTATE SECURITIES INC. |
|   |                            |
|   | By:                             |   |
|   | Name:                           |   |
|   | Title:                          |   |
|   |                            |
|   |                            |
|   | By:                             |   |
|   | Name:                           |   |
|   | Title:                          |   |
|        |                                 |  |  |  |

 

----

* Please add additionalsignatures of any person authorized to execute a Cash AccountWithdrawal/Deposit Notice. Only authorized persons who have executed this lettermay execute a Cash Account Withdrawal/Deposit Notice.

 

X-2

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EXHIBITXI

 

UBS CASH ACCOUNT ADJUSTMENT NOTICE

 

[DATE]

 

To: [SELLER]

 

Re: [UBS CASH ACCOUNT#]

 

A journal entry will beprocessed today reflecting the following adjustment to your UBS Cash Account.

 

o CREDIT OF $

 

o DEBIT OF $

 

Explanation is as follows:

 
|   |
|--------|
|   |
|   |
|   |

 

Upon request, additional backup documentation will beprovided.

 
|   | Very truly yours,               |
|--------|---------------------------------|
|   |                            |
|   |                            |
|   | UBS REAL ESTATE SECURITIES INC. |
|   |                            |
|   |                            |
|   | By:                             |   |
|   |                            | Name: |
|   |                            | Title: |
|   |                            |
|   |                            |
|   | By:                             |   |
|   |                            | Name: |
|   |                            | Title: |

 

XI-1

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EXHIBIT XII

 

[DATE]

 

Mortgagor’s Name

Co-Mortgagor’s Name

Street Address

City, State, Zip Code

 

**RE:   Noticeof Transfer of Servicing Rights**

 

Dear Customer:

 

The purpose of this letter is to notify you that theservicing of your mortgage loan, that is, the right to collect payments fromyou, is being transferred from [SERVICER] to [SUCCESSOR SERVICER], effective[DATE].

 

The assignment, sale or transfer of the servicing of themortgage loan does not affect any term or condition of the mortgageinstruments, other than terms directly related to the servicing of your loan.

 

Your present servicer is [SERVICER]. If you haveany questions relating to the transfer of servicing from your present servicercall                                 between                       a.m.and              p.m.on the following days                        .This is a [toll-free] or [collect call] number.

 

Your new servicer will be [SUCCESSOR SERVICER].Your new servicer may becontacted              as            follows:

 

| **OVERNIGHT ADDRESS** | ** ** | **PAYMENTS** | ** ** | **CUSTOMER INQUIRIES** |
|----------------------------|------------|--------------|------------|-----------------------------|
| ** **                 | ** ** | ** **   | ** ** | ** **                  |
| ** **                 | ** ** | ** **   | ** ** | ** **                  |
| ** **                 | ** ** | ** **   | ** ** | ** **                  |

 

The [toll-free] [collect call] telephone number ofyour new serviceris                    .If you have any questions relating to the transfer of servicing to your newservicer call                              [enterthe name of an individual or department here] at                          [toll-freeor collect call telephone number]between                                       a.m.and                    p.m.on the followingdays                           .

 

XII-1

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The date that your present servicer will stop acceptingpayments from you is [DATE]. The date that your new servicer will startaccepting payments from you is [DATE]. Send all payments due on or after thatdate to your new servicer.

 

If you are currently making payments through a third party(e.g., government allotment or bill pay service), it is your responsibility tonotify them of your new loan number or payment change, if applicable.

 

The fire and homeowners insurance policies carried on yourproperty will be transferred to your new servicer and remain in full force. Toensure that your insurance renewal is paid timely, please verify that yourinsurance agent has updated the mortgagee clause to read: [SUCCESSOR SERVICER],its successors and/or assigns [ADDRESS].

 

If you previously arranged with your present servicer to haveyour monthly mortgage payments drafted from your bank account, this servicewill not continue. If your account is delinquent your new servicer will contactyou.

 

You will be receiving two Year End statements for [YEAR].One will reflect payment and disbursement activity for the period of time[SERVICER] serviced your loan and the other will be from [SUCCESSOR SERVICER]and will reflect payment and disbursement activity from the transfer datethrough the end of the year.

 

You should also be aware of the following information,which is set out in more detail in Section 6 of the Real Estate SettlementProcedures Act (RESPA) (12 U.S.C. 2605):

 

During the 60-day period following the effective date ofthe transfer of the loan servicing, a loan payment received by your oldservicer before its due date may not be treated by the new loan servicer aslate, and a late fee may not be imposed on you.

 

Section 6 of RESPA (12 U.S.C. 2605) gives you certainconsumer rights. If you send a “qualified written request” to your loanservicer concerning the servicing of your loan, your servicer must provide youwith a written acknowledgment within 20 Business Days of receipt of yourrequest. A “qualified written request” is a written correspondence, other thannotice on a payment coupon or other payment medium supplied by the servicer,which includes your name and account number, and your reasons for the request.If you want to send a “qualified written request” regarding the servicing ofyour loan, it must be sent to the “Customer Inquiries” address listed above.

 

Not later than 60 Business Days after receiving yourrequest, your servicer must make any appropriate corrections to your account,and must provide you with a written clarification regarding any dispute. Duringthis 60-Business Day period, your servicer may not provide information to aconsumer reporting agency concerning any overdue payment related to such periodor qualified written request. However, this does not prevent the servicer frominitiating foreclosure if proper grounds exist under the mortgage documents.

 

A Business Day is a day on which the offices of thebusiness entity are open to the public for carrying on substantially all of itsbusiness functions.

 

XII-2

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Section 6 of RESPA also provides for damages andcosts for individuals or classes of individuals in circumstances whereservicers are shown to have violated the requirements of that Section. Youshould seek legal advice if you believe your rights have been violated.

 

[SERVICER]

 

[SUCCESSOR SERVICER]

 

XII-3

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EXHIBIT XIII

 

[Reserved]

 

XIII-1

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EXHIBIT XIV

 

[Reserved]

 

XIII-1

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