Master Repurchase Agreement, dated 4/18/02



  
 Exhibit 10.5

  
 EXECUTION COPY 
  

  
 MASTER REPURCHASE AGREEMENT 
  
 between 
  
 CDC MORTGAGE
CAPITAL INC., as Buyer 
  
 and 
  
 WMC MORTGAGE CORP., as Seller 
  
 Dated as of April 18, 2002 
  

  









  
 TABLE OF CONTENTS

  

					
	 	  	 	  	Page


			
	1.	  	APPLICABILITY	  	1
			
	2.	  	DEFINITIONS	  	1
			
	3.	  	INITIATION; TERMINATION	  	20
			
	4.	  	MARGIN AMOUNT MAINTENANCE	  	27
			
	5.	  	INCOME PAYMENTS	  	27
			
	6.	  	REQUIREMENTS OF LAW	  	28
			
	7.	  	SECURITY INTEREST	  	29
			
	8.	  	PAYMENT, TRANSFER AND CUSTODY	  	31
			
	9.	  	HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS	  	31
			
	10.	  	SELLER REPRESENTATIONS	  	32
			
	11.	  	COVENANTS OF SELLER	  	36
			
	12.	  	EVENTS OF DEFAULT	  	43
			
	13.	  	REMEDIES	  	45
			
	14.	  	INDEMNIFICATION AND EXPENSES	  	48
			
	15.	  	RECORDING OF COMMUNICATIONS	  	49
			
	16.	  	SINGLE AGREEMENT	  	49
			
	17.	  	NOTICES AND OTHER COMMUNICATIONS	  	49
			
	18.	  	ENTIRE AGREEMENT; SEVERABILITY	  	50
			
	19.	  	NON-ASSIGNABILITY	  	50
			
	20.	  	TERMINABILITY	  	50
			
	21.	  	GOVERNING LAW	  	50
			
	22.	  	SUBMISSION TO JURISDICTION; WAIVERS	  	51

  

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	23.	  	NO WAIVERS, ETC.	  	51
			
	24.	  	SERVICING	  	52
			
	25.	  	INTENT	  	53
			
	26.	  	PERIODIC DUE DILIGENCE REVIEW	  	53
			
	27.	  	BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT	  	54
			
	28.	  	MISCELLANEOUS	  	55
			
	29.	  	CONFIDENTIALITY	  	56
			
	30.	  	CONFLICTS	  	56
			
	31.	  	SET-OFF	  	56

  

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 EXHIBITS 
  

			
		
	SCHEDULE 1	 	Representations and Warranties Re: Mortgage Loans
		
	SCHEDULE 2	 	Form of Residual Report
		
	EXHIBIT I	 	Transaction Request
		
	EXHIBIT II	 	Underwriting Guidelines
		
	EXHIBIT III	 	Form of Opinion Letter
		
	EXHIBIT IV	 	UCC Filing Jurisdictions
		
	EXHIBIT V	 	Form of Account Agreement
		
	EXHIBIT VI	 	Form of True Sale Certification
		
	EXHIBIT VII-A	 	Form of Seller’s Release Letter
		
	EXHIBIT VII-B	 	Form of Warehouse Lender’s Release Letter
		
	EXHIBIT VIII	 	Form of Servicer Notice
		
	EXHIBIT IX	 	Form of Request for Additional Transactions for Excess Margin

  

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 MASTER REPURCHASE AGREEMENT 
  
 This is a MASTER REPURCHASE AGREEMENT, dated as of April 18, 2002, between WMC MORTGAGE CORP., a California corporation
(“Seller”), and CDC MORTGAGE CAPITAL INC., a New York corporation (“Buyer”). 
  

	1.	APPLICABILITY 

  
 From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer Mortgage Loans against the transfer of funds
by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans on demand by Buyer not later than 364 days after the date of transfer, against the transfer of funds by Seller. Each such transaction shall be referred to
herein as a “Transaction” and shall be governed by this Agreement, unless otherwise agreed in writing. 
  

	2.	DEFINITIONS 

  
 As used herein, the following terms shall have the following meanings (all terms defined in this Section 2 or in other provisions of this Agreement in the
singular to have the same meanings when used in the plural and vice versa). Terms otherwise not defined herein shall have the meanings assigned thereto in the Custodial Agreement or the Disbursement Agreement. 
  
 “30 Plus Mortgage Loan” shall mean any Mortgage Loan that
has been delinquent in its scheduled monthly payments of principal and/or interest for more than 29 days but less than 60 days as of any date of determination. For example, a Mortgage Loan with a due date occurring between March 2, 2002 and April 1,
2002 which was delinquent in its payments as of May 31, 2002 would be considered a 30 Plus Mortgage Loan. A Mortgage Loan with a due date occurring between March 2, 2002 and April 1, 2002 would not be considered delinquent if such payment was not
made as of April 30, 2002. 
  
 “60 Plus Mortgage
Loan” shall mean any Mortgage Loan that has been delinquent in its scheduled monthly payments of principal and/or interest for more than 59 days but less than 90 days as of any date of determination. For example, a Mortgage Loan with a due
date occurring between February 2, 2002 and March 1, 2002 which was delinquent in its payments as of May 31, 2002 would be considered a 60 Plus Mortgage Loan. 
  

“90 day Aged HLTV Loans” shall mean any Mortgage Loan that is an HLTV Low Doc Loan that was initially purchased hereunder more than
ninety (90) days ago but less than one-hundred twenty (120) days ago. 
  
 “120-149 Aged Mortgage Loan” shall mean any Mortgage Loan initially purchased hereunder more than one-hundred nineteen (119) days ago but less than one-hundred fifty (150) days ago. 
  









 “150-179 Aged Mortgage Loan” shall mean any Mortgage Loan initially purchased hereunder
more than one-hundred forty-nine (149) days ago but less than one-hundred eighty (180) days ago. 
  
 “Account Agreement” shall mean a letter agreement among Seller, Fairbanks, Buyer, and the Bank substantially in the form of Exhibit
V attached hereto. 
  
 “Act of Insolvency”
shall mean, with respect to any Person, (i) the filing of a petition, commencing, or authorizing the commencement of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the
protection of creditors, or suffering any such petition or proceeding to be commenced by another which is consented to, not timely contested or results in entry of an order for relief; (ii) the seeking or consenting to the appointment of a receiver,
trustee, custodian or similar official for such Person or any substantial part of the property of such Person; (iii) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the
jurisdiction to do so; (iv) the making or offering by such Person of a composition with its creditors or a general assignment for the benefit of creditors; (v) the admission by such Person of its inability generally to pay its debts or discharge its
obligations as they become due or mature; or (vi) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to
assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the management of such Person or to curtail its authority in the conduct of the business of such Person. 

 
 “Additional Purchased Assets” shall mean Mortgage Loans
or cash provided by Seller to Buyer or its designee pursuant to Section 4. 
  
 “Affiliate” shall mean, with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code; provided, that for purposes of Section 12(e), 12(f),
12(i), 12(j) and 12(m) “Affiliate” shall mean with respect to Seller, only WMC Finance Co. and its Subsidiaries. 
  
 “Aged Mortgage Loan” shall mean any 120-149 Aged Mortgage Loan or any 150-179 Aged Mortgage Loan, as applicable. 
  
 “Aged Sub-Limit” shall mean an amount equal to the greater
of $3,000,000 or 10% of the aggregate Purchase Price for all outstanding Transactions. 
  
 “Agreement” shall mean this Master Repurchase Agreement, as the same may be further amended, supplemented or otherwise modified in accordance with the terms hereof. 
  
 “Alt-A Mortgage Loan” shall mean an Eligible Asset which is
a Mortgage Loan made to a Mortgagor of “A” or “A-” credit quality, which is secured by a lien on a single-family Residential Dwelling and for which the related Mortgagor has a FICO score of greater than 600. In no event shall any
Mortgage Loan be an “Alt-A Mortgage Loan” if the related Mortgagor does not have a FICO score of at least 600 as of the date of origination. 
  

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 “Alt-A First Mortgage Loan” shall mean an Eligible Asset which is an Alt-A Mortgage Loan
and a First Lien Mortgage Loan. 
  
 “Alt-A Second
Mortgage Loan” shall mean an Eligible Asset which is an Alt-A Mortgage Loan and a Second Lien Mortgage Loan. 
  
 “Alt-A Second Sub-Limit” shall mean an amount equal to $15,000,000. 
  
 “ALTA” shall mean the American Land Title Association. 
  
 “Appraised Value” shall mean the value set forth in an
appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property. 
  
 “Asset Schedule and Exception Report” shall have the meaning assigned thereto in the Custodial Agreement. 
  
 “Asset Value” shall mean as of any date of determination
(a) with respect to each Eligible Asset that is not a 30 Plus Mortgage Loan or a 60 Plus Mortgage Loan as of such date, the lesser of (i) the Purchase Percentage applicable to such Eligible Asset multiplied by the Market Value of such Mortgage Loan
as of such date and (ii) the outstanding principal balance of such Eligible Asset as of such date and (b) with respect to any Eligible Asset that is a 30 Plus Mortgage Loan or a 60 Plus Mortgage Loan as of such date, the Purchase Percentage
applicable to such Eligible Asset multiplied by the outstanding principal balance of such Mortgage Loan as of such date; provided that the following additional limitations on Asset Value shall apply: 
  
 (1) after giving effect to any requested Transaction, the
aggregate Asset Value of all Wet-Ink Mortgage Loans owned hereunder by Buyer as of such date of determination may not exceed the Wet-Ink Sub-Limit; 
  
 (2) after giving effect to any requested Transaction, the aggregate Asset Value of all Sub-Prime Second Mortgage Loans owned hereunder by
Buyer as of such date of determination may not exceed the Sub-Prime Second Lien Sub-Limit; 
  
 (3) after giving effect to any requested Transaction, the aggregate Asset Value of all Alt-A Second Mortgage Loans owned hereunder by
Buyer as of such date of determination may not exceed the Alt-A Second Sub-Limit; 
  
 (4) after giving effect to any requested Transaction, the aggregate Asset Value of all Mortgage Loans for which the related Mortgaged
Properties are not occupied by the related Mortgagor as its primary residence (as determined on the origination date) owned hereunder by Buyer as of such date of determination may not exceed the Non-Owner Sub-Limit; 
  
 (5) after giving effect to any requested Transaction, the
aggregate Asset Value of all Mortgage Loans made to “C” credit quality Mortgagors owned hereunder by Buyer as of such date of determination may not exceed the C Credit Sub-Limit; 
  

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 (6) after giving effect to any requested Transaction, the aggregate Asset Value of all
Manufactured Home Mortgage Loans owned hereunder by Buyer as of such date of determination may not exceed the Manufactured Home Sub-Limit; 
  
 (7) after giving effect to any requested Transaction, the aggregate Asset Value of all Condominium Mortgage Loans owned hereunder by Buyer
as of such date of determination may not exceed the Condominium Sub-Limit; 
  
 (8) after giving effect to any requested Transaction, the aggregate Asset Value of all Delinquent Mortgage Loans owned hereunder by Buyer as of such date of determination may not exceed the Delinquent Sub-Limit;

  
 (9) after giving effect to any requested
Transaction, the aggregate Asset Value of all Aged Mortgage Loans owned hereunder by Buyer as of such date of determination may not exceed the Aged Sub-Limit; provided that any Mortgage Loan which is both an Aged Mortgage Loan and a Delinquent
Mortgage Loan shall not be considered an Aged Mortgage Loan for purposes of this clause; 
  
 (10) after giving effect to any requested Transaction, the aggregate Asset Value of all Seasoned Mortgage Loans (determined at the time of
their original purchase hereunder) owned hereunder by Buyer as of such date of determination may not exceed the Seasoned Sub-Limit; 
  
 (11) after giving effect to any requested Transaction, the aggregate Asset Value of all HLTV Low Doc Loans owned hereunder by Buyer as of
such date of determination may not exceed the HLTV Sub-Limit; and 
  
 (12) the Asset Value shall be deemed to be zero with respect to each Mortgage Loan (i) in respect of which there is a breach of a representation and warranty set forth in Schedule 1 (assuming each representation and
warranty is made as of the date the Asset Value is determined), (ii) which has not been repurchased by Seller by the earlier to occur of (A) the Termination Date and (B) the 120th day after the date on which it is first purchased by Buyer (other
than with respect to Aged Mortgage Loans not in excess of the above-described Sub-Limits), (iii) with respect to Aged Mortgage Loans not in excess of the above-described Sub-Limits, which has not been repurchased by Seller by the earlier to occur of
(A) the Termination Date and (B) the 180th day after the date on which it is first purchased by Buyer, (iv) which has been released from the possession of Custodian under Section 5(a) or 5(b) of the Custodial Agreement to Seller or its designee for
a period in excess of ten (10) calendar days, (v) which exceed the Sub-Limit for the related Class or as otherwise set forth in this Agreement, (vi) which has been released from the possession of the Custodian pursuant to Section 5(c) of the
Custodial Agreement under a bailee letter for a period in excess of 45 calendar days or (vii) which is a Wet-Ink Mortgage Loan, for which Custodian has failed to receive the related Mortgage Documents by the seventh (7th) Business Day following the applicable Purchase Date. 
  
 “Assignment of Mortgage” shall mean, with respect to any Mortgage, an assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient 

  

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under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment of the Mortgage to Buyer. 
  
 “Bank” shall mean a depository institution as may be
reasonably acceptable to Buyer and its respective successors in interest. 
  
 “Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as amended from time to time. 
  
 “Business Day” shall mean any day other than (i) a Saturday or Sunday or (ii) a day on which banks in the State of New York (or state in
which any of Custodian, Disbursement Agent, Seller or Buyer is located) is authorized or obligated by law or executive order to be closed. 
  
 “Buyer” shall mean CDC Mortgage Capital Inc., a New York corporation, and its successors in interest and assigns. 
  
 “C Credit Sub-Limit” shall mean $15,000,000. 
  
 “CSFB Facility” shall mean the Master Repurchase Agreement,
dated as of August 17, 2001, as may be amended from time to time, between Credit Suisse First Boston Mortgage Capital LLC and Seller, and all other documents or agreements executed in connection therewith. 
  
 “Capital Lease Obligations” shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of
such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. 
  
 “Class” shall mean each group of Mortgage Loans where each Mortgage Loan within such group qualifies as at
least one of the following: 30 Plus Mortgage Loan, 60 Plus Mortgage Loan, 120-149 Aged Mortgage Loan, 150-179 Aged Mortgage Loan, Aged Mortgage Loan, Delinquent Mortgage Loan, Sub-Prime First Mortgage Loan, Sub-Prime Second Mortgage Loan, Alt-A
First Mortgage Loan, Alt-A Second Mortgage Loan or Wet-Ink Mortgage Loan, provided, that a Mortgage Loan may be within more than one Class as of any date of determination. 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. 
  
 “Collection Account” shall mean the account established by
the Bank subject to an Account Agreement, into which all Income shall be deposited. 
  
 “Combined Loan-to-Value Ratio or CLTV” shall mean, with respect to any Second Lien Mortgage Loan, the sum of the principal balance of such Second Lien Mortgage Loan at the time of origination and the
outstanding principal balance of any related first lien loan as of the date of origination of such Second Lien Mortgage Loan, divided by the lesser of 

  

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(a) the Appraised Value of the related Mortgage Property as of the date of origination of such Second Lien Mortgage Loan and (b) if the related Mortgaged
Property was purchased within six (6) months of the origination of such Second Lien Mortgage Loan, the purchase price of such Mortgaged Property. 
  
 “Commitment Fee” shall mean the fee payable by Seller to Buyer pursuant to Section 3(a)(7) equal to $187,500 (or 0.125% of the Maximum
Amount). 
  
 “Commonly Controlled Entity” shall
mean an entity, whether or not incorporated, which is under common control with Seller within the meaning of Section 4001 of ERISA or is part of a group which includes Seller and which is treated as a single employer under Section 414 of the Code.

  
 “Condominium Mortgage Loan” shall mean an
Eligible Asset secured by a Residential Dwelling which is a unit in a condominium project. 
  
 “Condominium Sub-Limit” shall mean an amount equal to $15,000,000. 
  
 “Confirmation” shall have the meaning specified in Section 3(c). 
  
 “Consolidated EBITDA” means, for any period, the sum for such period of (a) Consolidated Net Income for
such period, (b) the sum of provisions for such period for income taxes, interest expense, and depreciation and amortization expense used in determining such Consolidated Net Income, (c) amounts deducted in such period in respect of non-cash
expenses in accordance with GAAP, (d) the amount of any aggregate net loss (or minus the amount of any gain) during such period arising from the sale, exchange or other disposition of capital assets and (e) non-cash expenses deducted in such period
in connection with any earn-out agreements, stock appreciation rights, “phantom” stock plans, employment agreements, non-competition agreements, subscription and stockholders agreements and other incentive and bonus plans and similar
arrangements made in connection with acquisitions of Persons or businesses by the Seller or its Subsidiaries or the retention of executives, officers or employees by the Seller or its Subsidiaries, including (but without duplication) any Person that
has become a Subsidiary during such period, on a pro forma basis as if such acquisition had occurred on the first day of such period; provided, that Consolidated EBITDA shall in any event exclude, from and after the Effective Date, (x) the effect of
any write-up of any assets acquired and (y) the amount of any non-cash income recognized during any period for which Consolidated EBITDA is determined; provided, that for purposes of this definition and where this definition is used, WMC Residco,
Inc. shall not be deemed to be a Subsidiary of Seller. 
  
 “Consolidated Interest Expense” means, for any period, the amount which, in conformity with GAAP, would be set forth opposite the caption “interest expense” or any like caption (including without limitation,
imputed interest included in payments under Financing Leases) on a consolidated income statement of the Seller and its Subsidiaries for such period excluding the amortization of any original issue discount and capitalized 

  

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interest expense and fees; provided, that for purposes of this definition and where this definition is used, WMC Residco, Inc. shall not be deemed to be a
Subsidiary of Seller. 
  
 “Consolidated Net
Income” means, for any period, the consolidated net income (or deficit) of the Seller and the Subsidiaries for such period (taken as a cumulative whole), determined in accordance with GAAP; provided that there shall be excluded (a)
the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Seller or any Subsidiary, (b) the income (or deficit) of any Person (other than a Subsidiary) in which the Seller or
any Subsidiary has an ownership interest, except to the extent that any such income has been actually received by the Seller or such Subsidiary in the form of dividends or similar distributions, (c) the undistributed earnings of any Subsidiary to
the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation, Governing Document or Requirement of Law applicable to such Subsidiary, (d)
any net gain from the collection of the proceeds of life insurance policies, (e) any gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness, of the Seller or any Subsidiary, (f) in the case of a
successor to the Seller by consolidation or merger or as a transferee of its assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets, and (g) any deferred credit representing the excess of equity
in any Subsidiary at the date of acquisition over the cost of the investment in such Subsidiary. 
  
 “Consolidated Tangible Net Worth” means total shareholders equity minus goodwill, patents, trade names, trademarks, copyrights,
franchises, organizational expense, deferred expenses and other assets in each case as are shown as intangible assets on the balance sheet of Seller and its subsidiaries on a consolidated basis as determined at a particular date in accordance with
GAAP. 
  
 “Contractual Obligation” means, as to
any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. 
  
 “Custodial Agreement” shall mean that custodial agreement,
dated as of the date hereof, by and among Buyer, Seller and Custodian, as the same shall be modified and supplemented and in effect from time to time. 
  
 “Custodial Identification Certificate” shall have the meaning assigned thereto in the Custodial Agreement. 
  
 “Custodian” shall mean Wells Fargo Bank Minnesota, N.A., a
national banking association, and its successors in interest, as custodian under the Custodial Agreement, and any successor Custodian under the Custodial Agreement. 
  
 “Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become
an Event of Default. 
  
 “Delinquent Mortgage
Loan” shall mean any 30 Plus Mortgage Loan or any 60 Plus Mortgage Loan. 
  

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 “Delinquent Sub-Limit” shall mean an amount equal to the greater of $2,000,000 or 5% of
the aggregate Purchase Price for all outstanding Transactions. 
  
 “Disbursement Agent” shall mean Deutsche Bank National Trust Company f/k/a Bankers Trust Company of California, N.A., a national banking association, and its successors in interest, as disbursement agent under the
Disbursement Agreement, and any successor Disbursement Agent under the Disbursement Agreement. 
  
 “Disbursement Agreement” shall mean that disbursement agreement, dated as of the date hereof, by and among Buyer, Seller and Disbursement
Agent, as the same shall be modified and supplemented and in effect from time to time. 
  
 “Dollars” and “$” shall mean lawful money of the United States of America. 
  
 “Due Diligence Review” shall mean the performance by Buyer of any or all of the reviews permitted under Section 26 with respect to any or
all of the Mortgage Loans, as desired by Buyer from time to time. 
  
 “Effective Date” shall mean the date upon which the conditions precedent set forth in Section 3(a) shall have been satisfied. 
  
 “Electronic Agent” shall mean MERSCORP, INC., and its successors in interest. 
  
 “Electronic Tracking Agreement” shall mean the Electronic
Tracking Agreement to be entered into among Buyer, Seller, Electronic Agent and MERS, as the same shall be amended, supplemented or otherwise modified from time to time; provided that if no Mortgage Loans are or will be MERS Designated Mortgage
Loans, all references herein to the Electronic Tracking Agreement shall be disregarded. 
  
 “Electronic Transmission” shall mean the delivery of information in an electronic format acceptable to the applicable recipient thereof. 
  
 “Eligible Asset” shall mean a Mortgage Loan, including a Wet-Ink Mortgage Loan, (i) as to which the
representations and warranties in Schedule 1 attached hereto are true and correct, (ii) which is underwritten strictly in accordance with Seller’s Underwriting Guidelines, a copy of which is attached hereto as Exhibit II or with
such exceptions as Buyer shall approve pursuant to Section 3(b)(9) and (iii) which is secured by a Residential Dwelling. 
  
 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. 
  
 “ERISA Affiliate” shall mean any corporation or trade or
business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which Seller is a member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which Seller is a member. 
  

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 “Eurodollar Rate” shall mean, with respect to each day a Transaction is outstanding (and
reset on each day a Transaction is outstanding), the rate per annum equal to the rate appearing at page 5 of the Telerate Screen as one-month LIBOR at or about 9:00 a.m., New York City time, on such date (and if such date is not a Business Day, the
Eurodollar Rate in effect on the Business Day immediately preceding such date), and if such rate shall not be so quoted, the average rate per annum at which three mutually acceptable banks are offered Dollar deposits at or about 8:00 a.m., New York
City time, on such date by prime banks in the interbank eurodollar market where the eurodollar and foreign currency exchange operations in respect of its Transactions are then being conducted for delivery on such day for a period of thirty (30) days
and in an amount comparable to the amount of the Transactions to be outstanding on such day. The Eurodollar Rate shall be reset by Buyer as described above and Buyer’s determination of Eurodollar Rate shall be conclusive upon the parties absent
manifest error on the part of Buyer. 
  
 “Event of
Default” has the meaning specified in Section 12. 
  
 “Excess Margin” has the meaning specified in Section 3(p)(1). 
  
 “Existing Financing Facilities” shall mean the Lehman Facility, the CSFB Facility, the RFC Facility and the JPMorgan Facility. 
  
 “Fairbanks” shall mean Fairbanks Capital Corp. and its successors in interest. 
  
 “Fannie Mae” shall mean the Federal National Mortgage
Association, and its successors in interest. 
  
 “Financing Lease” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on the balance sheet of the lessee. 

 
 “First Lien Mortgage Loan” shall mean an Eligible Asset
secured by a first lien on the related Mortgaged Property. 
  
 “Foreclosed Loan” shall mean a loan the property securing which has been foreclosed upon by Seller. 
  
 “Freddie Mac” shall mean the Federal Home Loan Mortgage Corporation, and its successors in interest. 
  
 “GAAP” shall mean generally accepted accounting principles
as in effect from time to time in the United States. 
  
 “Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over Seller, any of its Subsidiaries or any of its properties. 
  

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 “Guarantee” shall mean, as to any Person, any obligation of such Person directly or
indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership
arrangements, by agreement to keep-well another Person, to purchase assets, goods, securities or services, or to agree to take-or-pay arrangement or otherwise); provided that the term “Guarantee” shall not include (i) endorsements for
collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance, or other obligations in respect of a Mortgaged Property, or other principal and interest advances made in
the ordinary course of servicing the Mortgage Loans. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative
meanings. 
  
 “HLTV Low Doc Loan” shall mean a
Mortgage Loan having an LTV or CLTV, as applicable, of 90% or more and which was underwritten pursuant to one of Seller’s streamlined, low or no documentation programs (including any stated income program). 
  
 “HLTV Sublimit” shall mean $20,000,000. 
  
 “Income” shall mean, with respect to any Mortgage Loan at
any time, all collections and proceeds on or in respect of the Mortgage Loans, including, without limitation, any principal thereof then payable and all interest or other distributions payable thereon less any related servicing fee(s) charged by
Servicer. 
  
 “Indebtedness” shall mean, for any
Person: (a) obligations created, 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 another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and
accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 90 days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for account of such Person; (e) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (f) Indebtedness of others Guaranteed by such Person;
(g) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; and (h) Indebtedness of general partnerships of which such Person is secondarily or contingently liable (other than by
endorsement of instruments in the course of collection), whether by reason of any agreement to acquire such indebtedness to supply or advance sums or otherwise; and (i) Capital Lease Obligations of such Person. 
  

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 “Initial Residual Information” shall mean, with respect to each retained interest in a
securitization owned by WMC Residco, Inc., a description of assumptions (and supporting data based on actual pool performance) used to determine delinquency roll rates and related losses (including with respect to mortgage loans (x) in foreclosure
and (y) that are 150 days delinquent, the percentage of such mortgage loans which are assumed (1) will go into alternative liquidation, (2) will be converted into real estate owned properties (with related loss severities) and (3) will be cured and
with respect to mortgage loans that are current, the percentage of such mortgage loans which are assumed will become 150+ days delinquent). 
  
 “Interim Funder” shall mean, with respect to each MERS Designated Mortgage Loan, the Person named on the MERS® System as the interim funder pursuant to the MERS Procedures Manual.

  
 “Investor” shall mean, with respect to each
MERS Designated Mortgage Loan, the Person named on the MERS® System as the investor pursuant to the MERS Procedures Manual. 
  
 “JPMorgan Facility” shall mean the Senior Secured Credit Agreement, dated as of March 9, 2000, between JPMorgan Chase Bank, as successor to The Chase Manhattan Bank and Seller as may be amended from
time to time, and all other documents or agreements executed in connection therewith. 
  
 “Late Payment Fee” has the meaning specified in Section 5(b). 
  
 “Lehman Facility” shall mean the Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans, dated as of March 19, 2001,
as may be amended from time to time, between Lehman Brothers Bank, FSB and Seller, and all other documents or agreements executed in connection therewith. 
  
 “Lien” shall mean any mortgage, lien, pledge, charge, security interest or similar encumbrance. 
  
 “Loan-to-Value Ratio” or “LTV” means, with
respect to any Mortgage Loan, the ratio of the outstanding principal amount of such Mortgage Loan at the time of origination to the lesser of (a) the Appraised Value of the related Mortgaged Property at origination of such Mortgage Loan and (b) if
the related Mortgaged Property was purchased within six (6) months of the origination of such Mortgage Loan, the purchase price of the related Mortgaged Property. 
  
 “Manufactured Home Mortgage Loan” shall mean an Eligible Asset secured by a Residential Dwelling which is a
manufactured home. 
  
 “Manufactured Home
Sub-Limit” shall mean an amount equal to $7,000,000. 
  
 “Margin Base” shall mean the aggregate Asset Value of all Purchased Assets which are Eligible Assets. 
  

 -11- 








 “Margin Deficit” has the meaning specified in Section 4. 
  
 “Market Value” shall mean, as of any date in respect of any
Mortgage Loan, the price at which such Mortgage Loan could readily be sold as determined in Buyer’s sole discretion using its good faith business judgment, which price may be determined to be zero. Buyer’s determination of Market Value
shall be conclusive upon the parties absent manifest error on the part of Buyer. 
  
 “Material Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations or financial condition of Seller, (b) the ability of Seller to perform its obligations under
any of the Repurchase Documents to which it is a party, (c) the validity or enforceability of any of the Repurchase Documents, (d) the rights and remedies of Buyer under any of the Repurchase Documents, (e) the timely payment of any amounts payable
under the Repurchase Documents, or (f) the Asset Value of the Purchased Assets. 
  
 “Maximum Amount” shall mean $150,000,000. 
  
 “MERS” shall mean Mortgage Electronic Registration Systems, Inc., and its successors in interest. 
  
 “MERS Designated Mortgage Loan” shall mean a Mortgage Loan for which (a) the Seller has designated or will designate MERS as, and has
taken or will take such action as is necessary to cause MERS to be, the mortgagee of record, as nominee for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has designated or will designate the Buyer as the Investor or Interim
Funder on the MERS® System. 
  
 “MERS Procedure Manual” shall mean the MERS Procedures
Manual attached as Exhibit B to the Electronic Tracking Agreement, as it may be amended, supplemented or otherwise modified from time to time. 
  
 “MERS Report” shall mean the schedule listing MERS Designated Mortgage Loans and other information prepared by the Electronic Agent
pursuant to the Electronic Tracking Agreement. 
  
 “MERS® System” shall mean
the Electronic Agent’s mortgage electronic registry system, as more particularly described in the MERS Procedures Manual. 
  
 “Mortgage” shall mean the mortgage, deed of trust or other instrument securing a Mortgage Note, which creates a first lien or second lien
on a fee simple Residential Dwelling securing the Mortgage Note or a leasehold estate with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely accepted practice. 

 
 “Mortgage File” shall have the meaning assigned thereto
in the Custodial Agreement. 
  
 “Mortgage Loan”
shall mean a mortgage loan originated in accordance with the Underwriting Guidelines which Custodian has been instructed to hold for Buyer pursuant 

  

 -12- 








 
to the Custodial Agreement, including any Wet-Ink Mortgage Loan listed on a Transaction Request, and which Mortgage Loan includes, without limitation, (i) a
Mortgage Note and related Mortgage, and (ii) all right, title and interest of Seller in and to the Mortgaged Property covered by such Mortgage. 
  
 “Mortgage Note” shall mean the original executed promissory note or other evidence of the indebtedness of a Mortgagor with respect to a
Mortgage Loan. 
  
 “Mortgaged Property” shall
mean a fee simple interest in (or a leasehold estate with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely accepted practice) the real property (including all
improvements, buildings, fixtures, building equipment and personal property thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral securing repayment of the debt evidenced by
a Mortgage Note. 
  
 “Mortgagee” shall mean the
record holder of a Mortgage Note secured by a Mortgage. 
  
 “Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder. 
  
 “Multiemployer Plan” shall mean a multiemployer plan defined as such in Section 3(37) of ERISA to which
contributions have been or are required to be made by Seller or any ERISA Affiliate and that is covered by Title IV of ERISA. 
  
 “Net Income” shall mean, with respect to any Person for any period, the net income of such Person for such period as determined in
accordance with GAAP. 
  
 “Non-Owner Sub-Limit”
shall mean an amount equal to $25,000,000. 
  
 “Payment
Calculation Date” shall mean the fifteenth (15th) day of each month. 
  
 “Payment Date” shall mean two (2) Business Days after the
Payment Calculation Date. 
  
 “PBGC” shall mean
the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. 
  
 “Periodic Advance Repurchase Payment” has the meaning specified in Section 5(b). 
  
 “Person” shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof). 
  
 “Plan” shall mean an employee benefit or other plan
established or maintained by any Seller or any ERISA Affiliate and covered by Title IV of ERISA, other than a Multiemployer Plan. 
  
 “Post-Default Rate” shall mean, in respect of any day a Transaction is outstanding and any amount under this Agreement or any other
Repurchase Document was not paid when 

  

 -13- 








 
due to Buyer at the stated Repurchase Date or otherwise when due (a “Post-Default Day”), a rate per annum on a 360 day per year basis during
the period from and including the due date to but excluding the date on which such amount is paid in full equal to 3% per annum plus the Prime Rate on such Post-Default Day. 
  
 “Price Differential” means, with respect to any Transaction hereunder as of any date, the aggregate amount
obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such
Transaction and ending on (but excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction). 
  
 “Pricing Rate” shall mean, with respect to any Class of Mortgage Loans and any date of determination, a
rate per annum equal to the sum of (a) the Eurodollar Rate applicable on such date plus (b) the Pricing Spread for such Class applicable on such date. 
  
 “Pricing Spread” shall mean, with respect to any Class of Mortgage Loans, the rate per annum corresponding to such Class as set forth in
the table below: 
  

				
	 Class

	  	Pricing Spread

	 
		
	 Alt-A First Mortgage Loans
	  	1.10	%
		
	 Sub-Prime First Mortgage Loans
	  	1.20	%
		
	 Alt-A Second Mortgage Loans
	  	1.30	%
		
	 Sub-Prime Second Mortgage Loans
	  	1.30	%
		
	 Wet-Ink Mortgage Loans
	  	1.37	%
		
	 120-149 Aged Mortgage Loans
	  	1.35	%
		
	 150-179 Aged Mortgage Loans
	  	1.50	%
		
	 60 Plus Mortgage Loans
	  	1.75	%

  
 provided that
should a Mortgage Loan qualify for more than one Class as of any date of determination, then the Pricing Spread shall be the Pricing Spread of the Class for which such Mortgage Loan qualifies that produces the greatest Pricing Rate. 
  
 “Prime Rate” shall mean the prime rate announced to be in
effect from time to time, as published as the average rate in The Wall Street Journal. 
  
 “Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible. 
  

 -14- 








 “Purchase Agreement” shall mean any purchase agreement by and between Seller and any
third party, including without limitation, any Affiliate of Seller, pursuant to which Seller has purchased assets subsequently sold to Buyer hereunder. 
  
 “Purchase Date” shall mean the date on which Purchased Assets are transferred by Seller to Buyer or its designee (including Custodian).

  
 “Purchase Percentage” shall mean, with
respect to any Class of Mortgage Loans, the applicable percentage corresponding to such Class as set forth in the table below: 
  

				
	 Class

	  	Purchase Percentage

	 
		
	 Alt-A First Mortgage Loans
	  	98	%
		
	 Alt-A Second Mortgage Loans
	  	95	%
		
	 Sub-Prime First Mortgage Loans
	  	98	%
		
	 Sub-Prime Second Mortgage Loans
	  	95	%
		
	 90 Day Aged HLTV Loans
	  	95	%
		
	 Aged Mortgage Loans
	  	90	%
		
	 30 Plus Mortgage Loans
	  	95	%
		
	 60 Plus Mortgage Loans
	  	50	%

  
 provided, that
should a Mortgage Loan qualify for more than one Class, then the Purchase Percentage shall be the Purchase Percentage of the Class for which such Mortgage Loan qualifies which produces the lowest percentage. 
  
 “Purchase Price” shall mean on each Purchase Date, the
price at which Purchased Assets are transferred by Seller to Buyer or its designee (including Custodian) which shall equal the Asset Value for such Purchased Assets on the Purchase Date. 
  
 “Purchased Assets” shall mean the Mortgage Loans sold by Seller to Buyer in a Transaction, and any
Additional Purchased Assets. 
  
 “Purchased
Items” has the meaning specified in Section 7. 
  
 “Regulations T, U and X” shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.

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

 -15- 








 “Reportable Event” shall mean any of the events set forth in Section 4043(b) of ERISA or
a successor provision thereof, other than those events as to which the thirty day notice period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. § 2615 or one or more successor provision thereof. 
  
 “Repurchase Date” shall mean the date on which Seller is to
repurchase the Purchased Assets from Buyer as specified in the related Confirmation including any date determined by application of the provisions of Sections 3 or 13 which date shall be specified as “open” unless otherwise requested by
Seller and agreed by Buyer; provided that in no event shall the Repurchase Date be in excess of 364 days after the Purchase Date. 
  
 “Repurchase Documents” shall mean this Agreement, the Custodial Agreement and the Disbursement Agreement. 
  
 “Repurchase Obligations” shall have the meaning specified
in Section 7(b). 
  
 “Repurchase Price” means
the price at which Purchased Assets are to be transferred from Buyer or its designee (including Custodian) to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum
of the Purchase Price and the Price Differential as of the date of such determination decreased by all cash, Income and Periodic Advance Repurchase Payments (including Late Payment Fees, if any) actually received by Buyer pursuant to Sections 5(a)
or 5(b), respectively. 
  
 “Request for Additional
Transactions for Excess Margin” shall have the meaning specified in Section 3(p)(1). 
  
 “Requirement of Law” shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. 
  
 “Residential Dwelling” shall mean any one of the following:
(i) a detached single family dwelling, (ii) a two- to four-family dwelling, (iii) a unit in a condominium project, (iv) a manufactured housing unit, (v) a dwelling situated on a leasehold estate (with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties is a widely accepted practice) or (vi) a detached single family dwelling in a planned unit development. Mortgaged Properties that consist of the following property types
are not Residential Dwellings: (a) co-operative units, (b) log homes, (c) earthen homes, (d) underground homes, (e) mobile homes and (f) any dwelling situated on more than ten acres of property. 
  
 “Residual Information” shall mean, with respect to each
retained interest in a securitization owned by WMC Residco, Inc., (i) a copy of the certificate report or statement to certificateholders prepared by the trustee or other Person responsible for report preparation for the related securitized pool of
mortgage loans, (ii) a schedule, updated quarterly, setting forth the following information with respect to each securitized 

  

 -16- 








 
pool of mortgage loans (a) the current book value, (b) the constant prepayment assumptions, (c) the cumulative loss percentage (expressed as a percentage of
original principal balance) and (d) the relevant discount rate, (iii) a schedule, to be delivered via Electronic Transmission, setting forth all cash received on the related pool of mortgage loans for each month during the immediately preceding
12-month period, and (iv) a monthly schedule in the form attached as Schedule 2 hereto, to be delivered via Electronic Transmission (reflecting information as of each month end during the immediately preceding 12-month period), setting forth (1)
outstanding principal balance, (2) weighted average mortgage interest rate, (3) CPR (1 month, 3 month, & cumulative), (4) the delinquency percentage (specifying 30 day, 60 day, 90+, foreclosure, bankruptcy, total), (5) the percentage of the pool
(by outstanding principal balance) which is real estate owned and (6) the cumulative losses on the pool. 
  
 “Responsible Officer” shall mean, as to any Person, the chief executive officer, the chief financial officer, the treasurer, the
controller or the chief operating officer of such Person. 
  
 “RFC Facility” shall mean the Warehousing Credit and Security Agreement, dated as of February 16, 2001, as may be amended from time to time, between Residential Funding Corporation and Seller, and all other documents or
agreements executed in connection therewith. 
  
 “Seasoned Loans” shall mean an Eligible Asset which, at the time of its original purchase hereunder, was originated more than 45 days prior to the related Purchase Date. 
  
 “Seasoned Sub-Limit” shall mean $5,000,000. 
  
 “Second Lien Mortgage Loan” shall mean an Eligible Asset
secured by a lien on the Mortgaged Property, which is subject to one prior lien on such Mortgaged Property. 
  
 “Security Agreement” shall mean, with respect to any Mortgage Loan, any contract, instrument or other document related to security for
repayment thereof (other than the related Mortgage and Mortgage Note), executed by the Mortgagor and/or others in connection with such Mortgage Loan, including without limitation, any security agreement, guaranty, title insurance policy, hazard
insurance policy, chattel mortgage, letter of credit or certificate of deposit or other pledged accounts, and any other documents and records relating to any of the foregoing. 
  
 “Seller” shall mean WMC Mortgage Corp., a California corporation, and its successors in interest.

  
 “Seller Asset Schedule” shall have the
meaning assigned thereto in the Custodial Agreement. 
  
 “Seller-Related Obligations” shall mean any obligations of Seller hereunder and under any other arrangement between Seller or an Affiliate of Seller on the one hand and Buyer or an Affiliate of Buyer on the other hand.

  
 “Servicer” shall have the meaning specified
in Section 24. 
  

 -17- 








 “Servicer Account” shall mean any account established by Servicer in connection with the
servicing of the Mortgage Loans. 
  
 “Servicer
Notice” shall mean the notice from Buyer to Servicer, substantially in the form of Exhibit VIII attached hereto. 
  
 “Servicing Agreement” has the meaning specified in Section 24. 
  
 “Servicing File” means, with respect to each Mortgage Loan, the file retained by Seller consisting of
originals of all documents in the Mortgage File which are not delivered to a Custodian and copies of all documents in the Mortgage File set forth in Section 2 of the Custodial Agreement. 
  
 “Servicing Records” has the meaning specified in Section 24. 
  
 “Settlement Agent” shall mean, with respect to any
Transaction the subject of which is a Wet-Ink Mortgage Loan, the entity approved by Buyer, in its sole good faith discretion, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction
where the related Wet-Ink Mortgage Loan is being originated, to which the proceeds of such Transaction are to be wired pursuant to Section 3. A Settlement Agent is deemed approved unless Buyer notifies Seller otherwise at any time electronically or
in writing. 
  
 “Sub-Limit” shall mean each of
the Aged Sub-Limit, the Delinquent Sub-Limit, Sub-Prime Second Lien Sub-Limit, the ALT-A Second Sub-Limit, the Condominium Sub-Limit, the Non-Owner Sub-Limit, the C Credit Sub-Limit, the Manufactured Home Sub-Limit and the Wet-Ink Sub-Limit, as
applicable; provided, however, the Buyer may waive any Sub-Limit in its sole discretion. 
  
 “Sub-Prime First Mortgage Loan” shall mean an Eligible Asset which is a Sub-Prime Mortgage Loan and a First Lien Mortgage Loan. 
  
 “Sub-Prime Mortgage Loan” shall mean an Eligible Asset originated in accordance with the Underwriting
Guidelines which is not an Alt-A Mortgage Loan secured by a lien on a Residential Dwelling. In no event shall any Eligible Asset be a “Sub-Prime Mortgage Loan” if the related Mortgagor does not have a FICO score of at least 500 as of the
date of origination. 
  
 “Sub-Prime Second Lien
Sub-Limit” shall mean an amount equal to $5,000,000. 
  
 “Sub-Prime Second Mortgage Loan” shall mean an Eligible Asset which is a Sub-Prime Mortgage Loan and a Second Lien Mortgage Loan. 
  
 “Subsidiary” shall mean, with respect to any Person, any corporation, partnership, limited liability company or other entity of which at
least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership, limited
liability company or other entity (irrespective of whether 

  

 -18- 








 
or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might
have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

  
 “Termination Date” shall mean the date which
is 364 days from the date hereof which shall be April 18, 2003 or such earlier date on which this Agreement shall terminate in accordance with the provisions hereof or by operation of law, as may be extended pursuant to Section 3(m). 
  
 “Total Indebtedness” shall mean, with respect to any
Person, for any period, the aggregate consolidated Indebtedness of such Person during such period maintained in accordance with GAAP. 
  
 “Transaction” has the meaning specified in Section 1. 
  
 “Transaction Request” means a request from Seller to Buyer, in the form attached as Exhibit I
hereto, to enter into a Transaction. 
  
 “True Sale
Certification” shall mean a true sale certification in the form of Exhibit VI attached hereto. 
  
 “Trust Receipt” shall mean a trust receipt issued by Custodian to Buyer confirming Custodian’s possession of certain Mortgage Files
which are held by Custodian for the benefit of Buyer or the registered holder of such trust receipt. 
  
 “Underwriting Guidelines” shall mean the underwriting guidelines including reasonable and customary exceptions made thereto taking into
account the compensating factors in the manner described therein delivered by Seller to Buyer on or prior to the Effective Date and attached hereto as Exhibit II, as the same may be modified or supplemented from time to time thereafter in
accordance with Section 11(h). 
  
 “Uniform
Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Purchased Items is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” shall mean the Uniform Commercial Code as
in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. 
  
 “Wet-Ink Mortgage Loan” shall mean an Eligible Asset which is sold to Buyer simultaneously with the origination thereof by Seller, which
origination is in accordance with the Underwriting Guidelines and is funded in part or in whole with proceeds of the sale of the Eligible Asset to Buyer advanced directly to a Settlement Agent. 
  
 “Wet-Ink Sub-Limit” shall mean an amount equal to
$50,000,000. 
  

 -19- 









	3.	INITIATION; TERMINATION 

  

	(a)	Conditions Precedent to Initial Transaction. Buyer’s obligation to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or
concurrently with the making of such Transaction, of the condition precedent that Buyer shall have received from Seller any fees and expenses payable hereunder, and all of the following documents, each of which shall be satisfactory in form and
substance to Buyer and its counsel: 

  

	 	(1)	The following Repurchase Documents, as well as certain other documents, delivered to Buyer: 

  
 (A) Master Repurchase Agreement. This Master Repurchase Agreement duly completed and executed by the
parties thereto. In addition, Seller shall have taken such other action as Buyer shall have requested in order to perfect the security interests created pursuant to this Agreement, including filing of UCC financing statements in form and substance
satisfactory to Buyer; 
  
 (B) Custodial
Agreement. The Custodial Agreement, duly executed and delivered by each party thereto. In addition, Seller shall have taken such other action as Buyer shall have requested in order to transfer the Purchased Assets pursuant to this Agreement;

  
 (C) Disbursement Agreement. The
Disbursement Agreement, duly executed and delivered by each party thereto; 
  
 (D) Servicer Notice. A Servicer Notice to Fairbanks, duly executed and delivered by the parties thereto; 
  
 (E) Consents and Waivers. Any and all consents and waivers required under the Existing Financing Facilities; and 
  
 (F) UCC Financing Statements. UCC Financing
Statements naming Seller as Debtor and Buyer as Secured Party and describing the Purchased Items; 
  

	 	(2)	Opinions of Counsel. An opinion or opinions of counsel to Seller (which may be the general counsel of the Seller), substantially in the form of Exhibit III;


  

	 	(3)	Organizational Documents. A good standing certificate and certified copies of the charter and by-laws (or equivalent documents) of Seller and of all corporate or other
authority for Seller with respect to the execution, delivery and performance of the Repurchase Documents and each other document to be delivered by Seller from time to time in connection herewith (and Buyer may conclusively rely on such certificate
until it receives notice in writing from Seller to the contrary); 

  

 -20- 









	 	(4)	Underwriting Guidelines. A copy of Seller’s current Underwriting Guidelines, including any material changes to the Underwriting Guidelines made since the Underwriting
Guidelines were last delivered to Buyer; 

  

	 	(5)	Servicing Agreement(s). Any Servicing Agreement, certified as a true, correct and complete copy of the original, with a Servicer Notice attached thereto acknowledged by the
Servicer; 

  

	 	(6)	Other Documents. Such other documents as Buyer may reasonably request, in form and substance reasonably acceptable to Buyer; and 

  

	 	(7)	Fees. Seller shall have paid to Buyer the Commitment Fee. 

  

	(b)	Conditions Precedent to all Transactions. Buyer’s obligation to enter into each Transaction (including the initial Transaction) is subject to the satisfaction of the
following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect to the consummation thereof and the intended use of the proceeds of the sale: 

  

	 	(1)	Seller shall have delivered a Transaction Request via Electronic Transmission in accordance with the procedures set forth in Section 3(c); 

  

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

  

	 	(3)	after giving effect to the requested Transaction, the aggregate outstanding Purchase Price of the Transactions outstanding shall not exceed the Maximum Amount;


  

	 	(4)	both immediately prior to the requested Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in
Section 10, shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date); 

  

	 	(5)	after giving effect to the requested Transaction, the aggregate outstanding Purchase Price of the Transactions outstanding shall not exceed the Asset Value of all the Purchased
Assets subject to outstanding Transactions; 

  

	 	(6)	subject to Buyer’s right to perform one or more Due Diligence Reviews pursuant to Section 26, Buyer shall have completed its due diligence review of the Mortgage File for each
Purchased Asset (other than a Wet-Ink Mortgage Loan), and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Purchased Asset as Buyer in its sole discretion deems appropriate to review and
such review shall be satisfactory to Buyer in its sole discretion; 

  

 -21- 









	 	(7)	Buyer shall have received from Seller copies of all Servicing Agreements, each certified as a true, correct and complete copy of the original, together with Servicer Notices
attached thereto acknowledged by the applicable Servicer; 

  

	 	(8)	[Reserved]; 

  

	 	(9)	Buyer shall have approved, in its sole discretion, all material exceptions to the Underwriting Guidelines; 

  

	 	(10)	[Reserved] 

  

	 	(11)	to the extent there are any MERS Designated Mortgage Loans, Buyer shall have received from Seller a copy of a fully executed Electronic Tracking Agreement; 


 

	 	(12)	Buyer shall have received from Seller, with respect to MERS Designated Mortgage Loans, a MERS Report reflecting Buyer as Investor or Interim Funder for each such MERS Designated
Mortgage Loan; 

  

	 	(13)	none of the following shall have occurred and/or be continuing: 

  
 (A) an event or events shall have occurred in the good faith determination of Buyer resulting in the effective absence of a “repo
market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in Buyer not being able to finance Purchased Assets through the
“repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or 
  
 (B) an event or events shall have occurred resulting in the effective absence of a “securities
market” for securities backed by mortgage loans or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events; or

  
 (C) there shall have occurred a material
adverse change in the financial condition of Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of Buyer to fund its obligations under this Agreement; 
  

	 	(14)	with respect to each Eligible Asset that is not a Wet-Ink Mortgage Loan, Buyer shall have received from Custodian on each Purchase Date an Asset Schedule and Exception Report, dated
the Purchase Date, duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day; 

  

	 	(15)	 Buyer shall have received from Seller a Warehouse Lender’s Release Letter substantially in the form of Exhibit VII-B hereto (or such other form
acceptable to 



  

 -22- 









	 	 
Buyer) or a Seller’s Release Letter substantially in the form of Exhibit VII-A hereto (or such other form acceptable to Buyer) covering each
Eligible Asset to be sold to Buyer; 


  

	 	(16)	prior to the purchase of any Mortgage Loan acquired (by purchase or otherwise) by Seller from any Affiliate of Seller, Buyer shall have received a True Sale Certification;


  

	 	(17)	Buyer shall not have determined that the introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to
Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions; 

  

	 	(18)	within 60 days of the Effective Date, an Account Agreement shall have been entered into; and 

  

	 	(19)	the Repurchase Date for such Transaction is not later than the Termination Date. 

  
 Each Transaction Request delivered by Seller hereunder shall constitute a certification by Seller that all the conditions
set forth in this Section 3(b) have been satisfied (both as of the date of such notice or request and as of the date of such purchase). 
  

	(c)	Seller shall request a Transaction by delivering to Custodian, Disbursement Agent and Buyer via Electronic Transmission a request in the form of Exhibit I attached hereto (a
“Transaction Request”) in accordance with the timeframe set forth in Section 2 of the Disbursement Agreement. Such Transaction Request shall describe the Purchased Assets in a Seller Asset Schedule and set forth (i) the Purchase
Date, (ii) the Purchase Price, (iii) the Repurchase Date, (iv) the Pricing Rate applicable to the Transaction, (v) the applicable Purchase Percentages, (vi) the applicable Class or Classes for each Mortgage Loan for which Seller is requesting the
Transaction and (vii) additional terms or conditions not inconsistent with this Agreement. 

  
 On each Purchase Date, Buyer shall forward to Seller a confirmation (a “Confirmation”) by Electronic Transmission setting forth, with
respect to each Transaction funded on such date, (1) the mortgage loan number, (2) the Purchase Price for such Purchased Assets, (3) the Market Value of the related Mortgage Loans as of the date of such Confirmation, (4) the outstanding principal
amount of the related Mortgage Loans, (5) the Repurchase Date, (6) the Pricing Rate and (7) the Class designations of such Purchased Assets. Buyer shall forward to Seller a revised Confirmation by Electronic Transmission notifying Seller as to any
changes made by Buyer in the Market Value, Pricing Spread or Purchase Percentage pursuant to the terms hereof. 
  
 On each date that all the documents set forth in Section 2(a)(i) of the Custodial Agreement are received by the Custodian with respect to any Wet-Ink
Mortgage Loan, and Custodian delivers to Buyer a Trust Receipt attaching an Asset Schedule and Exception Report with respect to such Eligible Assets, Buyer shall forward to Seller a new Confirmation by Electronic Transmission setting forth the
following information, updated to reflect the revised Pricing Rate, and, if applicable, Market Value as a result of 

  

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the conversion of such Mortgage Loan, (1) the mortgage loan number, (2) the Purchase Price for such Purchased Assets, (3) the Market Value of the related
Mortgage Loans, (4) the outstanding principal amount of related Mortgage Loans, (5) the Repurchase Date, (6) the Pricing Rate and (7) the Class designations of such Purchased Assets. 
  
 In the event Seller disagrees with any terms of the Confirmation, Seller shall notify Buyer in writing of such disagreement
within one (1) Business Day after receipt of such Confirmation unless a corrected Confirmation is sent by Buyer. An objection sent by Seller must state specifically that it is an objection, must specify the provision(s) being objected to by Seller,
must set forth such provision(s) in the manner that Seller believes they should be stated, and must be received by Buyer no more than two (2) Business Days after the Confirmation was received by Seller. 
  

	(d)	Any Confirmation by Buyer shall be deemed to have been received by Seller on the date actually received by Seller. 

  

	(e)	Except as set forth in Section 3(c), each Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect
to the Transaction to which the Confirmation relates, and Seller’s acceptance of the related proceeds shall constitute Seller’s agreement to the terms of such Confirmation. It is the intention of the parties that each Confirmation shall
not be separate from this Agreement but shall be made a part of this Agreement. 

  

	(f)	On the Repurchase Date, termination of a Transaction will be effected by transfer to Seller or its designee of the Purchased Assets (and any Income in respect thereof received by
Buyer not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Section 5) which amount shall be netted against the simultaneous receipt of the Repurchase Price by Buyer. To the extent a net amount is owed to
one party, the other party shall pay such amount to such party. Seller is obligated to obtain the Mortgage Files from Buyer or its designee (including Custodian) at Seller’s expense on the Repurchase Date. 

  

	(g)	Subject to the terms and conditions of this Agreement, during the term of this Agreement Seller may sell to Buyer, repurchase from Buyer and resell to Buyer Eligible Assets
hereunder. 

  

	(h)	In no event shall a Transaction be entered into when any Default or Event of Default has occurred and is continuing. 

  

	(i)	With respect to each Eligible Asset that is not a Wet-Ink Mortgage Loan, Seller shall deliver to Custodian the Mortgage File pertaining to each Eligible Asset to be purchased by
Buyer no later than the time set forth in the Custodial Agreement. 

  

	(j)	 With respect to each Eligible Asset that is not a Wet-Ink Mortgage Loan, pursuant to the Custodial Agreement, Custodian shall deliver to Buyer and Seller an Asset
Schedule and Exception Report with respect to the Eligible Assets which Seller has requested Buyer purchase on such Purchase Date, and no later than 5 p.m., New York City time, on each Purchase Date, Custodian shall deliver to Buyer a Trust Receipt
in respect of all such 



  

 -24- 









	 	 
Eligible Assets purchased by Buyer on such Purchase Date. Subject to the provisions of this Section 3 and Section 8 of the Disbursement Agreement, the
Purchase Price for each Eligible Asset that is not a Wet-Ink Mortgage Loan will be made available to Seller by Disbursement Agent transferring the aggregate amount of such Purchase Price in accordance with the Disbursement Agreement.



  

	(k)	Subject to the provisions of this Section 3 and Section 8 of the Disbursement Agreement, the Purchase Price for each Eligible Asset which is a Wet-Ink Mortgage Loan will be made
available to Seller by Disbursement Agent transferring the aggregate amount of such Purchase Price in accordance with the Disbursement Agreement. Seller shall deliver the Mortgage File related thereto to Custodian, for receipt by Custodian no later
than 7 Business Days following the Purchase Date. 

  

	(l)	Seller may repurchase Purchased Assets without penalty or premium, but subject to the last sentence of this Section 3(l), on any date. The Repurchase Price payable for the
repurchase of any such Purchased Asset shall be reduced as provided in Section 5(e). If Seller intends to make such a repurchase, Seller shall give one (1) Business Day’s prior written notice thereof to Buyer, designating the Purchased Assets
to be repurchased. If such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, and, on receipt, such amount shall be applied to the Repurchase Price for the designated Purchased Assets. The
amount of the original Purchase Price of the Purchased Assets thus repurchased shall be available for subsequent Transactions subject to the terms of this Agreement. If any Purchased Asset is repurchased on any date other than the Repurchase Date
for such Transaction, Seller shall pay to Buyer any amount determined by Buyer, in its sole discretion, exercised in good faith, as necessary to compensate Buyer for any additional losses, costs or expenses which it may reasonably incur as a result
of such repurchase, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by Buyer to fund or maintain such Transaction. 

  

	(m)	At the request of Seller made at least 45 days, but in no event earlier than 360 days, prior to the then current Termination Date, Buyer may in its sole discretion extend the
Termination Date for a period of 364 additional days or such other period to be determined by Buyer in its sole discretion by giving written notice of such extension to Seller no later than thirty (30) days after Buyer’s receipt of
Seller’s request. Any failure by Buyer to deliver such notice of extension shall be deemed to be Buyer’s determination not to extend the then current Termination Date. 

  

	(n)	 In the event Seller fails to maintain the daily average aggregate principal balance of Transactions outstanding hereunder of $45,000,000 during the period
commencing on the Effective Date and ending on the last day of June 2002 or fails to maintain the daily average aggregate principal balance of Transactions outstanding hereunder of $75,000,000 during any calendar quarter of the Seller thereafter
(each such period, the “Non-Use Period”), Seller agrees to pay to Buyer a non-usage fee, computed at the rate of fifteen basis points (0.15%) per annum on the average daily amount of the unutilized portion of the Maximum Amount
during each day of the applicable Non-Use Period, in each case payable quarterly in arrears on the first Business Day following the last day of 



  

 -25- 









	 	 
such Non-Use Period and on the Termination Date, such payment to be made in Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to Buyer at the account set forth in Section 8(a) hereof. 


  

	(o)	Seller agrees to pay to Buyer on or prior to the Effective Date a commitment fee equal to 12.5 basis points (0.125%) of the Maximum Amount (the “Commitment Fee”),
such payment to be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at the account set forth in Section 8(a). 

  

	(p)	On any day on which the Margin Base exceeds the aggregate outstanding Purchase Price of all Transactions, so long as no Default or Event of Default has occurred and is continuing:


  

	 	(1)	Seller may prepare a Request for Additional Transactions for Excess Margin in the form of Exhibit IX attached hereto (“Request for Additional Transactions for Excess
Margin”), (A) specifying (i) the increase in Purchase Price for all outstanding Transactions and the requested Purchase Date, (ii) the Excess Margin with respect to all outstanding Transactions before giving effect to the requested
Transaction, (iii) the remaining Excess Margin after giving effect to the requested Transaction, and (iv) the aggregate outstanding Purchase Price of the Transactions after giving effect to the requested Transaction, and (B) including a
certification that, upon the consummation of the additional Transactions, the Margin Base will be equal to or greater than the aggregate outstanding Purchase Price of all Transactions, and the excess of the Margin Base over the aggregate outstanding
Purchase Price, after giving effect to the requested Transaction, shall be the “Excess Margin”. 

  

	 	(2)	Seller shall transmit via Electronic Transmission the Request for Additional Transactions for Excess Margin to Disbursement Agent and Buyer prior to 3:00 p.m., New York City time,
on the requested Purchase Date. Upon confirming that the Request for Additional Transactions for Excess Margin correctly reflects the information set forth in Section 3(p)(1) and that, after giving effect to the requested Transaction, the amount of
the Margin Base would be equal to or greater than the aggregate outstanding Purchase Prices of all Transactions, Buyer shall cause Disbursement Agent to remit the additional Purchase Price in the amount set forth in such Request for Additional
Transactions for Excess Margin and send a revised Confirmation with respect to such Purchased Assets. In the event that Buyer’s assessment of the Margin Base would alter the information set forth in any Request for Additional Transactions for
Excess Margin, Buyer shall promptly notify Seller in writing of such assessment. 

  

	 	(3)	 Buyer shall not be obligated to cause Disbursement Agent to remit the additional Purchase Price requested pursuant to a Request for Additional Transactions for
Excess Margin which (i) Buyer reasonably determines is based on erroneous information or would result in a Transaction other than in accordance with the 



  

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terms of this Agreement, or (ii) does not reflect Buyer’s current determination of Market Value as provided in the definition thereof.



  

	4.	MARGIN AMOUNT MAINTENANCE 

  

	(a)	If at any time the Margin Base is less than the aggregate Purchase Price for all outstanding Transactions (a “Margin Deficit”), then Buyer may by notice to Seller
(as such notice is more particularly set forth below, a “Margin Deficit Notice”) require Seller to transfer to Buyer or its designee (including Custodian) cash or Eligible Assets (“Additional Purchased Assets”)
(provided that the Buyer may, in its sole discretion, require Seller to deliver cash rather than additional Eligible Assets), so that the aggregate Asset Value of the Purchased Assets, including any such Additional Purchased Assets, will thereupon
equal or exceed the aggregate Purchase Price for all outstanding Transactions. If Buyer delivers a Margin Deficit Notice to Seller on or prior to 10 a.m., New York City time, on any Business Day, then Seller shall transfer Additional Purchased
Assets to Buyer no later than 5 p.m. New York City time, on such Business Day. In the event Buyer delivers a Margin Deficit Notice to Seller after 10 a.m., New York City time, on any Business Day, Seller shall be required to transfer Additional
Purchased Assets no later than 5 p.m., New York City time, on the subsequent Business Day. All cash transferred to Buyer pursuant to this Section 4(a) shall be deposited in the account set forth in Section 8(a) hereof and shall be deemed to reduce
the aggregate Purchase Price with respect to all outstanding Transactions. 

  

	(b)	Buyer’s election, in its sole and absolute discretion, not to deliver a Margin Deficit Notice at any time there is a Margin Deficit shall not in any way limit or impair its
right to deliver a Margin Deficit Notice at any time a Margin Deficit exists. 

  

	5.	INCOME PAYMENTS 

  

	(a)	Where a particular Transaction’s term extends over an Income payment date on the Purchased Assets subject to that Transaction such Income shall be the property of Buyer. Buyer
agrees that until a Default or an Event of Default has occurred and Buyer otherwise directs as contemplated in each Servicer Notice, each Servicer that is not Seller shall be permitted to continue to remit Income in accordance with the respective
servicing agreement. In the event that Seller is the Servicer of any Mortgage Loans, Buyer agrees that until a Default or an Event of Default has occurred, Seller shall be permitted to continue to remit or retain Income with respect to such Mortgage
Loans in accordance with its current existing business practice. Upon notice of a Default or an Event of Default to Seller hereunder or to Servicer pursuant to a Servicer Notice, Seller shall, and pursuant to the Servicer Notice, Servicer shall be
required to, deposit promptly all Income in a deposit account (the title of which shall indicate that the funds therein are being held in trust for Buyer) (the “Collection Account”) with the Bank and which is subject to the Account
Agreement. All funds in the Collection Account may be withdrawn by Buyer and applied as determined by Buyer. 

  

	(b)	 Notwithstanding that Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets, Seller shall, on each Payment Date, pay to
Buyer the 



  

 -27- 









	 	 
accreted value of the Price Differential (less any amount of such Price Differential previously paid by Seller to Buyer) of each Transaction through but not
including the Payment Calculation Date (each such payment, a “Periodic Advance Repurchase Payment”). Buyer shall deliver to Seller, via Electronic Transmission, notice of the required Periodic Advance Repurchase Payment on or prior
to the second Business Day preceding each Payment Date. If Seller fails to make all or part of the Periodic Advance Repurchase Payment by 5:00 p.m., New York City time, on the Payment Date, Seller shall be obligated to pay to Buyer (in addition to,
and together with, the Periodic Advance Repurchase Payment) interest on the unpaid amount of the Periodic Advance Repurchase Payment at a rate per annum equal to the Post-Default Rate (the “Late Payment Fee”) until the overdue
Periodic Advance Repurchase Payment is received in full by Buyer. 


  

	(c)	Subject to Section 5(a), Seller shall hold or cause to be held for the benefit of, and in trust for, Buyer all income, including without limitation all Income received by or on
behalf of Seller with respect to such Purchased Assets. All such Income shall be held in trust for Buyer, shall constitute the property of Buyer and shall not be commingled with other property of Seller, any affiliate of Seller or the applicable
Servicer except as expressly permitted above in this Section 5. Funds deposited in the Collection Account during any month shall be held therein, in trust for Buyer. 

  

	(d)	Buyer shall offset against the Repurchase Price of each such Transaction all Income and Periodic Advance Repurchase Payments actually received by Buyer for such Transaction pursuant
to Sections 5(a) and 5(b) as of the applicable Repurchase Date, respectively, excluding any Late Payment Fees paid pursuant to Section 5(b); it being understood that the Late Payment Fees are properties of Buyer that are not subject to offset
against the Repurchase Price. 

  

	6.	REQUIREMENTS OF LAW 

  

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


  

	 	(1)	shall subject Buyer to any tax of any kind whatsoever with respect to this Agreement or any Transaction (excluding net income taxes) or change the basis of taxation of payments to
Buyer in respect thereof; 

  

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

  

	 	(3)	shall impose on Buyer any other condition; 

  

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

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

  

	(c)	Any payments made by Seller to Buyer shall be free and clear of, and without deduction or withholding for, any taxes; provided, however, that if Seller shall be required by law to
deduct or withhold any taxes from any sums payable to Buyer, then Seller shall (A) make such deductions or withholdings and pay such amounts to the relevant authority in accordance with applicable law, (B) pay to Buyer the sum that would have been
payable had such deduction or withholding not been made, and (C) at the time the Price Differential is paid, pay to Buyer all additional amounts as specified by Buyer to preserve the after-tax yield Buyer would have been received had such tax not
been imposed. 

  

	(d)	If Buyer becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify Seller of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this Section 6(d) submitted by Buyer to Seller shall be conclusive in the absence of manifest error. Seller shall not be required to compensate Buyer pursuant to this Section 6 for any
additional amounts or reductions, as the case may be, incurred more than 90 days prior to the date that Buyer notifies Seller of the amount and basis of determination of the additional amounts or reductions, as the case may be, and of Buyer’s
intention to claim compensation therefor; provided, further that, if the change giving rise to such additional amounts or reductions, as the case may be, is retroactive, then the 90-day period referred to above shall be extended to include the
period of retroactive effect thereof. 

  

	7.	SECURITY INTEREST 

  

	(a)	 Each of the following items or types of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, is hereinafter
referred to as the “Purchased Items”: all Mortgage Loans, all rights under each Purchase 



  

 -29- 









	 	 
Agreement (but not the obligations thereunder), all Mortgage Files, including without limitation all promissory notes, all Servicing Records relating to the
Mortgage Loans, all Servicing Agreements relating to the Mortgage Loans and 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 mortgage guaranties and insurance (issued by governmental agencies or otherwise) and any mortgage insurance certificate or
other document evidencing such mortgage guaranties or insurance relating to any Mortgage Loan, all servicing fees to which Seller is entitled and servicing and other rights relating to the Mortgage Loans, all Servicer Accounts established pursuant
to any Servicing Agreement and all amounts on deposit therein, from time to time, all Purchase Agreements or other agreements or contracts relating to, constituting, or otherwise governing, any or all of the foregoing to the extent they relate to
the Purchased Assets including the right to receive principal and interest payments with respect to the Purchased Assets and the right to enforce payments, the Collection Account and all monies from time to time on deposit in the Collection Account,
all “general intangibles”, “accounts”, “chattel paper”, “deposit accounts” and “investment property” as defined in the Uniform Commercial Code as in effect from time to time relating to or
constituting any and all of the foregoing, and any and all replacements, substitutions, distributions on or proceeds of any and all of the foregoing. 


  

	(b)	Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the Purchased Assets. However, in
order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as loans and as security for the performance by Seller of all of Seller’s obligations to Buyer
hereunder and the Transactions entered into hereunder (“Repurchase Obligations”) and the Seller-Related Obligations, Seller hereby assigns, pledges and grants a security interest in all of its right, title and interest in, to and
under the Purchased Items and the Purchased Assets to Buyer to secure the Repurchase Obligations and the Seller-Related Obligations, including without limitation the repayment of all amounts owing to Buyer hereunder. The assignment, pledge and grant
of security interest contained herein shall be, and Seller hereby represents and warrants to Buyer that it is, a first priority perfected security interest. Seller agrees to mark its computer records and tapes to evidence the interests granted to
Buyer hereunder. All Purchased Items shall secure the payment of all obligations of Seller now or hereafter existing under this Agreement, including, without limitation, Seller’s obligation to repurchase Purchased Assets, or if such obligation
is so recharacterized as a loan, to repay such loan, for the Repurchase Price and to pay any and all other amounts owing to Buyer hereunder. 

  

	(c)	Pursuant to the Custodial Agreement, Custodian shall hold the Mortgage Files as exclusive bailee and agent for Buyer pursuant to the terms of the Custodial Agreement and shall
deliver to Buyer Trust Receipts each to the effect that Custodian has reviewed such Mortgage Files in the manner and to the extent required by the Custodial Agreement and identifying any deficiencies in such Mortgage Files as so reviewed.


  

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	8.	PAYMENT, TRANSFER AND CUSTODY 

  

	(a)	Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to Buyer at the following account maintained by Buyer; Account No. GLA 111569, for the account of CDC Mortgage Capital, Inc., Bank of New York, ABA No. 021000018, Attn: Eric Seyffer not later than 3 p.m., New York City time,
on the date on which such payment shall become due (and each such payment made after such time shall be deemed to have been made on the next succeeding Business Day). Seller acknowledges that it has no rights of withdrawal from the foregoing
account. 

  

	(b)	On the Purchase Date for each Transaction, ownership of the Purchased Assets shall be transferred to Buyer or its designee (including Custodian) against the simultaneous transfer of
the Purchase Price as set forth in Section 8 of the Disbursement Agreement not later than 6 p.m., New York City time, simultaneously with the delivery to Custodian of the Purchased Assets relating to each Transaction. Seller hereby sells, transfers,
conveys and assigns to Buyer or its designee (including Custodian) without recourse, but subject to the terms of this Agreement, all the right, title and interest of Seller in and to the Purchased Assets together with all right, title and interest
in and to the proceeds of any related Purchased Items. 

  

	(c)	In connection with such sale, transfer, conveyance and assignment, on or prior to each Purchase Date, Seller shall deliver or cause to be delivered and released to Buyer or its
designee (including Custodian) (i) the Custodial Identification Certificate and (ii) the documents identified in the Custodial Agreement. 

  

	(d)	Any Mortgage Files not delivered to Buyer or its designee (including Custodian) are and shall be held in trust by Seller or its designee for the benefit of Buyer as the owner
thereof. Seller or its designee shall maintain a copy of the Mortgage File and the originals of the Mortgage File not delivered to Buyer or its designee (including Custodian). The possession of the Mortgage File by Seller or its designee is at the
will of Buyer for the sole purpose of servicing the related Purchased Asset, and such retention and possession by Seller or its designee is in a custodial capacity only. Each Mortgage File retained or held by Seller or its designee shall be
segregated on Seller’s books and records from the other assets of Seller or its designee and the books and records of Seller or its designee shall be marked appropriately to reflect clearly the sale of the related Purchased Asset to Buyer.
Seller or its designee shall release its custody of the Mortgage File only in accordance with written instructions from Buyer, unless such release is required as incidental to the servicing of the Purchased Assets or is in connection with a
repurchase of any Purchased Asset by Seller. 

  

	9.	HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS 

  
 Title to all Purchased Assets and Purchased Items shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Assets and Purchased Items. Nothing
in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets and Purchased Items or otherwise pledging, repledging, transferring, hypothecating, or 

  

 -31- 








 
rehypothecating the Purchased Assets and Purchased Items, all on terms that Buyer may determine in its sole discretion, but no such transaction shall relieve
Buyer of its obligations to transfer Purchased Assets and Purchased Items to Seller pursuant to Section 3(l). Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Assets and Purchased Items delivered to Buyer by
Seller. 
  

	10.	SELLER REPRESENTATIONS 

  
 Seller represents and warrants to Buyer that as of the Purchase Date for the purchase of any Purchased Assets by Buyer from Seller and as of the date of this Agreement
and any Transaction hereunder and at all times while the Repurchase Documents and any Transaction hereunder is in full force and effect: 
  

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

  

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

  

	(c)	No Broker. Seller has not dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in
connection with the sale of Purchased Assets pursuant to this Agreement. 

  

	(d)	Ability to Perform. Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in the Repurchase
Documents applicable to it to which it is a party. 

  

	(e)	No Defaults. No Default or Event of Default has occurred and is continuing hereunder. 

  

	(f)	 Legal Name; Existence; Organizational Identification Number. Seller’s exact legal name is WMC Mortgage Corp. Seller (a) is a corporation duly organized,
validly existing and in good standing under the laws of California; (b) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as
now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect; and (c) is qualified to do business and is in good standing in
all other jurisdictions in which the nature of the 



  

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business conducted by it makes such qualification necessary, except where failure so to qualify could not be reasonably likely (either individually or in the
aggregate) to have a Material Adverse Effect. Seller’s organizational identification number assigned by the state of California is CO308847. 


  

	(g)	Financial Condition. Seller has heretofore furnished to Buyer a copy of (a) Seller’s consolidated balance sheet and the consolidated balance sheets of its consolidated
Subsidiaries for the fiscal year ended December 31, 2001, and the related consolidated statements of income and retained earnings and of cash flows for Seller and its consolidated Subsidiaries for such fiscal year, each audited by and with the
unqualified opinion thereon of KPMG LLP. All such financial statements are complete and correct and fairly present, in all material respects, the consolidated financial position of Seller and its Subsidiaries and the consolidated results of their
operations as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis. Since December 31, 2001, there has been no material adverse change in the consolidated business, operations or financial condition of
either of Seller or WMC Finance Co. and its respective consolidated Subsidiaries taken as a whole from that set forth in said financial statements. 

  

	(h)	Litigation. There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or, to Seller’s knowledge,
threatened) or other legal or arbitrable proceedings affecting any of Seller, WMC Finance Co. or any of their respective Subsidiaries or affecting any of the Property of any of them before any Governmental Authority which (i) questions or challenges
the validity or enforceability of the Repurchase Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a claim in excess of $1,000,000 or claims in an aggregate amount greater than $3,000,000 or
(iii) individually or in the aggregate, if adversely determined, could reasonably be likely to have a Material Adverse Effect. 

  

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

  

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



  

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enforceable against Seller in accordance with its terms, except as such enforcement may be affected by bankruptcy, by other insolvency laws, or by general
principles of equity. 


  

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


  

	(l)	Margin Regulations. Neither any Transaction hereunder, nor the use of the proceeds thereof, will violate or be inconsistent with the provisions of Regulation T, U or X.


  

	(m)	Taxes. WMC Finance Co. and its Subsidiaries have filed all Federal income tax returns and all other material tax returns that are required to be filed by them and have paid
all taxes due pursuant to such returns or pursuant to any assessment received by it or any of its Subsidiaries, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been provided. The charges, accruals and reserves on the books of WMC Finance Co. and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of Seller, adequate.


  

	(n)	Investment Company Act. Neither Seller nor any of its Subsidiaries is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended. 

  

	(o)	Purchased Assets. 

  

	 	(1)	Seller has not assigned, pledged, or otherwise conveyed or encumbered any Mortgage Loan to any other Person, and immediately prior to the sale of such Mortgage Loan to Buyer, Seller
was the sole owner of such Mortgage Loan and had good and marketable title thereto, free and clear of all Liens, in each case except for Liens to be released simultaneously with the sale to Buyer hereunder. No Mortgage Loan sold to Buyer hereunder
was acquired (by purchase or otherwise) by Seller from an Affiliate of Seller unless a True Sale Certification has been delivered to Buyer. 

  

	 	(2)	The provisions of this Agreement are effective to either constitute a sale of Purchased Items to Buyer or to create in favor of Buyer a valid and fully perfected first priority
security interest in all right, title and interest of Seller in, to and under the Purchased Items. 

  

	 	(3)	Upon receipt by Custodian of each Mortgage Note, endorsed in blank by a duly authorized officer of Seller, either a purchase shall have been completed by Buyer of each Mortgage Note
or Buyer shall have a valid and fully perfected first priority security interest in the applicable Mortgage Note and in such Seller’s interest in the related Mortgaged Property. 

  

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	 	(4)	Upon the filing of financing statements on Form UCC-1 naming Buyer as “Secured Party”, Seller as “Debtor” and describing the Purchased Items, in the
jurisdictions and recording offices listed on Exhibit IV attached hereto, the security interests granted hereunder in the Purchased Items will constitute fully perfected security interests under the Uniform Commercial Code in all right, title
and interest of Seller in, to and under such Purchased Items, which can be perfected by filing under the Uniform Commercial Code. 

  

	 	(5)	Upon execution and delivery of the Account Agreement, Buyer shall either be the owner of, or have a valid and fully perfected first priority security interest in, the investment
property and all deposit accounts comprising Purchased Items. 

  

	 	(6)	With respect to each Purchased Asset, each of the representations and warranties on Schedule 1 is true and correct. 

  

	(p)	Location of Books and Records. The location where Seller keeps its books and records, including all computer tapes and records related to the Purchased Items, is its chief
executive office. 

  

	(q)	Servicing Agreements. Seller has delivered to Buyer all Servicing Agreements with respect to the Purchased Assets and no default or event of default exists thereunder.


  

	(r)	True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of Seller or WMC Finance Co. to
Buyer in connection with the negotiation, preparation or delivery of this Agreement and the other Repurchase Documents or included herein or therein or delivered pursuant hereto or thereto (other than with respect to the Mortgage Loans), when taken
as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information
furnished after the date hereof by or on behalf of Seller to Buyer in connection with this Agreement and the other Repurchase Documents and the transactions contemplated hereby (other than with respect to the Mortgage Loans) and thereby will be true
and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to a Responsible Officer of Seller, after due inquiry,
that could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Repurchase Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Buyer
for use in connection with the transactions contemplated hereby or thereby. 

  

	(s)	ERISA. Each Plan to which Seller or any of its Subsidiaries make direct contributions, and, to the knowledge of Seller, each other Plan and each Multiemployer Plan, is in
compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or State law. No event or condition has occurred and is continuing as
to which Seller would be under an obligation to furnish a report to Buyer under Section 11(a)(4). 

  

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	11.	COVENANTS OF SELLER 

  
 Commencing on the date hereof and until this Agreement is no longer in force with respect to any Transaction, Seller covenants that it will: 
  

	(a)	Financial Statements. Seller shall deliver to Buyer: 

  

	 	(1)	(i) as soon as available and in any event within thirty (30) calendar days after the end of each calendar month, the unaudited consolidated balance sheets of each of Seller and WMC
Finance Co. and its respective consolidated Subsidiaries as at the end of such period and the related unaudited respective consolidated statements of income and retained earnings and of cash flows for each of Seller and WMC Finance Co. and its
respective consolidated Subsidiaries for such period and the portion of the fiscal year through the end of such period, accompanied by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial
statements fairly present in all material respects the consolidated financial condition and results of operations of each of Seller and WMC Finance Co. and their respective consolidated Subsidiaries in accordance with GAAP, consistently applied, as
at the end of, and for, such period (subject to normal year-end adjustments) and (ii) no later than May 15, 2002, WMC Finance Co.’s consolidated balance sheet and the consolidated balance sheets of its consolidated Subsidiaries for the fiscal
year ended December 31, 2001, and the related consolidated statements of income and retained earnings and of cash flows for WMC Finance Co. and its consolidated Subsidiaries for such fiscal year, each audited by and with the unqualified opinion
thereon of KPMG LLP which financial statements shall be complete and correct and fairly present, in all material respects, the consolidated financial position of WMF Finance Co. and its Subsidiaries and the consolidated results of their operations
as at such dates and for such fiscal periods, all in accordance with GAAP applied on a consistent basis. 

  

	 	(2)	as soon as available and in any event within ninety (90) days after the end of each fiscal year of each of Seller and WMC Finance Co. the consolidated balance sheets of each of
Seller and WMC Finance Co. and its respective consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows for each of Seller and WMC Finance Co. and its
respective consolidated Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing,
which opinion shall not be qualified as to scope of audit or going concern and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of each of Seller and WMC Finance
Co. and its respective consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP; 

  

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	 	(3)	from time to time such other information regarding the financial condition, operations, or business of each of Seller or WMC Finance Co. as Buyer may reasonably request; and


  

	 	(4)	as soon as reasonably possible, and in any event within thirty (30) days after a Responsible Officer of Seller knows, or with respect to any Plan or Multiemployer Plan to which
Seller or any of its Subsidiaries makes direct contributions, has reason to believe, that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, a statement signed by a senior financial
officer of Seller setting forth details respecting such event or condition and the action, if any, that Seller or its ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to
PBGC by Seller or an ERISA Affiliate with respect to such event or condition): 

  
 (A) any reportable event, as defined in Section 4043(c) of ERISA or any successor provision thereof and the regulations issued thereunder,
with respect to a Plan, as to which PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event (provided that a failure to meet the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA or any successor provision thereof, including without limitation the failure to make on or before its due date a required installment under Section 412(m) of the Code or Section 302(e) of
ERISA or any successor provision thereof, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(d) of the Code or any successor provision thereof); and any request for a waiver under Section 412(d) of
the Code or any successor provision thereof for any Plan; 
  
 (B) the distribution under Section 4041(c) of ERISA or any successor provision thereof of a notice of intent to terminate any Plan or any action taken by Seller or an ERISA Affiliate to terminate any Plan; 

 
 (C) the institution by PBGC of proceedings under Section
4042 of ERISA or any successor provision thereof for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by Seller or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken
by PBGC with respect to such Multiemployer Plan; 
  
 (D) the complete or partial withdrawal from a Multiemployer Plan by Seller or any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA or any successor provision thereof (including the obligation to satisfy
secondary liability as a result of a purchaser default) that would have a Material Adverse Effect or the receipt by Seller or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241
or 

  

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4245 of ERISA or any successor provision thereof or that it intends to terminate or has terminated under Section 4041A of ERISA or any successor provision
thereof; 
  
 (E) the institution of a proceeding
by a fiduciary of any Multiemployer Plan against Seller or any ERISA Affiliate to enforce Section 515 of ERISA or any successor provision thereof, which proceeding is not dismissed within thirty (30) days; and 
  
 (F) the adoption of an amendment to any Plan that would
result in the loss of tax-exempt status of the trust of which such Plan is a part if Seller or an ERISA Affiliate fails to provide timely security to such Plan in accordance with the provisions of Section 401(a)(29) of the Code or Section 307 of
ERISA or any successor provision thereof. 
  
 Seller will furnish
to Buyer, at the time Seller furnishes each set of financial statements pursuant to paragraphs (a)(1) and (a)(2) above, a certificate of a Responsible Officer of Seller to the effect that, to the best of such Responsible Officer’s knowledge,
during such fiscal period or year, Seller has observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Repurchase Documents to be observed,
performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate (and, if any Default or Event of Default has occurred and is continuing, describing
the same in reasonable detail and describing the action Seller has taken or proposes to take with respect thereto). 
  

	(b)	Litigation. Seller will promptly, and in any event within ten (10) days after service of process on any of the following, give to Buyer notice of all litigation, actions,
suits, arbitrations, investigations (including, without limitation, any of the foregoing which are, to Seller’s knowledge, threatened or pending) or other legal or arbitrable proceedings affecting Seller or any of its Subsidiaries or affecting
any of the Property of any of them before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Repurchase Documents or any action to be taken in connection with the transactions contemplated
hereby, (ii) makes a claim in excess of $1,000,000 or claims in an aggregate amount greater than $3,000,000, or (iii) which, individually or in the aggregate, if adversely determined, could be reasonably likely to have a Material Adverse Effect.


  

	(c)	Existence, etc. Seller will: 

  

	 	(1)	preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (provided that nothing in
this Section 11(c)(1) shall prohibit any transaction expressly permitted under Section 11(d)); 

  

	 	(2)	 comply with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including, without limitation, all environmental




  

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laws) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect;



  

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

  

	 	(4)	not (i) cause or permit any change to be made in its name, organizational identification number, identity or corporate structure, each as described in Section 10(f) or (ii) change
its jurisdiction of organization, unless it shall have provided Buyer thirty (30) days’ prior written notice of such change and shall have first taken all action required by Buyer for the purpose of perfecting or protecting the lien and
security interest of Buyer established hereunder; 

  

	 	(5)	pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; and 

  

	 	(6)	permit representatives of Buyer, upon reasonable notice (unless a Default shall have occurred and is continuing, in which case, no prior notice shall be required), during normal
business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by Buyer to the extent Buyer deems
necessary to ensure that Seller has the resources and ability to comply with its obligations hereunder. 

  

	(d)	Prohibition of Fundamental Changes. Seller shall not enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets; provided, that Seller may merge or consolidate with (i) any wholly owned subsidiary of Seller, or (ii) any other Person if Seller is the surviving
corporation; and provided, further, that if after giving effect thereto, no Default would exist hereunder. 

  

	(e)	Margin Deficit. If at any time there exists a Margin Deficit Seller shall cure same in accordance with Section 4. 

  

	(f)	Notices. Seller shall give notice to Buyer: 

  

	 	(1)	promptly upon receipt of notice or knowledge of the occurrence of any Default or Event of Default; 

  

	 	(2)	with respect to any Purchased Asset, promptly upon receipt of any principal prepayment (in full or partial prepayments in excess of $10,000) of such Purchased Asset;


  

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	 	(3)	with respect to any Purchased Asset hereunder, promptly upon receipt of notice or knowledge that the underlying Mortgaged Property has been damaged by waste, fire, earthquake or
earth movement, flood, tornado or other casualty, or otherwise damaged so as to affect adversely the Asset Value of such Purchased Asset; 

  

	 	(4)	promptly upon receipt of notice or knowledge of (i) any material default related to any Purchased Item, (ii) any Lien or security interest on, or claim asserted against, any
Purchased Item or (iii) any event or change in circumstances or in the market value of any or all of Seller’s assets which in each case could reasonably be expected to have a Material Adverse Effect; 

  

	 	(5)	upon any material amendment to the Existing Financing Facilities, any decrease in the gross amount available to be borrowed thereunder, or any material change in custodian or
custodial arrangements relating thereto; and 

  

	 	(6)	promptly upon the occurrence of any default or event of default under the Existing Financing Facilities. 

  
 Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of Seller setting forth
details of the occurrence referred to therein and stating what action Seller has taken or proposes to take with respect thereto. 
  

	(g)	Reports. Within thirty (30) calendar days of the end of each calendar month, Seller shall provide Buyer with a monthly report, which report shall include, among other items,
a summary of such Seller’s delinquency and loss experience with respect to Mortgage Loans serviced by Seller, any Servicer or any designee of either, and other property level information, with respect to any MERS Designated Mortgage Loan, MERS
Reports plus any such additional reports as Buyer may reasonably request with respect to Seller or any Servicer’s servicing portfolio or pending originations of Mortgage Loans or economic assumptions used to value the retained interests owned
by WMC Residco, Inc. Within 30 calendar days after the end of each calendar month, Seller shall provide or cause Trustee to provide Buyer with the Residual Information. 

  

	(h)	Underwriting Guidelines. (1) Seller shall not make any material change in the Underwriting Guidelines without the prior written consent of Buyer, which shall be deemed given
if written notice to the contrary, including the reason(s) therefor, is not received by Seller within five (5) Business Days following Seller’s written notice to Buyer, confirmed via telephone, of any such change, and Seller shall review the
Underwriting Guidelines periodically to confirm that they are being complied with in all material respects and are adequate to meet Seller’s business objectives. In the event Seller makes any amendment or modification to the Underwriting
Guidelines, Seller shall promptly deliver to Buyer a complete copy of the amended or modified Underwriting Guidelines. (2) Additionally, Seller shall provide to Buyer by the 10th calendar day following the end of each fiscal quarter the most current version of its Underwriting Guidelines, and Buyer may in its reasonable discretion
request a current copy of the Underwriting Guidelines at any time. 

  

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	(i)	Transactions with Affiliates. Seller shall not enter into any transaction with an Affiliate, including without limitation any purchase, sale, lease or exchange of property or
the rendering of any service unless such transaction is not otherwise expressly prohibited under this Agreement, upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a
Person which is not an Affiliate, except for (i) the acquisition of equity or stock or warrants of an Affiliate, (ii) the payment of dividends, in either case, in the ordinary course of business, (iii) the redemption of stock, or (iv) the purchase
or sale of loans in the ordinary course of business which is a true sale and does not constitute a fraudulent conveyance. Seller shall not make a payment that is not otherwise permitted by this Section 11(i) to any Affiliate. In no event shall
Seller transfer to Buyer hereunder any Mortgage Loan acquired by Seller from an Affiliate of Seller unless a True Sale Certification has been delivered to Buyer prior to such sale. 

  

	(j)	Limitation on Liens. Immediately upon notice of a Lien or any circumstance which could give rise to a Lien on the Purchased Items, Seller will defend the Purchased Items
against, and will take such other action as is necessary to remove, any Lien, security interest or claim on or to the Purchased Items (other than any security interest created under this Agreement), and Seller will defend the right, title and
interest of Buyer in and to any of the Purchased Items against the claims and demands of all persons whomsoever. 

  

	(k)	[Reserved]. 

  

	(l)	Limitation on Distributions. After the occurrence and during the continuation of any Default, Seller shall not make any payment on account of, or set apart assets for, a
sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity or partnership interest of Seller, whether now or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of Seller; provided, however, that nothing in this Section 11(l) shall restrict Seller’s right to declare and pay dividends or make distributions to WMC Finance Co.
(A) for the purpose of compensating its officers and other employees; provided that so long as there shall be an Event of Default in existence, such amount shall not exceed $1,500,000 during any consecutive twelve (12) month period (or that portion
of such amount equal to the pro rata portion of such twelve (12) month period during which such Event of Default shall exist and be continuing), or (B) for the purpose of paying that portion of taxes due and payable to WMC Finance Co. on account of
the business activities of WMC Finance Co. and its consolidated Subsidiaries reasonably allocable to the business activities of Seller and its consolidated Subsidiaries. 

  

	(m)	Maintenance of Profitability. For each fiscal quarter commencing after March 31, 2002, Net Income of Seller (excluding for purposes of this covenant, any amounts with respect
to WMC Residco, Inc.) before income taxes and distributions shall not be less than $1.00. 

  

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	(n)	Maintenance of Consolidated Tangible Net Worth. Seller shall not permit Consolidated Tangible Net Worth of Seller and its consolidated Subsidiaries at any time to be less
than $45,000,000. 

  

	(o)	Maintenance of Ratio of Total Indebtedness to Consolidated Tangible Net Worth. Seller shall not permit the ratio of Total Indebtedness to Consolidated Tangible Net Worth of
Seller and its consolidated Subsidiaries at any time to be greater than 12:1. Seller shall not permit the ratio of Total Indebtedness excluding warehouse Indebtedness as set forth in the Seller’s financial statements, to Consolidated Tangible
Net Worth of Seller and its consolidated Subsidiaries at any time to be greater than 2:1. 

  

	(p)	Maintenance of Ratio of Consolidated EBITDA to Consolidated Interest Expense. Seller shall not permit the ratio of Consolidated EBITDA to Consolidated Interest Expense of
Seller and its consolidated Subsidiaries as determined at the end of each fiscal quarter to be less than 1.05 to 1. 

  

	(q)	Servicer; Servicing Tape. Seller shall provide to Buyer and to Disbursement Agent via Electronic Transmission, a remittance report on a monthly basis by no later than the
12th day of each month (the “Reporting Date”) containing servicing information, including without limitation those fields reasonably requested by Buyer from time to time, on a loan-by-loan basis and in the aggregate, with respect to
the Purchased Assets serviced hereunder by Seller or any Servicer for the month (or any portion thereof) prior to the Reporting Date (such remittance report, an “Asset Tape”). Seller shall not cause the Mortgage Loans to be serviced
by any servicer other than a servicer expressly approved in writing by Buyer, which approval shall be deemed granted by Buyer with respect to Seller with the execution of this Agreement. 

  

	(r)	Required Filings. Seller shall retain and promptly provide Buyer upon request with copies of all material filings (including documents or exhibits thereto) which Seller or
any Subsidiary of Seller is required to file with any regulatory body in accordance with its regulations. 

  

	(s)	Remittance of Prepayments. Seller shall remit or cause to be remitted to Buyer, with sufficient detail via Electronic Transmission to enable Buyer to appropriately identify
the Mortgage Loan to which any amount remitted applies, all full principal prepayments or partial principal prepayments in excess of $10,000 on any Purchased Asset that Seller or Servicer has received no later than one (1) Business Day following the
date such prepayment was received. 

  

	(t)	Custodial Agreement, Disbursement Agreement and Account Agreement. Seller shall maintain each of the Custodial Agreement, Disbursement Agreement and Account Agreement in full
force and effect and shall not amend or modify either of the Custodial Agreement, Disbursement Agreement or the Account Agreement or waive compliance with any provisions thereunder without the prior written consent of Buyer.


  

	(u)	 Compliance Report. Seller shall provide Buyer no later than the 30th day after the end of each calendar quarter, in a letter format acceptable to Buyer in
its sole discretion, a 



  

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compliance report demonstrating therein the calculations Seller utilized to determine its compliance with the financial covenants set forth in clauses (m),
(n), (o) and (p) of this Section 11 as of the end of the immediately preceding quarter. In addition, Seller shall provide Buyer no later than 90 days after year-end a compliance report demonstrating therein the calculations Seller utilized in
determining its compliance with the financial covenants set forth in clauses (n), (o), and (p) of this Section 11 as of the end of such calendar year. 


  

	(v)	[Reserved]. 

  

	(w)	Account Agreement. Within 60 days of the Effective Date, Seller shall have entered into and delivered to Buyer an Account Agreement, duly executed and delivered by the
parties thereto. 

  

	(x)	Inconsistent Agreements. Seller will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into any agreement containing any provision which
would be violated or breached by any Transaction hereunder or by the performance by Seller of its obligations under any Repurchase Document. 

  

	(y)	Escrow Imbalance. Seller will, no later than five (5) Business Days after learning (from any source) of any material imbalance in any escrow account, fully and completely
correct and eliminate such imbalance including, without limitation, depositing its own funds into such account to eliminate any overdrawal or deficit. 

  

	(z)	Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants,
the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of an Event of Default or Default if such action is taken or condition exists.


  

	(aa)	Initial Residual Information. Seller shall provide to Buyer no later than 30 days after the Effective Date the Initial Residual Information prepared as of a date reasonably
acceptable to the Buyer. 

  

	12.	EVENTS OF DEFAULT 

  
 If any of the following events (each, an “Event of Default”) occur, Seller and Buyer shall have the rights set forth in Section 13, as applicable: 
  

	(a)	Seller shall default in the payment of any Repurchase Price due or any amount under Section 5 when due (whether at stated maturity, upon acceleration or at mandatory or optional
prepayment); or 

  

	(b)	Seller shall default in the payment of any other amount payable by it hereunder or under any other Repurchase Document after notification by Buyer of such default, and such default
shall have continued unremedied for five (5) Business Days; or 

  

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	(c)	any representation, warranty or certification made or deemed made herein or in any other Repurchase Document by Seller or any certificate furnished to Buyer pursuant to the
provisions hereof or thereof or any information with respect to the Mortgage Loans furnished in writing by on behalf of Seller shall prove to have been false or misleading in any material respect as of the time made or furnished (other than the
representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Asset Value of the Purchased Assets, unless (i) Seller shall have made any such representations and warranties with actual
knowledge that they were materially false or misleading at the time made; or (ii) any such representations and warranties have been determined in good faith by Buyer in its sole discretion to be materially false or misleading on a regular basis); or


  

	(d)	Seller shall fail to comply with the requirements of Section 11(c), through Section 11(f), or Sections 11(g), Section 11(h)(1), Section 11(i) through 11(p) and 11(t); Seller shall
fail to comply with the requirements of Section 11(h)(2), 11(q), 11(r), 11(s) or 11(aa), and such failure to observe or perform shall continue unremedied for period of five (5) Business Days; or except as otherwise set forth in Sections 12(a),
12(b), 12(c), or 12(d), Seller shall fail to observe or perform any other covenant or agreement contained in this Agreement or any other Repurchase Document and such failure to observe or perform shall continue unremedied for a period of 30 days; or


  

	(e)	a final judgment for the payment of money in excess of $1,000,000 or final judgments for the payment of money in excess of $3,000,000 in the aggregate shall be rendered against
Seller or any of its Affiliates by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution
thereof shall not be procured, within 30 days from the date of entry thereof; or 

  

	(f)	an Act of Insolvency shall have occurred with respect to Seller or any of its Affiliates; or 

  

	(g)	the Custodial Agreement, the Disbursement Agreement, the Account Agreement or any Repurchase Document shall for whatever reason be terminated or cease to be in full force and
effect, or the enforceability thereof shall be contested by Seller; or 

  

	(h)	Seller shall grant, or suffer to exist, any Lien on any Purchased Item (except any Lien in favor of Buyer); or the Purchased Items shall not have been sold to Buyer, or the Liens
contemplated hereby shall cease or fail to be first priority perfected Liens on any Purchased Items in favor of Buyer or shall be Liens in favor of any Person other than Buyer; or 

  

	(i)	 Seller or any of Seller’s Affiliates shall be in default after the expiration of any grace periods under (i) any Indebtedness of Seller or of such Affiliate
which has individually or in the aggregate an outstanding principal balance in excess of $5,000,000, which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other
party to or beneficiary with respect to such Indebtedness, (ii) any other contract to which Seller or such Affiliate is a party which has individually or in the aggregate an outstanding principal balance in excess of $5,000,000, 



  

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which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or
beneficiary of such contract, or (iii) any Seller-Related Obligation; or 


  

	(j)	any material adverse change in the Property, business or financial condition of Seller or any of its Affiliates shall occur, in each case as determined by Buyer in its sole good
faith discretion, or any other condition shall exist which, in Buyer’s sole good faith discretion, constitutes a material impairment of Seller’s ability to perform its obligations under this Agreement or any other Repurchase Document; or


  

	(k)	(i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any material
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of Seller or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or commencement of proceedings
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 of ERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) Seller or any Commonly
Controlled Entity shall, or in the reasonable opinion of Buyer is likely to, incur any liability in connection with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or


  

	(l)	upon any event of default under any Existing Financing Facility; or 

  

	(m)	upon any material adverse change in the terms of, or any material reduction in amounts available to Seller or its Affiliates, under any of the Existing Financing Facilities; unless
replaced with replacement facilities with substantially similar terms (including, but not limited to, amounts and rates) within 60 days; or 

  

	(n)	if the Buyer has purchased MERS Designated Mortgage Loans, the Electronic Tracking Agreement has for whatever reason been terminated or ceases to be in full force and effect and the
Buyer )or the Custodian as its designee) shall not have received an assignment of mortgage with respect to each MERS Designated Mortgage Loan, in blank, in recordable form, but unrecorded. 

  

	13.	REMEDIES 

  

	(a)	If an Event of Default occurs, the following rights and remedies are available to Buyer; provided, that an Event of Default shall be deemed to be continuing unless expressly waived
by Buyer in writing or cured by Seller. 

  

	 	(1)	 At the option of Buyer, exercised by written notice to Seller (which option shall be deemed to have been exercised, even if no notice is given, immediately upon




  

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the occurrence of an Act of Insolvency of Seller), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed
immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise of the Buyer’s option, such Transaction shall be deemed immediately cancelled).
Buyer shall (except upon the occurrence of an Act of Insolvency of Seller) give notice to Seller of the exercise of such option as promptly as practicable. 


  

	 	(2)	If Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(1) of this Section 13, 

  
 (A) (i) Seller’s obligations in such Transactions to
repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date, and to pay all other amounts owed by Seller hereunder shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed
exercise shall be retained by Buyer and applied to the aggregate unpaid Repurchase Prices and any other amounts owed by Seller hereunder, and (iii) Seller shall immediately deliver to Buyer any Purchased Assets subject to such Transactions then in
Seller’s possession or control; 
  
 (B) to
the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the
period from and including the date of the exercise or deemed exercise of such option to but excluding the date of payment of the Repurchase Price, (x) the Post-Default Rate to (y) the Repurchase Price for such Transaction as of the Repurchase Date
(decreased as of any day by (i) any amounts actually in the possession of Buyer pursuant to clause (C) of this subsection, (ii) any proceeds from the sale of Purchased Assets applied to the Repurchase Price pursuant to subsection (a)(4) of this
Section 13, and (iii) any amounts applied to the Repurchase Price pursuant to subsection (a)(4) of this Section 13); and 
  
 (C) all Income actually received by Buyer pursuant to Section 5 (excluding any Late Payment Fees paid pursuant to Section 5(b)) shall be
applied to the aggregate unpaid Repurchase Price owed by Seller. 
  

	 	(3)	 Upon the occurrence of one or more Events of Default, Buyer shall have the right to obtain physical possession of the Servicing Records (subject to the provisions
of the Custodial Agreement) and all other files of Seller relating to the Purchased Assets and all documents relating to the Purchased Assets which are then or may thereafter come in to the possession of Seller or any third party acting for Seller
and Seller shall deliver to Buyer such assignments as Buyer shall request and Buyer shall have the right to appoint any Person to act as Servicer for the 



  

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Purchased Assets. Buyer shall be entitled to specific performance of all agreements of Seller contained in the Repurchase Documents.



  

	 	(4)	At any time on the Business Day following notice to Seller (which notice may be the notice given under subsection (a)(1) of this Section 13), in the event Seller has not repurchased
all Purchased Assets, Buyer may (A) immediately sell, without demand or further notice of any kind, at a public or private sale and at such price or prices as Buyer may deem satisfactory any or all Purchased Assets subject to such Transactions
hereunder and apply the proceeds thereof to the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller
credit for such Purchased Assets in an amount equal to the Market Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder. The proceeds of any disposition of Purchased Assets shall
be applied first to the costs and expenses incurred by Buyer in connection with Seller’s default; second to costs of related covering and/or related hedging transactions; third to the Repurchase Price; fourth to any other outstanding obligation
of Seller to Buyer or its Affiliates; fifth to any outstanding obligations of Seller or its Affiliates pursuant to Section 31 hereof; and sixth, to Seller. 

  

	 	(5)	Seller agrees that Buyer may obtain an injunction or an order of specific performance to compel Seller to fulfill its obligations as set forth in Section 24, if Seller fails or
refuses to perform its obligations as set forth therein. 

  

	 	(6)	Seller shall be liable to Buyer, payable as and when incurred by Buyer, for (A) the amount of all actual out-of-pocket expenses, including legal or other expenses incurred by Buyer
in connection with or as a consequence of an Event of Default, and (B) all costs incurred in connection with hedging or covering transactions; provided that any net gains in connection therewith shall be applied in accordance with the last sentence
of Section 13(a)(4) above. 

  

	 	(7)	Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law. 

  

	(b)	Buyer may exercise one or more of the remedies available to Buyer immediately upon the occurrence of an Event of Default and, except to the extent provided in subsections (a)(1) and
(4) of this Section 13, at any time thereafter without notice to Seller. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may
have. 

  

	(c)	 Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might
otherwise have to require Buyer to enforce its rights by judicial process. Seller also waives any defense (other than a defense of payment or performance) Seller might otherwise have arising from the use of nonjudicial process, enforcement and sale
of all or any portion of the Purchased Items, or from any other election of remedies. Seller recognizes that 



  

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nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at
arm’s-length. 


  

	(d)	To the extent permitted by applicable law, Seller shall be liable to Buyer for interest on any amounts owing by Seller hereunder, from the date Seller becomes liable for such
amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Buyer’s rights hereunder. Interest on any sum payable by Seller to Buyer under this paragraph 13(d) shall be at a rate equal to the
Post-Default Rate. 

  

	14.	INDEMNIFICATION AND EXPENSES 

  

	(a)	Seller agrees to hold Buyer and its Affiliates and their respective officers, directors, employees, agents, advisors and other representatives (each, an “Indemnified
Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against such Indemnified Party (including
counsel’s fees and disbursements) (collectively, “Costs”), relating to or arising out of this Agreement, the Electronic Tracking Agreement, if any, any other Repurchase Document or any transaction contemplated hereby or
thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, that, in each case, results from anything
other than the Indemnified Party’s gross negligence or willful misconduct. Without limiting the generality of the foregoing, Seller agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with
respect to all Mortgage Loans relating to or arising out of any violation or alleged violation of any environmental law, rule or regulation or any consumer credit laws, including without limitation the federal Truth in Lending Act and/or the federal
Real Estate Settlement Procedures Act, that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct. In any suit, proceeding or action brought by an Indemnified Party in connection with any
Mortgage Loan for any sum owing thereunder, or to enforce any provisions of any Mortgage Loan, Seller will save, indemnify and hold such Indemnified Party harmless from and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such account debtor or obligor or its successors from Seller. Seller also agrees to reimburse an Indemnified Party as and when billed by such Indemnified Party for all the Indemnified Party’s costs and expenses
incurred in connection with the enforcement or the preservation of Buyer’s rights under this Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, including without limitation the reasonable fees and
disbursements of its counsel. 

  

	(b)	 Seller agrees to pay as and when billed by Buyer all of the out-of-pocket costs and expenses (including legal fees and any costs associated with any upfront due
diligence costs, including appraisals) incurred by Buyer in connection with the development, preparation and execution of this Agreement, any other Repurchase Document or any 



  

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other documents prepared in connection herewith or therewith; provided that if such expenses in the aggregate exceed $80,000, Buyer shall be required to
obtain prior written consent of Seller, which consent shall not be unreasonably withheld. Seller agrees to pay as and when billed by Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the consummation and
administration of the transactions contemplated hereby and thereby including without limitation all fees, disbursements and expenses of counsel to Buyer and all initial set-up costs with the Custodian and the Disbursement Agent. Seller agrees to pay
as and when billed by Buyer all of the reasonable out-of-pocket costs and expenses (including legal fees) incurred by Buyer in connection with the development, preparation and execution of any amendment, supplement or modification to this Agreement,
any other Repurchase Document or any other documents prepared in connection therewith. 


  

	15.	RECORDING OF COMMUNICATIONS 

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

	16.	SINGLE AGREEMENT 

  
 Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single
business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and
that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any
Transaction against obligations owing to them in respect of any other Transaction hereunder; (iii) that payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration
of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted and (iv) to promptly provide
notice to the other after any such set off or application. 
  

	17.	NOTICES AND OTHER COMMUNICATIONS 

  
 Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein and under the other Repurchase Documents
(including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by email or telecopy) delivered to the intended recipient at the
“Address for Notices” specified below its name on the signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such 

  

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party in a written notice to each other party. Except as otherwise provided in this Agreement and except for notices given under Section 3 (which shall be
effective only on receipt), all such communications shall be deemed to have been duly given when transmitted by telecopy or personally delivered or, in the case of a mailed notice, upon receipt. 
  

	18.	ENTIRE AGREEMENT; SEVERABILITY 

  
 This Agreement, together with the other Repurchase Documents, constitute the entire understanding between Buyer and Seller with respect to the subject matter it covers
and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Assets. By acceptance of this Agreement, Buyer and Seller acknowledge that they have not made,
and are not relying upon, any statements, representations, promises or undertakings not contained in this Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and
shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. 
  

	19.	NON-ASSIGNABILITY 

  
 The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by Seller without the prior written consent of Buyer, and any attempted assignment without such consent
shall be null and void. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Nothing in this Agreement, express or implied,
shall give to any person, other than the parties to this Agreement and their successors hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Agreement. 
  

	20.	TERMINABILITY 

  
 Except as set forth below, this Agreement may not be terminated by Seller or Purchaser except in accordance with the terms of this Agreement. Each representation and warranty made or deemed to be made by entering into
a Transaction, herein or pursuant hereto shall survive the making of such representation and warranty, and Buyer shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be false
or misleading, notwithstanding that Buyer may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was made. Notwithstanding any such termination or the occurrence
of an Event of Default, all of the representations and warranties and covenants hereunder shall continue and survive. The obligations of Seller under Section 14 shall survive the termination of this Agreement. 
  

	21.	GOVERNING LAW 

  
 THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES. 
  

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	22.	SUBMISSION TO JURISDICTION; WAIVERS 

  
 EACH OF BUYER AND SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY: 
  

	 	(A)	SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS
FROM ANY THEREOF; 

  

	 	(B)	CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; 

  

	 	(C)	AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED; 

  

	 	(D)	AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND


  

	 	(E)	WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
REPURCHASE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 

  

	23.	NO WAIVERS, ETC. 

  
 No failure on the part of Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Repurchase Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under any Repurchase Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative
and not exclusive of any 

  

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remedies provided by law. An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing. 
  

	24.	SERVICING 

  

	(a)	Seller covenants to maintain or cause the servicing of the Mortgage Loans to be maintained in conformity with accepted and prudent sub-prime servicing practices in the industry for
the same type of mortgage loans as the Mortgage Loans and in a manner at least equal in quality to the servicing Seller provides for mortgage loans which it owns. In the event that the preceding sentence is interpreted as constituting one or more
servicing contracts, each such servicing contract shall terminate automatically upon the earliest of (i) an Event of Default, (ii) the date on which this Agreement terminates or (iii) the transfer of servicing approved by Buyer.


  

	(b)	If the Mortgage Loans are serviced by Seller, Seller agrees that Buyer is the owner of all servicing records, including but not limited to any and all servicing agreements, files,
documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the
servicing of the Mortgage Loans (the “Servicing Records”). Seller covenants to safeguard such Servicing Records and to deliver them promptly to Buyer or its designee (including Custodian) at Buyer’s request.


  

	(c)	If the Mortgage Loans are serviced by a third party servicer (such third party servicer, the “Servicer”), Seller (i) shall provide a copy of the servicing agreement
to Buyer, which shall be in form and substance reasonably acceptable to Buyer (the “Servicing Agreement”); (ii) shall provide a Servicer Notice to the Servicer substantially in the form of Exhibit VIII hereto; and (iii)
hereby irrevocably assigns to Buyer and Buyer’s successors and assigns all right, title and interest of Seller in, to and under, and the benefits of, any Servicing Agreement with respect to the Mortgage Loans. Any successor to the Servicer
shall be approved in writing by Buyer (such approval not to be unreasonably withheld or delayed) prior to such successor’s assumption of servicing obligations with respect to the Mortgage Loans. 

  

	(d)	If the servicer of the Mortgage Loans is Seller or Servicer is an Affiliate of Seller, Seller shall provide to Buyer a letter from Seller or Servicer, as the case may be, to the
effect that upon the occurrence of an Event of Default, Buyer may terminate any Servicing Agreement and transfer servicing to its designee, at no cost or expense to Buyer, it being agreed that Seller will pay any and all fees required to terminate
the Servicing Agreement and to effectuate the transfer of servicing to the designee of Buyer. 

  

	(e)	After the Purchase Date, until the repurchase of any Mortgage Loan, Seller will have no right to modify or alter the terms of such Mortgage Loan and Seller will have no obligation
or right to repossess such Mortgage Loan or substitute another Mortgage Loan, in each case except as provided in the Custodial Agreement. 

  

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	(f)	In the event Seller or its Affiliate is servicing the Mortgage Loans, Seller shall permit Buyer to inspect Seller’s or its Affiliate’s servicing facilities, as the case
may be, for the purpose of satisfying Buyer that Seller or its Affiliate, as the case may be, has the ability to service the Mortgage Loans as provided in this Agreement. 

  

	(g)	Seller agrees to comply with its obligations in the manner described in the Electronic Tracking Agreement, if any: 

  

	25.	INTENT 

  

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

  

	(b)	It is understood that either party’s right to liquidate Purchased Assets delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to
Section 16 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. 

  

	(c)	The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as
amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of Purchased
Assets subject to such Transaction would render such definition inapplicable). 

  

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


  

	26.	PERIODIC DUE DILIGENCE REVIEW 

  
 Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Mortgage Loans, for purposes of verifying compliance with the
representations, warranties and specifications made hereunder, or otherwise, and Seller agrees that upon reasonable (but no less than two (2) Business Days’) prior notice unless an Event of Default shall have occurred, in which case no notice
is required, to Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Mortgage Files and any and all documents, records, agreements, instruments or
information relating to such Mortgage Loans in the possession or under the 

  

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control of Seller and/or Custodian. Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Mortgage Files and the Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Mortgage Loans from Seller based solely upon the information provided by Seller to Buyer in
the Seller Asset Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Mortgage Loans
purchased in a Transaction, including without limitation ordering new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan. Buyer may underwrite such
Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to,
providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Seller. Buyer shall pay all
out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 26 (“Due Diligence Costs”); provided that, in the event that a Default or an Event of Default shall have
occurred, Seller shall reimburse Buyer for all Due Diligence Costs for any and all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 26. 
  

	27.	BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT 

  

	(a)	Seller hereby irrevocably constitutes and appoints Buyer and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Buyer’s discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be reasonably necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, Seller hereby gives Buyer the power and
right, on behalf of Seller, without assent by, but with notice to, Seller, to do the following: 

  

	 	(1)	while a Default or Event of Default is continuing, in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any mortgage insurance or with respect to any other Purchased Items and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by Buyer for the purpose of collecting any and all such moneys due under any such mortgage insurance or with respect to any other Purchased Items whenever payable; 

  

	 	(2)	while a Default or Event of Default is continuing, to pay or discharge taxes and Liens levied or placed on or threatened against the Purchased Items; 

  

	 	(3)	 while a Default or Event of Default is continuing (A) to direct any party liable for any payment under any Purchased Items to make payment of any and all moneys




  

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


  

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

  

	 	(5)	while a Default or Event of Default is continuing, to execute, from time to time, in connection with any sale provided for in Section 13, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Purchased Items. 

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

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

  

	28.	MISCELLANEOUS 

  

	(a)	If there is any conflict between the terms of this Agreement or any Transaction entered into hereunder and the other Repurchase Documents, this Agreement shall prevail.


  

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

  

 -55- 









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


  

	(d)	Seller hereby acknowledges that: 

  

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

  

	 	(2)	Buyer has no fiduciary relationship to Seller; and 

  

	 	(3)	no joint venture exists between Buyer and Seller. 

  

	29.	CONFIDENTIALITY 

  
 Each of the parties hereto hereby acknowledges and agrees that all information regarding the terms set forth in any of the Repurchase Documents or the Transactions contemplated thereby (the “Confidential
Terms”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, (ii) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, or (iii) in the
event of a Default or an Event of Default Buyer determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Assets or otherwise to enforce or exercise Buyer’s rights
hereunder. The provisions set forth in this Section 29 shall survive the termination of this Agreement for a period of one year following such termination. 
  

	30.	CONFLICTS 

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

	31.	SET-OFF 

  
 In addition to any rights and remedies of Buyer provided by this Agreement and by law, Buyer shall have the right, without prior notice to Seller, any such notice being expressly waived by Seller to the extent
permitted by applicable law, upon any amount becoming due and payable by Seller to Buyer hereunder or otherwise (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all
monies and other property of Seller, any and all deposits (general or special, time or demand, provisional or final), in any currency, and any and all other credits, indebtedness or claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, and in each case at any time held or owing by Buyer or any Affiliate thereof to or for the credit or the account of Seller. Buyer agrees promptly to notify Seller after any such set-off and application
made by Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 -56- 








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

  

			
	 BUYER:
  

	
	CDC MORTGAGE CAPITAL INC.
		
	 By:
	 	/s/    ADIL NATHANI        
	 	 	

	 Name:
	 	Adil Nathani
	 Title:
	 	Managing Director


  

			
		
	 By:
	 	/s/    WILLIAM BRANAGH        
	 	 	

	 Name:
	 	William Branagh
	 Title:
	 	Director


  

			
	 Address for Notices:
	 	with a copy to:
	 	 	 
	 9 West 57th
Street
	 	 9 West 57th
Street

	 New York, NY 10019
	 	 New York, NY 10019

	 Attn: Ray Sullivan
	 	 Attn: Al Zakes, Esq., General Counsel

	 	 	 
	 Telecopier No.: (212) 891-3347
	 	 Telecopier No.: (212) 891-1922

	 Telephone No.: (212) 891-5815
	 	 Telephone No.: (212) 891-6137

	 Email: r.sullivan@cdcixis-cmna.com
	 	 Email: albert.zakes@cdcixis-cmna.com


  










			
	 SELLER:

	
	 WMC MORTGAGE CORP.

		
	 By:
	 	 /s/    DAVID
TRZCINSKI        


	 Name:
	 	David Trzcinski
	 Title:
	 	Executive Vice President,
Chief Financial Officer and Trustee


  

			
	 Address for Notices:
  
 6320 Canoga Avenue
 Woodland Hills, CA
91367
  
 Attn: David B. Trzcinski
 Telecopier No.: (818) 712-2882
 Telephone No.: (818) 592-2530
 Email: dtrzcins@homelender.com
	  	 with a copy to:
  
 6320 Canoga Avenue
 Woodland Hills, CA
91367
  
 Attn: George M. Eshaghian, Esq.
 Telecopier No.: (818) 592-2605
 Telephone No.: (818) 592-2626
 Email: geshaghi@homelender.com


  









 SCHEDULE 1 
  

REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS 
  
 Part I: Residential Mortgage Loans 
  
 Seller makes the following representations and warranties to Buyer, with respect to each Mortgage Loan, as of the Purchase Date for the purchase of any Purchased Assets
by Buyer from Seller and as of the date of this Agreement and any Transaction hereunder and at all times while the Repurchase Documents and any Transaction hereunder is in full force and effect. For purposes of this Schedule 1 and the
representations and warranties set forth herein, a breach of a representation or warranty shall be deemed to have been cured with respect to a Mortgage Loan if and when Seller has taken or caused to be taken action such that the event, circumstance
or condition that gave rise to such breach no longer adversely affects such Mortgage Loan. 
  

	 	(1)	Mortgage Loans as Described. The information set forth in the Seller Asset Schedule is, true and correct; 

  

	 	(2)	Payments Current. All payments required to be made up to the related Purchase Date for the Mortgage Loan (other than for a 30 Plus Mortgage Loan or a 60 Plus Mortgage Loan)
under the terms of the related Mortgage Note have been made and credited. No payment required under the Mortgage Loan (other than for a 30 Plus Mortgage Loan or a 60 Plus Mortgage Loan) is delinquent nor has any payment under the Mortgage Loan
(other than for a 30 Plus Mortgage Loan or a 60 Plus Mortgage Loan) been delinquent for 30 days or more; 

  

	 	(3)	No Outstanding Charges. There are no defaults in complying with the terms of the Mortgage securing the Mortgage Loan, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents applicable to the Mortgaged Property which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is not yet due and payable if required. Except for (A) payments in the nature of escrow payments and (B) interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest, including, without limitation, taxes and insurance payments, Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest; 

  

 Sch. 1-1 









	 	(4)	Original Terms Unmodified. The terms of the Mortgage Note and Mortgage have not been impaired, waived, altered or modified in any material respect, except by a written
instrument which has been recorded, if necessary to protect the interests of Buyer and which has been delivered to Custodian and the terms of which are reflected in the Seller Asset Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by the policy, and its terms are reflected on the Seller Asset Schedule. No Mortgagor has been released, in whole or in part, except in connection with an assumption
agreement approved by the title insurer, to the extent required by the policy, and which assumption agreement is part of the Mortgage File delivered to Custodian and the terms of which are reflected in the Seller Asset Schedule;


  

	 	(5)	No Defenses. The Mortgage Loan is not subject to any valid right of rescission, set-off, counterclaim or defense, including without limitation the defense of usury, nor will
the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding at, or subsequent to, the time the Mortgage Loan was originated; 

  

	 	(6)	 Hazard Insurance. Pursuant to the terms of the Mortgage, all buildings or other improvements upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located pursuant to insurance policies conforming to the requirements of Fannie Mae and Freddie
Mac in an amount not less than the greater of (i) 100% of the replacement cost of all improvements to the Mortgaged Property or (ii) the outstanding principal balance of the Mortgage Loan but in no event greater than the amount allowed by applicable
law, but in any event at least equal to the amount necessary to avoid the operation of any co-insurance provisions with respect to the Mortgaged Property, and consistent with the amount that would have been required as of the date of origination in
accordance with that required by Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the Mortgaged Property was in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood insurance policy meeting the requirements of the current guidelines of the Federal Flood Insurance Administration is in effect which policy conforms to the requirements of Fannie Mae
and Freddie Mac. All individual insurance policies contain a standard mortgagee clause naming Seller and its successors and assigns as mortgagee, and all premiums thereon have been paid and such policies may not be reduced, terminated or cancelled
without 30 days’ prior written notice to the mortgagee. The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes
the holder of the 



  

 Sch. 1-2 









	 	 
Mortgage to obtain and maintain such insurance at such Mortgagor’s cost and expense, and to seek reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering the
common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer, is in full force and effect, and will be in full force and effect and inure to the benefit of Buyer upon the
consummation of the transactions contemplated by this Agreement. Seller has not engaged in, and has no knowledge of the Mortgagor’s or any subservicer’s having engaged in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for therein, or the validity and binding effect of either. No unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized
by any attorney, firm or other person or entity from Seller or any Affiliate or to Seller’s knowledge, any other Person, and no such unlawful items have been received, retained or realized by Seller; 


  

	 	(7)	Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or
regulations and Seller shall maintain in its possession, available for Buyer’s inspection, and shall deliver to Buyer, upon demand, evidence of compliance with all such requirements; 

  

	 	(8)	No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated (other than a Second Lien Mortgage Loan) or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. Seller has not waived the performance by
the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller knowingly waived any default resulting from any action or inaction by the Mortgagor;


  

	 	(9)	 Location and Type of Mortgaged Property. The Mortgaged Property is a fee simple property located in the state identified in the Seller Asset Schedule, except
with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely-accepted practice, the Mortgaged Property consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual residential condominium unit in a low-rise condominium project, or an individual unit in a planned unit development, provided, however, that any condominium unit or
planned unit development shall not fall within any of the “Ineligible Projects” of part VIII, Section 102 of the Fannie Mae Selling Guide and shall 



  

 Sch. 1-3 









	 	 
conform with the Underwriting Guidelines, and no residence or dwelling is a mobile home. In the case of any Manufactured Home Mortgage Loans, (i) such
Manufactured Home Mortgage Loan conforms with the applicable Fannie Mae or Freddie Mac requirements regarding mortgage loans related to manufactured dwellings, (ii) the related manufactured dwelling is permanently affixed to the land, (iii) the
related manufactured dwelling and the related land are subject to a Mortgage properly filed in the appropriate public recording office and naming Seller as mortgagee, (iv) the applicable laws of the jurisdiction in which the related Mortgaged
Property is located will deem the manufactured dwelling located on such Mortgaged Property to be a part of the real property on which such dwelling is located, and (v) such Manufactured Home Mortgage Loan (assuming such Mortgage Loan was transferred
to a real estate mortgage investment conduit (a “REMIC”) on the REMIC’s “start-up date” in exchange for the regular interest and residual interests thereof) is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by manufactured housing treated as a single family residence under Section 25(e)(10) of the Code. No portion of the Mortgaged Property is used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other
than those commonly used for homeowner repair, maintenance and/or household purposes; 


  

	 	(10)	Valid First or Second Lien. The Mortgage is a valid, subsisting, enforceable and perfected first or second lien and first or second priority security interest on the
Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing. The lien of the Mortgage is subject only to: 

  
 (A) the lien of current real property taxes and assessments not yet due and payable; 
  
 (B) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the
Mortgage Loan and (i) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (ii) which do not adversely affect the appraised value of the Mortgaged Property set forth in such appraisal; 
  
 (C) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property; and 
  

 Sch. 1-4 








 (D) with respect to each Second Lien Mortgage Loan a prior mortgage lien on the Mortgaged
Property. 
  
 Any Security Agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable (A) first lien and first priority perfected security interest with respect to each First Lien Mortgage
Loan, or (B) second lien and second priority perfected security interest with respect to each Second Lien Mortgage Loan, in either case, on the property described therein and Seller has full right to sell and assign the same to Buyer. The Mortgaged
Property (unless it secures a Second Lien Mortgage Loan) was not, as of the date of origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of
the Mortgage; 
  

	 	(11)	Validity of Mortgage Loan Documents. The Mortgage Note, the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection
with the Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms except as enforceability may be limited by bankruptcy, by other insolvency loans or by general
principles of equity. All parties to the Mortgage Note, the Mortgage and any other related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any other related agreement, and
the Mortgage Note, the Mortgage and any other related agreement have been duly and properly executed by such parties. The documents, instruments and agreements submitted for loan underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated therein or necessary to make the information and statements therein not misleading. No fraud, error, negligence, misrepresentation or omission of fact with respect to a Mortgage
Loan has taken place on the part of Seller or the Mortgagor or any other party involved in the origination or servicing of the Mortgage Loan. Seller has reviewed all of the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set forth herein; 

  

	 	(12)	Full Disbursement of Proceeds. The Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been fully disbursed and there is no requirement for future
advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage; 

  

	 	(13)	 Ownership. Seller is the sole owner of record and holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and Seller has good,
indefeasible and marketable title thereto, and has full right to transfer and sell the Mortgage 



  

 Sch. 1-5 









	 	 
Loan therein to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right
and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign each Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, Buyer will own such Mortgage Loan free and
clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the Repurchase Agreement; 


  

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

  

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

  

	 	(16)	 Title Insurance. The Mortgage Loan is covered by an ALTA lender’s title insurance policy (as evidenced by a title commitment or binder if the final
policy has not yet been issued) or other generally acceptable form of policy of insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction
where the Mortgaged Property is located to the extent required, insuring Seller, its successors and assigns, as to the first or second priority lien of the Mortgage in the original principal amount of the Mortgage Loan, and against any loss by
reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment in the Mortgage Interest Rate and Monthly Payment, subject only to the exceptions contained in clauses (A), (B), and (C),
and with respect to each Second Lien Mortgage Loan clause (D) of Paragraph (10) of this Schedule 1. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress, and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special
exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Seller and its successors and assigns are the
sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims
have been made under such lender’s title insurance policy, and no prior holder or servicer of the Mortgage, including Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy.
No unlawful fee, commission, kickback or other unlawful 



  

 Sch. 1-6 









	 	 
compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person from Seller or Affiliates or to
the Seller’s knowledge, any other Person, and no such unlawful items have been received, retained or realized by Seller; 


  

	 	(17)	No Defaults. There is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration. With
respect to each Second Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii) there is no default, breach, violation or event of acceleration existing under such prior mortgage or the related mortgage note, (iii) no event
which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration thereunder, and either (A) the prior mortgage contains a provision which allows or
(B) applicable law requires, the mortgagee under the Second Lien Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to cure any default by payment in full or otherwise under the prior mortgage; 

  

	 	(18)	No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under
the law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage unless insured pursuant to clause (16) above; 


 

	 	(19)	Location of Improvements; No Encroachments. All material improvements which were considered in determining the Appraised Value of the Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable
zoning and building law, ordinance or regulation; 

  

	 	(20)	 Origination; Payment Terms. Except with respect to Mortgage Loans originated by correspondents as set forth on the Seller Asset Schedule, at the time the
Mortgage Loan was originated, the originator was a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank,
credit union, insurance company or other similar institution which is supervised and examined by a federal or state authority. No Mortgage Loan contains terms or provisions which would result in negative amortization. Principal payments on the
Mortgage Loan commenced no more than 60 days after funds were disbursed in connection with the Mortgage Loan. The Mortgage Interest Rate is adjusted, with respect to adjustable rate Mortgage Loans, on each Interest Rate Adjustment Date to equal the
applicable index plus the Gross 



  

 Sch. 1-7 









	 	 
Margin (rounded up or down to the nearest 0.125%), subject to the Maximum Mortgage Interest Rate. The Mortgage Note is payable on the first day of each month
in equal monthly installments of principal and interest, which installments of interest, with respect to adjustable rate Mortgage Loans, are subject to change due to the adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment
Date, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than 30 years from commencement of amortization; 


  

	 	(21)	Customary Provisions. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. 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 merchantable title to the Mortgaged Property. There is no
homestead or other exemption available to the Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage, subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and right of redemption; 

  

	 	(22)	Conformance with Underwriting Guidelines and Agency Standards; FICO Score. The Mortgage Loan was underwritten in accordance with Seller’s Underwriting Guidelines in
effect at the time the Mortgage Loan was originated. The related Mortgagor had at the time of origination a FICO score of at least 500; provided, however, that with respect to any HLTV Low Doc Loans, the related Mortgagor had at the time of
origination a FICO score of at least 600. The Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or Freddie Mac and Seller has not made any representations to a Mortgagor that are inconsistent with the mortgage instruments used;


  

	 	(23)	Occupancy of the Mortgaged Property. As of the related Purchase Date the Mortgaged Property is lawfully occupied under applicable law. All inspections, licenses and
certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate authorities. Seller has not received notification from any Governmental Authority that the Mortgaged Property is in material non-compliance with such laws or regulations, is being used,
operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be. Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard,
license or certificate; 

  

	 	(24)	 No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security




  

 Sch. 1-8 









	 	 
interest of any applicable Security Agreement or chattel mortgage referred to in Paragraph (10) above; 


  

	 	(25)	Deeds of 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 been properly
designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by Custodian or Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the
Mortgagor; 

  

	 	(26)	Acceptable Investment. The Mortgagor is not in bankruptcy or insolvent; 

  

	 	(27)	Delivery of Mortgage Loan Documents. Other than with respect to Wet-Ink Mortgage Loans, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered by Seller under this Agreement have been delivered to Buyer or its Custodian. Seller is in possession of a complete, true and accurate Mortgage File in compliance with Section 2 of the Custodial Agreement, except for such
documents the originals of which have been delivered to Buyer or its Custodian; 

  

	 	(28)	Due on Sale. Subject to any limitation of applicable law, the Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance
of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the Mortgagee thereunder; 

  

	 	(29)	Transfer of Mortgage Loans. The Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged
Property is located; 

  

	 	(30)	No Buydown Provisions; No Graduated Payments or Contingent Interests. The Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially
paid with funds deposited in any separate account established by Seller, the Mortgagor or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions currently in effect which
may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature; 

  

	 	(31)	 Consolidation of Future Advances. Any future advances made prior to the related Purchase Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first or second
lien priority by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence 



  

 Sch. 1-9 









	 	 
acceptable to Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan;



  

	 	(32)	Mortgaged Property Undamaged. There is no proceeding pending or, to Seller’s knowledge, threatened for the total or partial condemnation of the Mortgaged Property. The
Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended; 

  

	 	(33)	Collection Practices; Escrow Deposits; Adjustable Rate Mortgage Loan Adjustments. The origination and collection practices used with respect to the Mortgage Loan have been in
accordance with Accepted Servicing Practices and in all respects in compliance with all applicable laws and regulations. With respect to escrow deposits and Escrow Payments (other than with respect to Second Lien Mortgage Loans for which the
mortgagee under the prior mortgage lien is collecting Escrow Payments), all such payments are in the possession, or under the control, of Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment
thereof have not been made. Each Mortgage Loan is covered by a life of loan tax service contract. All Escrow Payments have been collected in full compliance with state and federal laws. An escrow of funds is not prohibited by applicable law and has
been established in an amount sufficient to pay for every item which remains unpaid and which has been assessed but is not yet due and payable, if required. No escrow deposits or Escrow Payments or other charges or payments due Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal laws and the terms of the related Mortgage Note. Any interest required to be paid pursuant to
state and local laws has been properly paid and credited; 

  

	 	(34)	Appraisal. The Servicing File includes an appraisal of the Mortgaged Property signed prior to the approval of the Mortgage application by a appraiser qualified under Fannie
Mae and Freddie Mac guidelines who (i) is licensed in the state where the Mortgaged Property is located, (ii) has no interest, direct or indirect, in the Mortgaged Property or in any Mortgage Loan or the security therefor, and (iii) does not receive
compensation that is affected by the approval or disapproval of the Mortgage Loan. The appraisal shall have been made within one hundred and eighty (180) days of the origination of the Mortgage Loan, be completed in compliance with the Uniform
Standards of Professional Appraisal Practice and all applicable Federal and state laws and regulations. If the appraisal was made more than one hundred and twenty (120) days before the origination of the Mortgage Loan, Seller shall have received and
included in the Servicing File a recertification of the appraisal; 

  

	 	(35)	Soldiers’ and Sailors’ Civil Relief Act. The Mortgagor has not notified Seller, and Seller has no knowledge of, any relief requested or allowed to the Mortgagor
under the Soldiers’ and Sailors’ Civil Relief Act of 1940; 

  

 Sch. 1-10 









	 	(36)	Environmental Matters. The Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal
environmental law, rule or regulation. There is no pending action or proceeding directly involving any Mortgaged Property of which Seller is aware in which compliance with any environmental law, rule or regulation is an issue; and to the best of
Seller’s knowledge, nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property; 

  

	 	(37)	No Construction Loans No Mortgage Loan was made in connection with (a) facilitating the trade-in or exchange of a Mortgaged Property or (b) the construction or rehabilitation
of a Mortgaged Property, unless the Mortgage Loan is a construction-to-permanent mortgage loan listed on the Seller Asset Schedule which has been fully disbursed, all construction work is complete and a completion certificate has been issued;


  

	 	(38)	No Denial of Insurance. No action, inaction, or event has occurred and no state of fact exists or has existed that has resulted or will result in the exclusion from, denial
of, or defense to coverage under any applicable pool insurance policy, primary mortgage insurance policy, special hazard insurance policy, or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of
any such insurance, no commission, fee, or other compensation has been or will be received by Seller or any designee of Seller or any corporation in which Seller or any officer, director, or employee had a financial interest at the time of placement
of such insurance; 

  

	 	(39)	Regarding the Mortgagor. The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such
“living trust” is in compliance with Fannie Mae guidelines for such trusts; 

  

	 	(40)	Mortgagor Acknowledgment. The Mortgagor has received all disclosure materials required by applicable law with respect to the making of Adjustable Rate Mortgage Loans. Seller
shall maintain such documents in the Mortgage File; 

  

	 	(41)	Predatory Lending Regulations. No Mortgage Loan is a Section 32 Loan; 

  

	 	(42)	Qualified Mortgage. The Mortgage Loan (assuming such Mortgage Loan was transferred to a REMIC on the REMIC’s “start-up date” in exchange for the regular
interest and residual interests thereof) is a “qualified mortgage” within the meaning of Section 860G(a)(3) or any successor provision thereof of the Internal Revenue Code of 1986, as amended; 

  

	 	(43)	 Insurance. Seller has caused or will cause to be performed any and all acts required to preserve the rights and remedies of Buyer in any insurance policies
applicable to the Mortgage Loans including, without limitation, any necessary notifications of insurers, assignments of policies or interests therein, and 



  

 Sch. 1-11 









	 	 
establishments of coinsured, joint loss payee and mortgagee rights in favor of Buyer; 


  

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

  

	 	(45)	Prepayment Fee. With respect to each Mortgage Loan that has a prepayment fee feature, each such prepayment fee is enforceable and will be enforced by Seller for the benefit
of Buyer, and each prepayment fee is permitted pursuant to federal, state and local law and is only payable during the first 5 years (or less) of the term of the Mortgage Loan. Each such prepayment fee is in an amount not more than the maximum
amount permitted under applicable law; 

  

	 	(46)	Flood Certification Contract. Seller has obtained a life of loan, transferable flood certification contract for each Mortgage Loan and has assigned all such contracts to
Buyer; 

  

	 	(47)	CLTV. No Second Lien Mortgage Loan has a CLTV in excess of 100%; 

  

	 	(48)	Consent. Either (a) no consent for the Second Lien Mortgage Loan is required by the holder of the related first lien or (b) such consent has been obtained and is contained in
the Mortgage File; 

  

	 	(49)	Wet-Ink Mortgage Loans. With respect to each Wet-Ink Mortgage Loan, Seller has received an insured closing letter from each Settlement Agent that is not a title insurance
company (other than in the states where such letters are not permitted to be issued under law) or such Mortgaged Property is located in California and Department of Corporation insurance has been obtained; 

  

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

  

	 	(51)	Proceeds of Mortgage Loan. The proceeds of the Mortgage Loan have not been and shall not be used to satisfy, in whole or in part, any debt owed or owing by the Mortgagor to
Seller or any Affiliate or correspondent thereof unless such debt was originated more than 12 months prior to the origination of such Mortgage Loan; 

  

	 	(52)	 Withdrawn Mortgage Loans. If the Mortgage Loan has been released to Seller or its designee pursuant to a Request for Release as permitted under Section 5(a)
or 5(b) of the Custodial Agreement, then the Mortgage Note relating to the Mortgage Loan was returned to Custodian within ten (10) calendar days and if released 



  

 Sch. 1-12 









	 	 
under a bailee letter pursuant to Section 5(c), such Mortgage Note was returned within 45 calendar days; 


  

	 	(53)	Origination Date. The Origination Date is no earlier than 60 days prior to the date the Mortgage Loan is initially purchased by Buyer (except with respect to Seasoned Loans
not in excess of the Seasoned Sub-Limit); 

  

	 	(54)	No Exception. Custodian has not noted any material exceptions on a Seller Asset Schedule and Exception Report (as defined in the Custodial Agreement) with respect to the
Mortgage Loan which would materially and adversely affect the Mortgage Loan or Buyer’s ownership of the Mortgage Loan, unless consented to by Buyer; 

  

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

  

	 	(56)	Endorsements. Each Mortgage Note has been endorsed by Seller for its own account and not as a fiduciary, trustee, trustor or beneficiary under a trust agreement;


  

	 	(57)	Accuracy of Information. All information provided to Buyer by Seller with respect to the Mortgage Loans is accurate in all material respects; and 

  

	 	(58)	Single Premium Credit Insurance. No Mortgagor is offered or required to purchase single premium credit insurance in connection with the origination of the related Mortgage
Loan. 

  

 Sch. 1-13 








 Part II: Defined Terms 
  
 In addition to terms defined elsewhere in the Repurchase Agreement, the following terms shall have the following meanings
when used in this Schedule 1: 
  
 “Accepted
Servicing Practices” shall mean, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans of the same type as such Mortgage Loans in the jurisdiction where
the related Mortgaged Property is located. 
  
 “Adjustable
Rate Mortgage Loan” shall mean an Adjustable Rate Mortgage Loan purchased pursuant to this Agreement. 
  
 “Due Date” shall mean the day on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace. 
  
 “Escrow Payments” shall mean, with respect to any Mortgage
Loan, the amounts constituting ground rents, taxes, assessments, water charges, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and other payments as may be required to be
escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note, Mortgage or any other document. 
  
 “First Lien Mortgage Loan” shall mean a Mortgage Loan secured by a first lien Mortgage on the related Mortgaged Property. 
  
 “Gross Margin” shall mean, with respect to each Adjustable
Rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note which amount is added to the index in accordance with the terms of the related Mortgage Note to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate for such Mortgage Loan. 
  
 “Interest Rate
Adjustment Date” shall mean, with respect to each Adjustable Rate Mortgage Loan, the date set forth in the related Mortgage Note on which the Mortgage Interest Rate on the Mortgage Loan is adjusted in accordance with the terms of the
Mortgage Note. 
  
 “Maximum Mortgage Interest
Rate” shall mean, with respect to each Adjustable Rate Mortgage Loan, a rate that is set forth on the related Seller Asset Schedule and in the related Mortgage Note and is the maximum interest rate to which the Mortgage Interest Rate on
such Mortgage Loan may be increased on any Interest Rate Adjustment Date. 
  
 “Monthly Payment” shall mean, with respect to any Mortgage Loan, the scheduled combined payment of principal and interest payable by a Mortgagor under the related Mortgage Note on each Due Date.

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

 Sch. 1-14 








 “Origination Date” shall mean, with respect to each Mortgage Loan, the date on which the
applicable lien was placed on the related Mortgaged Property. 
  
 Section 32 Loan: A Mortgage Loan classified as (a) a “high cost” under the Home Ownership and Equity Protection Act of 1994 or (b) a “high cost,” “threshold,” or “predatory” loan under any
other applicable state, federal or local law. 
  

 Sch. 1-15 








 SCHEDULE 2 
  

FORM OF RESIDUAL REPORT 
  

 Sch. 2-1 








 EXHIBIT I 
  

FORM OF TRANSACTION REQUEST 
  
 [Date] 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, New York 10019 
 Attention: 
  
 Confirmation No.:                                 
  
 Ladies/Gentlemen: 
  
 This letter is a request for you to purchase from us the Mortgage Loans listed in Appendix I hereto, pursuant to the Master
Repurchase Agreement governing purchases and sales of Mortgage Loans between us, dated as of April 18, 2002 (the “Agreement”), as follows: 
  
 Requested Purchase Date: 
  
 Eligible Assets requested to be Purchased: See Appendix I hereto. 
 [Appendix I to Transaction Request Letter will list Mortgage Loans] 
  
 Aggregate Principal Amount of Eligible Assets requested to be purchased: 
  
 Purchase Price: 
  
 Pricing Rate: 
  
 Repurchase Date: 
  
 Repurchase Price: 
  
 Purchase Percentage: 
  
 Names and addresses for communications: 
  
 Buyer: 
  
 CDC Mortgage Capital Inc. 
 9 West
57th Street 
 New York, NY 10019 
 Attention: Ray Sullivan 
 Email: r.sullivan@cdcixis-cmna.com 
  

 Exh. I-1 








 with copies to: 
  

John Racy 
 Email: jracy@cdcixis-cmna.com

  
 Seller: 
  
 ________________________ 
  
 ________________________ 
  
 ________________________ 
  
 ________________________ 
  
 Attention: 
 Email: 
  
 This Transaction Request constitutes certification by Seller that: 
  

	 	1.	No Default or Event of Default has occurred and is continuing on the date hereof nor will occur after giving effect to such Transaction as a result of such Transaction.


  

	 	2.	Each of the conditions precedent set forth in Section 3 with respect to the Transaction has been satisfied. 

  

	 	3.	Each of the representations and warranties made by Seller in or pursuant to the Agreement is true and correct in all material respects on and as of such date and as of the date
hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date). 

  

	 	4.	With respect to the mortgage loans described on Appendix I: (a) we hereby certify to you that the Mortgage Loans are not subject to a lien of any third party and (b) we hereby
release all right, interest or claim of any kind with respect to such Mortgage Loans, such release to be effective automatically without further action by any party upon payment from CDC Mortgage Capital Inc., of the amount of the Purchase Price
contemplated under the Agreement (calculated in accordance with the terms thereof) in accordance with the wiring instructions set forth in the Agreement 

  
 All capitalized terms used herein shall have the meaning assigned thereto in the Agreement. 
  
 WMC MORTGAGE CORP. 
  

			
		
	 By:
	 	  


	 Name:
	 	 
	 Title:
	 	 

  

 Exh. I-2 








 EXHIBIT II 
  
 UNDERWRITING GUIDELINES 
  
 [To be provided by Seller] 
  

 Exh. II-1 








 EXHIBIT III 
  

FORM OF OPINION LETTER 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, NY 10019 
  
 Dear Sirs and Mesdames: 
  
 You have requested our opinion as counsel to WMC Mortgage Corp., a corporation organized and existing under the laws of Delaware (the
“Seller”), with respect to certain matters in connection with that certain Master Repurchase Agreement governing purchases and sales of certain Mortgage Loans, dated April 18, 2002 (the “Repurchase Agreement”), by
and between Seller and CDC Mortgage Capital Inc. (the “Buyer”), and the Custodial Agreement, dated as of April 18, 2002 (the “Custodial Agreement”), among Seller, Buyer and Wells Fargo Bank Minnesota, N.A. as
custodian and the Disbursement Agreement, dated as of April 18, 2002 (the “Disbursement Agreement”), between Buyer and Deutsche Bank National Trust Company, as disbursement agent. Capitalized terms not otherwise defined herein have
the meanings set forth in the Repurchase Agreement. 
  

	 	1.	the Repurchase Agreement; 

  

	 	2.	the Custodial Agreement; 

  

	 	3.	the Disbursement Agreement; 

  

	 	4.	unfiled copies of the financing statements listed on Schedule 1 (collectively, the “Financing Statements”) naming Seller as Debtor and Buyer as Secured Party
and describing the Purchased Items (as defined in the Master Repurchase Agreement) as to which security interests may be perfected by filing under the Uniform Commercial Code of the States listed on Schedule 1 attached hereto (the
“Filing Collateral”), which I understand will be filed in the filing offices listed on Schedule 1 (the “Filing Offices”); 

  

	 	5.	the reports listed on Schedule 2 attached hereto as to UCC financing statements (collectively, the “UCC Search Report”); and 

  

	 	6.	such other documents, records and papers as we have deemed necessary and relevant as a basis for this opinion. 

  
 The Repurchase Agreement, the Disbursement Agreement and the Custodial
Agreement are hereinafter collectively referred to as the “Governing Agreements”. To the extent [we] [I] have deemed necessary and proper, [we] [I] have relied upon the representations and warranties of the Company contained in the
Repurchase Agreement. [We] [I] have assumed the 

  

 Exh. III-1 








 
authenticity of all documents submitted to me [us] as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity
to the originals of all documents. 
  
 Based upon the foregoing,
it is [our] [my] opinion that: 
  
 1. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to transact business in, and is in good standing under, the laws of the State of Delaware. 
  
 2. The execution, delivery and performance by Seller of the Governing
Agreements to which it is a party, and the sales by Seller and the pledge of the Purchased Items under the Repurchase Agreement have been duly authorized by all necessary corporate action on the part of Seller. Each of the Governing Agreements have
been executed and delivered by Seller and are legal, valid and binding agreements enforceable in accordance with their respective terms against Seller, subject to bankruptcy laws and other similar laws of general application affecting rights of
creditors and subject to the application of the rules of equity, including those respecting the availability of specific performance, none of which will materially interfere with the realization of the benefits provided thereunder or with
Buyer’s purchase of the Purchased Assets and/or security interest in the Purchased Assets. 
  
 3. No consent, approval, authorization or order of, and no filing or registration with, any court or governmental agency or regulatory body is required on
the part of Seller for the execution, delivery or performance by Seller of the Governing Agreements to which it is a party or for the sales by Seller under the Repurchase Agreement or the sale of the Purchased Items to Buyer and/or granting of a
security interest to Buyer in the Purchased Items, pursuant to the Repurchase Agreement. 
  
 4. The execution, delivery and performance by Seller of, and the consummation of the transactions contemplated by the Governing Agreements to which it is a party do not and will not (a) violate any provision of
Seller’s charter or by-laws, (b) violate any applicable law, rule or regulation, (c) violate any order, writ, injunction or decree of any court or governmental authority or agency or any arbitral award applicable to Seller of which I [we] have
knowledge (after due inquiry) or (d) result in a breach of, constitute a default under, require any consent under, or result in the acceleration or required prepayment of any indebtedness pursuant to the terms of, any agreement or instrument of
which I have knowledge (after due inquiry) to which Seller is a party or by which it is bound or to which it is subject, or (except for the Liens created pursuant to the Repurchase Agreement) result in the creation or imposition of any Lien upon any
Property of Seller pursuant to the terms of any such agreement or instrument. 
  
 5. There is no action, suit, proceeding or investigation pending or, to the best of [our] [my] knowledge, threatened against Seller which, in [our] [my] judgment, either in any one instance or in the aggregate, could
be reasonably likely to result in any material adverse change in the properties, business or financial condition, or prospects of Seller or in any material impairment of the right or ability of Seller to carry on its business substantially as now
conducted or in any material liability on the part of Seller or which would draw into question the validity of the Governing Agreements to which it is a party or the Mortgage Loans or of any action taken or to be taken in connection with the
transactions contemplated thereby, or which could be 

  

 Exh. III-2 








 
reasonably likely to impair materially the ability of Seller to perform under the terms of the Governing Agreements to which it is a party or the Mortgage
Loans. 
  
 6. The Repurchase Agreement is effective to create, in
favor of Buyer, either a valid sale of the Purchased Items to Buyer or a valid security interest under the Uniform Commercial Code in all of the right, title and interest of Seller in, to and under the Purchased Items as collateral security for the
payment of Seller’s obligations under the Repurchase Agreement, except that (a) such security interests will continue in Purchased Items after its sale, exchange or other disposition only to the extent provided in Section 9-306 of the Uniform
Commercial Code, (b) the security interests in Purchased Items in which Seller acquires rights after the commencement of a case under the Bankruptcy Code in respect of Seller may be limited by Section 552 of the Bankruptcy Code. 
  
 7. When the Mortgage Notes are delivered to Custodian, endorsed in blank by a
duly authorized officer of Seller, the security interest referred to in Section 6 above in the Mortgage Notes will constitute a fully perfected first priority security interest in all right, title and interest of Seller therein. 
  
 8. (a) Upon the filing of financing statements on Form UCC-1 naming Buyer as
“Secured Party” and Seller as “Debtor”, and describing the Purchased Items, in the jurisdictions and recording offices listed on Schedule 1 attached hereto, the security interests referred to in Section 6 above will
constitute fully perfected security interests under the Uniform Commercial Code in all right, title and interest of Seller in, to and under such Purchased Items, which can be perfected by filing under the Uniform Commercial Code, or, will
demonstrate a completion of the sale of the Mortgage Loans to Buyer. 
  
 (b) The UCC Search Report sets forth the proper filing offices and the proper debtors necessary to identify those Persons who have on file in the jurisdictions listed on Schedule 1 financing statements covering
the Purchased Items as of the dates and times specified on Schedule 2. The UCC Search Report identifies no Person who has filed in any Filing Office a financing statement describing the Purchased Items prior to the effective dates of the UCC
Search Report. 
  
 9. Seller is not an “investment
company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. 
  

Very truly yours, 
  

 Exh. III-3 








 EXHIBIT IV 
  

UCC FILING JURISDICTIONS 
  
 Secretary of State of California 
  

 Exh. IV-1 








 EXHIBIT V 
  

FORM OF ACCOUNT AGREEMENT 
  
 [             ], 2002 
  
 WMC Mortgage Corp., as Seller 
 [ADDRESS]

 Attn: 
  
 [BANK], as Bank 
 [ADDRESS] 
 Attn: 
  

	 	Re:	Collection Account Established by WMC Mortgage Corp. (the “Seller”) at [BANK] (the “Bank”) pursuant to that certain Master Repurchase Agreement (as amended,
supplemented or otherwise modified from time to time, the “Repurchase Agreement”), dated April 18, 2002, between CDC Mortgage Capital Inc. (the “Buyer”) and Seller. 

  
 Ladies and Gentlemen: 
  
 Seller has entered into a Repurchase Agreement pursuant to which Buyer may from time to time enter into Transactions (as
defined therein) secured by, among other things, the payments made by mortgagors on account of Purchased Assets sold to Buyer under the Repurchase Agreement. As a requirement of such Transactions, upon an event of default under the Repurchase
Agreement, all such payments are required to be forwarded daily to Buyer at the Collection Account identified below within one (1) Business Day of receipt. 
  
 Seller has established a collection account, Account No. [            ], for the
account of Buyer, with the Bank, ABA# [            ] (the “Collection Account”) which the Bank maintains in the name of, and in trust for, Buyer as the
Bank’s customer. Seller has granted to Buyer a security interest in all payments deposited in the Collection Account with respect to the Purchased Assets sold to Buyer under the Repurchase Agreement. 
  
 In the event the Bank receives notice from Buyer that an event of default has
occurred and is continuing under the Repurchase Agreement (a “Notice of Event of Default”) from Buyer, the Bank shall in no event (a) transfer funds from the Collection Account to Seller or any other person other than pursuant the
Buyer’s direction, (b) act on the instruction of Seller or any person other than Buyer or (c) cause or permit withdrawals from the Collection Account in any manner not approved by Buyer in writing. Until receipt of a Notice of an Event of
Default, Seller shall be permitted to withdraw funds or cause funds to be transferred from the Collection Account without the Buyer’s approval. 
  

 Exh. V-1 








 The Bank hereby waives any right that the Bank may now or hereafter have to security interest,
bank’s or other possessory liens, rights to offset or other claims against the funds in the Collection Account. 
  
 In addition, the Bank acknowledges that (a) Seller has granted to Buyer a security interest in all of Seller’s right, title and interest in and to
any funds from time to time on deposit in the Collection Account with respect to the Purchased Assets sold to Buyer under the Repurchase Agreement, (b) that such funds are received by the Bank in trust for the benefit of Buyer and, except as
provided below, are for application against Seller’s obligations to Buyer, and (c) that the Bank shall comply with Buyer’s instructions regarding the disposition of funds in the Collection Account in accordance with Buyer’s
instructions, without the consent of Seller until the Bank receives notice from Buyer that it has released its lien on the Collection Account and all funds deposited therein. 
  
 All bank statements in respect to the Collection Account shall be sent to Buyer at: 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street

 New York, NY 10019 
 Attention:
Ray Sullivan 
 Email: r.sullivan@cdcixis-cmna.com 
  
 with copies to Seller at: 
  
 [Seller] 
  
 __________________________ 
  
 __________________________ 
 Attention:

  
 __________________________ 
  

 Exh. V-2 








 Kindly acknowledge your agreement with the terms of this agreement by signing the enclosed copy of this
letter and returning it to the undersigned. 
  

			
	 Very truly yours,
  
 CDC MORTGAGE CAPITAL INC.

		
	 By:
	 	  


	 Name:
 Title:
	 	 


  

			
	 
		
	 By:
	 	  


	 Name:
	 	 
	 Title:
	 	 


  
 Agreed and acknowledged:

  
 WMC Mortgage Corp., as Seller 

			
		
	 By:
	 	  


	 Name:
	 	 
	 Title:
	 	 

  
 Agreed and acknowledged: 

 
 [BANK], as Bank 

			
		
	 By:
	 	  
  


	 Name:
	 	 
	 Title:
	 	 

  

 Exh. V-3 








 EXHIBIT VI 
  

FORM OF TRUE SALE CERTIFICATION 
  
 CERTIFICATE OF [PURCHASER] 
  
 In connection with the transaction pursuant to the Master Repurchase Agreement, dated as of April 18, 2002 between CDC Mortgage Capital Inc. and WMC
Mortgage Corp. (the “Purchaser”), the undersigned certifies, on behalf of Purchaser, that: 
  
 1. I personally participated as the              of the Purchaser in the transaction
(the “Transaction”), pursuant to which [NAME OF SELLING ENTITY] (the “Seller”) sold [DESCRIBE ASSETS] (the “Assets”) to the Purchaser. In such capacity, I reviewed the purchase and sale agreement
relating to the Transaction dated as of                          , 200_ (the “Purchase and Sale
Agreement”). 
  
 2. Due to my close involvement in the
Transaction, I can accurately and diligently certify the facts listed herein on behalf of the Purchaser. 
  
 3. Seller has shifted all of the risks and burdens which are associated with the ownership of the Assets to the Purchaser. 
  
 4. Seller has shifted all of the benefits and rewards which are associated
with the Assets to the Purchaser. Subsequent to the consummation of the Transaction, Seller had no control rights with respect to the Assets, and all legal rights and title with respect to the Assets vested in the Purchaser. 
  
 5. There has been no recourse to Seller with respect to the performance of
the Assets. 
  
 6. As of the date of the consummation of the
Transaction, Seller received from the Purchaser reasonably equivalent value for the transferred Assets, in the form of [DESCRIBE CONSIDERATION]. 
  
 7. The Purchase and Sale Agreement represented the intention of Seller and the Purchaser to accomplish a complete and irrevocable sale of the Assets.

  
 8. Seller neither was obligated to repurchase, nor had any
“call” rights with respect to, the Assets. 
  
 9. The
Purchaser neither was obligated to sell the Assets back to Seller, nor had any “put” rights with respect to the Assets. 
  
 10. The Purchaser’s books and records reflect that the Transaction was a sale of the Assets, rather than a secured financing or a loan. 

 

 Exh. VI-1 








 11. The Purchaser treated the Transaction as a sale for accounting and tax purposes. 
  
 12. The Transaction was duly authorized by the Purchaser’s officers and
directors, as required by the Purchaser’s organizational documents and applicable law. 
  
 I have been duly authorized to execute this certificate on behalf of Purchaser. 
  

			
	WMC MORTGAGE CORP. 
		
	 By:
	 	  


	 Name:
	 	 
	 Title:
	 	 


  

 Exh.VI-2 








 CERTIFICATE OF [NAME OF SELLING ENTITY] 
  
 In connection with the transaction pursuant to the Master Repurchase
Agreement, dated as of April 18, 2002 between CDC Mortgage Capital Inc. and WMC Mortgage Corp. (the “Purchaser”), the undersigned certifies, on behalf of [NAME OF SELLING ENTITY] (the “Seller”), that: 
  
 1. I personally participated as the
             of Seller in the transaction (the “Transaction”) pursuant to which Seller sold [DESCRIBE ASSETS] (the “Assets”) to the Purchaser. In
such capacity, I reviewed the purchase and sale agreement relating to the Transaction dated as of             
            , 200     (the “Purchase and Sale Agreement”). 
  
 2. Due to my close involvement in the Transaction, I can accurately and diligently certify the facts listed herein on behalf
of Seller. 
  
 3. Seller has shifted all of the risks and burdens
which are associated with the ownership of the Assets to the Purchaser. 
  
 4. Seller has shifted all of the benefits and rewards which are associated with the Assets to the Purchaser. Subsequent to the consummation of the Transaction, Seller had no control rights with respect to the Assets, and all legal rights
and title with respect to the Assets vested in the Purchaser. 
  
 5. There has been no recourse to Seller with respect to the performance of the Assets. 
  
 As of the date of the consummation of the Transaction, Seller received from the Purchaser reasonably equivalent value for the transferred Assets, in the
form of [DESCRIBE CONSIDERATION]. 
  
 6. The Purchase and Sale
Agreement represented the intention of Seller and the Purchaser to accomplish a complete and irrevocable sale of the Assets. 
  
 7. Seller neither was obligated to repurchase, nor had any “call” rights with respect to, the Assets. 
  
 8. The Purchaser neither was obligated to sell the Assets back to Seller, nor
had any “put” rights with respect to the Assets. 
  
 9.
Seller’s books and records reflect that the Transaction was a sale of the Assets, rather than a secured financing or a loan. 
  
 10. Seller treated the Transaction as a sale for accounting and tax purposes. 
  
 11. The Transaction was duly authorized by Seller’s officers and directors, as required by Seller’s organizational
documents and applicable law. 
  
 I have been duly authorized to
execute this certificate on behalf of [NAME OF SELLER]. 
  

			
	 [SELLING ENTITY]

		
	 By:
	 	  


	 Name:
 Title:
	 	 


  

 Exh. VI-3 








 EXHIBIT VII-A 
  
 FORM OF SELLER’S RELEASE LETTER 
  

[Date] 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, NY 10019 
  

	 	Re:	Master Repurchase Agreement, dated as of April 18, 2002 (the “Repurchase Agreement”), by and between WMC Mortgage Corp. (the “Seller”) and CDC
Mortgage Capital Inc. (the “Buyer”) 

  
 Ladies and
Gentlemen: 
  
 With respect to the mortgage loans described in the
attached Schedule A (the “Mortgage Loans”) (a) we hereby certify to you that the Mortgage Loans are not subject to a lien of any third party and (b) we hereby release all right, interest or claim of any kind with respect to
such Mortgage Loans, such release to be effective automatically without further action by any party upon payment from CDC Mortgage Capital Inc., of the amount of the Purchase Price contemplated under the Repurchase Agreement (calculated in
accordance with the terms thereof) in accordance with the wiring instructions set forth in the Repurchase Agreement. 
  

			
	Very truly yours,
	  
 WMC Mortgage Corp.

		
	 By:
	 	  


	 Name:
	 	 
	 Title:
	 	 


  

 Exh. VII-A-1 








 EXHIBIT VII-B 
  
 FORM OF WAREHOUSE LENDER’S RELEASE LETTER 
  
 (Date) 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, NY 10019 
  

	 	Re:	Certain Mortgage Loans Identified on Schedule A hereto and owned by WMC Mortgage Corp. 

  
 The undersigned hereby releases all right, interest, lien or claim of any kind with respect to the mortgage loan(s)
described in the attached Schedule A, such release to be effective automatically without any further action by any party upon payment in one or more installments, in immediately available funds of
$                        , in accordance with the following wire instructions: 
  

			
	
	

	
	

	  
 Very truly
yours,

	  
 [WAREHOUSE LENDER]

		
	 By:
	 	  


	 Name:
 Title:
	 	 


  

 Exh. VII-B-1 








 EXHIBIT VIII 
  
 FORM OF SERVICER NOTICE 
  
                         ,
200     
  
 [SERVICER], as Servicer 
 [ADDRESS] 
 Attention: 
  

	 	Re:	Master Repurchase Agreement, dated as of
[                        , 200_] (the “Agreement”), by and between [Seller] (the
“Seller”) and [Buyer] (the “Buyer”). 

  
 Ladies and Gentlemen: 
  
 [SERVICER] (the “Servicer”) is
servicing certain mortgage loans for Seller pursuant to certain Servicing Agreements between the Servicer and Seller. Pursuant to the Agreement between Buyer and Seller, the Servicer is hereby notified that Seller has sold to Buyer certain mortgage
loans which are serviced by Servicer. 
  
 Upon receipt of a Notice of Event of
Default from Buyer in which Buyer shall identify the mortgage loans which are then owned by Buyer under the Agreement (the “Mortgage Loans”), the Servicer shall segregate all amounts collected on account of such Mortgage Loans, hold
them in trust for the sole and exclusive benefit of Buyer, and remit such collections in accordance with Buyer’s written instructions. Following such Notice of Event of Default, Servicer shall follow the instructions of Buyer with respect to
the Mortgage Loans, and shall deliver to Buyer any information with respect to the Mortgage Loans reasonably requested by Buyer. 
  
 Notwithstanding any contrary information which may be delivered to the Servicer by Seller, the Servicer may conclusively rely on any information or Notice of Event of
Default delivered by Buyer, and Seller shall indemnify and hold the Servicer harmless for any and all claims asserted against it for any actions taken in good faith by the Servicer in connection with the delivery of such information or Notice of
Event of Default. 
  

 Exh. VIII-1 








 Please acknowledge receipt of this instruction letter by signing in the signature block below and forwarding an executed
copy to Buyer promptly upon receipt. Any notices to Buyer should be delivered to the following address: 9 West 57th
Street, New York, New York 10019, Attention Ray Sullivan. 
  

			
	 Very truly yours,

	  
 [SELLER]

		
	 By:
	 	  


	 Name:
	 	 
	 Title:
	 	 


  

			
	 ACKNOWLEDGED:

	
	

	 as Servicer

		
	 By:
	 	  


	 Title:
	 	 
	 Telephone:
	 	 
	 Facsimile:
	 	 

  

 Exh. VIII-2 








 EXHIBIT IX 
  

FORM OF REQUEST FOR ADDITIONAL TRANSACTIONS FOR EXCESS MARGIN 
  

Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed thereto in the Master Repurchase Agreement, dated
as of April 18, 2002, between WMC Mortgage Corp. (the “Seller”) and CDC Mortgage Capital Inc. (“Buyer”). 
  
 Pursuant to Section 3(p) of the Master Repurchase Agreement, Seller hereby requests the advance of additional Transactions, and in connection with such
request provides the following information: 
  

			
	Requested Increase in Purchase Price	  	$___________________
	Requested Purchase Date	  	___________________
	Excess Margin prior to giving effect to Requested Transaction	  	$__________________
	Remaining Excess Margin After Giving Effect to such Transaction	  	$__________________
	Aggregate Outstanding Purchase Price of the Transactions as of Date Hereof after giving effect to the Requested Transaction	  	$__________________

  
 Seller hereby
certifies that, after giving effect to the Transaction requested pursuant hereto, the Margin Base will be equal to or greater than the aggregate Purchase Price of the Transactions. 
  
 This Request For Additional Transactions For Excess Margin is dated
                        . 
  

			
	WMC MORTGAGE CORP.
		
	 By:
	 	  


	 Name:
	 	 
	 Title:
	 	 


  

 Exh. IX-1 








 AMENDMENT NO. 1 
  

AMENDMENT NO. 1, dated as of November 24, 2003 (“Amendment”), to the Amended and Restated Master Repurchase Agreement, dated as of
July 15, 2003 (the “Repurchase Agreement”), between CDC MORTGAGE CAPITAL INC. (“Buyer”) and WMC MORTGAGE CORP. (the “Seller”). 
  
 RECITALS 
  
 WHEREAS, the parties hereto have entered into the Repurchase Agreement; 
  
 WHEREAS, the parties hereto desire to modify the Repurchase Agreement as set forth in this Amendment; 
  
 NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  

	 	1.	Defined Terms. Unless otherwise defined herein, terms defined in the Repurchase Agreement are used herein as therein defined. 

  

	 	2.	Amendments. 

  
 a. Section 2 of the Repurchase Agreement is hereby amended by deleting the definition of “Alt-A Second Sub-Limit” in its
entirety and replacing it with the following: 
  
 ““Alt-A Second Sub-Limit” shall mean (a) with respect to Committed Transactions, an amount equal to $15,000,000 and (b) with respect to Uncommitted Transactions, $15,000,000.” 
  
 b. Section 2 of the Repurchase Agreement is hereby amended
by deleting the definition of “C Credit Sub-Limit” in its entirety and replacing it with the following: 
  
 ““C Credit Sub-Limit” shall mean (a) with respect to Committed Transactions, an amount equal to $15,000,000 and (b) with respect to
Uncommitted Transactions, $5,000,000.” 
  
 c. Section 2 of the Repurchase Agreement is hereby amended by deleting the definition of “Condominium Sub-Limit” in its entirety and replacing it with the following: 
  
 ““Condominium Sub-Limit” shall mean (a) with respect to Committed Transactions, an amount equal to
$15,000,000 and (b) with respect to Uncommitted Transactions, $15,000,000.” 
  









 d. Section 2 of the Repurchase Agreement is hereby amended by deleting the definition of
“HLTV Sub-limit” in its entirety and replacing it with the following: 
  
 ““HLTV Sub-limit” shall mean (a) with respect to Committed Transactions, $20,000,000 and (b) with respect to Uncommitted Transactions, $16,000,000.” 
  
 e. Section 2 of the Repurchase Agreement is hereby amended
by deleting the definition of “Manufactured Home Sub-Limit” in its entirety and replacing it with the following: 
  
 ““Manufactured Home Sub-Limit” shall mean (a) with respect to Committed Transactions, $7,000,000 and (b) with respect to Uncommitted
Transactions, $3,000,000.” 
  
 f. Section 2
of the Repurchase Agreement is hereby amended by deleting the definition of “Maximum Uncommitted Amount” in its entirety and replacing it with the following: 
  
 ““Maximum Uncommitted Amount” shall mean $150,000,000, which amount may be reduced by Buyer at any
time in its sole discretion upon thirty (30) days’ notice from Buyer to Seller.” 
  
 g. Section 2 of the Repurchase Agreement is hereby amended by deleting the definition of “Non-Owner Sub-Limit” in its entirety
and replacing it with the following: 
  
 ““Non-Owner
Sub-Limit” shall mean (a) with respect to Committed Transactions, $25,000,000 and (b) with respect to Uncommitted Transactions, $5,000,000.” 
  
 h. Section 2 of the Repurchase Agreement is hereby amended by deleting the definition of “Sub-Prime Second Lien Sub-Limit” in
its entirety and replacing it with the following: 
  
 ““Sub-Prime Second Lien Sub-Limit” shall mean (a) with respect to Committed Transactions, $5,000,000 and (b) with respect to Uncommitted Transactions, $5,000,000.” 
  
 i. Section 2 of the Repurchase Agreement is hereby amended
by deleting the definition of “Wet-Ink Sub-Limit” in its entirety and replacing it with the following: 
  
 ““Wet-Ink Sub-Limit” shall mean (a) with respect to Committed Transactions, $50,000,000 and (b) with respect to Uncommitted
Transactions, $50,000,000.” 
  
 3. Ratification of
Agreement. Except as modified and expressly amended by this Amendment, the Repurchase Agreement is in all respects ratified and confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect.

  

 -2- 








 4. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number
of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 
  
 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE. 
  
 [SIGNATURE PAGES FOLLOW] 
  

 -3- 








 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of
the day and year first above written. 
  

			
	CDC MORTGAGE CAPITAL INC.
		
	 By:
	 	 /s/    ANTHONY
MALANGA        


	 Name:
	 	Anthony Malanga
	 Title:
	 	Managing Director
		
	 By:
	 	 /s/    MICHAEL
CAVANAUGH        


	 Name:
	 	Michael Cavanaugh
	 Title:
	 	Vice President and Operations Manager


  

			
	WMC MORTGAGE CORP.
		
	 By:
	 	 /s/    DAVID
TRZCINSKI        


	 Name:
	 	David Trzcinski
	 Title:
	 	Chief Financial Officer