EX-10.2






AMENDMENT NO. 1




TO MASTER REPURCHASE AGREEMENT




Amendment No. 1, dated as of July 21, 2005 (this “Amendment”), by and between CREDIT
SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “Buyer”), ENCORE CREDIT CORP., (“ECC”
and a “Seller”), ECC CAPITAL CORPORATION (“ECC Capital” and a “Seller”) and
BRAVO CREDIT CORPORATION (“Bravo” and a “Seller”).



RECITALS




The Buyer and the Sellers are parties to that certain Master Repurchase Agreement, dated as of
February 18, 2005 (the “Existing Repurchase Agreement”; as amended by this Amendment, the
“Repurchase Agreement”). Capitalized terms used but not otherwise defined herein shall have
the meanings given to them in the Existing Repurchase Agreement.



The Buyer and the Sellers have agreed, subject to the terms and conditions of this Amendment,
that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the
terms of the Existing Repurchase Agreement.



Accordingly, the Buyer and the Sellers hereby agree, in consideration of the mutual premises
and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended
as follows:




Section 1. Definitions. Section 2 of the Existing Repurchase Agreement is
hereby amended by:



(a) deleting the definitions of “Market Value”, “Maximum Aggregate Purchase Price” and
“Pricing Rate” and replacing them with the following language:



““Market Value” means, with respect to any Purchased Mortgage Loan as of any date of
determination, the whole-loan servicing released fair market value of such Purchased Mortgage Loan
on such date as determined by Buyer (or an Affiliate thereof) in its good faith discretion.
Without limiting the generality of the foregoing, each Seller acknowledges that (a) in the event
that a Purchased Mortgage Loan is not subject to a Take-out Commitment, Buyer may deem the Market
Value for such Mortgage Loan to be no greater than par and (b) the Market Value of a Purchased
Mortgage Loan may be reduced (including to zero) by Buyer if:




(i) a breach of a representation, warranty or covenant made by a Seller in this
Agreement with respect to such Purchased Mortgage Loan has occurred and is
continuing and such breach would be reasonably likely to adversely affect the value
of such Purchased Mortgage Loan;




(ii) such Purchased Mortgage Loan (other than a Repurchased Mortgage Loan) is a
Non-Performing Mortgage Loan;




(iii) such Purchased Mortgage Loan has been released from the possession of the
Custodian under the Custodial Agreement (other than to a Take-out Investor pursuant
to a Bailee Letter) for a period in excess of ten (10) calendar days;




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




(v) such Purchased Mortgage Loan has been subject to a Transaction hereunder
for a period of greater than (a) 120 days for all Mortgage Loans other than Aged
Loans or Repurchased Mortgage Loans and (b) 180 days with respect to each Aged Loan
or Repurchased Mortgage Loan;




(vi) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for which the
Mortgage File has not been delivered to the Custodian on or prior to the eighth
Business Day after the related Purchase Date;




(vii) such Purchased Mortgage Loan is no longer acceptable for purchase by
Buyer (or an Affiliate thereof) under any of the flow purchase or conduit programs
for which a Seller then has been approved due to a Requirement of Law relating to
consumer credit laws or otherwise;




(viii) when the Purchase Price for such Purchased Mortgage Loan is added to
other Purchased Mortgage Loans, the aggregate Purchase Price of all Repurchased
Mortgage Loans that are Purchased Mortgage Loans exceeds $3 million;




(ix) when the Purchase Price for such Purchased Mortgage Loan is added to other
Purchased Mortgage Loans, the aggregate Purchase Price of all Aged Loans (other than
Repurchased Mortgage Loans) that are Purchased Mortgage Loans exceeds $20 million;




(x) when the Purchase Price for such Purchased Mortgage Loan is added to other
Purchased Mortgage Loans, the aggregate Purchase Price of all Second Lien Mortgage
Loans (including HELOCs) that are Purchased Mortgage Loans exceeds $50 million;




(xi) when the Purchase Price for such Purchased Mortgage Loan is added to other
Purchased Mortgage Loans, the aggregate Purchase Price of all HELOCs that are
Purchased Mortgage Loans exceeds $30 million;




(xii) when the Purchase Price for such Purchased Mortgage Loan is added to
other Purchased Mortgage Loans, the aggregate Purchase Price of all Purchased
Mortgage Loans for which the credit quality is below that of a B Credit Mortgage
Loan exceeds 5% of the Maximum Aggregate Purchase Price;




(xiii) when the Purchase Price for such Purchased Mortgage Loan is added to
other Purchased Mortgage Loans, the aggregate Purchase Price of all Purchased
Mortgage Loans for which the origination date with respect to such Mortgage Loan is
greater than thirty (30) days prior to the related Purchase Date but not greater
than sixty (60) days prior to the related Purchase Date exceeds $50,000,000;




(xiv) during the first five (5) Business Days and the last five (5) Business
Days of each calendar month, when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate Purchase Price of all
Wet-Ink Mortgage Loans that are Purchased Mortgage Loans exceeds 40% of the Maximum
Aggregate Purchase Price;




(xv) other than during the first five (5) Business Days and the last five (5)
Business Days of each calendar month, when the Purchase Price for such Purchased
Mortgage Loan is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all Wet-Ink Mortgage Loans that are Purchased Mortgage Loans exceeds 30% of
the Maximum Aggregate Purchase Price.




(xvi) such Purchased Mortgage Loan is a Repurchased Mortgage Loan for which the
Mortgaged Property has been foreclosed upon or has been converted to REO Property.”



““Maximum Aggregate Purchase Price” means FIVE HUNDRED MILLION DOLLARS
($500,000,000).”



““Pricing Rate” means LIBOR plus:




(a) initially and until the ATNW $400m Step-Up Date:




(i) 1.125% with respect to Transactions the subject of which are
Sub-Prime Mortgage Loans, Second Lien Mortgage Loans, HELOCs or Wet-Ink
Mortgage Loans or (other than, in all cases, Aged Loans or Repurchased
Mortgage Loans);




(ii) 1.25% with respect to Transactions the subject of which are Aged
Loans (other than, in all cases, Repurchased Mortgage Loans




(iii) 2.00% with respect to Transactions the subject of which are
Repurchased Mortgage Loans;




(iv) the rate determined in the sole discretion of Buyer with respect
to Transactions the subject of which are Exception Mortgage Loans and any
other Transactions so identified by the Buyer in agreeing to enter into a
Transaction with respect to such Exception Mortgage Loan.




(b) On and after the ATNW $400m Step-Up Date:




(i) 0.750% with respect to Transactions the subject of which are
Sub-Prime Mortgage Loans, Second Lien Mortgage Loans, HELOCs or Wet-Ink
Mortgage Loans or (other than, in all cases, Aged Loans or Repurchased
Mortgage Loans);




(ii) 1.00% with respect to Transactions the subject of which are Aged
Loans (other than, in all cases, Repurchased Mortgage Loans




(iii) 1.75% with respect to Transactions the subject of which are
Repurchased Mortgage Loans;




(iv) the rate determined in the sole discretion of Buyer with respect to
Transactions the subject of which are Exception Mortgage Loans and any other
Transactions so identified by the Buyer in agreeing to enter into a Transaction with
respect to such Exception Mortgage Loan.



The Pricing Rate shall change in accordance with LIBOR, as provided in Section 5(a);
provided that, in the event that a Seller shall sell to Buyer or an affiliate of Buyer
pursuant to one of its flow purchase or conduit programs (but not including this Agreement)
Mortgage Loans in an aggregate principal balance of at least the Pricing Rate Reduction Threshold
in any calendar quarter, beginning with the calendar quarter which shall end on March 31, 2005, the
Pricing Rate shall be reduced for such calendar quarter by 0.15% per annum multiplied by the
average aggregate outstanding Purchase Price of all Purchased Mortgage Loans subject to
Transactions for such quarter divided by twelve and multiplied by three, which reduction shall be
applied to the weighted average Pricing Rate and shall be reflected in the Price Differential due
on the next succeeding Price Differential Payment Date.”



(b) adding the following definition in its proper alphabetical order:



““Non-Recourse Indebtedness” means all Indebtedness of any Seller or its Subsidiaries
that is non-recourse to such party, including any term securitization.”




Section 2. Covenants. Section 14 of the Existing Repurchase Agreement is
hereby amended by deleting subsection (b) in its entirety and replacing it with the
following language:



“b. Indebtedness to Adjusted Tangible Net Worth Ratio. Sellers’ ratio of Indebtedness
(excluding in all cases any Non-Recourse Indebtedness) to Adjusted Tangible Net Worth, on a
consolidated basis, shall not exceed (i) on and after the Effective Date until but not including
the REIT Event, 20:1 and (ii) on and after the REIT Event, 16:1.




Section 3. Conditions Precedent. This Amendment shall become effective on July
21, 2005, (the “Amendment Effective Date”), subject to the satisfaction of the following
conditions precedent:



(a) Delivered Documents. On the Amendment Effective Date, the Buyer shall have
received the following documents, each of which shall be satisfactory to the Buyer in form and
substance:




(i) this Amendment, executed and delivered by a duly authorized officer of the Buyer
and Seller;




(ii) such other documents as the Buyer or counsel to the Buyer may reasonably request.



(b) Payment of Attorneys’ Fees. On the Amendment Effective Date, the Seller shall
have paid attorneys’ fees to Buyer or its counsel either by payment or by authorized debit in
connection with this Amendment in an amount equal to $2,000.




Section 4. Representations and Warranties. The Sellers hereby represent and
warrant to the Buyer that they are in compliance with all the terms and provisions set forth
in the Repurchase Agreement on its part to be observed or performed, and that no Event of
Default has occurred or is continuing, and hereby confirm and reaffirm the representations
and warranties contained in Section 13 of the Repurchase Agreement.




Section 5. Limited Effect. Except as expressly amended and modified by this
Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full
force and effect in accordance with its terms.




Section 6. Counterparts. This Amendment may be executed by each of the parties
hereto on any number of separate counterparts, each of which shall be an original and all of
which taken together shall constitute one and the same instrument.




Section 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW
PROVISIONS THEREOF.



[SIGNATURE PAGE FOLLOWS]




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IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above written.




Buyer:




CREDIT SUISSE FIRST BOSTON


MORTGAGE CAPITAL LLC,


as Buyer




By: Bruce S. Kaiserman

Name: Bruce S. Kaiserman

Title: Vice President





Sellers:




ENCORE CREDIT CORP.




By: William E. Moffatt

Name: William E. Moffatt

Title: Treasurer



ECC CAPITAL CORPORATION




By: William E. Moffatt

Name: William E. Moffatt

Title: Treasurer



BRAVO CREDIT CORPORATION




By: William E. Moffatt

Name: William E. Moffatt

Title: Treasurer





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