EX-10.3






AMENDMENT NO. 1




TO MASTER REPURCHASE AGREEMENT




Amendment No. 1, dated as of July 25, 2005 (this “Amendment”), by and between MERRILL
LYNCH BANK USA (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 14, 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. Covenants. Section 12(k) is hereby amended by deleting clause (ii)
thereof and replacing it with the following language:



“(ii) Maintenance of Ratio of Indebtedness to Tangible Net Worth. The Sellers, on a
consolidated basis shall maintain a ratio of Indebtedness to Tangible Net Worth of no greater than
20:1.”




Section 2. Conditions Precedent. This Amendment shall become effective on July
25, 2005 (the “Amendment Effective Date”) on which the following conditions
precedent shall have been satisfied:



(a) The Buyer shall have received the following, each of which shall be satisfactory to the
Buyer:




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




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




Section 3. Representations and Warranties. The Sellers hereby represent and
warrant to the Buyer that it is 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 confirms and reaffirms the representations
and warranties contained in Section 11 of the Repurchase Agreement.




Section 4. Confidentiality. The parties hereto acknowledge that this
Amendment, the Existing Repurchase Agreement, and all drafts thereof, documents relating
thereto and transactions contemplated thereby are confidential in nature and the Sellers
agree that, unless otherwise directed by a court of competent jurisdiction, it shall limit
the distribution of such documents and the discussion of such transactions to such of its
officers, employees, attorneys, accountants and agents as is required in order to fulfill
its obligations under such documents and with respect to such transactions.




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. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.




Section 7. Counterparts. This Amendment may be executed in one or more
counterparts and by different parties hereto on separate counterparts, each of which, when
so executed, shall constitute one and the same agreement.




Section 8. Conflicts. The parties hereto agree that in the event there is any
conflict between the terms of this Amendment, and the terms of the Existing Repurchase
Agreement, the provisions of this Amendment shall control.



[SIGNATURE PAGE FOLLOWS]




1




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.




MERRILL LYNCH BANK USA,


as Buyer




By: John Winchester

Name: John Winchester

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





2