**Exhibit 10.25**

 

**EXECUTION VERSION**

** **

** **

** **

**AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT**

 

 

Between:

 

 

**Merrill Lynch Mortgage Capital Inc.,as Buyer**

** **

 

and

 

 

**MortgageIT, Inc., as Seller**

** **

 

and

 

 

**MortgageIT Holdings, Inc. as Seller**

** **

 

 

Dated as of August4, 2004

 

 

Portions of thisAgreement have been omitted pursuant to a confidential treatment request andfiled separately with the Securities and Exchange Commission.

 

 

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TABLE OF CONTENTS

 
| SECTION  1.  | APPLICABILITY                                       |   |
|--------------|-----------------------------------------------------|--------|
|         |                                                |   |
| SECTION  2.  | DEFINITIONS                                         |   |
|         |                                                |   |
| SECTION 3.   | INITIATION;  TERMINATION                            |   |
|         |                                                |   |
| SECTION 4.   | MARGIN AMOUNT  MAINTENANCE                          |   |
|         |                                                |   |
| SECTION 5.   | INCOME PAYMENTS                                     |   |
|         |                                                |   |
| SECTION 6.   | REQUIREMENTS OF LAW                                 |   |
|         |                                                |   |
| SECTION 7.   | TAXES.                                              |   |
|         |                                                |   |
| SECTION 8.   | SECURITY INTEREST                                   |   |
|         |                                                |   |
| SECTION 9.   | PAYMENT,  TRANSFER AND CUSTODY                      |   |
|         |                                                |   |
| SECTION  10. | HYPOTHECATION  OR PLEDGE OF PURCHASED MORTGAGE LOAN |   |
|         |                                                |   |
| SECTION 11.  | REPRESENTATIONS                                     |   |
|         |                                                |   |
| SECTION  12. | COVENANTS                                           |   |
|         |                                                |   |
| SECTION 13.  | EVENTS OF DEFAULT                                   |   |
|         |                                                |   |
| SECTION  14. | REMEDIES                                            |   |
|         |                                                |   |
| SECTION  15. | INDEMNIFICATION  AND EXPENSES; RECOURSE             |   |
|         |                                                |   |
| SECTION  16. | SERVICING                                           |   |
|         |                                                |   |
| SECTION 17.  | SINGLE AGREEMENT                                    |   |
|         |                                                |   |
| SECTION  18. | SET-OFF                                             |   |

 

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| SECTION  19. | NOTICES  AND OTHER COMMUNICATIONS                    |   |
|--------------|------------------------------------------------------|--------|
|         |                                                 |   |
| SECTION 20.  | ENTIRE  AGREEMENT; SEVERABILITY                      |   |
|         |                                                 |   |
| SECTION 21.  | NON-ASSIGNABILITY                                    |   |
|         |                                                 |   |
| SECTION 22.  | TERMINABILITY                                        |   |
|         |                                                 |   |
| SECTION  23. | GOVERNING  LAW                                       |   |
|         |                                                 |   |
| SECTION  24. | SUBMISSION  TO JURISDICTION; WAIVERS                 |   |
|         |                                                 |   |
| SECTION 25.  | NO WAIVERS, ETC.                                     |   |
|         |                                                 |   |
| SECTION  26. | [RESERVED]                                           |   |
|         |                                                 |   |
| SECTION  27. | DUE  DILIGENCE                                       |   |
|         |                                                 |   |
| SECTION 28.  | COMMITMENT FEE                                       |   |
|         |                                                 |   |
| SECTION  29. | [RESERVED]                                           |   |
|         |                                                 |   |
| SECTION  30. | BUYER’S  APPOINTMENT AS ATTORNEY-IN-FACT        |   |
|         |                                                 |   |
| SECTION 31.  | MISCELLANEOUS                                        |   |
|         |                                                 |   |
| SECTION 32.  | CONFIDENTIALITY                                      |   |
|         |                                                 |   |
| SECTION 33.  | INTENT                                               |   |
|         |                                                 |   |
| SECTION  34. | DISCLOSURE  RELATING TO CERTAIN FEDERAL PROTECTIONS  |   |
|         |                                                 |   |
| SECTION  35. | CONFLICTS                                            |   |
|         |                                                 |   |
| SECTION 36.  | AUTHORIZATIONS                                       |   |
|         |                                                 |   |
| SECTION  37. | ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING  POLICIES. |   |

 

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**EXHIBITS**

 
| SCHEDULE 1   | Representations and  Warranties Re:  Mortgage Loans |
|--------------|----------------------------------------------------------|
|         |                                                     |
| SCHEDULE 2   | Existing Indebtedness                                    |
|         |                                                     |
| EXHIBIT I    | Form of Confirmation  Letter                             |
|         |                                                     |
| EXHIBIT II   | Form of Opinion Letter                                   |
|         |                                                     |
| EXHIBIT III  | UCC Filing Jurisdiction                                  |
|         |                                                     |
| EXHIBIT IV   | Form of Collection  Account Control Agreement            |
|         |                                                     |
| EXHIBIT V    | Mortgage Loan Schedule  Fields                           |
|         |                                                     |
| EXHIBIT VI   | Mortgage File Documents                                  |
|         |                                                     |
| EXHIBIT VII  | Reserved                                                 |
|         |                                                     |
| EXHIBIT VIII | Form of Seller’s  Officer’s Certificate        |
|         |                                                     |
| EXHIBIT IX   | Form of Servicer Notice                                  |
|         |                                                     |
| EXHIBIT X    | Authorized  Representatives                              |
|         |                                                     |
| EXHIBIT XI   | Responsible Officers                                     |
|         |                                                     |
| EXHIBIT XII  | Co-op Loan Mortgage  File                                |

 

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MASTER REPURCHASEAGREEMENT

 

This is an AMENDED AND RESTATED MASTER REPURCHASEAGREEMENT, dated as of August 4, 2004 (this “Agreement”), amongMORTGAGEIT, INC., a New York corporation (“MortgageIT” and a “Seller”),MORTGAGEIT HOLDINGS, INC., a Maryland corporation (“Holdings” and a “Seller”,and collectively with MortgageIT, the “Sellers”)  and MERRILL LYNCH MORTGAGE CAPITAL INC., aNew York corporation (“MLMCI” and the “Buyer”).

 

Merrill Lynch CommercialFinance Corp. (“MLCFC”) and MortgageIT previously entered into a MasterRepurchase Agreement, dated June 20, 2003, (the “Existing Master RepurchaseAgreement”) and MLCFC subsequently assigned its rights as Buyer thereunderto MLMCI.

 

The Buyer and the Sellershave requested that the Existing Master Repurchase Agreement be amended andrestated on the terms and conditions set forth herein.

 

Accordingly, the partieshereby agree, in consideration of the mutual promises and mutual obligationsset forth herein, that the Existing Master Repurchase Agreement is herebyamended and restated as set forth herein.

 

# **SECTION 1.**                                      APPLICABILITY

 

From time to time theparties hereto shall enter into transactions in which the Sellers agree totransfer to Buyer, Mortgage Loans against the transfer of funds by Buyer, witha simultaneous agreement by Buyer to transfer to the Sellers such Mortgage Loansat a date certain not later than the date 364 days after the related PurchaseDate, against the transfer of funds by the Sellers. Each such transaction shallbe referred to herein as a “Transaction” and shall be governed by thisRepurchase Agreement, unless otherwise agreed in writing. This RepurchaseAgreement is a commitment by Buyer to engage in the Transactions as set forthherein up to the Maximum Committed Purchase Price; provided, that theBuyer shall have no commitment to enter into any Transaction requested whichwould result in the aggregate Purchase Price of then outstanding Transactionsto exceed the Maximum Committed Purchase Price.

 

# **SECTION 2.**                                      DEFINITIONS

# ** **

As used herein, thefollowing terms shall have the following meanings (all terms defined in thisSection 2 or in other provisions of this Repurchase Agreement in thesingular to have the same meanings when used in the plural and viceversa)

 

“Accepted Servicing Practices” shall mean, withrespect to any Mortgage Loan, those mortgage servicing practices of prudentmortgage lending institutions which service mortgage loans of the same type assuch Mortgage Loan in the jurisdiction where the related Mortgaged Property islocated.

 

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“Account Agreement” shall mean a letteragreement between the Sellers, the Buyer, and a depository institutionacceptable to Buyer in its sole discretion substantially in the form of Exhibit IVattached hereto.

 

“Additional Purchased Mortgage Loans” shallmean Mortgage Loans or cash provided by the Sellers to Buyer or its designeepursuant to Section 4 of this Repurchase Agreement.

 

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

 

“Aged Mortgage Loan” shall mean a Mortgage Loanthat has been subject to a Transaction hereunder for period of greater than 120days but no longer than 180 days.

 

“Agency” shall mean Freddie Mac, Fannie Mae orGinnie Mae, as applicable.

 

“Agency Takeout Commitment” shall mean acommitment by an Agency to purchase the Mortgage Loan under any of its cashpurchase programs.

 

“Appraised Value” shall mean the value setforth in an appraisal made in connection with the origination of the relatedMortgage Loan as the value of the Mortgaged Property.

 

“Asset Value” shall mean with respect to eachEligible Mortgage Loan, the applicable Purchase Price Percentage for therelated Purchased Mortgage Loan multiplied by the lesser of (a) the MarketValue of such Mortgage Loan and (b) the outstanding principal balance of suchMortgage Loan.

 

“Assignment of LeaseAgreement” shall mean the specific agreement creating a first lien on andpledge of the Co-op Shares and the appurtenant Proprietary Lease securing aCo-op Loan.

 

“Assignment ofProprietary Lease” shall mean, with respect to a Co-op Loan, an assignmentof the Proprietary Lease sufficient under the laws of the jurisdiction whereinthe related Co-op Unit is located to reflect the assignment of such ProprietaryLease.

 

“Authorized Representative” shall mean, for thepurposes of this Repurchase Agreement only, an agent or Responsible Officer ofthe Sellers listed on Exhibit X hereto, as such Exhibit X may beamended from time to time by the Sellers providing written notice to the Buyer.

 

“Bailee Letter” shall have the meaning assignedto such term in the Custodial Agreement.

 

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

 

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“Business Day” shall mean a day other than (i) aSaturday or Sunday, (ii) any day on which banking institutions areauthorized or required by law, executive order or governmental decree to beclosed in the State of New York or (iii) any day on which the New York StockExchange is closed.

 

“Buyer” shall mean Merrill Lynch MortgageCapital Inc., and its successors in interest and assigns.

 

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

 

“Cash Equivalents” shall mean(a) securities with maturities of 90 days or less from the date ofacquisition issued or fully guaranteed or insured by the United StatesGovernment or any agency thereof, (b) certificates of deposit andeurodollar time deposits with maturities of 90 days or less from the date ofacquisition and overnight bank deposits of Buyer or of any commercial bankhaving capital and surplus in excess of $500,000,000, (c) repurchaseobligations of Buyer or of any commercial bank satisfying the requirements ofclause (b) of this definition, having a term of not more than sevendays with respect to securities issued or fully guaranteed or insured by the UnitedStates Government, (d) commercial paper of a domestic issuer rated atleast A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereofby Moody’s and in either case maturing within 90 days after the day ofacquisition, (e) securities with maturities of 90 days or less from thedate of acquisition issued or fully guaranteed by any state, commonwealth orterritory of the United States, by any political subdivision or taxingauthority of any such state, commonwealth or territory or by any foreigngovernment, the securities of which state, commonwealth, territory, politicalsubdivision, taxing authority or foreign government (as the case may be) arerated at least A by S&P or A by Moody’s, (f) securities withmaturities of 90 days or less from the date of acquisition backed by standbyletters of credit issued by Buyer or any commercial bank satisfying therequirements of clause (b) of this definition or (g) shares ofmoney market mutual or similar funds which invest exclusively in assetssatisfying the requirements of clauses (a) through (f) of thisdefinition.

 

“Change in Control” shall mean:

 

### (a)                                  the sale, transfer, or other disposition of all or substantially all of aSeller’s assets (excluding any such action taken in connection with anysecuritization transaction); or

###  

### (b)                                 theconsummation of a merger or consolidation of a Seller with or into anotherentity or any other corporate reorganization, if more than 50.1% of thecombined voting power of the continuing or surviving entity’s stock outstandingimmediately after such merger, consolidation or such other reorganization isowned by persons who were not stockholders of such Seller immediately prior tosuch merger, consolidation or other reorganization.

###  

### 3

### 

###  

“Closed End Second Lien Mortgage Loan” shallmean a closed end, Second Lien Mortgage Loan that (i) qualifies under the“CAL-Rural” or “PERS” loan programs or which is otherwise underwritten inaccordance with the Underwriting Guidelines and (ii) is eligible for sale by aSeller in a securitization transaction or to a Takeout Investor.

 

“Code” shall mean the Internal Revenue Code of1986, as amended from time to time.

 

“Collection Account” shall mean the accountestablished by a financial institution acceptable to Buyer subject to anAccount Agreement, into which all Income shall be deposited after theoccurrence of an Event of Default.

 

“Combined Loan to Value Ratio or CLTV” shallmean, with respect to any Second Lien Mortgage Loan, the sum of (a) theoriginal principal balance of such Mortgage Loan or, with respect to theHELOCs, the original Credit Limit and (b) the outstanding principal balance ofany related first lien as of the date of origination of the Mortgage Loan,divided by the Appraisal Value of the Mortgaged Property as of the originationdate.

 

“Commitment Fee”shall mean an amount equal to (A) (i) 0.25% multiplied by (ii) the MaximumCommitted Purchase Price, less (B) any commitment fees previously paid by theSellers to the Buyer for the same periods covered by this Agreement, whichtotal shall be due and payable to Buyer by the Sellers pursuant to thisRepurchase Agreement at the account set forth in Section 9 hereof.

 

“Committed Mortgage Loan” shall mean a MortgageLoan which is the subject of a Takeout Commitment with a Takeout Investor.

 

“Confirmation” shall mean a Confirmation Letterin the form of Exhibit I hereto.

 

“Conforming Mortgage Loan” shall mean a firstlien Mortgage Loan that (i) conforms to the requirements of an Agency forsecuritization or cash purchase and (ii) is subject to an Agency Commitment ora Takeout Commitment, including, without limitation, conventional MortgageLoans, FHA Loans and VA Loans.

 

“Co-op” shall mean a private, cooperativehousing corporation, having only one class of stock outstanding, which owns orleases land and all or part of a building or buildings, including apartments,spaces used for commercial purposes and common areas therein and whose board ofdirectors authorizes the sale of stock and the issuance of a Proprietary Lease.

 

“Co-op Corporation” shall mean, with respect toany Co-op Loan, the cooperative apartment corporation that holds legal title tothe related Co-op Project and grants occupancy rights to units therein tostockholders through Proprietary Leases or similar arrangements.

 

“Co-op Lien Search” shall mean a search for (a)federal tax liens, mechanics’ liens, lis pendens, judgments of record orotherwise against (i) the Co-op Corporation and (ii) the seller of the Co-opUnit, (b) filings Uniform Commercial Code financing statements and (c) the deedof the Co-op Project into the Co-op Corporation.

 

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“Co-op Loan” shall mean a Mortgage Loan securedby the pledge of stock allocated to a dwelling unit in a residentialcooperative housing corporation and collateral assignment of the relatedProprietary Lease.

 

“Co-op Project” shall mean, with respect to anyCo-op Loan, all real property and improvements thereto and rights therein andthereto owned by a Co-op Corporation including without limitation the land,separate dwelling units and all common elements.

 

“Co-op Shares” shall mean, with respect to anyCo-op Loan, the shares of stock issued by a Co-op Corporation and allocated toa Co-op Unit and represented by a stock certificates.

 

“Co-op Unit” shall mean, with respect to anyCo-op Loan, a specific unit in a Co-op Project.

 

“Credit Limit” shall mean, with respect to eachHELOC, the maximum amount permitted under the terms of the related Credit LineAgreement.

 

“Credit Line Agreement” shall mean, withrespect to each HELOC,  the related homeequity line of credit agreement, account agreement and promissory note (if any)executed by the related mortgagor and any amendment or modification thereof.

 

“Custodial Agreement” shall mean that certainAmended and Restated Custodial Agreement dated as of the date hereof, among theSellers, Buyer and Custodian as the same may be amended from time to time.

 

“Custodian” shall mean Deutsche Bank NationalTrust Company, or any successor thereto under the Custodial Agreement.

 

“Default” shall mean an Event of Default or anevent that with notice or lapse of time or both would become an Event ofDefault.

 

“Delinquent Mortgage Loan” shall mean anyMortgage Loan as to which any Monthly Payment, or part thereof, remains unpaidfor 30 days or more from the original Due Date for such Monthly Payment.

 

“Disbursement Agent” shall mean Deutsche BankNational Trust Company, its successor or assigns.

 

“Disbursement Agreement” shall mean thatcertain Amended and Restated Disbursement Agreement, dated as of the datehereof, among the Disbursement Agent, the Buyer and the Sellers, as the samemay be amended from time to time, setting forth the terms pursuant to which theDisbursement Agent shall disburse funds related to Wet-Ink Mortgage Loans.

 

“Dollars” and “$” shall mean lawfulmoney of the United States of America.

 

“Draw” shall mean, with respect to each HELOC,an additional borrowing by the Mortgagor in accordance with the related CreditLine Agreement.

 

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“Due Date” shall mean the day of the month onwhich the Monthly Payment is due on a Mortgage Loan, exclusive of any days ofgrace.

 

“Due Diligence Review” shall mean theperformance by Buyer of any or all of the reviews permitted underSection 27 hereof with respect to any or all of the Mortgage Loans, asdesired by the Buyer from time to time.

 

“EC Mortgage Loan” shall mean a first lienMortgage Loan that (i) is a prime quality Mortgage Loan underwritten inconformity to the Underwriting Guidelines for EC Mortgage Loans and (ii) iseligible for sale to a Takeout Investor or for securitization.

 

“Effective Date” shall mean the date upon whichthe conditions precedent set forth in Section 3(a) shall have beensatisfied.

 

“Electronic Tracking Agreement” shall mean thatcertain Amended and Restated Electronic Tracking Agreement, dated as of thedate hereof, among Buyer, Sellers, MERS and MERSCORP, Inc., as the same may beamended from time to time.

 

“Eligible Mortgage Loan” shall mean a PurchasedMortgage Loan which (i) complies with the representations and warranties setforth on Schedule 1 to this Repurchase Agreement and (ii) is aConforming Mortgage Loan, a Jumbo Mortgage Loan, a Super Jumbo Mortgage Loan, aHELOC, an EC Mortgage Loan, a Closed End Second Lien Mortgage Loan, a Co-opLoan or a Sub-prime Mortgage Loan.

 

“ERISA” shall, with respect to any Person, meanthe Employee Retirement Income Security Act of 1974, as amended from time totime and any successor thereto, and the regulations promulgated and rulingsissued thereunder.

 

“ERISA Affiliate” shall, with respect to anyPerson, mean any Person which is a member of any group of organizations(i) described in Section 414(b) or (c) of the Code of which suchPerson is a member, or (ii) solely for purposes of potential liabilityunder Section 302(c)(11) of ERISA and Section 412(c)(11) of the Codeand 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 whichsuch Person is a member.

 

“Estoppel Letter”shall mean a document executed by the Co-op Corporation certifying, withrespect to a Co-op Unit, (i) the appurtenant Proprietary Lease will be in fullforce and effect as of the date of issuance thereof, (ii) the related StockCertificate was registered in the Mortgagor’s name and the Co-op Corporationhas not been notified of any lien upon, pledge of, levy of execution on ordisposition of such Stock Certificate, and (iii) the Mortgagor is not indefault under the appurtenant Proprietary Lease and all charges due the Co-opCorporation have been paid.

 

“Escrow Payments” shall mean, with respect toany Mortgage Loan, the amounts constituting ground rents, taxes, assessments,water rates, sewer rents, municipal charges, mortgage insurance premiums, fireand hazard insurance premiums, condominium charges, and any other paymentsrequired to be escrowed by the Mortgagor with the mortgagee pursuant to theMortgage or any other document.

 

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“Event of Default” shall have the meaningspecified in Section 13.01 hereof.

 

“Event of Insolvency” shall mean, for anyPerson:

 

(a) that such Person or any Material Subsidiary shalldiscontinue or abandon operation of its business; or

 

(b) that such Person or any Material Subsidiary shallfail generally to, or admit in writing its inability to, pay its debts as theybecome due; or

 

(c) a proceeding shall have been instituted in a courthaving jurisdiction in the premises seeking a decree or order for relief inrespect of such Person or any Material Subsidiary in an involuntary case underany applicable bankruptcy, insolvency, liquidation, reorganization or othersimilar law now or hereafter in effect, or for the appointment of a receiver,liquidator, assignee, trustee, custodian, sequestrator, conservator or othersimilar official of such Person or any Material Subsidiary, or for anysubstantial part of its property, or for the winding-up or liquidation of itsaffairs; or

 

(d)  the commencement by such Person or anyMaterial Subsidiary of a voluntary case under any applicable bankruptcy,insolvency or other similar Law now or hereafter in effect, or such Person’s orany Material Subsidiary’s consent to the entry of an order for relief in aninvoluntary case under any such Law, or consent to the appointment of or takingpossession by a receiver, liquidator, assignee, trustee, custodian,sequestrator, conservator or other similar official of such Person or suchMaterial Subsidiary, or for any substantial part of its property, or anygeneral assignment for the benefit of creditors; or

 

(e) that such Person or any Material Subsidiary shallbecome insolvent; or

 

(f) if such Person or any Material Subsidiary is acorporation, such Person or any Material Subsidiary shall take any corporateaction in furtherance of, or the action of which would result in any of theactions set forth in the preceding clause (a), (b), (c), (d) or (e).

 

“Event of Termination” shall, with respect toany Seller, mean (i) with respect to any Plan, a reportable event, as definedin Section 4043 of ERISA, as to which the PBGC has not by regulation waived therequirement of Section 4043(a) of ERISA that it be notified within 30 days ofthe occurrence of such event, or (ii) the withdrawal of such Seller or anyERISA Affiliate thereof from a Plan during a plan year in which it is asubstantial employer, as defined in Section 4001(a)(2) of ERISA, or (iii) thefailure by such Seller or any ERISA Affiliate thereof to meet the minimumfunding standard of Section 412 of the Code or Section 302 of ERISA withrespect to any Plan, including, without limitation, the failure to make on orbefore its due date a required installment under Section 412(m) of the Code orSection 302(e) of ERISA, or (iv) the distribution under Section 4041 of ERISAof a notice of intent to terminate any Plan or any action taken by such Selleror any ERISA Affiliate thereof to terminate any Plan, or (v) the adoption of anamendment to any Plan that, pursuant to Section 401(a)(29) of the Code orSection 307 of ERISA, would result in the loss of tax-exempt status of thetrust of which such Plan is a part if such Seller or any ERISA Affiliatethereof fails to timely provide security to the Plan in accordance with theprovisions of said Sections, or (vi) the institution by the PBGC of proceedingsunder Section 4042 of ERISA for the termination of, or the appointment of atrustee

 

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to administer, any Plan, or (vii) the receipt by such Seller or anyERISA Affiliate thereof of a notice from a Multiemployer Plan that action ofthe type described in the previous clause (vi) has been taken by the PBGC withrespect to such Multiemployer Plan, or (viii) any event or circumstance existswhich may reasonably be expected to constitute grounds for such Seller or anyERISA Affiliate thereof to incur liability under Title IV of ERISA or underSections 412(c)(11) or 412(n) of the Code with respect to any Plan.

 

“Excluded Taxes” shall have the meaningspecified in Section 7 hereof.

 

“Expenses” shall mean all present and futurereasonable expenses incurred by or on behalf of the Buyer in connection withthis Repurchase Agreement or any of the other Repurchase Documents and anyamendment, supplement or other modification or waiver related hereto orthereto, whether incurred heretofore or hereafter, which reasonable expensesshall include the cost of title, lien, judgment and other record searches;reasonable attorneys’ fees; and costs of preparing and recording any UCCfinancing statements or other filings necessary to perfect the securityinterest created hereby.

 

“Fannie Mae” shall mean Fannie Mae, or any successor thereto.

 

“FHA” shall mean the Federal HousingAdministration, an agency within the United States Department of Housing andUrban Development, or any successor thereto, and including the Federal HousingCommissioner and the Secretary of Housing and Urban Development where appropriateunder the FHA Regulations.

 

“FHA Approved Mortgagee” shall mean acorporation or institution approved as a mortgagee by the FHA under theNational Housing Act, as amended from time to time, and applicable FHARegulations, and eligible to own and service mortgage loans such as the FHALoans.

 

“FHA Loan” shall mean a Mortgage Loan which isthe subject of an FHA Mortgage Insurance Contract.

 

“FHA Mortgage Insurance” shall mean, mortgageinsurance authorized under the National Housing Act, as amended from time totime, and provided by the FHA.

 

“FHA Mortgage Insurance Contract” shall meanthe contractual obligation of the FHA respecting the insurance of a MortgageLoan.

 

“FHA Regulations” shall mean the regulationspromulgated by the Department of Housing and Urban Development under theNational Housing Act, as amended from time to time and codified in 24 Code ofFederal Regulations, and other Department of Housing and Urban Developmentissuances relating to FHA Loans, including the related handbooks, circulars,notices and mortgagee letters.

 

“Fidelity Insurance” shall mean insurancecoverage with respect to employee errors, omissions, dishonesty, forgery,theft, disappearance and destruction, robbery and safe burglary, property(other than money and securities) and computer fraud in an aggregate amountacceptable to Sellers’ regulators.

 

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“Financial Statements” shall mean theconsolidated financial statements of the Sellers, prepared in accordance withGAAP for the year or other period then ended. Such financial statements will beaudited, in the case of annual statements, by BDO Seidman LLP or such otherindependent certified public accountants approved by the Buyer (which approvalshall not be unreasonably withheld).

 

“Financing Statement” shall mean a financingstatement in the form of a UCC-1 filed pursuant to the Uniform Commercial Codeto perfect a security interest in the Co-op Shares and Pledge Instruments.

 

“First Payment Default” shall mean, with respectto a Mortgage Loan, the failure of the Mortgagor to make the first MonthlyPayment due under the Mortgage Loan on or before its scheduled Due Date.

 

“Fitch” shall mean Fitch Ratings, Inc., or any successor thereto.

 

“Freddie Mac” shall mean Freddie Mac, or anysuccessor thereto.

 

“GAAP” shall mean generally accepted accountingprinciples in the United States of America, applied on a consistent basis andapplied to both classification of items and amounts, and shall include, withoutlimitation, the official interpretations thereof by the Financial AccountingStandards Board, its predecessors and successors.

 

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

 

“Governmental Authority” shall mean any nationor the government of any state, county, municipality or other politicalsubdivision thereof or any governmental body, agency, authority, department orcommission (including, without limitation, any taxing authority) or anyinstrumentality or officer of any of the foregoing (including, withoutlimitation, any court or tribunal) exercising executive, legislative, judicial,regulatory or administrative functions of or pertaining to government and anycorporation, partnership or other entity directly or indirectly owned by orcontrolled by the foregoing.

 

“Guarantee” shall mean, as to any Person, anyobligation of such Person directly or indirectly guaranteeing any Indebtednessof any other Person or in any manner providing for the payment of anyIndebtedness of any other Person or otherwise protecting the holder of suchIndebtedness against loss (whether by virtue of partnership arrangements, byagreement to keep-well, to purchase assets, goods, securities or services, orto take-or-pay or otherwise); provided that the term “Guarantee” shallnot include endorsements for collection or deposit in the ordinary course ofbusiness.  The amount of any Guaranteeof a Person shall be deemed to be an amount equal to the stated or determinableamount of the primary obligation in respect of which such Guarantee is made or,if not stated or determinable, the maximum reasonably anticipated liability inrespect thereof as determined by such Person in good faith.  The terms “Guarantee” and “Guaranteed”used as verbs shall have correlative meanings.

 

“HELOC” shall mean a home equity revolving lineof credit secured by a mortgage, deed of trust or other instrument creating afirst or second lien on the related

 

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Mortgaged Property, which lien secures the related Credit LineAgreement, and which is underwritten in conformity with the UnderwritingGuidelines.

 

“High Cost Mortgage Loan”shall mean a Mortgage Loan classified as (a) a “high cost” loan under the HomeOwnership and Equity Protection Act of 1994 or (b) a “high cost,” “threshold,”“covered,” or “predatory” loan under any other applicable state, federal orlocal law (or a similarly classified loan using different terminology under alaw, regulation or ordinance imposing heightened regulatory scrutiny oradditional legal liability for residential mortgage loans having high interestrates, points and/or fees).

 

“HUD” shall mean the Department of Housing andUrban Development.

 

“Income” shall mean, with respect to anyMortgage Loan at any time, any principal thereof then payable and all interest,dividends or other distributions payable thereon.

 

“Indebtedness” shall mean, with respect to anyPerson, (a) obligations created, issued or incurred by such Person for borrowedmoney (whether by loan, the issuance and sale of debt securities or the sale ofProperty to another Person subject to an understanding or agreement, contingentor otherwise, to repurchase such Property from such Person); (b) obligations ofsuch Person to pay the deferred purchase or acquisition price of Property orservices, other than trade accounts payable (other than for borrowed money)arising, and accrued expenses incurred, in the ordinary course of business, solong as such trade accounts payable are payable within 90 days of the date therespective 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 suchPerson; (d) obligations (contingent or otherwise) of such Person in respect ofletters of credit or similar instruments issued or accepted by banks and otherfinancial institutions for the account of such Person; (e) Capital LeaseObligations of such Person; (f) obligations of such Person under repurchaseagreements, sale/buy-back agreements or like arrangements; (g) Indebtedness ofothers Guaranteed by such Person; (h) all obligations of such Person incurredin connection with the acquisition or carrying of fixed assets by such Person;and (i) Indebtedness of general partnerships of which such Person is a generalpartner.

 

“Interest Rate Protection Agreement” shallmean, with respect to any or all of the Purchased Mortgage Loans, any shortsale of a US Treasury Security, or futures contract, or mortgage relatedsecurity, or Eurodollar futures contract, or options related contract, orinterest rate swap, cap or collar agreement or Takeout Commitment, or similararrangement providing for protection against fluctuations in interest rates orthe exchange of nominal interest obligations, either generally or underspecific contingencies, entered into by a Seller and an Affiliate of the Buyer,and acceptable to the Buyer.

 

“Jumbo Mortgage Loan” shall mean a first lienMortgage Loan with a principal balance of not more than $1,000,000 that (i)except with respect to the original principal balance thereof, conforms to therequirements for securitization or cash purchase by an Agency or is eligiblefor pool insurance by an insurer acceptable to the Buyer, and (ii) that either(a) is eligible to be sold or securitized by a Seller or (b) is eligible forsale to a Takeout Investor pursuant to a Takeout Commitment.

 

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“Late Payment Fee” shall mean the excess of thePrice Differential paid as a result of its calculation at the Post-Default Rateover the Price Differential as would have been calculated at the Pricing Rate.

 

“Law” shall mean, any law, treaty, rule orregulation or determination of an arbitrator or court or other GovernmentalAuthority, in each case applicable to or binding upon such Person or any of itsproperty or to which such Person or any of its property is subject.

 

“LIBOR Period” shall mean, with respect to eachPayment Date, the period from and including the immediately preceding PaymentDate (or, with respect to the first LIBOR Period for each Transaction, from andincluding the related Purchase Date) to but excluding such Payment Date, unlessotherwise agreed to by the Buyer and such Seller and set forth in the relatedConfirmation.

 

“LIBOR Period Commencement Date” shall mean(a) with respect to the initial LIBOR Period with respect to aTransaction, the Purchase Date, and (b) with respect to each succeeding LIBORPeriod with respect to a Transaction, the Payment Date, or if the LIBOR Periodis other than one month, the last day of the immediately preceding LIBORPeriod.

 

“LIBOR Rate” shall mean, with respect to eachday during the applicable LIBOR Period, the rate per annum equal to the onemonth British Bankers Association Rate as reported on the display designated as“BBAM” “Page DG8 4a” on Bloomberg (or such other display as may replace “BBAM”“Page DG8 4a on Bloomberg), as of 8:00 a.m., New York City time, on the datetwo Business Days prior to the commencement of such LIBOR Period, and if suchrate shall not be so quoted, or if the related LIBOR Period shall be less thanone month, the rate per annum at which the Buyer or its Affiliate is offereddollar deposits at or about 8:00 a.m., New York City time, on the date twoBusiness Days prior to the commencement of the such LIBOR Period, by primebanks in the interbank eurodollar market where the eurodollar and foreigncurrency exchange operations in respect of its Transactions are then beingconducted for delivery on such day for a period of one month or such otherperiod as agreed upon in writing by the Buyer and the Sellers and in an amountcomparable to the amount of the Transactions outstanding on such day.

 

“Lien” shall mean any lien, claim, charge,restriction, pledge, security interest, mortgage, deed of trust or otherencumbrance.

 

“Loan to Value Ratio” shall mean with respectto any Mortgage Loan, the ratio of the original outstanding principal amount ofsuch Mortgage Loan to the lesser of (a) the Appraised Value of the MortgagedProperty at origination or (b) if the Mortgage Property was purchased within 12months of the origination of such Mortgage Loan, the purchase price of theMortgaged Property.

 

“Margin Call” shall have the meaning specifiedin Section 4.

 

“Margin Deficit” shall have the meaningspecified in Section 4.

 

“Market Value” shall mean, as of any date withrespect to any Purchased Mortgage Loan, the price at which such Mortgage Loancould readily be sold as determined by

 

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the Buyer in its sole good-faith discretion.  Without limiting the generality of the foregoing, the Sellersacknowledge that the Market Value of a Purchased Mortgage Loan may be reducedto zero by Buyer if:

 

(a)                                  suchPurchased Mortgage Loan ceases to be an Eligible Mortgage Loan;

 

(b)                                 thePurchased Mortgage Loan has been released from the possession of the Custodianunder the Custodial Agreement (other than to a Take-out Investor pursuant to aBailee Letter) for a period in excess of 10 Business Days;

 

(c)                                  thePurchased Mortgage Loan is a Wet-Ink Mortgage Loan for which the relatedMortgage File has not been received and certified by the Custodian by theseventh Business Day following the related Purchase Date;

 

(d)                                 suchPurchased Mortgage Loan is a Delinquent Mortgage Loan;

 

(e)                                  suchPurchased Mortgage Loan is rejected by the related Takeout Investor;

 

(f)                                    suchPurchased Mortgage Loan has been subject to a Transaction hereunder for periodof greater than 120 days, unless such Purchased Mortgage Loan is an AgedMortgage Loan;

 

(g)                                 aFirst Payment Default occurs with respect to such Purchased Mortgage Loan;

 

(h)                                 theBuyer has determined in its sole good-faith discretion that the PurchasedMortgage Loan is not eligible for whole loan sale or securitization in atransaction consistent with the prevailing sale and securitization industrywith respect to substantially similar Mortgage Loans;

 

(i)                                     suchPurchased Mortgage Loan contains a material breach of a representation orwarranty made by a Seller in this Repurchase Agreement or the CustodialAgreement;

 

(j)                                     whenthe Purchase Price for such Purchased Mortgage Loan is added to the aggregatePurchase Price of other Purchased Mortgage Loans, the aggregate Purchase Priceof all Aged Mortgage Loans exceeds 5% of the Maximum Purchase Price;

 

(k)                                  whenthe Purchase Price for such Purchased Mortgage Loan is added to the aggregatePurchase Price of other Purchased Mortgage Loans, the aggregate Purchase Priceof all HELOCs exceeds $100,000,000;

 

(l)                                     whenthe Purchase Price for such Purchased Mortgage Loan is added to the aggregatePurchase Price of other Purchased Mortgage Loans, the aggregate Purchase Priceof all HELOCs that have a FICO score of 680 or less exceeds $35,000,000;

 

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(m)                             whenthe Purchase Price for such Purchased Mortgage Loan is added to the aggregatePurchase Price of other Purchased Mortgage Loans, the aggregate Purchase Priceof all Closed End Second Lien Mortgage Loans exceeds 5% of the Maximum PurchasePrice;

 

(n)                                 whenthe Purchase Price for such Purchased Mortgage Loan is added to the aggregatePurchase Price of other Purchased Mortgage Loans, the aggregate Purchase Priceof all Super Jumbo Mortgage Loans exceeds 7.5% of the Maximum Purchase Price;

 

(o)                                 whenthe Purchase Price for such Purchased Mortgage Loan is added to the aggregatePurchase Price of other Purchased Mortgage Loans, the aggregate Purchase Priceof all EC Mortgage Loans exceeds 5% of the aggregate Purchase Price of allPurchased Mortgage Loans;

 

(p)                                 whenthe Purchase Price for such Purchased Mortgage Loan is added to the aggregatePurchase Price of other Purchased Mortgage Loans, the aggregate Purchase Priceof all Wet-Ink Mortgage Loans exceeds (i) with respect to the first five (5)Business Days of a month and the last five (5) Business Days of a month, 25% ofthe Maximum Purchase Price or (ii) with respect to all other times, 15% of theMaximum Purchase Price;

 

(q)                                 whenthe Purchase Price for such Purchased Mortgage Loan is added to the aggregatePurchase Price of other Purchased Mortgage Loans, the aggregate Purchase Priceof all Sub-prime Mortgage Loans exceeds 20% of the Maximum Purchase Price;

 

(r)                                    when the Purchase Price for such PurchasedMortgage Loan is added to the aggregate Purchase Price of other PurchasedMortgage Loans, the aggregate Purchase Price of all Wet-Ink Mortgage Loans thatare Sub-prime Mortgage Loans exceeds 4% of the Maximum Purchase Price; and

 

(s)                                  when the Purchase Price for such PurchasedMortgage Loan is added to the aggregate Purchase Price of other PurchasedMortgage Loans, the aggregate Purchase Price of all Co-op Loans exceeds 5% ofthe aggregate Purchase Price of all Purchased Mortgage Loans.

 

“Material Adverse Effect” shall mean a materialadverse effect on (a) the Property, business, operations, financialcondition or prospects of any Seller or any Material Subsidiary, (b) theability of any Seller or any Material Subsidiary to perform its obligationsunder any of the Repurchase Documents to which it is a party, (c) thevalidity or enforceability of any of the Repurchase Documents, (d) therights and remedies of the Buyer or any Affiliate under any of the RepurchaseDocuments or (e) the Market Value of the Purchased Mortgage Loans.

 

“Material Subsidiary” shall mean any Subsidiaryof a Seller which accounts for more than 15% of such Seller’s net income.

 

“Maximum Committed Purchase Price” shall mean$10,000,000.  All funds made availableby Buyer to the Sellers under this Agreement will first be attributed to theMaximum Committed Purchase Price. For purposes of this Repurchase Agreement,Mortgage Loans will be allocated first to the Maximum Committed Purchase Pricebased on the date on which such

 

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Mortgage Loan becomes subject to this Repurchase Agreement, commencingfrom the earliest date to the most recent date.

 

“Maximum Purchase Price” shall mean$500,000,000.

 

“MERS” shall mean Mortgage ElectronicRegistration Systems, Inc., a corporation organized and existing under the lawsof the State of Delaware, or any successor thereto.

 

“MERS System” shall mean the system ofrecording transfers of mortgages electronically maintained by MERS.

 

“Monthly Payment” shall mean the scheduledmonthly payment of principal and interest on a Mortgage Loan.

 

“Moody’s” shall mean Moody’s Investor’sService, Inc. or any successors thereto.

 

“Mortgage” shall mean each mortgage, assignmentof rents, security agreement and fixture filing, or deed of trust, assignmentof rents, security agreement and fixture filing, deed to secure debt,assignment of rents, security agreement and fixture filing, or similarinstrument creating and evidencing a first lien or second lien on (i) withrespect to a Mortgage Loan other than a Co-op Loan, real property and otherproperty and rights incidental thereto or (ii) with respect to a Co-op Loan,the Proprietary Lease and related Co-op Shares.

 

“Mortgage File” shall mean, (i) with respect toa Mortgage Loan other than a Co-op Loan, the documents and instruments relatingto such Mortgage Loan and set forth in Exhibit VI hereto and (ii)with respect to a Mortgage Loan that is a Co-op Loan, the documents andinstruments relating to such Mortgage Loan and set forth in Exhibit XII.

 

“Mortgage Interest Rate” shall mean the rate ofinterest borne on a Mortgage Loan from time to time in accordance with theterms of the related Mortgage Note.

 

“Mortgage Loan” shallmean any first or second lien, one-to-four-family residential mortgage loan,Co-op Loan or HELOC evidenced by a Mortgage Note or Credit Line Agreement, asapplicable, and secured by a Mortgage, which Mortgage Loan is subject to aTransaction hereunder, which in no event shall include any mortgage loan which(a) is subject to Section 226.32 of Regulation Z or any similar state law(relating to high interest rate credit/lending transactions), (b) includes anysingle premium credit life or accident and health insurance or disabilityinsurance, or (c) is a High Cost Mortgage Loan.

 

“Mortgage Loan Schedule” shall mean withrespect to any Transaction as of any date, a mortgage loan schedule in the formof a computer tape or other electronic medium generated by a Seller and deliveredto Buyer and the Custodian, which provides information (including, withoutlimitation, the information set forth on Exhibit V attached hereto)relating to the Purchased Mortgage Loans in a format acceptable to the Buyer.

 

“Mortgage Loan Schedule and Exception Report”shall have the meaning set forth in the applicable Custodial Agreement.

 

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“Mortgage Note” shall mean the promissory noteor other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

 

“Mortgaged Property” shall mean the realproperty securing repayment of the debt evidenced by a Mortgage Note.

 

“Mortgagor” shall mean the obligor or obligorson a Mortgage Note, including any Person who has assumed or guaranteed theobligations of the obligor thereunder.

 

“Multiemployer Plan” shall mean, with respectto any Person, a “multiemployer plan” as defined in Section 4001(a)(3) of ERISAwhich is or was at any time during the current year or the immediatelypreceding five years contributed to by such Person or any ERISA Affiliatethereof on behalf of its employees and which is covered by Title IV of ERISA.

 

“Net Worth” means, with respect to any Person,an amount equal to, on a consolidated basis, such Person’s stockholder equity(determined in accordance with GAAP).

 

“Non-Excluded Taxes” shall have the meaning setforth in Section 7(a) hereof.

 

“Nondefaulting Party” shall have the meaningset forth in Section 29 hereof.

 

“Obligations” shall mean(a) any amounts due and payable by the Sellers to Buyer in connection with aTransaction hereunder, together with interest thereon (including interest whichwould be payable as post-petition interest in connection with any bankruptcy orsimilar proceeding) and all other fees or expenses which are payable hereunderor under any of the Repurchase Documents and (b) all other obligations oramounts due and payable by the Sellers to the Buyer or an Affiliate of Buyerunder any other contract or agreement.

 

“Other Taxes” shall have the meaning set forthin Section 7(b) hereof.

 

“Payment Date” shall mean the first day of eachmonth, or if such date is not a Business Day, the Business Day immediatelypreceding the first day of the month.

 

“PBGC” shall mean the Pension Benefit GuarantyCorporation or any entity succeeding to any or all of its functions underERISA.

 

“Periodic Advance Repurchase Payment” shallhave the meaning specified in Section 5(a).

 

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

 

“Plan” shall mean, with respect to any Person,any employee benefit or similar plan that is or was at any time during thecurrent year or immediately preceding five years established or maintained bysuch Person or any ERISA Affiliate thereof and that is covered by Title IV ofERISA, other than a Multiemployer Plan.

 

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“Pledge Instruments” shall mean, with respectto each Co-op Loan, the Stock Power, the Assignment of the Proprietary Lease,the Assignment of the Mortgage Note and the Assignment of Lease Agreement.

 

“PMI Policy” shall mean a policy of primarymortgage guaranty insurance issued by a Qualified Insurer, as required by thisRepurchase Agreement with respect to certain Mortgage Loans.

 

“Post-Default Rate” shall mean a rate equal tothe sum of (a) the Pricing Rate plus (b) [•]* percent ([•]*%).

 

“Price Differential” shall mean, with respectto any Transaction hereunder as of any date, the aggregate amount obtained bydaily application of the Pricing Rate (or, during the continuation of an Eventof Default, by daily application of the Post-Default Rate) for such Transactionto the Purchase Price for such Transaction on a 360 day per year basis for theactual number of days during the period commencing on (and including) thePurchase Date for such Transaction and ending on (but excluding) the RepurchaseDate (reduced by any amount of such Price Differential previously paid by theSellers to Buyer with respect to such Transaction).

 

“Pricing Rate” shall mean a rate per annumequal to the sum of (a) the LIBOR Rate plus (b) the Pricing Spread.

 

“Pricing Spread” shall mean the respectivepercentages set forth opposite the applicable type of Mortgage Loan:

 
| Conforming  Mortgage Loans             |   | [•] | *% |
|----------------------------------------|--------|----------|----|
| Jumbo Mortgage  Loans                  |   | [•] | *% |
| EC Mortgage  Loans                     |   | [•] | *% |
| HELOCs                                 |   | [•] | *% |
| Super Jumbo  Mortgage Loans            |   | [•] | *% |
| Closed End Second  Lien Mortgage Loans |   | [•] | *% |
| Sub-prime  Mortgage Loans              |   | [•] | *% |
| Co-op Loans                            |   | [•] | *% |
| Aged Mortgage  Loans                   |   | [•] | *% |

 

“Property” shallmean any right or interest in or to property of any kind whatsoever, whetherreal, personal or mixed and whether tangible or intangible.

 

“Proprietary Lease”shall mean the lease on a Co-op Unit evidencing the possessory interest of theowner of the Co-op Shares in such Co-op unit.

 

“Purchase Date”shall mean the date on which Purchased Mortgage Loans are transferred by the Sellersto the Buyer or its designee.

 

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* Confidential portionsomitted and filed separately with the Securities and Exchange Commission.

 

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“Purchase Price”shall mean:

 

### (a)                                  on the Purchase Date, the price at which eachPurchased Mortgage Loan is transferred by the Sellers to Buyer which shallequal the applicable Purchase Price Percentage multiplied by the lesser of (i)the Market Value of such Mortgage Loan on the Purchase Date and (ii) theoutstanding principal balance of the Mortgage Loan; and

###  

### (b)                                 thereafter, except where Buyer and theSellers mutually agree in writing to the contrary, such Purchase Pricedecreased by the amount of any cash, Income and Periodic Advance RepurchasePayments actually received by Buyer pursuant to Section 5 or applied to reducethe Sellers’ obligations under Section 4(b) hereof.

###  

“Purchase Price Increase”shall mean an increase in the Purchase Price for a HELOC based upon a Draw, asrequested by Sellers pursuant to Section 3(c) hereof.

 

“Purchase PricePercentage” shall mean:

 

### (a)                                  With respect Mortgage Loans other than Wet-Ink Mortgage Loans, the respectivepercentages set forth opposite the applicable type of Mortgage Loan:

###  

| Closed End  Second Lien    |   | [•] | *% |
|----------------------------|--------|----------|----|
| Aged Mortgage  Loan        |   | [•] | *% |
| Sub-prime  Mortgage Loan   |   | [•] | *% |
| Co-op Loan                 |   | [•] | *% |
| HELOC                      |   | [•] | *% |
| Super Jumbo  Mortgage Loan |   | [•] | *% |
| Conforming  Mortgage Loan  |   | [•] | *% |
| Jumbo Mortgage  Loan       |   | [•] | *% |
| EC Mortgage Loan           |   | [•] | *% |

###  

### (b)                                 Withrespect Mortgage Loans that are Wet-Ink Mortgage Loans, the respectivepercentages set forth opposite the applicable type of Wet-Ink Mortgage Loan:

###  

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* Confidential portionsomitted and filed separately with the Securities and Exchange Commission.

###  

### 17

### 

###  

| Closed End  Second Lien    |   | [•] | *% |
|----------------------------|--------|----------|----|
| Sub-prime  Mortgage Loan   |   | [•] | *% |
| Co-op Loan                 |   | [•] | *% |
| HELOC                      |   | [•] | *% |
| Super Jumbo  Mortgage Loan |   | [•] | *% |
| Conforming  Mortgage Loan  |   | [•] | *% |
| Jumbo Mortgage  Loan       |   | [•] | *% |
| EC Mortgage Loan           |   | [•] | *% |

###  

“Purchased MortgageLoan Report” shall mean a report, delivered with each Transaction Request,on Friday of each week (or if such date is not a Business Day, the nextpreceding Business Day), or upon the request of the Buyer, including a MortgageLoan Schedule in the form of Exhibit V hereto, setting forth informationwith respect to the Purchased Mortgage Loans (and Mortgage Loans proposed to bethe subject of a Transaction on the related Purchase Date, if applicable).

 

“Purchased MortgageLoans” shall mean the Mortgage Loans sold by the Sellers to Buyer in aTransaction, and any Additional Purchased Mortgage Loans as evidenced by aConfirmation and a Trust Receipt.

 

“Qualified Insurer”shall mean a mortgage guaranty insurance company duly authorized and licensedwhere required by law to transact mortgage guaranty insurance business andacceptable under the Underwriting Guidelines.

 

“Rating Agency”shall mean any of S&P, Moody’s or Fitch.

 

“RecognitionAgreement” shall mean, an agreement among a Co-op Corporation, a lender anda Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledgethat such lender may make, or intends to make, such Co-op Loan, and (ii) makecertain agreements with respect to such Co-op Loan.

 

“Records” shallmean all instruments, agreements and other books, records, and reports and datagenerated by other media for the storage of information maintained by anySeller or any other person or entity with respect to a Purchased Mortgage Loan.Records shall include the Mortgage Notes, any Mortgages, the Mortgage Files,the credit files related to the Purchased Mortgage Loan and any otherinstruments necessary to document or service a Mortgage Loan.

 

“Regulations T, U andX” shall mean Regulations T, U and X of the Board of Governors ofthe Federal Reserve System (or any successor), as the same may be modified andsupplemented and in effect from time to time.

 

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* Confidential portionsomitted and filed separately with the Securities and Exchange Commission.

 

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“REIT” shall meana real estate investment trust, as defined in Section 856 of the Code, as maybe amended from time to time.

 

“Reportable Event”shall mean any of the events set forth in Section 4043(c) of ERISA, otherthan those events as to which the thirty day notice period is waived undersubsections .21, .22, .24, .26, .27 or .28 of PBGC Reg.  § 4043.

 

“Repurchase Agreement”shall mean this Amended and Restated Master Repurchase Agreement between Buyerand the Sellers, dated as of the date hereof as the same may be furtheramended, supplemented or otherwise modified in accordance with the termshereof.

 

“Repurchase Assets”shall have the meaning provided in Section 8 hereof.

 

“Repurchase Date”shall mean the date on which the Sellers are to repurchase the PurchasedMortgage Loans subject to a Transaction from Buyer as specified in the relatedConfirmation, or if not so specified in the related Confirmation on a daterequested pursuant to Section 3(d) or on the Termination Date, includingany date determined by application of the provisions of Sections 3or 14, or the date identified to Buyer by the Sellers as the date that therelated Mortgage Loan is to be sold pursuant to a Take-out Commitment.

 

“Repurchase Documents”shall mean this Repurchase Agreement, the Custodial Agreement, the ElectronicTracking Agreement, if applicable, a Servicer Notice, if any, the DisbursementAgreement, the Account Agreement and the Settlement Account Control Agreement.

 

“Repurchase Price”shall mean the price at which Purchased Mortgage Loans are to be transferredfrom Buyer or its designee to the Sellers upon termination of a Transaction,which will be determined in each case (including Transactions terminable upondemand) as the sum of the Purchase Price and the Price Differential as of thedate of such determination.

 

“Requirement of Law”shall mean as to any Person, the certificate of incorporation and by-laws orother organizational or governing documents of such Person, and any law,treaty, rule, regulation, procedure or determination of an arbitrator or acourt or other Governmental Authority, in each case applicable to or bindingupon such Person or any of its property or to which such Person or any of itsProperty is subject.

 

“Responsible Officer”shall mean an officer of a Seller listed on Exhibit XI hereto, as such ExhibitXI may be amended from time to time by such Seller providing written noticeto Buyer.

 

“Reset Date” shallmean the last day of the related LIBOR Period.

 

“S&P” shallmean Standard & Poor’s Ratings Services, or any successor thereto.

 

“SEC” shall meanthe Securities Exchange Commission.

 

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“Second Lien MortgageLoan” shall mean a Mortgage Loan secured by a second lien on the relatedMortgaged Property.

 

“Seller” shallmean each of MortgageIT and Holdings or any successor in interest thereto.

 

“Servicer” shallmean the MortgageIT, or any successor or permitted assigns or other Personwhich serves as a sub-servicer to any Seller.

 

“Servicer Notice”shall mean the notice acknowledged by the Servicer substantially in the form ofExhibit IX hereto.

 

“Servicing Agreement”shall mean any servicing agreement entered into among a Seller and a Servicer,as the same may be amended from time to time.

 

“Settlement Account”shall have the meaning set forth in the Custodial Agreement.

 

“Settlement AccountAgreement” shall mean the Amended and Restated Settlement Account ControlAgreement entered into among the Buyer, the Sellers and the Custodian, dated asof August 4, 2004 as the same may be amended, supplemented or otherwisemodified from time to time in accordance with its terms.

 

“Single-Employer Plan”shall mean a single-employer plan as defined in Section 4001(a)(15) of ERISAwhich is subject to the provisions of Title IV of ERISA.

 

“StockCertificate” shall mean, with respect to a Co-op Loan, the certificatesevidencing ownership of the Co-op Shares issued by the Co-op Corporation.

 

“Stock Power” shallmean, with respect to a Co-op Loan, an assignment of the Stock Certificate oran assignment of the Co-op Shares issued by the Co-op Corporation.

 

“Sub-prime Mortgage Loan”shall mean a first lien Mortgage Loan originated in accordance with Sellers’Underwriting Guidelines for sub-prime mortgage loans, acceptable to Buyer inits sole discretion, that either (a) will be sold or securitized by the Sellersor (b) is subject to a Takeout Commitment.”

 

“Subsidiary” shallmean, with respect to any Person, any corporation, partnership or other entityof which at least a majority of the securities or other ownership interestshaving by the terms thereof ordinary voting power to elect a majority of theboard of directors or other persons performing similar functions of suchcorporation, partnership or other entity (irrespective of whether or not at thetime securities or other ownership interests of any other class or classes ofsuch corporation, partnership or other entity shall have or might have votingpower by reason of the happening of any contingency) is at the time directly orindirectly owned or controlled by such Person or one or more Subsidiaries ofsuch Person or by such Person and one or more Subsidiaries of such Person.

 

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“Super Jumbo MortgageLoan” shall mean a Jumbo Mortgage Loan with an unpaid principal balance inexcess of $1,000,000 but not greater than $2,000,000, and which is subject to aTakeout Commitment from Merrill Lynch Credit Corp.

 

“Takeout Commitment”means a commitment of a Seller to sell one or more Mortgage Loans to a TakeoutInvestor, and the corresponding Takeout Investor’s commitment back to a Sellerto effectuate the foregoing.

 

“Takeout Investor”  shall mean any institution which has made aTakeout Commitment and has been approved by Buyer, which approval shall not beunreasonably withheld or delayed.

 

“Tangible Net Worth”shall mean, for any Person, the Net Worth of such Person determined in accordance with GAAP minus allintangible assets, including goodwill, patents, tradenames, trademarks,copyrights, franchises, any organizational expenses, deferred expenses,receivables from shareholders, Affiliates or employees, and any other asset asshown as an intangible asset on the balance sheet of such Person on aconsolidated basis as determined at a particular date in accordance with GAAP.

 

“Taxes” shall havethe meaning set forth in Section 7(a) hereof.

 

“Termination Date”shall mean August 3, 2005.

 

“Termination Event”shall have the meaning set forth in Section 13.02 hereof.

 

“Test Period”shall mean any period of three (3) consecutive months.

 

“Transaction”shall have the meaning specified in Section 1.

 

“Transaction Request”shall mean a request from a Seller to Buyer to enter into a Transaction.

 

“Trust Receipt”shall have the meaning set forth in the Custodial Agreement, and shall includeany Wet-Ink Trust Receipt (as such term is defined in the Custodial Agreement).

 

“UnderwritingGuidelines” shall mean the underwriting guidelines of MortgageIT which havebeen delivered to the Buyer on or prior to the Effective Date of thisRepurchase Agreement, as such underwriting guidelines may be amended from timeto time in conformity with the terms and conditions of this RepurchaseAgreement.

 

“Uniform CommercialCode” shall mean the Uniform Commercial Code as in effect from time to timein the State of New York; provided that if by reason of mandatory provisions oflaw, the perfection or the effect of perfection or non-perfection of thesecurity interest in any Repurchase Assets or the continuation, renewal orenforcement thereof is governed by the Uniform Commercial Code as in effect ina jurisdiction other than New York, “Uniform Commercial Code” shall mean theUniform Commercial Code as in effect in such other jurisdiction for purposes ofthe provisions hereof relating to such perfection or effect of perfection ornon-perfection.

 

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“VA” shall meanthe U.S. Department of Veterans Affairs, an agency of the United States ofAmerica, or any successor thereto including the Secretary of Veterans Affairs.

 

“VA Approved Lender”shall mean a lender which is approved by the VA to act as a lender inconnection with the origination of VA Loans.

 

“VA Loan” shallmean a Mortgage Loan which is subject of a VA Loan Guaranty Agreement asevidenced by a VA Loan Guaranty Agreement, or a Mortgage Loan which is a venderloan sold by the VA.

 

“VA Loan GuarantyAgreement” shall mean the obligation of the United States to pay a specificpercentage of a Mortgage Loan (subject to a maximum amount) upon default of theMortgagor pursuant to the Servicemen’s Readjustment Act, as amended.

 

“Wet-Ink FundingAccount” shall mean an account established in the name of the Sellers,subject to the dominion and control of the Buyer, at the Disbursement Agentpursuant to the terms of the Disbursement Agreement.

 

“Wet-Ink Mortgage Loan”shall mean a Mortgage Loan which any Seller is selling to Buyer simultaneouslywith the origination thereof and for which the Mortgage Loan Documents have notbeen delivered to the Custodian.

 

“Wiring Schedule”shall mean, for each Wet-Ink Mortgage Loan, a schedule setting forth the loanidentification number, the loan amount to be funded by wire transfer and wiringdirections for such Wet-Ink Mortgage Loan.

 

# **SECTION 3.**                                      INITIATION; TERMINATION

# ** **

### (a)                                  ConditionsPrecedent to Initial Transaction. Buyer’s agreement to enter into the initial Transaction hereunder issubject to the satisfaction, immediately prior to or concurrently with themaking of such Transaction, of the condition precedent that Buyer shall havereceived from the Sellers any fees and expenses payable hereunder, and all ofthe following documents, each of which shall be satisfactory to Buyer and itscounsel in form and substance:

###  

#### (i)                                     Thefollowing Repurchase Documents delivered to the Buyer:

####  

##### (A)                              RepurchaseAgreement.  This RepurchaseAgreement, duly executed by the parties thereto;

#####  

##### (B)                                CustodialAgreement.  The Custodial Agreement,duly executed by the parties thereto;

#####  

##### (C)                                AccountAgreement.  An Account Agreement,duly executed by the parties thereto in form and substance acceptable to theBuyer;

#####  

##### (D)                               SettlementAccount Agreement.  A SettlementAccount Agreement, duly executed by the parties thereto in form and substanceacceptable to the Buyer;

#####  

##### 22

##### 

#####  

##### (E)                                 ElectronicTracking Agreement.  To the extentthe Sellers are selling Mortgage Loans which are registered on the MERS®System, an Electronic Tracking Agreement entered into, duly executed and deliveredby the parties thereto, in full force and effect, free of any modification,breach or waiver; and

#####  

##### (F)                                 DisbursementAgreement.  A DisbursementAgreement, duly executed by the parties thereto in form and substanceacceptable to the Buyer; and the establishment thereunder of all accounts,computer systems and agreements with the Disbursement Agent necessary fordisbursing the Purchase Price related to Wet-Ink Mortgage Loans.

#####  

#### (ii)                                  Opinionsof Counsel. An opinion or opinions of outside counsel to the Sellers,substantially in the form of Exhibit II.

####  

#### (iii)                               Seller OrganizationalDocuments.  A certificate ofcorporate existence of each Seller delivered to Buyer prior to the EffectiveDate (or if unavailable, as soon as available thereafter) and certified copiesof the charter and by-laws (or equivalent documents) of such Seller and of allcorporate or other authority for such Seller with respect to the execution,delivery and performance of the Repurchase Documents and each other document tobe delivered by such Seller from time to time in connection herewith.

####  

#### (iv)                              SecurityInterest.  Evidence that all otheractions necessary or, in the opinion of Buyer, desirable to perfect and protectBuyer’s interest in the Purchased Mortgage Loans and other Repurchase Assetshave been taken, including, without limitation, UCC searches and dulyauthorized and filed Uniform Commercial Code financing statements onForm UCC-1.

####  

#### (v)                                 UnderwritingGuidelines.  A true and correct copyof the Underwriting Guidelines certified by an officer of MortgageIT.

####  

#### (vi)                              Insurance.  Evidence that Sellers have added Buyer as anadditional insured under their Fidelity Insurance.

####  

#### (vii)                           Other Documents.  Such other documents as Buyer may reasonablyrequest, in form and substance reasonably acceptable to Buyer.

####  

### (b)                                 ConditionsPrecedent to all Transactions.  Upon satisfaction of the conditions set forthin this Section 3(b), the Buyer shall enter into a Transaction with aSeller.  This Repurchase Agreement is acommitment by Buyer to engage in the Transactions as set forth herein up to theMaximum Committed Purchase Price; provided, that the Buyer shall have nocommitment to enter into any Transaction requested which would result in theaggregate Purchase Price of then outstanding Transactions to exceed the MaximumCommitted Purchase Price.  Buyer’sobligation to enter into each Transaction, provided that the Purchase Price ofthe requested Transaction combined with the aggregate amount of the respectivePurchase Prices for all then outstanding Transactions does not exceed theMaximum Committed Purchase Price (including the initial Transaction) is subjectto the satisfaction of the following further conditions

 

23

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precedent, both immediately prior to entering into such Transaction andalso after giving effect thereto to the intended use thereof:

###  

#### (i)                                     Buyershall have executed and delivered a Confirmation in accordance with theprocedures set forth in Section 3(c);

####  

#### (ii)                                  NoTermination Event, Default or Event of Default shall have occurred and becontinuing under the Repurchase Documents;

####  

#### (iii)                               Both immediately priorto the Transaction and also after giving effect thereto and to the intended usethereof, the representations and warranties made by the each Seller inSection 11 hereof, shall be true, correct and complete on and as of suchPurchase Date in all material respects with the same force and effect as ifmade on and as of such date (or, if any such representation or warranty isexpressly stated to have been made as of a specific date, as of such specificdate);

####  

#### (iv)                              After giving effect to the requestedTransaction, the aggregate outstanding Purchase Price for all PurchasedMortgage Loans subject to then outstanding Transactions under this RepurchaseAgreement shall not exceed the Maximum Purchase Price.  Notwithstanding the preceding sentence,Buyer shall have no obligation to enter into any Transaction, if, as a resultof such Transaction the aggregate Purchase Price for all Purchased Mortgage Loanssubject to then outstanding Transactions under this Agreement exceed theMaximum Committed Purchase Price;

####  

#### (v)                                 Aftergiving effect to the requested Transaction, the Asset Value of all PurchasedMortgage Loans exceeds the aggregate Repurchase Price for such Transactions;

####  

#### (vi)                              Onor prior to 5:30 p.m. (New York Time) one (1) day prior to the related PurchaseDate, each applicable Seller shall have delivered to the Buyer (a) aTransaction Request, and (b) a Purchased Mortgage Loan Report;

####  

#### (vii)                           With respect to Transactionsthe subject of which are Wet-Ink Mortgage Loans:

####  

##### (A)                              Atleast one Business Day prior to the related Purchase Date, the Buyer shall havereceived a Transaction Request;

#####  

##### (B)                                By12:00 noon (New York time) on the related Purchase Date, the Custodian shallhave received from the Buyer a schedule setting forth the mortgage loanidentification number, the Mortgagor name and the outstanding principal balanceof Wet-Ink Mortgage Loans to be purchased by Buyer on such Purchase Date; and

#####  

##### (C)                                TheCustodian and the Buyer shall have received a Wiring Schedule setting forth thedisbursement amount and wiring instructions for each Wet-Ink Mortgage Loan.

#####  

##### 24

##### 

#####  

#### (viii)                        The Sellers shall havedelivered to the Custodian the Mortgage File with respect to each PurchasedMortgage Loan which is not a Wet-Ink Mortgage Loan and the Custodian shall haveissued a Trust Receipt with respect to each such Purchased Mortgage Loan to theBuyer and (B) with respect to each Wet-Ink Mortgage Loan, by no later than 5:00p.m. (New York Time) on the seventh Business Day following the applicablePurchase Date, the Sellers shall deliver the Mortgage File to the Custodian;

####  

#### (ix)                                TheBuyer shall have received all fees and expenses of counsel to the Buyer ascontemplated by Sections 15(b) and 27 which amounts, at the Buyer’soption, may be withheld from the proceeds remitted by Buyer to the Sellerspursuant to any Transaction hereunder;

####  

#### (x)                                   Noneof the following shall have occurred and/or be continuing:

####  

##### (A)                              anevent or events shall have occurred in the good faith determination of theBuyer resulting in the effective absence of a “repo market” or comparable“lending market” for financing debt obligations secured by securities or an eventor events shall have occurred resulting in the Buyer not being able to financePurchased Mortgage Loans through the “repo market” or “lending market” withtraditional counterparties at rates which would have been reasonable prior tothe occurrence of such event or events; or

#####  

##### (B)                                thereshall have occurred a material adverse change in the financial condition of theBuyer which affects (or can reasonably be expected to affect) materially andadversely the ability of the Buyer to fund its obligations under thisRepurchase Agreement; or

#####  

#### (xi)                                EachTransaction Request delivered by a Seller hereunder shall constitute acertification by such Seller that all the conditions set forth in thisSection 3(b) (other than clause (x) hereof) have been satisfied (both asof the date of such notice or request and as of the date of such purchase).

####  

### (c)                                  Initiation;Confirmation.

###  

#### (i)                                     EachSeller shall deliver a Transaction Request to the Buyer on or prior to 5:30p.m. on the date one (1) Business Day prior to entering into any Transaction(including Transactions resulting in a Purchase Price Increase, which shall notbe requested more than once per month). Such Transaction Request shall include a Mortgage Loan Schedule withrespect to the Mortgage Loans to be sold in such requested Transaction.  Following receipt of such request, Buyer mayagree to enter into such requested Transaction or shall notify such Seller ofits intention not to enter into such Transaction within one (1) Business Day ofthe receipt of any Transaction Request. Buyer shall confirm the terms of each Transaction by issuing a writtenconfirmation to each Seller promptly after the parties enter into suchTransaction in the form of Exhibit I attached hereto (a “Confirmation”).  Such Confirmation shall set forth(A) the Purchase Date, (B) the Purchase Price or Purchase PriceIncrease, as applicable, (C) the Repurchase Date, (D) the PricingRate applicable to the Transaction, (E) the applicable

####  

#### 25

#### 

####  

#### Purchase PricePercentages, (F) LIBOR Period and (G) additional terms or conditions notinconsistent with this Repurchase Agreement.

####  

#### (ii)                                  TheRepurchase Date for each Transaction shall not be later than the date which is364 days after the related Purchase Date. The LIBOR Period for each Transaction shall be one month, unless agreedto in writing by the Buyer.

####  

#### (iii)                               Each Confirmation,together with this Repurchase Agreement, shall be conclusive evidence of theterms of the Transaction(s) covered thereby unless objected to in writing bythe Sellers no more than two (2) Business Days after the date theConfirmation was received by the Sellers or unless a corrected Confirmation issent by Buyer.  An objection sent by theSellers must state specifically that writing which is an objection, mustspecify the provision(s) being objected to by the Sellers, must set forth suchprovision(s) in the manner that the Sellers believe they should be stated, andmust be received by Buyer no more than two (2) Business Days after theConfirmation was received by the Sellers.

####  

#### (iv)                              Subjectto the terms and conditions of this Repurchase Agreement, during such periodthe Sellers may sell, repurchase and resell Eligible Mortgage Loans hereunder.

####  

#### (v)                                 Inno event shall a Transaction be entered into when the Repurchase Date for suchTransaction would be later than the Termination Date.

####  

#### (vi)                              Nolater than 3 p.m., New York City time, on the Business Day prior to therequested Purchase Date, the Sellers shall deliver to the Custodian theMortgage Loan File pertaining to each Eligible Mortgage Loan (other than aWet-Ink Mortgage Loan) to be purchased by the Buyer.

####  

#### (vii)                           With respect to Transactionsthe subject of which are Wet-Ink Mortgage Loans:

####  

##### (A)                              Nolater than 5:30 p.m. (New York time) on the Business Day prior to the relatedPurchase Date, the Buyer shall have received a report detailing the approximateoutstanding principal balance of Wet-Ink Mortgage Loans to be purchased by theBuyer on such Purchase Date and the Estimated Purchase Price.

#####  

##### (B)                                Onor before the Purchase Date, the Buyer shall have received (a) a schedulesetting forth the mortgage loan identification number, the Mortgagor name andthe approximate outstanding principal balance of Wet-Ink Mortgage Loans to bepurchased by Buyer on such Purchase Date, and (b) an updated report settingforth the approximate outstanding principal balance of Wet-Ink Mortgage Loansto be purchased by the Buyer on such Purchase Date and the amount of the ActualPurchase Price.  On the Purchase Date,the Buyer shall remit the amount of the Estimated Purchase Price directly tothe Wet-Ink Funding Account to be disbursed by the Disbursement Agent inaccordance with the Disbursement Agreement.

#####  

##### 26

##### 

#####  

##### (C)                                Withrespect to Wet-Ink Mortgage Loans which are being purchased in whole or in partby means of wire transfer, on or prior to the related Purchase Date, theCustodian shall have received the Wiring Schedule related to such Wet-InkMortgage Loans.  Upon receipt by theBuyer of the Wiring Schedule, the Buyer shall forward the Wiring Schedule anddirect the Disbursement Agent to wire the related funding amount to eachMortgagor from the Wet-Ink Funding Account.

#####  

##### (D)                               Notwithstandingthe foregoing, the full amount of the Estimated Purchase Price shall be deemedto have been made on the Purchase Date for all purposes hereunder.

#####  

##### (E)                                 Uponreceipt of the final Wiring Schedule with respect to any Purchase Date, theBuyer shall determine the amount, if any, by which the Estimated Purchase Pricedeposited in the Wet-Ink Funding Account exceeds the Actual Purchase Price(such amount, the “Overestimate Amount”).  The Buyer shall cause the Disbursement Agent to promptly wiresuch Overestimate Amount directly to the Buyer as a prepayment of theTransaction made on such Purchase Date.

#####  

#### (viii)                        Subject to the provisions ofthis Section 3, the Purchase Price or Purchase Price Increase, asapplicable, will then be made available to the Sellers by the Buyertransferring, via wire transfer, in the aggregate amount of such Purchase Priceor Purchase Price Increase, as applicable, in funds immediately available.

####  

#### (ix)                                Sellersmay request a Purchase Price Increase not more than once per month on accountof a Draw made by a Mortgagor on the related HELOC.  The Buyer shall not be obligated to fund such Purchase PriceIncrease if a Margin Deficit exists or would exist as a result thereof.

####  

### (d)                                 Repurchase

###  

#### (i)                                     TheSellers may repurchase Purchased Mortgage Loans without penalty or premium onany date.  The Repurchase Price payablefor the repurchase of any such Purchased Mortgage Loan shall be reduced asprovided in Section 5(d).  If theSellers intend to make such a repurchase, the Sellers shall give prior writtennotice thereof by 10:00 a.m. on the same Business Day to the Buyer, designatingthe Purchased Mortgage Loans to be repurchased.  If such notice is given, the amount specified in such noticeshall be due and payable on the date specified therein, and, on receipt, suchamount shall be applied to the Repurchase Price for the designated PurchasedMortgage Loans.

####  

#### (ii)                                  Onthe Repurchase Date, termination of the Transaction will be effected byreassignment to a Seller or its designee of the Purchased Mortgage Loans (andany Income in respect thereof received by Buyer not previously credited ortransferred to, or applied to the obligations of, the Sellers pursuant toSection 5) against the simultaneous transfer of the Repurchase Price to anaccount of Buyer.  The Sellers areobligated to

####  

#### 27

#### 

####  

#### obtain theMortgage Files from Buyer or its designee at the Sellers’ expense on theRepurchase Date.

####  

# **SECTION 4.**                                      MARGIN AMOUNT MAINTENANCE

# ** **

### (a)                                  TheBuyer shall determine the Asset Value of the Purchased Mortgage Loans on aweekly basis, or at such intervals as determined by the Buyer in its sole goodfaith discretion.

###  

### (b)                                 Ifat any time the aggregate Asset Value of all related Purchased Mortgage Loanssubject to all Transactions is less than the aggregate Repurchase Price for allsuch Transactions (a “Margin Deficit”), then Buyer may by notice to theSellers (as such notice is more particularly set forth below, a “Margin Call”),require the Sellers to transfer to Buyer or its designee cash or EligibleMortgage Loans approved by the Buyer in its sole good faith discretion (“AdditionalPurchased Mortgage Loans”) so that the aggregate Asset Value of thePurchased Mortgage Loans, including any such cash or Additional PurchasedMortgage Loans or cash, will thereupon equal or exceed the aggregate RepurchasePrice for all Transactions. If Buyer delivers a Margin Call to the Sellers onor prior to 5 p.m. (New York City time) on any Business Day, then the Sellersshall transfer cash or Additional Purchased Mortgage Loans to Buyer no laterthan 5 p.m. (New York City time) on the subsequent Business Day.

###  

### (c)                                  Buyer’selection, in its sole and absolute discretion, not to make a Margin Call at anytime there is a Margin Deficit shall not in any way limit or impair its rightto make a Margin Call at any time a Margin Deficit exists.

###  

### (d)                                 Anycash transferred to the Buyer pursuant to Section 4(b) above shall be creditedto the Repurchase Price of the related Transactions.

###  

# **SECTION 5.**                                      INCOMEPAYMENTS

# ** **

### (a)                                  Notwithstandingthat Buyer and the Sellers intend that the Transactions hereunder be sales toBuyer of the Purchased Mortgage Loans, the Sellers shall pay to Buyer theaccreted value of the Price Differential (less any amount of such PriceDifferential previously paid by the Sellers to Buyer) plus the amount of anyunpaid Margin Deficit (each such payment, a “Periodic Advance RepurchasePayment”) on each Payment Date, as invoiced by the Buyer on the relatedPayment Date.  The Sellers shallinitiate wire payment of the Periodic Advance Repurchase Payment within two (2)hours of receipt of such invoice on the related Payment Date.  If the Sellers fail to make all or part ofthe Periodic Advance Repurchase Payment in accordance with the previous sentence,the Pricing Rate shall be equal to the Post-Default Rate until the PeriodicAdvance Repurchase Payment is received in full by Buyer.

###  

### (b)                                 TheSellers shall hold for the benefit of, and in trust for, Buyer all income,including without limitation all Income received by or on behalf of the Sellerswith respect to such Purchased Mortgage Loans. All Income shall be held in trust for Buyer, shall constitute theproperty of Buyer.  With respect to eachPayment Date, the Sellers shall remit all Income as follows:

###  

### 28

### 

###  

#### (i)                                     first,to the payment of all costs and fees payable by the Sellers pursuant to thisRepurchase Agreement;

####  

#### (ii)                                  second,to the Buyer in payment of any accrued and unpaid Price Differential; and

####  

#### (iii)                               third, without limitingthe rights of Buyer under Section 4 of this Repurchase Agreement, to the Buyer,in the amount of any unpaid Margin Deficit.

####  

### (c)                                  Afterthe occurrence of an Event of Default, the Sellers shall deposit such Income ina deposit account (the title of which shall indicate that the funds therein arebeing held in trust for Buyer) (the “Collection Account”) with afinancial institution acceptable to Buyer and subject to the AccountAgreement.  All such Income shall beheld in trust for Buyer, shall constitute the property of Buyer and shall notbe commingled with other property of the Sellers or any Affiliate of theSellers except as expressly permitted above. Funds deposited in the Collection Account during any month shall be heldtherein, in trust for the Buyer, until the next Payment Date.  Subject to the terms of the AccountAgreement, the Sellers shall withdraw any funds on deposit in the CollectionAccount and apply such funds as follows:

###  

#### (i)                                     first,to the payment of all costs and fees payable by the Sellers pursuant to thisRepurchase Agreement;

####  

#### (ii)                                  second,to the Buyer in payment of any accrued and unpaid Price Differential;

####  

#### (iii)                               third, without limitingthe rights of Buyer under Section 4 of this Repurchase Agreement, to theBuyer, in the amount of any unpaid Margin Deficit; and

####  

#### (iv)                              fourth,to the Sellers.

####  

### (d)                                 Tothe extent that the Buyer receives any funds from a Takeout Investor withrespect to the purchase by such Takeout Investor of a Mortgage Loan, the Buyershall promptly apply such funds in accordance with the same order of priorityset forth in Section 5(b) hereof.

###  

### (e)                                  Buyershall offset against the Repurchase Price of each such Transaction all Incomeand Periodic Advance Repurchase Payments actually received by Buyer pursuant toSection 5(a), excluding any Late Payment Fees paid pursuant to any PeriodicAdvance Repurchase Payments made at the Post-Default Rate pursuant to Section5(a).

###  

# **SECTION 6.**                                      REQUIREMENTS OF LAW

# ** **

### (a)                                  Ifany Requirement of Law (other than with respect to any amendment made to theBuyer’s certificate of incorporation and by-laws or other organizational orgoverning documents) or any change in the interpretation or application thereofor compliance by the Buyer with any request or directive (whether or not havingthe force of law) from any central bank or other Governmental Authority madesubsequent to the date hereof:

###  

### 29

### 

###  

#### (i)                                     shallsubject the Buyer to any tax of any kind whatsoever with respect to thisRepurchase Agreement or any Transaction (excluding net income taxes, branchprofits taxes, franchise taxes or similar taxes imposed on the Buyer as aresult of any present or former connection between the Buyer and the UnitedStates, other than any such connection arising solely from the Buyer havingexecuted, delivered or performed its obligations or received a payment under,or enforced, this Repurchase Agreement) or change the basis of taxation ofpayments to the Buyer in respect thereof;

####  

#### (ii)                                  shallimpose, modify or hold applicable any reserve, special deposit, compulsory loanor similar requirement against assets held by, deposits or other liabilities inor for the account of, advances, or other extensions of credit by, or any otheracquisition of funds by, any office of the Buyer which is not otherwiseincluded in the determination of the LIBOR Rate hereunder;

####  

#### (iii)                               shall impose on theBuyer any other condition;

####  

and the result of any ofthe foregoing is to increase the cost to the Buyer, by an amount which theBuyer determines in good faith to be material, of entering, continuing ormaintaining any Transaction or to reduce any amount due or owing hereunder inrespect thereof, then, in any such case, the Sellers shall promptly pay theBuyer such additional amount or amounts as calculated by the Buyer in goodfaith as will compensate the Buyer for such increased cost or reduced amountreceivable.

 

### (b)                                 Ifthe Buyer shall have determined that the adoption of or any change in anyRequirement of Law (other than with respect to any amendment made to theBuyer’s certificate of incorporation and by-laws or other organizational orgoverning documents) regarding capital adequacy or in the interpretation orapplication thereof or compliance by the Buyer or any corporation controllingthe Buyer with any request or directive regarding capital adequacy (whether ornot having the force of law) from any Governmental Authority made subsequent tothe date hereof shall have the effect of reducing the rate of return on theBuyer’s or such corporation’s capital as a consequence of its obligationshereunder to a level below that which the Buyer or such corporation could haveachieved but for such adoption, change or compliance (taking into considerationthe Buyer’s or such corporation’s policies with respect to capital adequacy) byan amount determined in good faith by the Buyer to be material, then from timeto time, the Sellers shall promptly pay to the Buyer such additional amount oramounts as will compensate the Buyer for such reduction.

###  

### (c)                                  Ifthe Buyer becomes entitled to claim any additional amounts pursuant to thisSection, it shall promptly notify the Sellers of the event by reason of whichit has become so entitled.  Acertificate as to any additional amounts payable pursuant to this Section submittedby the Buyer to the Sellers shall be conclusive in the absence of manifesterror.

###  

### (d)                                 Noamount shall be payable by either Seller under this Section 6 with respectto any period in excess of ninety (90) days prior to the date of demand by theBuyer unless the effect of a change in the interpretation or application of theRequirement of Law is retroactive by its terms to a period prior to the date ofthe change in interpretation or application of the Requirement of Law, in whichcase any additional amount or amounts shall be payable for the

 

30

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retroactive period but only if the Buyer provides its written demandnot later than ninety (90) days after the change in the interpretation orapplication of the Requirement of Law.

###  

# **SECTION 7.**                                      TAXES.

# ** **

### (a)                                  Allpayments made by the Seller under this Repurchase Agreement shall be made freeand clear of, and without deduction or withholding for, or on account of, anypresent or future taxes, levies, imposts, deductions, charges or withholdings,and all liabilities (including penalties, interest and additions to tax) withrespect thereto imposed by any Governmental Authority thereof or therein (“Taxes”),excluding income taxes, branch profits taxes, franchise taxes or similartaxes imposed on the Buyer as a result of any present or former connectionbetween the Buyer and the United States, other than any such connection arisingsolely from the Buyer having executed, delivered or performed its obligationsor received a payment under, or enforced, this Repurchase Agreement (all suchnonexcluded Taxes, “Non-Excluded Taxes”).  If the Seller shall be required to deduct or withhold any Taxesfrom or in respect of any amount payable hereunder, (i) the Seller shall makesuch deductions or withholdings, (ii) the Seller shall pay the full amountdeducted or withheld to the relevant Governmental Authority in accordance withapplicable law, and (iii) with respect to any Non-Excluded Taxes, the amountpayable shall be increased by an amount (the “additional amount”)necessary so that the Buyer, shall receive a net amount equal to the amount itwould have received had no such deductions or withholdings in respect ofNon-Excluded Taxes been made.

###  

### (b)                                 Inaddition, the Seller agrees to pay to the relevant Governmental Authority inaccordance with applicable law any current or future stamp or documentary taxesor any other excise or property taxes, charges or similar levies (including,without limitation, mortgage recording taxes and similar fees) imposed by theUnited States or any taxing authority thereof or therein that arise from anypayment made hereunder or from the execution, delivery or registration of, orotherwise with respect to, this Repurchase Agreement (“Other Taxes”)

###  

### (c)                                  TheSeller will indemnify the Buyer for the full amount of Non-Excluded Taxes(including additional amounts with respect thereto) and Other Taxes paid by theBuyer, provided that the Buyer shall have provided the Seller withevidence, reasonably satisfactory to the Seller, of payment of Non-ExcludedTaxes or Other Taxes, as the case may be.

###  

### (d)                                 Assoon as practicable after the date of any payment of Taxes or Other Taxes bythe Seller to the relevant Governmental Authority, the Seller will deliver tothe Buyer the original or a certified copy of the receipt issued by suchGovernmental Authority evidencing payment thereof.

###  

### (e)                                  Withoutprejudice to the survival of any other agreement of the Seller hereunder, theagreements and obligations of the Seller contained in this Section 7 shallsurvive the termination of this Repurchase Agreement.  Nothing contained in this Section 7 shall require the Buyer tomake available any of its tax returns or any other information that it deems tobe confidential or proprietary.

###  

### 31

### 

 

# **SECTION 8.**                                      SECURITY INTEREST

# ** **

Although the partiesintend that all Transactions hereunder be sales and purchases (other than foraccounting and tax purposes) and not loans, in the event any such Transactionsare deemed to be loans, each Seller hereby pledges to Buyer as security for theperformance by the Sellers of their Obligations and hereby grants, assigns andpledges to Buyer a fully perfected first priority security interest in thePurchased Mortgage Loans, the Records, and all servicing rights related to thePurchased Mortgage Loans, the Repurchase Documents (to the extent suchRepurchase Documents and such Seller’s right thereunder relate to the PurchasedMortgage Loans), any Property relating to any Purchased Mortgage Loan or therelated Mortgaged Property, any Takeout Commitments relating to any PurchasedMortgage Loan, all insurance policies and insurance proceeds relating to anyPurchased Mortgage Loan or the related Mortgaged Property, including but notlimited to any payments or proceeds under any related primary insurance, hazardinsurance, FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (ifany), any Income relating to any Purchased Mortgage Loan, the CollectionAccount, any Interest Rate Protection Agreements relating to any PurchasedMortgage Loan, and any other contract rights, accounts (including any interestof such Seller in escrow accounts), payments, rights to payment (includingpayments of interest or finance charges) and general intangibles to the extentthat the forgoing relates to any Purchased Mortgage Loan and any other assetsrelating to the Purchased Mortgage Loans or any interest in the PurchasedMortgage Loans, all collateral under any other secured debt facility betweenthe Sellers or their Affiliates on the one hand and the Buyer and the Buyer’sAffiliates on the other, and any proceeds (including the related securitizationproceeds) and distributions and any other property, rights, title or interestsas are specified on a Trust Receipt and Mortgage Loan Schedule and ExceptionReport with respect to any of the foregoing, in all instances, whether nowowned or hereafter acquired, now existing or hereafter created (collectively,the “Repurchase Assets”).

 

The Sellers herebyauthorize the Buyer to file such financing statement or statements relating tothe Repurchase Assets as the Buyer, at its option, may deem appropriate.  The Sellers shall pay the filing costs forany financing statement or statements prepared pursuant to this Section 8.

 

# **SECTION 9.**                                      PAYMENT, TRANSFER AND CUSTODY

# ** **

### (a)                                  Unlessotherwise mutually agreed in writing, all transfers of funds to be made by theSellers hereunder shall be made in Dollars, in immediately available funds,without deduction, set-off or counterclaim, to the Buyer at the followingaccount maintained by the Buyer: Account No. 00812914, for the account of MLMCIMatchbook, Bankers Trust, N.Y., ABA# 021 001 033, not later than 5:00 p.m.New York City time, on the date on which such payment shall become due (andeach such payment made after such time shall be deemed to have been made on thenext succeeding Business Day).  TheSellers acknowledge that they have no rights of withdrawal from the foregoingaccount.

###  

### (b)                                 Onthe Purchase Date for each Transaction, ownership of the Purchased MortgageLoans shall be transferred to the Buyer or its designee against thesimultaneous transfer of the Purchase Price to the following account of theSellers (or as otherwise directed by the Sellers):  Deutsche Bank National Trust Company, AccountNo. 37622, for the accountof

 

32

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Buyer, ABA#0021-001-033.  With respect to thePurchased Mortgage Loans being sold by a Seller on a Purchase Date, each Sellerhereby sells, transfers, conveys and assigns to Buyer or its designee withoutrecourse, but subject to the terms of this Repurchase Agreement, all the right,title and interest of such Seller in and to the Purchased Mortgage Loanstogether with all right, title and interest in and to the proceeds of anyrelated Repurchase Assets.

###  

### (c)                                  Inconnection with such sale, transfer, conveyance and assignment, on or prior toeach Purchase Date, the Sellers shall deliver or cause to be delivered andreleased to Buyer or its designee the Mortgage File for the related PurchasedMortgage Loans.

###  

# **SECTION 10.**                               HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOAN

# ** **

Title to all PurchasedMortgage Loans and Repurchase Assets shall pass to Buyer and Buyer shall havefree and unrestricted use of all Purchased Mortgage Loans.  Nothing in this Repurchase Agreement shallpreclude the Buyer from engaging in repurchase transactions with the PurchasedMortgage Loans or otherwise pledging, repledging, transferring, hypothecating,or rehypothecating the Purchased Mortgage Loans.  Nothing contained in this RepurchaseAgreement shall obligate the Buyer to segregate any Purchased Mortgage Loansdelivered to the Buyer by the Sellers.

 

# **SECTION 11.**                               REPRESENTATIONS

# ** **

Each Seller representsand warrants to the Buyer that as of the Purchase Date for any PurchasedMortgage Loans by the Buyer from the Sellers and as of the date of thisRepurchase Agreement and any Transaction hereunder and at all times while theRepurchase Documents and any Transaction hereunder is in full force and effect:

 

### (a)                                  Actingas Principal.  The Sellers willengage in such Transactions as principals (or, if agreed in writing in advanceof any Transaction by the other party hereto, as agent for a disclosedprincipal).

###  

### (b)                                 NoBroker.  The Sellers have not dealt with any broker, investmentbanker, agent, or other person, except for the Buyer, who may be entitled toany commission or compensation in connection with the sale of PurchasedMortgage Loans pursuant to this Repurchase Agreement.

###  

### (c)                                  FinancialStatements.  The Sellers haveheretofore furnished to the Buyer a copy of its (a) consolidated balance sheetand the consolidated balance sheets of its consolidated Subsidiaries for thefiscal year ended December 31, 2003 and the related consolidated statements ofincome and retained earnings and of cash flows for the Sellers and theirrespective consolidated Subsidiaries for such fiscal year, setting forth ineach case in comparative form the figures for the previous year, with theopinion thereon of BDO Seidman LLP and (b) consolidated balance sheet and theconsolidated balance sheets of its consolidated Subsidiaries for the quarterlyfiscal period of the Sellers ended March 31, 2004 and June 30, 2004,respectively and the related consolidated statements of income and retained earningsand of cash flows for the Sellers and their respective consolidatedSubsidiaries for such quarterly fiscal

 

33

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period, setting forth in each case in comparative form the figures forthe previous year.  All such financialstatements are complete and correct and fairly present, in all materialrespects, the consolidated financial condition of the Sellers and theirrespective Subsidiaries and the consolidated results of their operations as atsuch dates and for such fiscal periods, all in accordance with GAAP applied ona consistent basis.  Since December 31,2003, there has been no material adverse change in the consolidated business,operations or financial condition of the Sellers and their respective consolidatedSubsidiaries taken as a whole from that set forth in said financial statementsnor are the Sellers aware of any state of facts which (without notice or thelapse of time) would or could result in any such material adverse change.  The Sellers do not have, on the date of thestatements delivered pursuant to this section (the “Statement Date”),any liabilities, direct or indirect, fixed or contingent, matured or unmatured,known or unknown, or liabilities for taxes, long-term leases or unusual forwardor long-term commitments not disclosed by, or reserved against in, said balancesheet and related statements, and at the present time there are no materialunrealized or anticipated losses from any loans, advances or other commitmentsof the Sellers which are required to be disclosed in or reserved against insaid balance sheet and related statement under GAAP.

###  

### (d)                                 Organization,Etc. MortgageIT is a corporation duly organized, validly existing and ingood standing under the laws of New York. Holdings is a corporation duly organized, validly existing and in goodstanding under the laws of Maryland.  TheSellers (a) have all requisite corporate or other power, and have allgovernmental licenses, authorizations, consents and approvals necessary to owntheir respective assets and carry on their respective businesses as now beingor as proposed to be conducted, except where the lack of such licenses,authorizations, consents and approvals would not be reasonably likely to have aMaterial Adverse Effect; (b) are qualified to do business and is in goodstanding in all other jurisdictions in which the nature of the businessconducted by it makes such qualification necessary, except where failure so toqualify would not be reasonably likely (either individually or in theaggregate) to have a Material Adverse Effect; and (c) have full power andauthority to execute, deliver and perform their respective obligations underthe Repurchase Documents.

###  

### (e)                                  Authorization,Compliance, Etc.  The execution anddelivery of, and the performance by the Sellers of their obligations under, theRepurchase Documents to which they are parties (a) are within the Sellers’powers, (b) have been duly authorized by all requisite action, (c) do notviolate any provision of applicable law, rule or regulation, or any order,writ, injunction or decree of any court or other Governmental Authority, ortheir respective organizational documents, (d) do not violate any indenture,agreement, document or instrument to which the Sellers are parties, or by whichthey or any of their properties, any of the Repurchase Assets are bound or towhich they are subject and (e) are not in conflict with, do not result in abreach of, or constitute (with due notice or lapse of time or both) a defaultunder, or except as may be provided by any Repurchase Document, result in thecreation or imposition of any Lien upon any of the property or assets of theSellers pursuant to, any such indenture, agreement, document orinstrument.  The Sellers are not requiredto obtain any consent, approval or authorization from, or to file anydeclaration or statement with, any Governmental Authority in connection with oras a condition to the consummation of the Transactions contemplated herein andthe execution, delivery or performance of the Repurchase Documents to which itis a party.

###  

### 34

### 

###  

### (f)                                    Litigation.On the date hereof, there are no actions, suits, arbitrations, investigations(including, without limitation, any of the foregoing which are pending orthreatened) or other legal or arbitrable proceedings affecting the Sellers orany of their Subsidiaries or affecting any of the Repurchase Assets or any ofthe other properties of the Sellers before any Governmental Authority which (i)questions or challenges the validity or enforceability of the RepurchaseDocuments or any action to be taken in connection with the transactionscontemplated hereby, (ii) individually or in the aggregate, if adverselydetermined, would have a Material Adverse Effect, or (iii) requires filing withthe SEC in accordance with its regulations.

###  

### (g)                                 PurchasedMortgage Loans.

###  

#### (i)                                     NeitherSeller has assigned, pledged, or otherwise conveyed or encumbered any PurchasedMortgage Loan to any other Person, and immediately prior to the sale of suchMortgage Loan to the Buyer, the applicable Seller was the sole owner of suchPurchased Mortgage Loan and had good and marketable title thereto, free andclear of all Liens, in each case except for Liens to be released simultaneouslywith the sale to the Buyer hereunder.

####  

#### (ii)                                  Theprovisions of this Repurchase Agreement are effective to either constitute asale of Repurchase Assets to the Buyer or to create in favor of the Buyer avalid security interest in all right, title and interest of the Sellers in, toand under the Repurchase Assets.

####  

### (h)                                 ChiefExecutive Office/Jurisdiction of Organization.  On the Effective Date, MortgageIT’s chiefexecutive office is, and has been, located at 33 Maiden Lane, 6thFloor, New York, New York 10038. MortgageIT’s jurisdiction of organization isNew York.  On the Effective Date,Holdings’ chief executive office is, and has been, located at 33 Maiden Lane, 6thFloor, New York, New York 10038. Holdings’ jurisdiction of organization is Maryland.

###  

### (i)                                     Locationof Books and Records.  The locationwhere the Sellers keep their books and records, including all computer tapesand records related to the Repurchase Assets are their respective chiefexecutive offices.

###  

### (j)                                     Filingand Payment of Taxes. Each Seller and its subsidiaries have timely filed ona timely basis all federal, state and local Tax and information returns,reports and any other information statements or schedules that are required tobe filed by or in respect of them and have timely paid all Taxes due pursuantto such returns, reports or other information statements or schedules orpursuant to any assessment received by it or any of its Subsidiaries, exceptfor any such Taxes as are being appropriately contested in good faith by appropriateproceedings diligently conducted and with respect to which adequate reserveshave been provided.  The charges,accruals and reserves on the books of the Sellers in respect of taxes and othergovernmental charges are adequate.  Thereare no Liens for Taxes except Statutory liens for Taxes not yet due andpayable.

###  

### (k)                                  Enforceability.  This Repurchase Agreement and all of theother Repurchase Documents executed and delivered by the Sellers in connectionherewith are legal, valid and

 

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binding obligations of the Sellers and are enforceable against theSellers in accordance with their terms except as such enforceability may belimited by (i) the effect of any applicable bankruptcy, insolvency, reorganization,moratorium or similar laws affecting creditors rights generally and (ii)general principles of equity.

###  

### (l)                                     Abilityto Perform.  Neither Seller believes,nor do they have any reason or cause to believe, that they cannot perform eachand every covenant contained in the Repurchase Documents to which they areparties on their part to be performed

###  

### (m)                               MaterialAdverse Effect.  Since December 31,2003, there has been no development or event nor, to either Seller’s knowledge,any prospective development or event, which has had or could have a MaterialAdverse Effect.

###  

### (n)                                 NoDefault.  No Default or Event ofDefault has occurred and is continuing.

###  

### (o)                                 UnderwritingGuidelines.  The UnderwritingGuidelines provided to Buyer are the true and correct Underwriting Guidelinesof the Sellers.

###  

### (p)                                 AdverseSelection.  Neither Seller has notselected the Purchased Mortgage Loans in a manner so as to adversely affectBuyer’s interests.

###  

### (q)                                 TangibleNet Worth.  The Tangible Net Worth ofthe Sellers, on a consolidated basis, is not less than $175,000,000.  The Tangible Net Worth of MortgageIT is notless than $25,000,000.

###  

### (r)                                    Indebtedness.  The Sellers do not have any Indebtedness,except as disclosed on Schedule 2 to this Repurchase Agreement.

###  

### (s)                                  Accurateand Complete Disclosure. The information, reports, financial statements,exhibits and schedules furnished in writing by or on behalf of either Seller tothe Buyer in connection with the negotiation, preparation or delivery of thisRepurchase Agreement and the other Repurchase Documents or included herein ortherein or delivered pursuant hereto or thereto, when taken as a whole, do notcontain any untrue statement of material fact or omit to state any materialfact necessary to make the statements herein or therein, in light of thecircumstances under which they were made, not misleading.  All written information furnished after thedate hereof by or on behalf of either Seller to the Buyer in connection withthis Repurchase Agreement and the other Repurchase Documents and thetransactions contemplated hereby and thereby will be true, complete andaccurate in every material respect, or (in the case of projections) based onreasonable estimates, on the date as of which such information is stated orcertified.  There is no fact known toeither Seller that could reasonably be expected to have a Material AdverseEffect that has not been disclosed herein, in the other Repurchase Documents orin a report, financial statement, exhibit, schedule, disclosure letter or otherwriting furnished to the Buyer for use in connection with the transactionscontemplated hereby or thereby.

###  

### (t)                                    MarginRegulations.  The use of all fundsacquired by the Sellers under this Repurchase Agreement will not conflict withor contravene any of Regulations T, U or X promulgated by the Board ofGovernors of the Federal Reserve System as the same may from time to time beamended, supplemented or otherwise modified.

###  

### 36

### 

###  

### (u)                                 InvestmentCompany.  Neither Seller is an“investment company” or a company “controlled” by an “investment company”within the meaning of the Investment Company Act of 1940, as amended.

###  

### (v)                                 Solvency.  As of the date hereof and immediately aftergiving effect to each Transaction, the fair value of the respective assets ofeach Seller is greater than the fair value of the liabilities (including,without limitation, contingent liabilities if and to the extent required to berecorded as a liability on the financial statements of such Seller inaccordance with GAAP) of such Seller and such Seller is solvent and, aftergiving effect to the transactions contemplated by this Repurchase Agreement andthe other Repurchase Documents, will not be rendered insolvent or left with anunreasonably small amount of capital with which to conduct its business andperform its obligations.  The Sellers donot intend to incur, nor do they believe that they have incurred, debts beyondtheir ability to pay such debts as they mature. The Sellers are not contemplating the commencement of an insolvency,bankruptcy, liquidation, or consolidation proceeding or the appointment of areceiver, liquidator, conservator, trustee, or similar official in respect ofthemselves or any of their property.

###  

### (w)                               ERISA.

###  

#### (i)                                     Noliability under Section 4062, 4063, 4064 or 4069 of ERISA has been or isexpected by either Seller to be incurred by either Seller or any ERISAAffiliate thereof with respect to any Plan which is a Single-Employer Plan inan amount that could reasonably be expected to have a Material Adverse Effect.

####  

#### (ii)                                  NoPlan of either Seller which is a Single-Employer Plan had an accumulatedfunding deficiency, whether or not waived, as of the last day of the mostrecent fiscal year of such Plan ended prior to the date hereof.  Neither of the Sellers nor any ERISAAffiliate thereof is (i) required to give security to any Plan which is aSingle-Employer Plan pursuant to Section 401(a) (29) of the Code or Section 307of ERISA, or (ii) subject to a Lien in favor of such a Plan under Section302(f) of ERISA.

####  

#### (iii)                               Each Plan of theSellers, each of their Subsidiaries and each of its ERISA Affiliates is incompliance in all material respects with the applicable provisions of ERISA andthe Code, except where the failure to comply would not result in any MaterialAdverse Effect.

####  

#### (iv)                              Neitherof the Sellers nor any of their Subsidiaries has incurred a tax liability underSection 4975 of the Code or a penalty under Section 502(i) of ERISA in respectof any Plan which has not been paid in full, except where the incurrence ofsuch tax or penalty would not result in a Material Adverse Effect.

####  

#### (v)                                 Neitherof the Sellers nor any of their Subsidiaries or any ERISA Affiliate thereof hasincurred or reasonably expects to incur any withdrawal liability under Section4201 of ERISA as a result of a complete or partial withdrawal from aMultiemployer Plan which will result in withdrawal liability to either of theSellers, any of their Subsidiaries or any ERISA Affiliate thereof in an amountthat could reasonably be expected to have a Material Adverse Effect.

####  

#### 37

#### 

####  

### (x)                                   AgencyApprovals. Each Seller is an FHA Approved Mortgagee and a VA ApprovedLender. Each Seller is also approved by Fannie Mae as an approved lender andFreddie Mac as an approved seller, and, to the extent necessary, approved bythe Secretary of Housing and Urban Development pursuant to Sections 203 and 211of the National Housing Act.  In eachsuch case, each Seller is in good standing, with no event having occurred priorto the issuance of the consummation of the related Takeout Commitment,including, without limitation, a change in insurance coverage which wouldeither make such Seller unable to comply with the eligibility requirements formaintaining all such applicable approvals or require notification to therelevant Agency or to the Department of Housing and Urban Development, FHA orVA.  Each Seller has adequate financialstanding, servicing facilities, procedures and experienced personnel necessaryfor the sound servicing of mortgage loans of the same types as may from time totime constitute Mortgage Loans and in accordance with Accepted ServicingPractices.

###  

### (y)                                 MortgageLoan Schedule.  The information setforth in the related Mortgage Loan Schedule and all other information or datafurnished by, or on behalf of, the Sellers to Buyer is complete, true andcorrect in all material respects, and the Sellers acknowledge that Buyer hasnot verified the accuracy of such information or data.

###  

### (z)                                   Reserved.

###  

### (aa)                            No Reliance.  Each Seller has made its ownindependent decision to enter into the Repurchase Documents and eachTransaction and as to whether such Transaction is appropriate and proper for itbased upon its own judgment and upon advice from such advisors (includingwithout limitation, legal counsel and accountants) as it has deemednecessary.  Neither Seller is relyingupon any advice from Buyer as to any aspect of the Transactions, including withoutlimitation, the legal, accounting or tax treatment of such Transactions.

###  

### (bb)                          Plan Assets.  Neither Seller is an employeebenefit plan as defined in Section 3 of Title I of ERISA, or a plan describedin Section 4975(e)(1) of the Code, and the Purchased Mortgage Loans are not“plan assets” within the meaning of 29 CFR §2510.3-101 in the Sellers’ hands.

###  

### (cc)                            Real Estate Investment Trust. Holdings has not engaged in any material “prohibited transactions” asdefined in Section 857(b)(6)(B)(iii) and (C) of the Code or the requirements inany successor or replacement provision in the Code, if any.  Holdings for its current “tax year” (asdefined in the Code) is entitled to a dividends paid deduction under therequirements of Section 857 of the Code with respect to any dividends paid byit with respect to each such year for which it claims a deduction in its Form1120-REIT filed with the United States Internal Revenue Service for such year,or the requirements in any successor or replacement provision in the Code, ifany.

###  

# **SECTION 12.**                               COVENANTS

# ** **

On and as of the date ofthis Repurchase Agreement and each Purchase Date and until this RepurchaseAgreement is no longer in force with respect to any Transaction, each Sellercovenants as follows:

 

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### (a)                                  Preservationof Existence; Compliance with Law. Each Seller shall:

###  

#### (i)                                     Preserveand maintain its legal existence and all of its material rights, privileges,licenses and franchises necessary for the operation of its business;

####  

#### (ii)                                  Complywith the requirements of all applicable laws, rules, regulations and orders,whether now in effect or hereafter enacted or promulgated by any applicableGovernmental Authority (including, without limitation, all environmental laws);

####  

#### (iii)                               Maintain all licenses,permits or other approvals necessary for such Seller to conduct its businessand to perform its obligations under the Repurchase Documents, and shallconduct its business in accordance with applicable law;

####  

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

####  

#### (v)                                 Permitrepresentatives of the Buyer, upon reasonable notice (unless an Event ofDefault shall have occurred and is continuing, in which case, no prior noticeshall be required), during normal business hours, to examine, copy and makeextracts from its books and records, to inspect any of its Properties, and todiscuss its business and affairs with its officers, all to the extentreasonably requested by the Buyer.

####  

### (b)                                 Taxes,Etc.  The Sellers shall timely file all tax returns that are required to befiled by them and shall timely pay all Taxes due, except for any such Taxes asare being appropriately contested in good faith by appropriate proceedingsdiligently conducted and with respect to which adequate reserves have beenprovided.

###  

### (c)                                  Noticeof Proceedings or Adverse Change. The Sellers shall give notice to the Buyer immediately after aResponsible Officer of either Seller has any knowledge of:

###  

#### (i)                                     theoccurrence of any Default or Event of Default or Termination Event;

####  

#### (ii)                                  any(a) default or event of default under any Indebtedness of either Seller in anaggregate amount in excess of $1,000,000 or (b) litigation, investigation,regulatory action or proceeding that is pending or threatened by or againsteither Seller in any federal or state court or before any GovernmentalAuthority which, if not cured or if adversely determined, would reasonably beexpected to have a Material Adverse Effect or constitute a Default or Event ofDefault, and (c) any Material Adverse Effect with respect to either Seller;

####  

#### (iii)                               any litigation orproceeding that is pending or threatened against (a) either Seller in which theamount involved exceeds $1,000,000 and is not covered by insurance, in whichinjunctive or similar relief is sought, or which, would reasonably be expectedto have a Material Adverse Effect and (b) any litigation or proceeding that ispending or threatened in connection with any of the Repurchase Assets, which,if adversely determined, would reasonably be expected to have a MaterialAdverse Effect;

####  

#### (iv)                              and,as soon as reasonably possible, notice of any of the following events:

####  

#### 39

#### 

####  

##### (A)                              achange in the insurance coverage of either Seller, with a copy of evidence ofsame attached;

#####  

##### (B)                                anymaterial adverse change in accounting policies or financial reporting practicesof either Seller;

#####  

##### (C)                                promptlyupon receipt of notice or knowledge of any Lien or security interest (other thansecurity interests created hereby or under any other Repurchase Document) on,or claim asserted against, any of the Repurchase Assets; and

#####  

##### (D)                               anyother event, circumstance or condition that has resulted, or has a possibilityof resulting, in a Material Adverse Effect; and

#####  

#### (v)                                 Promptly,but no later than five (5) Business Days after either Seller receives any ofthe same, deliver to the Buyer a true, complete, and correct copy of anyschedule, report, notice, or any other document delivered to such Seller by anyPerson pursuant to, or in connection with, any of the Repurchase Assets.

####  

### (d)                                 FinancialReporting.  Each Seller shallmaintain a system of accounting established and administered in accordance withGAAP, and furnish to the Buyer:

###  

#### (i)                                     Withinone hundred twenty (120) days after the close of each fiscal year, FinancialStatements, including a statement of income and changes in shareholders’ equityof the Sellers for such year, and the related balance sheet as at the end ofsuch year, all in reasonable detail and accompanied by an opinion of anaccounting firm as to said financial statements;

####  

#### (ii)                                  Withinsixty (60) days after the close of each of the Sellers’ first three fiscalquarters in each fiscal year unaudited balance sheets and income statements,for the period from the beginning of such fiscal year to the end of such fiscalyear, subject, however, to year end adjustments;

####  

#### (iii)                               Within thirty (30) daysafter the end of each calendar month, the unaudited balance sheets of theSellers as at the end of such period and the related unaudited consolidatedstatements of income and retained earnings and of cash flows for the Sellersfor such period and the portion of the fiscal year through the end of suchperiod, subject, however, to year end adjustments;

####  

#### (iv)                              Simultaneouslywith the furnishing of each of the Financial Statements to be deliveredpursuant to subsection (ii) above, or monthly upon Buyer’s request, acertificate in the form of Exhibit VIII hereto and certified by aResponsible Officer of such Seller;

####  

#### (v)                                 Ifapplicable, copies of any 10-Ks, 10-Qs, registration statements and other“corporate finance” SEC filings (other than 8-Ks) by such Seller, within 5Business Days of their filing with the SEC; provided, that, such Seller or anyAffiliate will provide the

####  

#### 40

#### 

####  

#### Buyer with a copyof the annual 10-K filed with the SEC by such Seller or its Affiliates, nolater than 90 days after the end of the year; and

####  

#### (vi)                              Promptly,from time to time, such other information regarding the business affairs,operations and financial condition of such Seller as the Buyer may reasonablyrequest.

####  

### (e)                                  Visitationand Inspection Rights.  Subject tothe provisions of Section 27, the Sellers shall permit the Buyer to inspect,and to discuss with a Seller’s officers, agents and auditors, the affairs,finances, and accounts of a Seller, the Repurchase Assets, and the Sellers’books and records, and to make abstracts or reproductions thereof and toduplicate, reduce to hard copy or otherwise use any and all computer orelectronically stored information or data, in each case, (i) during normalbusiness hours, (ii) upon reasonable notice (provided, that upon the occurrenceof an Event of Default, no notice shall be required), and (iii) at the expenseof the Sellers to discuss with its officers, its affairs, finances, andaccounts.

###  

### (f)                                    Reimbursementof Expenses.  On the date ofexecution of this Repurchase Agreement, the Sellers shall reimburse the Buyerfor all expenses incurred by the Buyer on or prior to such date.  From and after such date, the Sellers shallpromptly reimburse the Buyer for all expenses as the same are incurred by theBuyer and within thirty (30) days of the receipt of invoices therefor.

###  

### (g)                                 FurtherAssurances.  The Sellers shallexecute and deliver to the Buyer all further documents, financing statements,agreements and instruments, and take all further action that may be requiredunder applicable law, or that the Buyer may reasonably request, in order toeffectuate the transactions contemplated by this Repurchase Agreement and theRepurchase Documents or, without limiting any of the foregoing, to grant,preserve, protect and perfect the validity and first-priority of the securityinterests created or intended to be created hereby.  The Sellers shall do all things necessary topreserve the Repurchase Assets so that they remain subject to a first priorityperfected security interest hereunder. Without limiting the foregoing, the Sellers will comply with all rules,regulations, and other laws of any Governmental Authority and cause theRepurchase Assets to comply with all applicable rules, regulations and otherlaws.  The Sellers will not allow anydefault for which the Sellers are responsible to occur under any RepurchaseAssets or any Repurchase Document and the Sellers shall fully perform or causeto be performed when due all of its obligations under any Repurchase Assets orthe Repurchase Documents.

###  

### (h)                                 Trueand Correct Information.  Allinformation, reports, exhibits, schedules, financial statements or certificatesof either Seller or any of its Affiliates thereof or any of their officersfurnished to Buyer hereunder and during Buyer’s diligence of either Seller areand will be true and complete in all material respects and do not omit todisclose any material facts necessary to make the statements therein ortherein, in light of the circumstances in which they are made, notmisleading.  All required financial statements,information and reports delivered by either Seller to the Buyer pursuant tothis Repurchase Agreement shall be prepared in accordance with GAAP, or ifapplicable, to SEC filings, the appropriate SEC accounting requirements.

###  

### 41

### 

###  

### (i)                                     ERISAEvents.

###  

#### (i)                                     Promptlyupon becoming aware of the occurrence of any Event of Termination whichtogether with all other Events of Termination occurring within the prior 12months involve a payment of money by or a potential aggregate liability of theSellers or any ERISA Affiliate thereof or any combination of such entities inexcess of $250,000 the Sellers shall give the Buyer a written notice specifyingthe nature thereof, what action the Sellers or any ERISA Affiliate thereof hastaken and, when known, any action taken or threatened by the Internal RevenueService, the Department of Labor or the PBGC with respect thereto;

####  

#### (ii)                                  Promptlyupon receipt thereof, the Sellers shall furnish to the Buyer copies of (i) allnotices received by the Sellers or any ERISA Affiliate thereof of the PBGC’sintent to terminate any Plan or to have a trustee appointed to administer anyPlan; (ii) all notices received by the Sellers or any ERISA Affiliate thereoffrom the sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISAinvolving a withdrawal liability in excess of $250,000; and (iii) all fundingwaiver requests filed by the Sellers or any ERISA Affiliate thereof with theInternal Revenue Service with respect to any Plan, the accrued benefits ofwhich exceed the present value of the plan assets as of the date the waiverrequest is filed by more than $250,000, and all communications received by theSellers or any ERISA Affiliate thereof from the Internal Revenue Service withrespect to any such funding waiver request.

####  

### (j)                                     FinancialCondition Covenants.

###  

#### (i)                                     Maintenanceof Tangible Net Worth.  The Sellers,on a consolidated basis, shall maintain a Tangible Net Worth of not less than$175,000,000. At no time shall MortgageIT individually maintain a Tangible NetWorth at the end of any two consecutive calendar quarters of less than$25,000,000.

####  

#### (ii)                                  Maintenanceof Ratio of Indebtedness to Tangible Net Worth.  MortgageIT, on a consolidated basis, shallmaintain the ratio of Indebtedness to Tangible Net Worth no greater than 20:1.

####  

#### (iii)                               Maintenance ofLiquidity.  MortgageIT shall ensurethat, as of the end of each calendar month, it has Cash Equivalents in anamount not less than $10,000,000.

####  

### (k)                                  RESERVED.

###  

### (l)                                     NoAdverse Selection.  The Sellers shallnot select Eligible Mortgage Loans to be sold to Buyer as Purchased MortgageLoans using any type of adverse selection or other selection criteria whichwould adversely affect the Buyer in any material respect.

###  

### (m)                               MortgageLoan Schedule.  On the Friday of eachcalendar week (or if such date is not a Business Day, the next precedingBusiness Day), or with such greater frequency as requested by Buyer, theSellers shall provide to Buyer, electronically, in a format mutually acceptableto Buyer, a Mortgage Loan Schedule.  TheSellers shall not cause the Purchased Mortgage Loans to be serviced by anyservicer other than a servicer expressly approved in

 

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writing by Buyer, which approval shall be deemed granted by Buyer withrespect to the Sellers with the execution of this Repurchase Agreement.

###  

### (n)                                 Insurance.  The Sellers shall continue to maintaininsurance coverage with respect to employee dishonesty, forgery or alteration,theft, disappearance and destruction, robbery and safe burglary, property(other than money and securities) and computer fraud in an aggregate amount atleast equal to $2,000,000 with respect to errors and omissions insurance and$5,000,000 with respect to blanket insurance policy.  The Sellers shall maintain a fidelity bond asrequired by applicable state regulations in respect of its officers, employeesand agents, with respect to any claims made in connection with all or anyportion of the Repurchase Assets.  TheSellers shall notify the Buyer of any material change in the terms of any suchfidelity bond or insurance policy.

###  

### (o)                                 Booksand Records.  Each Seller shall, tothe extent practicable, maintain and implement administrative and operatingprocedures (including, without limitation, an ability to recreate recordsevidencing the Repurchase Assets in the event of the destruction of theoriginals thereof), and keep and maintain or obtain, as and when required, alldocuments, books, records and other information reasonably necessary oradvisable for the collection of all Repurchase Assets.

###  

### (p)                                 SecurityInterest.  The Sellers shall do allthings necessary to preserve the Repurchase Assets so that they remains subjectto a first priority perfected security interest hereunder.  Without limiting the foregoing, the Sellerswill comply with all rules, regulations and other laws of any GovernmentalAuthority and cause the Repurchase Assets to comply with all applicable rules,regulations and other laws.  The Sellerswill not allow any default for which such Seller is responsible to occur underany Repurchase Assets or any Repurchase Documents and such Seller shall fullyperform or cause to be performed when due all of its obligations under anyRepurchase Assets or the Repurchase Documents.

###  

### (q)                                 IllegalActivities.  Neither Seller shallengage in any conduct or activity that could subject their respective assets toforfeiture or seizure.

###  

### (r)                                    MaterialChange in Business.  Neither Sellershall make any material change in the nature of their respective businesses ascarried on at the date hereof.

###  

### (s)                                  Limitationon Dividends and Distributions. Neither Seller shall make any payment on account of, or set apart assetsfor, a sinking or other analogous fund for the purchase, redemption,defeasance, retirement or other acquisition of any equity interest of suchSeller, whether now or hereafter outstanding, or make any other distribution inrespect of any of the foregoing or to any shareholder or equity owner of suchSeller, either directly or indirectly, whether in cash or property or inobligations of such Seller or any of such Seller’s consolidated Subsidiaries inany calendar year; in excess of 50% of the net income of such Seller for suchcalendar year (determined in accordance with GAAP); provided that no such dividendsor other distributions may be made at any time following the occurrence andduring the continuation of an Event of Default.

###  

### 43

### 

###  

### (t)                                    Dispositionof Assets; Liens.  Neither Sellershall create, incur, assume or suffer to exist any mortgage, pledge, Lien,charge or other encumbrance of any nature whatsoever on any of the RepurchaseAssets, whether real, personal or mixed, now or hereafter owned, other than theLiens created in connection with the transactions contemplated by thisRepurchase Agreement; nor shall such Seller cause any of the Purchased MortgageLoans to be sold, pledged, assigned or transferred, except for sales ofPurchased Mortgage Loans to Takeout Investors or pursuant to securitizations, providedthat the proceeds therefrom are remitted to Buyer in accordance with thisRepurchase Agreement.

###  

### (u)                                 Transactionswith Affiliates.  Neither Sellershall enter into any transaction, including, without limitation, the purchase,sale, lease or exchange of property or assets or the rendering or accepting ofany service with any Affiliate, unless such transaction is (a) not otherwiseprohibited in this Repurchase Agreement and (b) upon fair and reasonable termsno less favorable to such Seller, as the case may be, than it would obtain in acomparable arm’s length transaction with a Person which is not an Affiliate.

###  

### (v)                                 ERISAMatters.

###  

#### (i)                                     NeitherSeller shall permit any event or condition which is described in any of clauses(i) through (vii) of the definition of “Event of Termination” to occur or existwith respect to any Plan or Multiemployer Plan if such event or condition,together with all other events or conditions described in the definition ofEvent of Termination occurring within the prior 12 months, involves the paymentof money by or an incurrence of liability of such Seller or any ERISA Affiliatethereof, or any combination of such entities in an amount in excess of$250,000.

####  

#### (ii)                                  NeitherSeller shall be an employee benefit plan as defined in Section 3 of Title I ofERISA, or a plan described in Section 4975(e)(1) of the Code and (b) the Sellershall not use “plan assets” within the meaning of 29 CFR §2510.3-101 to engagein this Repurchase Agreement or the Transactions hereunder.

####  

### (w)                               Consolidations,Mergers and Sales of Assets.  NeitherSeller shall (i) consolidate or merge with or into any other Person or (ii)sell, lease or otherwise transfer all or substantially all of its assets to anyother Person; provided that such Seller may merge or consolidate withanother Person if such Seller is the Person surviving such merger and suchSeller may sell Purchased Mortgage Loans to Takeout Investors or pursuant tosecuritizations provided that the proceeds therefrom are remitted to Buyer inaccordance with this Repurchase Agreement.

###  

### (x)                                   MortgageLoan Reports.  Each Seller willfurnish to Buyer monthly electronic Mortgage Loan performance data, including,without limitation, delinquency reports, pool analytic reports and static poolreports (*i.e.,* delinquency, foreclosure and netcharge-off reports) and monthly stratification reports summarizing thecharacteristics of the Mortgage Loans.

###  

### (y)                                 AgencyApprovals; Servicing.  MortgageITshall maintain its status with Fannie Mae and Ginnie Mae as an approved lenderand Freddie Mac as an approved seller, in each case in good standing (each suchapproval, an “Agency Approval”). MortgageIT shall

 

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service or cause to be serviced, all Mortgage Loans which are subjectto an Agency Takeout Commitment in accordance with the applicable Agencyguide.  Should MortgageIT, for anyreason, cease to possess all such applicable Agency Approvals to the extentnecessary, or should notification to the relevant Agency or to HUD, FHA or VAbe required, MortgageIT shall so notify Buyer immediately in writing.  Notwithstanding the preceding sentence, suchSeller shall take all necessary action to maintain all of its applicable AgencyApprovals at all times during the term of this Repurchase Agreement and eachoutstanding Transaction.

###  

### (z)                                   Guarantees.  Neither Seller shall create, incur, assume orsuffer to exist any Guarantees, except (i) to the extent reflected in suchSeller’s financial statements or notes thereto and (ii) to the extent theaggregate Guarantees of such Seller do not exceed, $2,000,000.

###  

### (aa)                            TakeoutPayments.  With respect to eachMortgage Loan subject to a Takeout Commitment, the Sellers shall arrange thatall payments under the related Takeout Commitment shall be paid to theSettlement Account as set forth in the Custodial Agreement, or to an accountapproved by the Buyer in writing prior to such payment.  With respect to any Agency TakeoutCommitment, if applicable, (1) with respect to the wire transfer instructionsas set forth in Freddie Mac Form 987 (Wire Transfer Authorization for a CashWarehouse Delivery) such wire transfer instructions are identical to Buyer’swire instructions or the Buyer has approved such wire transfer instructions inwriting in its sole discretion, or (2) the Payee Number set forth on Fannie MaeForm 1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage LoanSchedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), asapplicable, is identical to the Payee Number that has been identified by Buyerin writing as Buyer’s Payee Number or the Buyer has approved the related PayeeNumber in writing in its sole discretion; With respect to any TakeoutCommitment with an Agency for which the Agency is swapping the related MortgageLoans for a mortgage backed security, the applicable Agency documents listBuyer as sole subscriber.

###  

### (bb)                          UnderwritingGuidelines.  Without the priorwritten consent of Buyer, neither Seller shall amend in any material respect orotherwise modify the Underwriting Guidelines in any material respect.  Without limiting the foregoing, in the eventthat a Seller makes any amendment or modification to the UnderwritingGuidelines, such Seller shall promptly deliver to Buyer a complete copy of theamended or modified Underwriting Guidelines.

###  

### (cc)                            HELOCProvisions.  With respect to eachHELOC, if a Mortgagor requests an increase in the related Credit Limit, suchSeller shall, in its sole discretion, either accept or reject the Mortgagor’srequest in accordance with such Seller’s Underwriting Guidelines and notify theBuyer’s decision in writing.  If therequest for a Credit Limit increase is accepted by such Seller, the increasewill be effected by such Seller through modification of the Mortgage Loan withthe Mortgagor.  Such Seller shall deliverto the Buyer an updated Mortgage Loan Schedule reflecting the modification tothe Mortgage Loan and shall deliver any modified Mortgage Loan Documents to theCustodian.

###  

### 45

### 

###  

# **SECTION 13.**                               EVENTS OF DEFAULT

# ** **

## Section 13.01                          Events of Default.  If any of the following events (each an “Eventof Default”) occur, the Sellers and Buyer shall have the rights set forthin Section 14, as applicable:

##  

### (a)                                  eitherSeller shall default in the payment of the Repurchase Price or PriceDifferential on its related Repurchase Date or Payment Date, respectively, orany amount necessary to satisfy a Margin Deficit when due pursuant to Section4;

###  

### (b)                                 eitherSeller shall default in the payment of any other amount payable by it hereunderor under any other Repurchase Document, or the payment of Expenses or any otherObligations, when the same shall become due and payable, whether at the duedate thereof, or by acceleration or otherwise and such failure to make suchpayment, in all instances set forth herein shall continue unremedied for aperiod of three Business Days; or

###  

### (c)                                  thefailure of either Seller to perform, comply with or observe any term, covenantor agreement applicable to such Seller contained in Sections 12(a)(i), (h),(j), (n), (r), (s), (t), (u), (v), (w), (x), (y), (z), (aa), (bb) or (cc); or

###  

### (d)                                 anyrepresentation, warranty or certification made or deemed made herein or in anyother Repurchase Document by either Seller or any certificate furnished to theBuyer pursuant to the provisions hereof or thereof or any information withrespect to the Purchased Mortgage Loans furnished in writing by on behalf ofeither Seller shall prove to have been untrue or misleading in any material respectas of the time made or furnished (other than the representations and warrantiesset forth in Schedule 1, which shall be considered solely for the purposeof determining the Market Value of the Purchased Mortgage Loans; unless(i) either Seller shall have made any such representations and warrantieswith actual knowledge that they were materially false or misleading at the timemade; or (ii) any such representations and warranties have been determinedin good faith by the Buyer in its sole discretion to be materially false ormisleading on a regular basis); or

###  

### (e)                                  eitherSeller shall fail to observe or perform any other covenant or agreementcontained in this Repurchase Agreement (and not identified in clause (b) ofSection 13.01) or any other Repurchase Document, and if such default shall becapable of being remedied, and such failure to observe or perform shallcontinue unremedied for a period of 1 Business Day; or

###  

### (f)                                    ajudgment or judgments for the payment of money in excess of $1,000,000 in the aggregateshall be rendered against either Seller or any of its Material Subsidiaries byone or more courts, administrative tribunals or other bodies havingjurisdiction and the same shall not be satisfied, discharged (or provisionshall not be made for such discharge) or bonded, or a stay of execution thereofshall not be procured, within 30 days from the date of entry thereof, andeither Seller nor any such Material Subsidiary shall, within said period of30 days, or such longer period during which execution of the same shallhave been stayed or bonded, appeal therefrom and cause the execution thereof tobe stayed during such appeal; or

###  

### (g)                                 any “event of default” or any other default whichpermits a demand for, or requires, the early repayment of obligations due byany Seller or its Material Subsidiaries under

 

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(i) any agreement (after the expiration of anyapplicable grace period under any such agreement) relating to any Indebtednessof any Seller or any Material Subsidiary, as applicable, to which the Buyer orany Affiliate is a party or (iii) any agreement (after the expiration of anyapplicable grace period under any such agreement) relating to any Indebtednessof a Seller or any Material Subsidiary, as applicable in an aggregate amount inexcess of $1,000,000; or

###  

### (h)                                 anEvent of Insolvency shall have occurred with respect to either Seller; or

###  

### (i)                                     for any reason, this Repurchase Agreement at anytime shall not be in full force and effect in all material respects or shallnot be enforceable in all material respects in accordance with its terms, orany Lien granted pursuant thereto shall fail to be perfected and of firstpriority, or any Person (other than Buyer) shall contest the validity,enforceability, perfection or priority of any Lien granted pursuant thereto, orany party thereto (other than Buyer) shall seek to disaffirm, terminate, limitor reduce its obligations hereunder; or

###  

### (j)                                     eitherSeller shall grant, or suffer to exist, any Lien on any Repurchase Asset(except any Lien in favor of the Buyer); or (A) the Repurchase Assetsshall not have been sold to the Buyer, or (B) the Liens contemplatedhereby shall cease or fail to be first priority perfected Liens on anyRepurchase Assets in favor of the Buyer or shall be Liens in favor of anyPerson other than the Buyer; or

###  

### (k)                                  anymaterial adverse change in the Property, business, prospects, financialcondition or operations of either Seller or any of its Material Subsidiariesshall occur, in each case as determined by Buyer in its sole good faithdiscretion, or any other condition shall exist which, in Buyer’s sole goodfaith discretion, constitutes a material impairment of such Seller’s ability toperform its obligations under this Repurchase Agreement or any other RepurchaseDocument.

###  

### (l)                                     (i) anyPerson shall engage in any “prohibited transaction” (as defined inSection 406 of ERISA or Section 4975 of the Code) involving any Planof either Seller, (ii) any material “accumulated funding deficiency” (asdefined in Section 302 of ERISA), whether or not waived, shall exist withrespect to any Plan or any Lien in favor of the PBGC or a Plan shall arise onthe assets of either Seller or any Commonly Controlled Entity, (iii) aReportable Event shall occur with respect to, or proceedings shall commence tohave a trustee appointed, or a trustee shall be appointed, to administer or toterminate, any Plan of either Seller, which Reportable Event or commencement ofproceedings or appointment of a trustee is, in the reasonable opinion of theBuyer, likely to result in the termination of such Plan for purposes of TitleIV of ERISA, (iv) any Plan of either Seller shall terminate for purposesof Title IV of ERISA, (v) either Seller or any Commonly Controlled Entity shall,or in the reasonable opinion of the Buyer is likely to, incur any liability inconnection with a withdrawal from, or the insolvency or reorganization of, aMultiemployer Plan or (vi) any other event or condition shall occur orexist with respect to a Plan of either Seller; and in each case inclauses (i) through (vi) above, such event or condition, togetherwith all other such events or conditions, if any, could reasonably be expectedto have a Material Adverse Effect;

###  

### (m)                               any change or development involving a prospective change in taxation or otherapplicable law or regulation or interpretation thereof in the United Statesdirectly affecting

 

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the Purchased Mortgage Loans or the consequences of Buyer owning, orholding a security interest in, the Purchased Mortgage Loans; the imposition ofexchange controls by the United States, that directly affects the PurchasedMortgage Loans or the consequences of Buyer owning, or holding a securityinterest in, the Purchased Mortgage Loans; or the imposition of exchangecontrols by the United States, that directly affects the financial markets ofthe United States, and makes it, in the sole judgment of Buyer, inadvisable orimpracticable to enter into Transactions with the Mortgage Loans;

###  

### (n)                                 eitherSeller’s audited annual financial statements or the notes thereto or otheropinions or conclusions stated therein shall be qualified or limited byreference to the status of either Seller as a “going concern” or a reference ofsimilar import;

###  

### (o)                                 Thefailure of Holdings to at any time continue to be (i) qualified as a realestate investment trust as defined in Section 856 of the Code and (ii) entitledto a dividend paid deduction under Section 857 of the Code with respect todividends paid by it with respect to each taxable year for which it claims adeduction on its Form 1120 – REIT filed with the United States Internal RevenueService for such year, or the entering into by Holdings of any material“prohibited transactions” as defined in Sections 857(b)(6) of the Code.

###  

### (p)                                 Thefailure of Holdings to satisfy any of the following asset or income tests andBuyer has delivered notice of an Event of Default to Holdings with respectthereto:

###  

#### (i)                                     Atthe close of each taxable year, at least 75 percent of Holdings’ gross income(excluding gross income from prohibited transactions) consists of (i) “rentsfrom real property” within the meaning of Section 856(c)(3)(A) of the Code or the requirements in any successor orreplacement provision in the Code, if any, (ii) interest on obligationssecured by mortgages on real property or on interests in real property, withinthe meaning of Section 856(c)(3)(B) of the Code or the requirements in any successor or replacement provision in theCode, if any, (iii) gain from the sale or other disposition of realproperty (including interests in real property and interests in mortgages onreal property) which is not property described in Section 1221(a)(1) of theCode, within the meaning of Section 856(c)(3)(C) of the Code or the requirements in any successor orreplacement provision in the Code, if any, (iv) dividends or otherdistributions on, and gain (other than gain from “prohibited transactions”within the meaning of Section 857(b)(6)(B)(iii) of the Code) from the sale orother disposition of, transferable shares (or transferable certificates ofbeneficial interest) in other qualifying REITs within the meaning of Section856(d)(3)(D) of the Code or therequirements in any successor or replacement provision in the Code, if any,and (v) amounts described in Sections 856(c)(3)(E) through 856(c)(3)(I) of theCode or the requirements in anysuccessor or replacement provision in the Code, if any.

####  

#### (ii)                                  Atthe close of each taxable year, at least 95 percent of Holdings’ gross income(excluding gross income from prohibited transactions) consists of (i) the itemsof income described in paragraph 1 hereof (other than those described inSection 856(c)(3)(I) of the Code or therequirements in any successor or replacement provision in the Code, if any),(ii) gain realized from the sale or other disposition of stock or securitieswhich are not property described in Section 1221(a)(1) of the Code or the requirements in

####  

#### 48

#### 

####  

#### any successor orreplacement provision in the Code, if any, (iii) interest, (iv) dividends, and(v) income derived from payments to Holdings on interest rate swap or capagreements, options, futures contracts, forward rate agreements and othersimilar financial instruments entered into to reduce the interest rate riskswith respect to any indebtedness incurred or to be incurred to acquire or carryreal estate assets, or gain from the sale or other disposition of such aninvestment as described in section 856(c)(5)(G), in each case within themeaning of Section 856(c)(2) of the Code or the requirements in any successoror replacement provision in the Code, if any.

####  

#### (iii)                               At the close of eachquarter of Holdings’ taxable years, at least 75 percent of the value ofHoldings’ total assets (as determined in accordance with Treasury RegulationsSection 1.856-2(d)) has consisted of and will consist of real estate assetswithin the meaning of Sections 856(c)(4) and 856(c)(5)(B) of the Code, cash andcash items (including receivables which arise in the ordinary course ofHoldings’ operations, but not including receivables purchased from anotherperson), and Government Securities, orthe requirements in any successor or replacement provision in the Code, if any.

####  

#### (iv)                              Atthe close of each quarter of each of Holdings’ taxable years, (1) (a) not morethan 25 percent of Holdings’ total asset value will be represented bysecurities (other than those described in paragraph 3) , (b) not more than 20percent of Holdings’ total asset value will be represented by securities of oneor more taxable REIT subsidiaries, and (c) (i) not more than 5 percent of thevalue of Holdings’ total assets will be represented by securities of any oneissuer (other than Government Securities and securities of taxable REITsubsidiaries), and (ii) Holdings will not hold securities possessing more than10 percent of the total voting power or value of the outstanding securities ofany one issuer (other than Government Securities, securities of taxable REITsubsidiaries, and securities of a qualified REIT subsidiary within the meaningof Section 856(i) of the Code) or (2) such other requirements as set forth inthe Code from time to time.

####  

## Section 13.02                          Termination Event.

##  

### (a)                                  Ifthe following event (a “Termination Event”) occurs, the Buyer shall havethe rights set forth in Section 13.02(b):

###  

#### (i)                                     thesenior debt obligations or short-term debt obligations of Merrill Lynch &Co., Inc. shall be rated below the four highest generic grades (without regardto any pluses and minuses reflecting gradations within such generic grades) byany nationally recognized statistical rating organization; or

####  

#### (ii)                                  AChange of Control of either Seller shall have occurred; or

####  

#### (iii)                               Doug Naidus shall ceaseto be in a senior management position of MortgageIT, and a replacementacceptable to the Buyer in its sole discretion has not been secured within 180days.

####  

#### 49

#### 

####  

### (b)                                 Uponthe occurrence of a Termination Event, the Buyer shall have the right, in itssole discretion, to immediately terminate the Buyer’s agreement to enter intoany additional Transactions on the terms of this Agreement.  With respect to the Termination Events set forthin Section 13.02(i) and (ii), the Sellers shall repurchase any PurchasedMortgage Loans subject to a Transaction hereunder within 60 days followingreceipt of a request therefor from Buyer following the occurrence of suchTermination Event.

###  

# **SECTION 14.**                               REMEDIES

# ** **

### (a)                                  Ifan Event of Default occurs with respect to either Seller, the following rightsand remedies are available to the Buyer; provided, that an Event of Defaultshall be deemed to be continuing unless expressly waived by the Buyer inwriting.

###  

#### (i)                                     Atthe option of the Buyer, exercised by written notice to the Sellers (whichoption shall be deemed to have been exercised, even if no notice is given,immediately upon the occurrence of an Event of Insolvency of the Sellers), theRepurchase Date for each Transaction hereunder, if it has not already occurred,shall be deemed immediately to occur. The Buyer shall (except upon the occurrence of an Act of Insolvency ofthe Sellers) give notice to the Sellers of the exercise of such option aspromptly as practicable.

####  

#### (ii)                                  Ifthe Buyer exercises or is deemed to have exercised the option referred to insubsection (a)(i) of this Section,

####  

##### (A)                              theSellers’ obligations in such Transactions to repurchase all Purchased MortgageLoans, at the Repurchase Price therefor on the Repurchase Date determined inaccordance with subsection (a)(i) of this Section, (1) shallthereupon become immediately due and payable and (2) all Income paid aftersuch exercise or deemed exercise shall be retained by the Buyer and applied tothe aggregate unpaid Repurchase Price and any other amounts owed by the Sellershereunder;

#####  

##### (B)                                tothe extent permitted by applicable law, the Repurchase Price with respect toeach such Transaction shall be increased by the aggregate amount obtained bydaily application of, on a 360 day per year basis for the actual number ofdays during the period from and including the date of the exercise or deemedexercise of such option to but excluding the date of payment of the RepurchasePrice as so increased, (x) the Post-Default Rate in effect following anEvent of Default to (y) the Repurchase Price for such Transaction as ofthe Repurchase Date as determined pursuant to subsection (a)(i) of thisSection (decreased as of any day by (i) any amounts actually in thepossession of Buyer pursuant to clause (C) of this subsection, and(ii) any proceeds from the sale of Purchased Mortgage Loans applied to theRepurchase Price pursuant to subsection (a)(iv) of this Section; and

#####  

##### 50

##### 

#####  

##### (C)                                allIncome actually received by the Buyer pursuant to Section 5 (excluding anyLate Payment Fees paid pursuant to Section 5(a)) shall be applied to theaggregate unpaid Repurchase Price owed by the Sellers.

#####  

#### (iii)                               Upon the occurrence ofone or more Events of Default, the Buyer shall have the right to obtainphysical possession of all files of the Sellers relating to the PurchasedMortgage Loans and the Repurchase Assets and all documents relating to thePurchased Mortgage Loans which are then or may thereafter come in to the possessionof the Sellers or any third party acting for the Sellers and the Sellers shalldeliver to the Buyer such assignments as the Buyer shall request.  The Buyer shall be entitled to specificperformance of all agreements of the Sellers contained in the RepurchaseDocuments.

####  

#### (iv)                              Atany time on the Business Day following notice to the Sellers (which notice maybe the notice given under subsection (a)(i) of this Section), in the eventthe Sellers have not repurchased all Purchased Mortgage Loans, the Buyer may(A) immediately sell, without demand or further notice of any kind, at apublic or private sale and at such price or prices as the Buyer may deemsatisfactory any or all Purchased Mortgage Loans and the Repurchase Assetssubject to a such Transactions hereunder and apply the proceeds thereof to theaggregate unpaid Repurchase Prices and any other amounts owing by the Sellershereunder or (B) in its sole discretion elect, in lieu of selling all or aportion of such Purchased Mortgage Loans, to give the Sellers credit for suchPurchased Mortgage Loans and the Repurchase Assets in an amount equal to theMarket Value of the Purchased Mortgage Loans against the aggregate unpaidRepurchase Price and any other amounts owing by the Sellers hereunder.  The proceeds of any disposition of PurchasedMortgage Loans and the Repurchase Assets shall be applied first to the costsand expenses incurred by the Buyer in connection with such Seller’s default;second to costs of cover and/or related hedging transactions; third to theRepurchase Price; and fourth to any other outstanding obligation of the Sellersto the Buyer or its Affiliates.

####  

#### (v)                                 TheSellers shall be liable to Buyer for (i) the amount of all reasonablelegal or other expenses (including, without limitation, all costs and expensesof Buyer in connection with the enforcement of this Repurchase Agreement or anyother agreement evidencing a Transaction, whether in action, suit or litigationor bankruptcy, insolvency or other similar proceeding affecting creditors’rights generally, further including, without limitation, the reasonable feesand expenses of counsel (including the costs of internal counsel of Buyer)incurred in connection with or as a result of an Event of Default,(ii) damages in an amount equal to the cost (including all fees, expensesand commissions) of entering into replacement transactions and entering into orterminating hedge transactions in connection with or as a result of an Event ofDefault, and (iii) any other loss, damage, cost or expense directlyarising or resulting from the occurrence of an Event of Default in respect of aTransaction.

####  

#### (vi)                              TheBuyer shall have, in addition to its rights hereunder, any rights otherwiseavailable to it under any other agreement or applicable law.

####  

#### 51

#### 

####  

### (b)                                 Buyermay exercise one or more of the remedies available to Buyer immediately uponthe occurrence of an Event of Default and at any time thereafter without noticeto the Sellers.  All rights and remediesarising under this Repurchase Agreement as amended from time to time hereunderare cumulative and not exclusive of any other rights or remedies which Buyermay have.

###  

### (c)                                  Buyermay enforce its rights and remedies hereunder without prior judicial process orhearing, and each Seller hereby expressly waives any defenses such Seller mightotherwise have to require Buyer to enforce its rights by judicial process.  Each Seller also waives any defense (otherthan a defense of payment or performance) such Seller might otherwise havearising from the use of nonjudicial process, enforcement and sale of all or anyportion of the Repurchase Assets, or from any other election of remedies.  Each Seller recognizes that nonjudicial remediesare consistent with the usages of the trade, are responsive to commercialnecessity and are the result of a bargain at arm’s length.

###  

### (d)                                 Tothe extent permitted by applicable law, the Sellers shall be liable to theBuyer for interest on any amounts owing by the Sellers hereunder, from the datethe Sellers become liable for such amounts hereunder until such amounts are(i) paid in full by the Sellers or (ii) satisfied in full by theexercise of the Buyer’s rights hereunder. Interest on any sum payable by the Sellers to the Buyer under thisparagraph 14(d) shall be at a rate equal to the Post-Default Rate.

###  

### (e)                                  Uponthe occurrence of an Event of Default, the Buyer may obtain a life of loan,transferable real estate Tax Service Contract with an Approved Tax ServiceContract Provider on each Mortgage Loan at the sole cost and expense of theSellers.

###  

### (f)                                    Uponthe occurrence of a Default or Event of Default, the Sellers shall provide toBuyer, within 24 hours of request for same, any information requested by Buyerrelated to any PMI Policy or pool insurance, as applicable, with respect toeach Mortgage Loan covered by a PMI Policy or pool insurance.  Upon the Buyer’s request, after theoccurrence of a Default or Event of Default, the Sellers shall deliver to Buyer(i) with respect to each Mortgage Loan that is covered by a PMI Policy, acertified copy of such PMI Policy or evidence of delegated underwriter approvaland (ii) with respect to each Mortgage Loan which is covered by pool insurance,a pool insurer pool certification.

###  

# **SECTION 15.**                               INDEMNIFICATION AND EXPENSES; RECOURSE

# ** **

### (a)                                  TheSellers agree to hold the Buyer, and its Affiliates and their officers,directors, employees, agents and advisors (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 imposedon, incurred by or asserted against such Indemnified Party (collectively, “Costs”),relating to or arising out of this Repurchase Agreement, any other RepurchaseDocument 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 Repurchase Agreement, any other Repurchase Document or any transactioncontemplated hereby or thereby, that, in each case, results from anything otherthan the Indemnified Party’s gross negligence or willful misconduct.  Without limiting the generality of

 

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the foregoing, the Sellers agree to hold any Indemnified Party harmlessfrom and indemnify such Indemnified Party against all Costs with respect to allPurchased Mortgage Loans relating to or arising out of any taxes incurred orassessed in connection with the ownership of the Purchased Mortgage Loans,that, in each case, results from anything other than the Indemnified Party’sgross negligence or willful misconduct. In any suit, proceeding or action brought by an Indemnified Party inconnection with any Purchased Mortgage Loan for any sum owing thereunder, or toenforce any provisions of any Purchased Mortgage Loan, the Sellers will save,indemnify and hold such Indemnified Party harmless from and against allexpense, loss or damage suffered by reason of any defense, set-off,counterclaim, recoupment or reduction or liability whatsoever of the accountdebtor or obligor thereunder, arising out of a breach by the Sellers of anyobligation thereunder or arising out of any other agreement, indebtedness orliability at any time owing to or in favor of such account debtor or obligor orits successors from the Sellers.  TheSellers also agree to reimburse an Indemnified Party as and when billed by suchIndemnified Party for all the Indemnified Party’s costs and expenses incurredin connection with the enforcement or the preservation of the Buyer’s rightsunder this Repurchase Agreement, any other Repurchase Document or anytransaction contemplated hereby or thereby, including without limitation thereasonable fees and disbursements of its counsel.

###  

### (b)                                 TheSellers agree to pay as and when billed by the Buyer all of the out-of-pocketcosts and expenses incurred by the Buyer in connection with the development,preparation and execution of, and any amendment, supplement or modification to,this Repurchase Agreement, any other Repurchase Document or any other documentsprepared in connection herewith or therewith. The Sellers agree to pay as and when billed by the Buyer all of thereasonable out-of-pocket costs and expenses incurred in connection with theconsummation and administration of the transactions contemplated hereby andthereby including without limitation filing fees and all the reasonable fees,disbursements and expenses of counsel to the Buyer which amount shall bededucted from the Purchase Price paid for the first Transaction hereunder.  Subject to the limitations set forth inSection 27 hereof, the Sellers agree to pay the Buyer all the reasonableout of pocket due diligence, inspection, testing and review costs and expensesincurred by the Buyer with respect to Purchased Mortgage Loans submitted by theSellers for purchase under this Repurchase Agreement, including, but notlimited to, those out of pocket costs and expenses incurred by the Buyerpursuant to Sections 15(b) and 27 hereof.

###  

### (c)                                  Theobligations of the Seller from time to time to pay the Repurchase Price, thePeriodic Advance Repurchase Payments, and all other amounts due under thisRepurchase Agreement shall be full recourse obligations of the Sellers.

###  

### (d)                                 EachSeller shall be jointly and severally liable for the full, complete andpunctual performance and satisfaction of all obligations of either Seller underthis Repurchase Agreement.  Accordingly,each Seller waives any and all notice of creation, renewal, extension oraccrual of any of the Obligations and notice of or proof of reliance by Buyerupon such Seller’s joint and several liability. Each Seller waives diligence, presentment, protest, demand for paymentand notice of default or nonpayment to or upon such Seller with respect to theObligations.  When pursuing its rightsand remedies hereunder against either Seller, Buyer may, but shall be under noobligation, to pursue such rights and remedies hereunder against either Selleror any other Person or against any collateral security for the Obligations orany right of offset with respect thereto, and any failure by Buyer to pursuesuch other rights or remedies or to

 

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collect any payments from such Seller or any such other Person to realizeupon any such collateral security or to exercise any such right of offset, orany release of such Seller or any such other Person or any such collateralsecurity, or right of offset, shall not relieve such Seller of any liabilityhereunder, and shall not impair or affect the rights and remedies, whetherexpress, implied or available as a matter of law, of Buyer against such Seller.

###  

# **SECTION 16.**                               SERVICING

# ** **

### (a)                                  TheSellers, on Buyer’s behalf, shall contract with a Servicer to, or if a Selleris the Servicer, such Seller shall, service the Mortgage Loans consistent withthe degree of skill and care that such Seller customarily requires with respectto similar Mortgage Loans owned or managed by it and in accordance withAccepted Servicing Practices.  The Servicershall (i) comply with all applicable Federal, State and local laws andregulations, (ii) maintain all state and federal licenses necessary for itto perform its servicing responsibilities hereunder and (iii) not impairthe rights of Buyer in any Purchased Mortgage Loans or any paymentthereunder.  Buyer may terminate theservicing of any Purchased Mortgage Loan with the then existing servicer inaccordance with Section 16(e) hereof.

###  

### (b)                                 TheSellers shall cause the Servicer to hold or cause to be held all escrow fundscollected by the Sellers with respect to any Purchased Mortgage Loans in trustaccounts and shall apply the same for the purposes for which such funds werecollected.

###  

### (c)                                  AfterSellers receive notice from Buyer of the need to deposit collections into theCollection Account, the Sellers shall cause the Servicer to deposit allcollections received by the Sellers on account of the Purchased Mortgage Loansin the Collection Account no later than two Business Days following receiptthereof.

###  

### (d)                                 TheSellers shall provide promptly to Buyer (i) a Servicer Notice addressed toand agreed to by the Servicer of the related Purchased Mortgage Loans, advisingsuch Servicer of such matters as Buyer may reasonably request, including,without limitation, recognition by the Servicer of Buyer’s interest in suchPurchased Mortgage Loans and the Servicer’s agreement that upon receipt ofnotice of an Event of Default from Buyer, it will follow the instructions ofBuyer with respect to the Purchased Mortgage Loans and any related Income withrespect thereto.

###  

### (e)                                  Uponthe occurrence of a Default or Event of Default hereunder or a material defaultunder the Servicing Agreement, Buyer shall have the right to immediatelyterminate the Servicer’s right to service the Purchased Mortgage Loans withoutpayment of any penalty or termination fee. The Sellers shall cooperate in transferring the servicing of thePurchased Mortgage Loans to a successor servicer appointed by Buyer in its solediscretion.

###  

### (f)                                    Ifthe Sellers should discover that, for any reason whatsoever, any entityresponsible to the Sellers by contract for managing or servicing any suchPurchased Mortgage Loan has failed to perform fully the Sellers’ obligationsunder the Repurchase Documents or any of the obligations of such entities withrespect to the Purchased Mortgage Loans, the Sellers shall promptly notifyBuyer.

###  

### 54

### 

###  

# **SECTION 17.**                               SINGLE AGREEMENT

# ** **

Buyer and the Sellersacknowledge that, and have entered hereinto and will enter into eachTransaction hereunder in consideration of and in reliance upon the fact that,all Transactions hereunder constitute a single business and contractualrelationship and that each has been entered into in consideration of the otherTransactions.  Accordingly, each of Buyerand the Sellers agree (i) to perform all of its obligations in respect ofeach Transaction hereunder, and that a default in the performance of any suchobligations shall constitute a default by it in respect of all Transactionshereunder, (ii) that each of them shall be entitled to set off claims andapply property held by them in respect of any Transaction against obligationsowing to them in respect of any other Transaction hereunder; (iii) thatpayments, deliveries, and other transfers made by either of them in respect ofany Transaction shall be deemed to have been made in consideration of payments,deliveries, and other transfers in respect of any other Transactions hereunder,and the obligations to make any such payments, deliveries, and other transfersmay be applied against each other and netted and (iv) to promptly providenotice to the other after any such set off or application.

 

# **SECTION 18.**                               SET-OFF

# ** **

In addition to any rightsand remedies of the Buyer hereunder and by law, the Buyer shall have the right,without prior notice to the Sellers, any such notice being expressly waived bythe Sellers to the extent permitted by applicable law, upon any amount becomingdue and payable by the Sellers hereunder (whether at the stated maturity, byacceleration or otherwise) to set-off and appropriate and apply against suchamount any and all deposits (general or special, time or demand, provisional orfinal), in any currency, and any other credits, indebtedness or claims, in anycurrency, in each case whether direct or indirect, absolute or contingent,matured or unmatured, at any time held or owing by the Buyer or any Affiliatethereof to or for the credit or the account of the Sellers or any Affiliatethereof.  The Buyer agrees promptly tonotify the Sellers after any such set-off and application made by the Buyer;provided that the failure to give such notice shall not affect the validity ofsuch set-off and application.

 

# **SECTION 19.**                               NOTICES AND OTHER COMMUNICATIONS

# ** **

Except as otherwiseexpressly permitted by this Repurchase Agreement, all notices, requests andother communications provided for herein (including without limitation anymodifications of, or waivers, requests or consents under, this Repurchase Agreement)shall be given or made in writing (including without limitation by telecopy)delivered to the intended recipient at the “Address for Notices” specifiedbelow its name on the signature pages hereof or thereof); or, as to any party,at such other address as shall be designated by such party in a written noticeto each other party.  Except as otherwiseprovided in this Repurchase Agreement and except for notices given underSection 3 (which shall be effective only on receipt), all suchcommunications shall be deemed to have been duly given when transmitted bytelecopy or personally delivered or, in the case of a mailed notice, uponreceipt, in each case given or addressed as aforesaid.

 

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# **SECTION 20.**                               ENTIRE AGREEMENT; SEVERABILITY

# ** **

This RepurchaseAgreement, together with the Repurchase Documents, constitute the entireunderstanding between Buyer and the Sellers with respect to the subject matterthey cover and shall supersede any existing agreements between the partiescontaining general terms and conditions for repurchase transactions involvingPurchased Mortgage Loans.  By acceptanceof this Repurchase Agreement, Buyer and Sellers acknowledge that they have notmade, and are not relying upon, any statements, representations, promises orundertakings not contained in this Repurchase Agreement.  Each provision and agreement herein shall betreated as separate and independent from any other provision or agreement hereinand shall be enforceable notwithstanding the unenforceability of any such otherprovision or agreement.

 

# **SECTION 21.**                               NON-ASSIGNABILITY

# ** **

The rights andobligations of the parties under this Repurchase Agreement and under anyTransaction shall not be assigned by either Seller without the prior writtenconsent of Buyer.  Subject to theforegoing, this Repurchase Agreement and any Transactions shall be binding uponand shall inure to the benefit of the parties and their respective successorsand assigns.  Nothing in this RepurchaseAgreement express or implied, shall give to any Person, other than the partiesto this Repurchase Agreement and their successors hereunder, any benefit of anylegal or equitable right, power, remedy or claim under this RepurchaseAgreement. Buyer may from time to time with the prior written consent of theSellers (which consent will not be unreasonably withheld (provided that suchconsent shall not be required with respect to an assignment to any Affiliate ofthe Buyer or if an Event of Default shall have occurred and is continuing))assign all or a portion of its rights and obligations under this RepurchaseAgreement and the Repurchase Documents; provided*,*howeverthat Buyer shall maintain, for review by the Sellers upon written request, aregister of assignees and a copy of an executed assignment and acceptance byBuyer and assignee (“Assignment and Acceptance”), specifying thepercentage or portion of such rights and obligations assigned.  Upon such assignment, (a) such assigneeshall be a party hereto and to each Repurchase Document to the extent of thepercentage or portion set forth in the Assignment and Acceptance, and shallsucceed to the applicable rights and obligations of Buyer hereunder, and(b) Buyer shall, to the extent that such rights and obligations have beenso assigned by it be released from its obligations hereunder and under theRepurchase Documents.  Unless otherwisestated in the Assignment and Acceptance, the Sellers shall continue to takedirections solely from Buyer unless otherwise notified by Buyer inwriting.  Buyer may distribute to anyprospective assignee any document or other information delivered to Buyer bySellers.

 

The Buyer may sellparticipations to one or more Persons in or to all or a portion of its rightsand obligations under this Repurchase Agreement; provided, however, that (i)the Buyer’s obligations under this Repurchase Agreement shall remain unchanged,(ii) the Buyer shall remain solely responsible to the other parties hereto forthe performance of such obligations; and (iii) the Sellers shall continue todeal solely and directly with the Buyer in connection with the Buyer’s rightsand obligations under this Repurchase Agreement and the other RepurchaseDocuments. Notwithstanding the terms of Sections 6,7 and 8, each participant ofthe Buyer shall be entitled to the additional compensation and other rights andprotections

 

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afforded the Buyer under Sections 6,7 and 8 to the same extent as theBuyer would have been entitled to receive them with respect to theparticipation sold to such participant.

 

The Buyer may, inconnection with any assignment or participation or proposed assignment orparticipation pursuant to this Section 21, disclose to the assignee orparticipant or proposed assignee or participant, as the case may be, anyinformation relating to the Sellers or any of its Subsidiaries or to any aspectof the Transactions that has been furnished to the Buyer by or on behalf of theSellers or any of their Subsidiaries; provided that such assignee orparticipant agrees to hold such information subject to the confidentialityprovisions of this Repurchase Agreement.

 

The Buyer may at any timecreate a security interest in all or any portion of its rights under thisRepurchase Agreement in favor of any Federal Reserve Bank in accordance withRegulation A of the Board of Governors of the Federal Reserve System and anyOperating Circular issued by such Federal Reserve Bank. No such assignmentshall release the assigning Buyer from its obligations hereunder.

 

In the event the Buyerassigns all or a portion of its rights and obligations under this RepurchaseAgreement, the parties hereto agree to negotiate in good faith an amendment tothis Repurchase Agreement to add agency provisions similar to those included inrepurchase agreements for similar syndicated repurchase facilities.

 

# **SECTION 22.**                               TERMINABILITY

# ** **

Each representation andwarranty made or deemed to be made by entering into a Transaction, herein orpursuant hereto shall survive the making of such representation and warranty,and the Buyer shall not be deemed to have waived any Default that may arisebecause any such representation or warranty shall have proved to be false ormisleading, notwithstanding that the Buyer may have had notice or knowledge orreason to believe that such representation or warranty was false or misleadingat the time the Transaction was made. Notwithstanding any such termination or the occurrence of an Event ofDefault, all of the representations and warranties and covenants hereundershall continue and survive.  Theobligations of the Sellers under Section 15 hereof shall survive thetermination of this Repurchase Agreement.

 

# **SECTION 23.**                               GOVERNINGLAW

# ** **

**THISREPURCHASE AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEWYORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.**

 

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# **SECTION 24.**                               SUBMISSION TO JURISDICTION; WAIVERS

# ** **

**BUYER ANDEACH SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:**

 

#### **(i)****                                    SUBMITSFOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THISREPURCHASE AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS, OR FOR RECOGNITION ANDENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTIONOF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATESOF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANYTHEREOF;**

####  

#### **(ii)****                                CONSENTSTHAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THEEXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVETO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCHACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TOPLEAD OR CLAIM THE SAME;**

####  

#### **(iii)****                            AGREESTHAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BYMAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLYSIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITSSIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE BEENNOTIFIED; AND**

####  

#### **(iv)****                               AGREESTHAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANYOTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHERJURISDICTION.**

####  

#### **(v)****                                   THEBUYER AND EACH SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTEDBY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGARISING OUT OF OR RELATING TO THIS REPURCHASE AGREEMENT, ANY OTHER TRANSACTIONDOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.**

####  

# **SECTION 25.**                               NOWAIVERS, ETC.

# ** **

No failure on the part ofthe Buyer to exercise and no delay in exercising, and no course of dealing withrespect to, any right, power or privilege under any Repurchase Document shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, power or privilege under any Repurchase Document preclude any other orfurther exercise thereof or the

 

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exercise of any other right, power or privilege.  The remedies provided herein are cumulativeand not exclusive of any remedies provided by law.  An Event of Default shall be deemed to becontinuing unless expressly waived by the Buyer in writing.

 

# **SECTION 26.**                               [RESERVED]

# ** **

# **SECTION 27.**                               DUEDILIGENCE

# ** **

The Sellers acknowledgethat Buyer has the right to perform continuing due diligence reviews withrespect to the Mortgage Loans and the Sellers, for purposes of verifyingcompliance with the representations, warranties and specifications madehereunder, or otherwise, and the Sellers agree that upon reasonable priornotice unless an Event of Default shall have occurred, in which case no noticeis required, to the Sellers, Buyer or its authorized representatives will bepermitted during normal business hours to examine, inspect, and make copies andextracts of, the Mortgage Files and any and all documents, records, agreements,instruments or information relating to such Mortgage Loans in the possession orunder the control of the Sellers and/or the Custodian.  The Sellers also shall make available toBuyer a knowledgeable financial or accounting officer for the purpose ofanswering questions respecting the Mortgage Files and the Mortgage Loans.  Without limiting the generality of theforegoing, the Sellers acknowledge that Buyer may purchase Mortgage Loans fromthe Sellers based solely upon the information provided by the Sellers to Buyerin the Purchased Mortgage Loan Schedule and the representations, warranties andcovenants contained herein, and that Buyer, at its option, has the right at anytime to conduct a partial or complete due diligence review on some or all ofthe Mortgage Loans purchased in a Transaction, including, without limitation,ordering broker’s price opinions, new credit reports and new appraisals on therelated Mortgaged Properties and otherwise re-generating the information usedto originate such Mortgage Loan.  Buyermay underwrite such Mortgage Loans itself or engage a mutually agreed uponthird party underwriter to perform such underwriting.  The Sellers agree to cooperate with Buyer andany third party underwriter in connection with such underwriting, including,but not limited to, providing Buyer and any third party underwriter with accessto any and all documents, records, agreements, instruments or informationrelating to such Mortgage Loans in the possession, or under the control, of theSellers.  The Sellers further agree thatthe Sellers shall pay all out-of-pocket costs and expenses incurred by Buyer inconnection with Buyer’s activities pursuant to this Section 27 (“DueDiligence Costs”); provided, that such Due Diligence Costs shall not exceed$20,000 per calendar year unless a Default or Event of Default shall haveoccurred, in which event Buyer shall have the right to perform due diligence,at the sole expense of Sellers without regard to the dollar limitation setforth herein.

 

# **SECTION 28.**                               COMMITMENTFEE

# ** **

The Seller shall pay theBuyer in immediately available funds, due and owing on the date hereof (andupon each extension, if the Repurchase Agreement has not been terminated), theCommitment Fee.  Such payment shall bemade in Dollars, in immediately available funds, without deduction, set-off orcounterclaim, to Buyer at such account designated by Buyer.

 

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# **SECTION 29.**                               [RESERVED]

# ** **

# **SECTION 30.**                               BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT

# ** **

### (a)                                  EachSeller hereby irrevocably constitutes and appoints the Buyer and any officer oragent thereof, with full power of substitution, as its true and lawfulattorney-in-fact with full irrevocable power and authority in the place andstead of such Seller and in the name of such Seller or in its own name, fromtime to time in the Buyer’s discretion, for the purpose of carrying out theterms of this Repurchase Agreement, to take any and all appropriate action andto execute any and all documents and instruments which may be reasonablynecessary or desirable to accomplish the purposes of this Repurchase Agreement,and, without limiting the generality of the foregoing, such Seller hereby givesthe Buyer the power and right, on behalf of such Seller, without assent by, butwith notice to, such Seller, if an Event of Default shall have occurred and becontinuing, to do the following:

###  

#### (i)                                     inthe name of such Seller, or in its own name, or otherwise, to take possessionof and endorse and collect any checks, drafts, notes, acceptances or otherinstruments for the payment of moneys due with respect to any other RepurchaseAssets and to file any claim or to take any other action or proceeding in anycourt of law or equity or otherwise deemed appropriate by the Buyer for thepurpose of collecting any and all such moneys due with respect to any otherRepurchase Assets whenever payable;

####  

#### (ii)                                  topay or discharge taxes and Liens levied or placed on or threatened against theRepurchase Assets;

####  

#### (iii)                               (A) to direct anyparty liable for any payment under any Repurchase Assets to make payment of anyand all moneys due or to become due thereunder directly to the Buyer or as theBuyer shall direct; (B) to ask or demand for, collect, receive payment ofand receipt for, any and all moneys, claims and other amounts due or to becomedue at any time in respect of or arising out of any Repurchase Assets;(C) to sign and endorse any invoices, assignments, verifications, noticesand other documents in connection with any Repurchase Assets; (D) tocommence and prosecute any suits, actions or proceedings at law or in equity inany court of competent jurisdiction to collect the Repurchase Assets or anyproceeds thereof and to enforce any other right in respect of any RepurchaseAssets; (E) to defend any suit, action or proceeding brought against suchSeller with respect to any Repurchase Assets; (F) to settle, compromise oradjust any suit, action or proceeding described in clause (E) above and,in connection therewith, to give such discharges or releases as the Buyer maydeem appropriate; and (G) generally, to sell, transfer, pledge and makeany agreement with respect to or otherwise deal with any Repurchase Assets asfully and completely as though the Buyer were the absolute owner thereof forall purposes, and to do, at the Buyer’s option and such Seller’s expense, atany time, and from time to time, all acts and things which the Buyer deemsnecessary to protect, preserve or realize upon the Repurchase Assets and theBuyer’s Liens thereon and to effect the intent of this Repurchase Agreement,all as fully and effectively as such Seller might do.

####  

#### 60

#### 

####  

### (b)                                 EachSeller hereby ratifies all that said attorneys shall lawfully do or cause to bedone by virtue hereof.  This power ofattorney is a power coupled with an interest and shall be irrevocable.

###  

### (c)                                  EachSeller also authorizes the Buyer, if an Event of Default shall have occurred,from time to time, to execute, in connection with any sale provided for inSection 14 hereof, any endorsements, assignments or other instruments ofconveyance or transfer with respect to the Repurchase Assets.

###  

### (d)                                 Thepowers conferred on the Buyer hereunder are solely to protect the Buyer’sinterests in the Repurchase Assets and shall not impose any duty upon it toexercise any such powers.  The Buyershall be accountable only for amounts that it actually receives as a result ofthe exercise of such powers, and neither it nor any of its officers, directors,employees or agents shall be responsible to the Sellers for any act or failureto act hereunder, except for its or their own gross negligence or willfulmisconduct.

###  

# **SECTION 31.**                               MISCELLANEOUS

# ** **

### (a)                                  Counterparts.  This Repurchase Agreement may be executed inany number of counterparts, all of which taken together shall constitute oneand the same instrument, and any of the parties hereto may execute thisRepurchase Agreement by signing any such counterpart.

###  

### (b)                                 Captions.  The captions and headings appearing hereinare for included solely for convenience of reference and are not intended toaffect the interpretation of any provision of this Repurchase Agreement.

###  

### (c)                                  Acknowledgment.  Each Seller hereby acknowledges that:

###  

#### (i)                                     ithas been advised by counsel in the negotiation, execution and delivery of thisRepurchase Agreement and the other Repurchase Documents;

####  

#### (ii)                                  theBuyer has no fiduciary relationship to the Sellers; and

####  

#### (iii)                               no joint venture existsbetween the Buyer and the Sellers.

####  

# **SECTION 32.**                               CONFIDENTIALITY

# ** **

The Buyer and the Sellershereby acknowledge and agree that all written or computer-readable informationprovided by one party to any other regarding the terms set forth in any of theRepurchase Documents or the Transactions contemplated thereby (the “ConfidentialTerms”) shall be kept confidential and shall not be divulged to any partywithout 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 inorder to comply with any applicable federal or state laws, (ii) any of theConfidential Terms are in the public domain other than due to a breach of thiscovenant, or (iii) in the event of an Event of Default the Buyerdetermines such information to be necessary or desirable to disclose in connectionwith the marketing and sales of the Purchased Mortgage

 

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Loans or otherwise to enforce or exercise the Buyer’s rightshereunder.  Each of the parties heretohereby acknowledges that the provisions of the federal securities laws mayrestrict any Person who is in the possession of material, non-publicinformation regarding any company from purchasing or selling securities of suchcompany and from communicating such information to any other Person undercircumstances in which it is reasonably foreseeable that such Person is likelyto purchase or sell such securities. Each of the parties hereto hereby agrees to abide by such laws as theyrelate to the other’s securities and confidential information.  Notwithstanding the foregoing or anything tothe contrary contained herein or in any other Repurchase Document, the partieshereto may disclose to any and all Persons, without limitation of any kind, theU.S. federal, state and local tax treatment of the Transactions, any factrelevant to understanding the U.S. federal, state and local tax treatment ofthe Transactions, and all materials of any kind (including opinions or othertax analyses) relating to such U.S. federal, state and local tax treatment andthat may be relevant to understanding such tax treatment; provided that Sellersmay not disclose the name of or identifying information with respect to Buyeror any pricing terms (including, without limitation, the Pricing Spread,Purchase Price Percentage, and Purchase Price) or other nonpublic business orfinancial information (including any sublimits and financial covenants) that isunrelated to the U.S. federal, state and local tax treatment of theTransactions to the taxpayer and is not relevant to understanding the U.S.federal, state and local tax treatment of the Transactions to the taxpayer,without the prior written consent of the Buyer. The provisions set forth in this Section 32 shall survive thetermination of this Repurchase Agreement.

 

# **SECTION 33.**                               INTENT

# ** **

### (a)                                  Theparties recognize that each Transaction is a “repurchase agreement” as thatterm is defined in Section 101 of Title 11 of the United States Code,as amended (except insofar as the type of Mortgage Loans subject to suchTransaction or the term of such Transaction would render such definitioninapplicable), and a “securities contract” as that term is defined inSection 741 of Title 11 of the United States Code, as amended (exceptinsofar as the type of assets subject to such Transaction would render suchdefinition inapplicable).

###  

### (b)                                 Itis understood that either party’s right to liquidate Mortgage Loans deliveredto it in connection with Transactions hereunder or to exercise any otherremedies pursuant to Paragraph 11 hereof is a contractual right toliquidate such Transaction as described in Sections 555 and 559 ofTitle 11 of the United States Code, as amended.

###  

### (c)                                  Theparties agree and acknowledge that if a party hereto is an “insured depositoryinstitution,” as such term is defined in the Federal Deposit Insurance Act, asamended (“FDIA”), then each Transaction hereunder is a “qualifiedfinancial contract,” as that term is defined in FDIA and any rules, orders orpolicy statements thereunder (except insofar as the type of assets subject tosuch Transaction would render such definition inapplicable).

###  

### (d)                                 Itis understood that this Repurchase Agreement constitutes a “netting contract”as defined in and subject to Title IV of the Federal Deposit InsuranceCorporation Improvement Act of 1991 (“FDICIA”) and each paymententitlement and payment obligation under any Transaction hereunder shallconstitute a “covered contractual payment entitlement” or “covered contractualpayment obligation”, respectively, as defined in and subject to FDICIA

 

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(except insofar as one or both of the parties is not a “financialinstitution” as that term is defined in FDICIA).

###  

# **SECTION 34.**                               DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

# ** **

Theparties acknowledge that they have been advised that:

 

### (a)                                  inthe case of Transactions in which one of the parties is a broker or dealerregistered with the Securities and Exchange Commission (“SEC”) underSection 15 of the Securities Exchange Act of 1934 (“1934 Act”), theSecurities Investor Protection Corporation has taken the position that theprovisions of the Securities Investor Protection Act of 1970 (“SIPA”) donot protect the other party with respect to any Transaction hereunder;

###  

### (b)                                 inthe case of Transactions in which one of the parties is a government securitiesbroker or a government securities dealer registered with the SEC underSection 15C of the 1934 Act, SIPA will not provide protection to the otherparty with respect to any Transaction hereunder; and

###  

### (c)                                  inthe case of Transactions in which one of the parties is a financialinstitution, funds held by the financial institution pursuant to a Transactionhereunder are not a deposit and therefore are not insured by the FederalDeposit Insurance Corporation or the National Credit Union Share InsuranceFund, as applicable.

###  

# **SECTION 35.**                               CONFLICTS

# ** **

In theevent of any conflict between the terms of this Repurchase Agreement, any otherRepurchase Document and any Confirmation, the documents shall control in thefollowing order of priority:  first,the terms of the Confirmation shall prevail, then the terms of this RepurchaseAgreement shall prevail, and then the terms of the Repurchase Documents shallprevail.

 

# **SECTION 36.**                               AUTHORIZATIONS

# ** **

Any ofthe persons whose signatures and titles appear on Exhibit X areauthorized, acting singly, to act for the Sellers or Buyer, as the case may be,under this Repurchase Agreement.

 

# **SECTION 37.**                               ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES.

# ** **

Buyer hasin place internal policies and procedures that expressly prohibit its purchaseof any High Cost Mortgage Loan.

 

[THIS SPACEINTENTIONALLY LEFT BLANK]

 

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INWITNESS WHEREOF, the parties have entered into this Repurchase Agreement as of thedate set forth above.

 

 
|   | BUYER:                                   |
|--------|------------------------------------------|
|   |                                     |
|   | **MERRILL LYNCH MORTGAGE CAPITAL  INC.** |
|   | ** **                               |
|   | ** **                               |
|   | By:                                      | /s/ JOHN WINCHESTER |
|   |                                     | Name: JOHN WINCHESTER |
|   |                                     | Title: Vice President |
|   |                                     |
|   |                                     |
|   | Address for Notices:                     |
|   |                                     |
|   |                                     | 4 World Financial  Center  10th Floor  New York, New York 10080  Attention:  James B. Cason  Telecopier No.:  (212) 449-3673  Telephone No.:  (212) 449-1219 |

 

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|   | SELLER:                       |
|--------|-------------------------------|
|   |                          |
|   | **MORTGAGEIT, INC.**          |
|   | ** **                    |
|   | ** **                    |
|   | By:                           | /s/ JOHN R. CUTI |
|   |                          | Name: JOHN R. CUTI |
|   |                          | Title: Secretary |
|   |                          |   |
|   | Address for Notices:          |
|   |                          | 33 Maiden Lane, 6th  Floor  New York, NY 10038Attention:  Chief Operating Officer  Telecopier No.:  212-651-4689  Telephone No:  212-651-4691 |
|   |                          |   |
|   |                          |   |
|   | SELLER:                       |
|   |                          |
|   | **MORTGAGEIT HOLDINGS, INC.** |
|   | ** **                    |
|   | ** **                    |
|   | By:                           | /s/ JOHN R. CUTI |
|   |                          | Name: JOHN R. CUTI |
|   |                          | Title: Secretary |
|   |                          |   |
|   | Address for Notices:          |
|   |                          | 33 Maiden Lane, 6th  Floor  New York, NY 10038Attention:           Michael  Zigrossi                                                                  John  R. Cuti  Telecopier No.:  212-651-4674  Telephone No:  212-651-7774 |

 

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