Exhibit 10.2


 


Execution Copy


 


 


CONTINGENT
PAYMENT AGREEMENT


 


This
Contingent Payment Agreement (the “Agreement”), dated as of August 12,
2005, is among Select Portfolio Servicing, Inc. (“SPS”), Credit Suisse
First Boston (USA), Inc. (the “Option Holder”), Greenrange Partners LLC
(“Greenrange”), The PMI Group, Inc. (“PMI”) and FSA Portfolio
Management, Inc. (“FSA”, and together with Greenrange and PMI, each a “Payee”
and collectively the “Payees”).


 


Background


 


A.                                   Pursuant to the
Option Agreement (as defined herein), the Option Holder has acquired an option
(the “Option”), exercisable on or before August 12, 2005, to
acquire 100% of the outstanding capital stock of SPS Holding Corp. (“Holding”)
from the Payees.  SPS is a wholly-owned
subsidiary of Holding.  The purchase
price for such acquisition will be comprised of a “Cash Payment” (as defined in
the Option Agreement), a series of “Monthly Contingent Payments” (as defined
below) and the “Final Payment Amount” (as defined below).


 


B.                                     The parties hereto
wish to provide for the calculation of the Monthly Contingent Payments and the
Final Payment Amount and for the remittance thereof by the Option Holder to the
Payees to the extent applicable hereunder.


 


Agreement


 


In consideration of the mutual premises and
mutual obligations set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:


 


Section 1.  Definitions.  Whenever used in this Agreement, the
following words and phrases shall have the following meanings:


 


“Accountants”: As defined in Section 3(e).


 


“Advance”: Any servicing advance or
advance related to delinquent principal and/or interest made by SPS in respect
of a Mortgage Loan.


 


“Affiliate”:  As defined in the Option Agreement.


 


“Aggregate Unit Cost”: With respect to
any calendar month, the sum of the Unit Costs for each Mortgage Loan serviced
by SPS on the first day of such calendar month.


 


“Agreement”: As defined in the preamble
hereto.


 


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“Ancillary Income”: With respect to a
Mortgage Loan, all income received by SPS from such Mortgage Loan (other than
servicing and sub-servicing fees and prepayment penalties) including, but not
limited to, late charges, non-sufficient fund charges, speed pay fees,
assignment fees, demand fees, payoff statement fees, loan document fees and any
other incidental fees and charges, in each case, to the extent that collection
of such amounts is not prohibited by the applicable Servicing Requirements or applicable
law.


 


“Business Day”: A day of the week
other than (a) Saturday or Sunday or (b) a day on which banking or
savings institutions in New York or Utah are authorized or permitted under
applicable law to be closed.


 


“Cash Payment”: As defined in the
Option Agreement.


 


“Closing Balance Sheet”: As defined in
the Option Agreement.


 


“Consent Order”: Order Preliminarily
Approving Stipulated Final Judgment and Order as to Fairbanks Capital Corp. and
Fairbanks Capital Holding Corp., entered by the United States District Court
for the District of Massachusetts on November 21, 2003, as the same may be
modified from time to time in accordance with the terms thereof.


 


 “Cumulative
Shortfall”: For any calendar month, (i) the sum of the Shortfall for
that month and for any prior month less (ii) the Cumulative Shortfall
Deductible Amount, if any, for all prior months.


 


“Cumulative Shortfall Deductible Amount”:
For any calendar month, the lesser of (i) the Cumulative Shortfall for
such calendar month and (ii) the Monthly Contingent Payment for such
calendar month, calculated assuming that the Cumulative Shortfall Deductible
Amount for such month is zero.


 


“Curry Settlement”: The Settlement
Agreement and Release, dated November 14, 2003, entered into by Fairbanks
Capital Corp., and Alanna Curry and certain other plaintiffs in connection with
Civil Action No. 03-10895-DPW, and approved by the United States District
Court for the District of Massachusetts, as the same may be modified from time
to time in accordance with the terms thereof.


 


“Customer Accommodation”: An amount
paid by SPS to a customer, or a credit by SPS to a customer’s account, in either
case after the Option Closing Date, that (x) does not qualify as a Customer
Reversal and (y) is a consequence of the customer alleging a Mortgage Loan Servicing
Error or SPS identifying a Mortgage Loan Servicing Error, in each case which (i) occurred
prior to the Option Closing Date (and which may or may not have continued
thereafter) and (ii) SPS believes is reasonably likely to result in
Private Litigation or a Regulatory Action; provided, however,
that in no event will any Customer Accommodation (i) also be included in
any calculation of Designated Litigation Expenses, (ii) include any
amounts payable in connection with a Private Litigation or Regulatory Action or
(iii) include any matter related to the Specified Disputes.


 


“Customer Accommodation Amount”: With
respect to any calendar month, the sum of all Customer Accommodations for such
calendar month; provided, however, that:


 


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(i)            for
any Customer Accommodation based in part upon Mortgage Loan Servicing Errors that
occur both before the Option Closing Date and more than 180 days after the
Option Closing Date, the related Customer Accommodation Amount (including
pursuant to the immediately succeeding clause (ii)) shall be reduced by fifty
percent (50%);


 


(ii)           any
Customer Accommodation in excess of $10,000 made by SPS without the prior
written approval of FSA and PMI shall be reduced by one-third (1/3) of the
excess of such Customer Accommodation over $10,000; and


 


(iii)          for
any Customer Accommodation involving only Mortgage Loan Servicing Errors
occurring after the Option Closing Date, the related Customer Accommodation
Amount shall be zero.


 


“Customer Information”: As defined in Section 8(g).


 


“Customer Reversal”: An amount paid by
SPS to a customer, or a credit by SPS to a customer’s account, in either case
after the Option Closing Date, of an erroneous, duplicative or excessive fee or
charge to such customer prior to the Option Closing Date that resulted from a
Mortgage Loan Servicing Error which occurred prior to the Option Closing Date
(and which may or may not have continued thereafter), except to the extent that
SPS had established a reserve with respect thereto prior to the Option Closing
Date and such reserve amount has not been reduced to zero as a result of a
prior Customer Reversal Amount; provided, however, that in no
event will any Customer Reversal (i) also be included in any calculation
of Designated Litigation Expenses, (ii) include any amounts payable in
connection with a Private Litigation or Regulatory Action or (iii) include
any matter related to the Specified Disputes.


 


“Customer Reversal Amount”: With
respect to any calendar month, the sum of all Customer Reversals for such
calendar month; provided, however, that:


 


(i)                                     the
Customer Reversal Amount shall not include any portion of a Customer Reversal that
resulted from a Mortgage Loan Servicing Error that occurred after the Option
Closing Date, unless, and only to the extent that, the erroneous, duplicative
or excessive fee or charge billed to the customer after the Option Closing Date
was included in the Monthly Contingent Payment actually paid to the Payees
hereunder;


 


(ii)                                  the
portion of the Customer Reversal Amount that is permitted to be included
pursuant to the immediately preceding clause (i) shall be reduced by fifty
percent (50%) if the Mortgage Loan Servicing Error giving rise to the Customer
Reversal continued to occur more than 180 days after the Option Closing Date;
and


 


(iii)                               for
any Customer Reversal involving only Mortgage Loan Servicing Errors occurring
after the Option Closing Date, the related Customer Reversal Amount shall be
zero.


 


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“Delinquent”: With respect to any
Mortgage Loan, when all or part of the related monthly payment or, where
applicable, the escrow payment, is not paid on the related due date, as
calculated using the method established by the Mortgage Bankers Association and
commonly referred to as the MBA method.


 


“Designated Litigation Expense Adjustment”:
Until such time as the Litigation Reserve Amount has been reduced to zero, the
Designated Litigation Expense Adjustment shall equal zero.  Thereafter, with respect to any calendar
month (or portion thereof), the Designated Litigation Expense Adjustment shall
equal the Designated Litigation Expenses paid by SPS during such calendar month
(or portion thereof); provided, however, that to the extent the
Litigation Reserve Amount has been reduced to zero and a Cumulative Shortfall
exists with respect to a given calendar month, the Designated Litigation Expense
Adjustment for such month shall equal zero.


 


“Designated Litigation Expenses”: With
respect to any calendar month, the aggregate, without duplication,
out-of-pocket costs related to damages, judgments, settlements, penalties,
fines or expenses of any kind paid by SPS during such calendar month arising
out of any Private Litigation, including interest, penalties, reasonable attorneys’
fees and expenses of outside counsel and all reasonable amounts paid in connection
with the investigation, defense or settlement of any such claim; provided,
however, that:


 


(i)                                     for
any Private Litigation based in part upon Mortgage Loan Servicing Errors that occur
both before the Option Closing Date and more than 180 days after the Option Closing
Date, the related Designated Litigation Expenses  (including pursuant to the immediately
succeeding clause (ii)) shall be reduced by fifty percent (50%);


 


(ii)                                  for
any Private Litigation that is settled by SPS without the prior written
approval of FSA and PMI which results in Designated Litigation Expenses in
excess of $15,000, the related Designated Litigation Expenses shall be reduced
by one-third (1/3) of the excess of such Designated Litigation Expenses over
$15,000;


 


(iii)                               for
any Private Litigation involving only Mortgage Loan Servicing Errors occurring
after the Option Closing Date, the related Designated Litigation Expenses shall
be zero; and


 


(iv)                              in
no event will any Designated Litigation Expense (x) also be included in any
calculation of Designated Nonrecoverable Advances, Customer Accommodation
Amounts or Customer Reversal Amounts, (y) include any amounts payable in
connection with any Regulatory Action or Origination Litigation, or (z) include
the Specified Disputes.


 


“Designated Nonrecoverable Advances”: With
respect to any calendar month, the sum of any Advance (other than any
servicing, delinquency or other advance that was purchased, rather than made,
by SPS) made by SPS prior to the Option Closing Date that


 


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SPS reasonably determines during such calendar month, consistent with
the practices of SPS during the six month period prior to the Option Closing
Date, to be a Nonrecoverable Advance; provided, however, that in
no event will any Designated Nonrecoverable Advance include any matter relating
to the Specified Disputes.


 


“Designated Representative”: As
defined in Section 8(d).


 


“Fee Matrix”:  As defined in the Option Agreement.


 


“Final Payment Amount”:  As defined in Section 3(c).


 


“FSA”: As defined in the preamble to
the Agreement.


 


“Governmental Entity”:  As defined in the Option Agreement.


 


“Greenrange”: As defined in the
preamble to the Agreement.


 


“Holding”: As defined in the preamble
to the Agreement.


 


“Indemnified Party”: As defined in Section 11(a).


 


“Indemnifying Party”: As defined in Section 11(a).


 


“Interest Expense”: With respect to
any calendar month, an amount equal to the product of (i) the average
outstanding balance of Advances on the Mortgage Loans during such calendar
month, times (ii) 85%, times (iii) one-month LIBOR as
of the first Business Day of the month preceding such calendar month plus 2%, times
(iv) 1/12.


 


“Interest Income”: With respect to any
calendar month, an amount equal to the sum of all interest income (including,
without limitation, income received under the Pledge Agreement), float income
and/or earnings credit and interest on Advances received by SPS during such
calendar month, to the extent that such amounts relate to the Servicing
Agreements or the Subsequent Designated Agreements, in each case, to the extent
such amounts may be collected in accordance with the related Servicing
Agreements or the Subsequent Designated Agreements, as applicable, and the
collection thereof is not prohibited by applicable law.


 


“Litigation Reserve Amount”: As of any
date of calculation, an amount equal to the (i) the sum of the reserve for
legal disputes (other than reserves for the Specified Disputes) and the “reserve
for unasserted claims in Mississippi”, in each case as included on or reflected
in the Closing Balance Sheet, minus (ii) the aggregate Designated
Litigation Expenses paid by SPS prior to such date of calculation but during
the Payment Period; provided, however, that the result shall not
be less than zero.


 


“Measurement Date”: As defined in the
Option Agreement.


 


“Monthly Contingent Payment”: With
respect to any Payment Date, an amount paid to the Payees pursuant to Section 3(b),
as such amount is received from collections


 


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on the Mortgage Loans.  Each
Monthly Contingent Payment shall equal the following, for the calendar month
preceding the calendar month in which the Payment Date occurs: (a) the sum
of, without duplication, (i) all Servicing Income for such preceding calendar
month, (ii) all Professional Services Income for such preceding calendar
month, (iii) the Recovery Amount for such preceding calendar month, and (iv) the
Interest Income for such preceding calendar month; less (b) the sum of,
without duplication, (i) the Aggregate Unit Cost for such preceding calendar
month, (ii) the Designated Litigation Expense Adjustment for such preceding
calendar month or, to the extent that the Litigation Reserve Amount has been
reduced to zero and a Cumulative Shortfall exists, the Cumulative Shortfall
Deductible Amount, (iii) the Designated Nonrecoverable Advances for such preceding
calendar month, (iv) the Customer Accommodation Amount for such preceding
calendar month, (v) the Customer Reversal Amount for such preceding
calendar month, and (vi) the Interest Expense for such preceding calendar
month; provided, however, that if the Monthly Contingent Payment
for any calendar month is a negative amount, then the Monthly Contingent
Payment for such month shall be zero, and a “Shortfall” shall be created in
accordance with the definition thereof.  All
components of each Monthly Contingent Payment, as itemized in Exhibit A, other
than the Aggregate Unit Cost, the Designated Litigation Expense Adjustment, the
Customer Accommodation Amount and the Interest Expense, shall be charged,
collected, calculated and applied by SPS in a manner consistent with methods
utilized by SPS during the six months immediately preceding the Option Closing Date,
consistently applied; provided, however, that the Servicing
Income and the Professional Services Income components of each Monthly
Contingent Payment, as itemized in Exhibit A, shall be charged, collected,
calculated and applied by SPS subject to Section 7(b);  provided,
further, that SPS shall use its commercially reasonable efforts and act
in good faith to achieve the same outcome on individual Customer Accommodations
and Designated Litigation Expenses that was realized for comparable situations
during the six months prior to the Option Closing Date.


 


“Mortgage Loan”: An individual
mortgage loan related to a Servicing Agreement or Subsequent Designated
Agreement.  As applicable, “Mortgage Loan”
shall be deemed to refer to the related REO Property.


 


“Mortgage Loan Servicing Error”: With
respect to any Portfolio Mortgage Loan, a violation by SPS of applicable laws
or applicable Servicing Requirements in its servicing of such Portfolio
Mortgage Loan.


 


“Nonrecoverable Advance”: Any Advance (other
than any servicing, delinquency or other advance that was purchased, rather
than made, by SPS) with respect to a Portfolio Mortgage Loan that was made by
SPS prior to the Option Closing Date as a result of a Servicing Process Error,
which (i) SPS has reasonably determined will not be recovered from
payments by or on behalf of the underlying obligor, liquidation proceeds or
other amounts related to such Portfolio Mortgage Loan, or the related
noteholder pursuant to the terms of the related Servicing Agreement and (ii) was
not in a category included in SPS’s calculation of “Reserves for advance
receivables” on the Closing Balance Sheet.


 


“Notification Date”: The twentieth (20th)
day of each calendar month (or, if such day is not a Business Day, the next
succeeding Business Day) beginning with the second


 


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month of the Payment Period and ending on January 20, 2008 (or, if
such day is not a Business Day, the next succeeding Business Day).  For purposes of illustration only, Exhibit B
sets forth a sample timeline which identifies the Notification Date in relation
to certain other dates relevant to this Agreement.


 


“Notification Summary”: As defined in Section 3(a).


 


“Objection”: As defined in Section 3(e).


 


“Option”:  As defined in the preamble.


 


“Option Agreement”: The Option
Agreement, dated as of August 12, 2005, among the Option Holder, Holding and
the Payees.


 


“Option Closing Date”:  The “Closing Date” as defined in the Option
Agreement.


 


“Option Holder”: As defined in the
preamble.


 


“Origination Litigation”:  Any litigation, action, suit, proceeding or
claim to the extent relating to the origination, rather than the servicing, of
a Portfolio Mortgage Loan.


 


“Payee”: As defined in the preamble to
the Agreement.


 


“Payee Designated Representative”: As
defined in Section 8(d).


 


“Payment Date”: The twenty-fifth (25th)
day of each calendar month (or, if such day is not a Business Day, the next
succeeding Business Day) beginning with the second month of the Payment Period
and ending on January 25, 2008 (or, if such day is not a Business Day, the
next succeeding Business Day).


 


“Payment Period”: The period
commencing on the first day of the first calendar month immediately following
the Measurement Date and ending on December 31, 2007.


 


“Peer Group”: Four Subprime Servicers,
which shall initially be:  Countrywide
Home Loans, Inc., Ocwen Loan Servicing, Inc., Litton Loan Servicing,
and Wells Fargo Bank, National Association doing business as America’s
Servicing Company, and any successor thereto, each solely in its (or its Affiliates’)
capacity as a Subprime Servicer.  If any
of such entities ceases to be a Subprime Servicer or acts as Subprime Servicer
for a subprime mortgage loan portfolio of less than $10 billion, files or is
the subject of an involuntary filing for bankruptcy protection or becomes
insolvent, dissolves, liquidates, or sells all or substantially all of its
assets to an unaffiliated entity, or merges with or into another member of the
Peer Group, then PMI and FSA may (but shall not be required to) jointly propose
to the Option Holder a replacement Subprime Servicer, which, subject to the
consent of the Option Holder (not to be unreasonably withheld or delayed),
shall replace the affected Supbrime Servicer as a member of the Peer Group.


 


“Pledge Agreement”: The Security
Agreement-Pledge (CDs, Commercial Paper, Loan Participations and Investment
Property Accounts) executed by SPS and dated May 8, 2001


 


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(in error, the actual date thereof being May 8, 2002), together
with any Revolving Credit Note executed by SPS in connection therewith.


 


“PMI”: As defined in the preamble to
the Agreement.


 


“Portfolio Mortgage Loan”:  An individual mortgage loan for which SPS has
been appointed as the servicer, subservicer and/or master servicer (excluding
any loans assigned to SPS’s Loss Recovery Division for collection which are not
otherwise being serviced by SPS).  As
applicable, “Portfolio Mortgage Loan” shall be deemed to refer to the related
REO Property.  For the avoidance of
doubt, “Portfolio Mortgage Loans” shall include all Mortgage Loans (as defined
herein), as well as all other mortgage loans and REO Properties serviced by
SPS.


 


“Privacy and Collection Legislation”:  (a) the Fair Debt Collection Practices
Act, (b) the Gramm-Leach-Bliley Act, (c) federal and state collections
licensing laws, (d) federal and state truth-in-lending laws, consumer
credit protection laws, equal credit opportunity laws, predatory and abusive
disclosure laws, and (e) personal data privacy laws, and all applicable
regulations passed under any such legislation, all as the same may be amended
or replaced from time to time.


 


“Private Litigation”: Any action, suit
or proceeding initiated by or on behalf of a borrower in any federal or state
court of competent jurisdiction alleging commission of a Mortgage Loan
Servicing Error by SPS prior to the Option Closing Date; provided, however,
that (i) solely for purposes of the definition of Designated Litigation
Expenses other than clause (iii) of the proviso contained therein, Private
Litigation may include the alleged commission of a Mortgage Loan Servicing
Error by SPS that occurred both prior and subsequent to the Option Closing
Date; and (ii) Private Litigation shall exclude any Regulatory Action.


 


“Professional Services Income”: All
income earned from professional services performed by SPS or its Affiliates (including,
without limitation, Alta Real Estate Services, Inc., Residential
RealEstate Review, Inc., Mountain West Realty Corp., Pelatis Insurance
Agency Corp. and Pelatis Insurance Limited), in each case to the extent derived
from or related to the Mortgage Loans, less the amount of all direct or
indirect, fixed or variable, costs or expenses derived from or related to such
professional services.


 


“Proprietary Information”: As defined
in Section 8(g).


 


“Recovery Amount”: For any calendar
month, the aggregate amount recovered during such month on account of any Designated
Nonrecoverable Advances irrespective of when such Designated Nonrecoverable
Advance was deducted from the Monthly Contingent Payment.


 


“Regulatory Action”: As defined in the
Option Agreement.


 


“Regulatory Fee Scrutiny”: Any of the
following shall have occurred with respect to any fee or charge billed to a borrower
which is included in the Fee Matrix:


 


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(i)            SPS
is examined or receives a direct communication from a Federal or state regulator
alleging that the fee or charge imposed by SPS violates applicable law or that
the amount of such fee or charge by SPS might subject SPS to regulatory sanctions;


 


(ii)           Either
(A) a Federal or state regulator has made a statement that it intends to,
or has taken an action to, subject Subprime Servicers to regulatory sanctions
for imposing such fee or charge at a rate which equals or exceeds the rate
being imposed by SPS or (B) Subprime Servicers have generally reduced the
rate at which they impose such fees or charges to a rate that is less than the corresponding
fee or charge included in the Fee Matrix; or


 


(iii)          any
such fee or charge in the Fee Matrix is shown to exceed the highest such fee or
charge billed to borrowers by members of the Peer Group with respect to
subprime mortgage loans that are substantially similar to the Mortgage Loans by
more than 20%; provided, however, that for purposes of this clause
(iii), the Option Holder shall use its commercially reasonable best efforts to
obtain the amount of such fee or charge billed by each member of the Peer Group.


 


“REO Property”: A mortgaged property
acquired by SPS, as servicer, through foreclosure, by deed in lieu of
foreclosure or otherwise.


 


“Servicing Agreement”: Each pooling
and servicing agreement, whole loan servicing agreement, subservicing agreement
and similar agreement listed on Schedule 1 hereto.


 


“Servicing Income”: All servicing fees
earned, subservicing fees earned and Ancillary Income, in each case to the
extent derived from or related to the Mortgage Loans, as reduced by any
compensating interest payments required to be made by SPS related to the Mortgage
Loans.  Servicing Income for the applicable
month shall be itemized and shown on each Monthly Contingent Payment report
delivered pursuant to Section 3(a). 
Subject to Section 7(b), all components of Servicing Income
shall be charged, collected, calculated and applied in a manner consistent with
methods utilized by SPS during the six months immediately preceding the Option Closing
Date, consistently applied.


 


“Servicing Process Error”: A clearly erroneous
application by SPS of the “net present value” formula that it utilized prior to
the Option Closing Date to determine that an Advance would be reimbursable to
SPS under the Servicing Agreement governing the Portfolio Mortgage Loan for
which the Advance was being made.


 


“Servicing Requirements”: With respect
to each Mortgage Loan, the applicable provisions of the related Servicing
Agreement with respect to the servicing, control and administration of such
Mortgage Loan.


 


“Servicing Rights”: Any and all of SPS’s
right, title and interest in and to: (1) all rights of subservicing, servicing
and/or master servicing of Mortgage Loans pursuant to


 


9





















 


any Servicing Agreement or Subsequent Designated Agreement; (2) all
rights under each applicable Servicing Agreement to receive or retain amounts
in respect of servicing fees, ancillary income, reimbursement for advances or
other expenses and costs, and investment earnings or other benefits from
positive account balances, together with all contract rights, incidental income
and benefits to the extent payable to SPS; (3) rights to possession and
use of servicing files and records directly or indirectly related to each
Mortgage Loan or pertaining to the past, present or prospective servicing of
such Mortgage Loan, including, without limitation, borrower lists, insurance policies
and tax service agreements; (4) all agreements or documents creating,
defining or evidencing any such servicing rights and all rights of SPS thereunder;
(5) all accounts and other rights to payment related to any of the
property described in this paragraph; and (6) all rights, powers and
privileges incident to any of the foregoing.


 


“Shortfall”: For any calendar month
after the Litigation Reserve Amount has been reduced to zero, the dollar
amount, if any (expressed as a positive number), by which the Monthly
Contingent Payment for such calendar month is a negative amount.


 


“Specified Disputes”: As defined in
the Option Agreement.


 


“SPS”: As defined in the preamble to
the Agreement.


 


“SPS Designated Representative”: As
defined in Section 8(d).


 


“Subprime Servicer”: An entity which
services, master services and/or subservices subprime one-to-four family
residential mortgage loans located within the United States, in each case
solely in its capacity as such.


 


“Subsequent Designated Agreement”: As
defined in Section 9(b).


 


“Unit Cost”: For any calendar month: (i) with
respect to any Mortgage Loan which is less than ninety (90) days Delinquent as
of the end of the last day of such calendar month, the Unit Cost is $18.35; and
(ii) with respect to any Mortgage Loan which is ninety (90) days or more Delinquent
as of the end of the last day of such calendar month, the Unit Cost is $50.96.  The Unit Cost shall apply to each Mortgage
Loan which is serviced by SPS for the related month and is subject to servicing
as of the first day of such calendar month.


 


Section 2.  Acknowledgment


 


(a)                                  Mortgage
Loans.  The parties to this Agreement
acknowledge that some, but not all, of the Portfolio Mortgage Loans will be factored
into the calculation of the Cash Payment made by the Option Holder to the
Payees pursuant to the Option Agreement. 
The Monthly Contingent Payments and the Final Payment Amount will be
based upon the Mortgage Loans, and may reflect reductions, to the extent
provided herein, with respect to Designated Litigation Expenses, Customer
Accommodations, Customer Reversals, and Designated Nonrecoverable Advances relating
to both the Mortgage Loans and all other Portfolio Mortgage Loans.


 


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(b)                                  Designated
Litigation Expenses.  The parties to this
Agreement acknowledge that the Cash Payment made by the Option Holder to the
Payees pursuant to the Option Agreement will not include an amount equal to the
Litigation Reserve Amount.  Accordingly,
the Monthly Contingent Payments to be made to the Payees hereunder will only be
reduced for Designated Litigation Expenses once the Litigation Reserve Amount
shall have been reduced to zero, as more specifically described in the
definition of “Designated Litigation Expense Adjustment”.


 


Section 3.  Payments


 


(a)                                  Payment
Notification.  On each Notification
Date, SPS shall notify the Payees of the amount of the Monthly Contingent
Payment to be made on the next Payment Date. 
Such notification shall include a detailed summary of each component of such
Monthly Contingent Payment in substantially the form of Exhibit A
hereto (the “Notification Summary”), together with a certificate of the Chief
Financial Officer of SPS (or, if there is a vacancy in such office, the Chief Executive
Officer of SPS) stating that such statement was prepared on the basis described
herein.


 


(b)                                  Monthly
Contingent Payments.  On each Payment
Date, the Option Holder shall remit (or cause SPS to remit on the Option Holder’s
behalf) to the Payees the Monthly Contingent Payment, if any, for such Payment
Date.


 


(c)                                  Final
Payment.  On
March 31, 2008 the Option Holder shall remit (or cause SPS to remit
on the Option Holder’s behalf) to the Payees an amount (the “Final Payment
Amount”) equal to (i) the net present value, as of December 31,
2007, of the anticipated Monthly Contingent Payments (excluding, for purposes
of such anticipated Monthly Contingent Payments, any deduction on account of
Designated Litigation Expense Adjustment, Designated Nonrecoverable Advances,
Customer Accommodation Amount, or Customer Reversal Amount) through the
expected remaining term of the Servicing Rights, calculated using a discount
rate of twenty percent (20%) per annum, reduced by (ii) the Cumulative
Shortfall Deductible Amount, if any, as of such date.  The calculation of the Final Payment Amount
shall assume that the revenue components, the Aggregate Unit Costs and Interest
Expense included in the calculation of Monthly Contingent Payments are
made or incurred in accordance with SPS’s financial projections as of December 31,
2007, which shall be prepared by SPS in good faith and in a manner that SPS
reasonably believes will represent the Monthly Contingent Payments through the
remaining term of the Servicing Rights, and, in the case of the one-month LIBOR
rate used to calculate the Interest Expense, projected in accordance with the
forward one-month LIBOR curve.  SPS shall
deliver to the Payees such projections and a detailed calculation of the Final
Payment Amount no later than February 15, 2008, together with all related
back-up material that may be reasonably requested by the Payees in reviewing
such projections and calculation.  SPS
shall cooperate in good faith with the Payees in their review of such
projections and calculation.


 


(d)                                  Payment
Instructions.  All payments pursuant
to this Section 3 shall be made as follows: 61.36500% of each
Monthly Contingent Payment and the Final Payment Amount shall be paid to PMI, 37.40412%
of each Monthly Contingent Payment


 


11





















 


and the Final Payment Amount shall be paid to FSA and 1.23088% of each
Monthly Contingent Payment and the Final Payment Amount shall be paid to Greenrange.  Such payments shall be made by wire transfer
as follows:


 


	
  In the case of PMI:

  
	
   

  
	
  Bank:

  	
  Bank of New York

  
	
  ABA #:

  	
  021 000 018

  
	
  Account #:

  	
  290430

  
	
  Account Name:  The PMI Group, Inc.

  
	
  Reference: Please include full details on the
  wire

  
	
   

  
	
   

  
	
  In the case of FSA:

  
	
   

  
	
  Bank:

  	
  The Bank of New York

  
	
   

  	
  One Wall Street

  
	
   

  	
  New York, NY  10286

  
	
  Bank ABA:

  	
  021 000 018

  
	
  or

  
	
  SWIFT Code:

  	
  IRVTUS3N

  
	
  For Further Credit:

  
	
  FSA
  Portfolio Management Inc.

  
	
  Account # : 
  8900 298 073

  
	
  Reference:     Please
  include full details on the wire.

  
	
   

  
	
   

  
	
  In the case of Greenrange:

  
	
   

  
	
  Name of Bank:  Mellon Bank

  
	
  Address of Bank:  Pittsburgh, PA

  
	
  ABA Number: 043-000-261

  
	
  Credit to: 
  Merrill Lynch A/C 101-1730

  
	
   

  
	
  For credit to:  81N-07016 n/o

  
	
  Greenrange Partners

  
	
   

  
	
  Reference:

  	
  Please include full details on the wire

  
				



 


Each Payee may change its wire transfer
instructions by providing the Option Holder and SPS with written notice of such
Payee’s new wire transfer instructions.


 


(e)                                  Reconciliation
and Dispute Resolution.  SPS shall deliver
to the Payee Designated Representatives, within five (5) days after its
receipt of written notice from the Payee Designated Representatives, all
related back-up material that may be reasonably requested to verify the
accuracy of the related Monthly Contingent Payment report delivered pursuant to
Section 3(a) and to recalculate the related Monthly Contingent
Payment.  SPS shall cooperate in good
faith with the Payees in their review of such material and in the Payees’
reconciliation.  In the event that that
PMI or FSA does not agree with the amount of any particular Monthly Contingent
Payment or the Final Payment Amount, such Payee may deliver to SPS (with a copy
to the Option Holder) a notice objecting to the amount of such payment (an “Objection”).  If PMI or FSA delivers an Objection to SPS
(with a copy to the Option Holder), the Payees and SPS shall negotiate in good
faith with a view to resolving the disputed items and arriving at a mutually
agreed amount for such payment.  If such
negotiations fail to resolve all


 


12





















 


disputed items within thirty (30) days after the Objection was
delivered to SPS, the remaining disputed items shall be submitted to Ernst &
Young LLP (or such other “Big Four” accounting firm as is mutually agreed to by
SPS and the Payees) (the “Accountants”) for final and exclusive
resolution.  The Accountants shall afford
each of SPS and the Payees and their respective representatives the opportunity
to present their positions as to the disputed items (which opportunity shall
not extend for more than thirty (30) days after the expiration of the thirty
(30) day period described in the previous sentence).  Each presentation shall include a statement
of the Monthly Contingent Payment or Final Payment Amount, as applicable,
proposed by such party and shall be accompanied by reasonably detailed
supporting documentation.  No later than
ten (10) days after the presentations to the Accountants by SPS and the
Payees of their respective positions on the disputed items, the Accountants
shall deliver their decision with respect to the disputed items, which decision
shall be in writing and shall include a reasonably detailed description of the
basis for such determination.  The
Accountants’ determination shall be final and binding upon all parties hereto
and shall be reflected in any necessary revisions to the relevant Notification
Summary, and SPS shall promptly remit to the Payees any amounts due, if
applicable, as a result of the Accountants’ determination, in proportion to the
percentages identified in Section 3(d).  The fees, costs and expenses of the
Accountants in connection with any such determination shall be borne by SPS if the
amount adopted as correct by the Accountants is closer to the amount proposed
by the Payees than the Monthly Contingent Payment or the Final Payment Amount,
as the case may be, originally proposed by the Option Holder and shall
otherwise be borne by the Payees in proportion to the percentages identified in
Section 3(d).  The
Accountants’ decision may be enforced in any state or federal court of
competent jurisdiction.  The failure to
deliver an Objection with respect to any particular Monthly Contingent Payment
(or the component calculations thereof) shall in no way prejudice the rights of
the Payees to object to other Monthly Contingent Payments or the Final Payment
Amount.


 


(f)                                    Payments
Unsecured.  The Monthly Contingent
Payment obligations owing under this Agreement shall be unsecured.  No Payee will require, solicit or accept the
pledge, mortgage, assignment or hypothecation of any property or property rights
or interests of SPS or the Option Holder, including, without limitation, the
Servicing Rights, as direct or indirect security for such Monthly Contingent
Payment obligations, or any covenant to pledge any of the same, and the parties
hereto agree that any such pledge, mortgage, assignment or hypothecation shall
be void ab initio.  Nothing in this Agreement, including the preceding
sentence, shall be construed to prevent or limit the Payees from assigning
their right to receive all or a portion of the Monthly Contingent Payments and
the Final Payment Amount.


 


(g)                                 No Set Off.  All payments to be made by the Option Holder
or SPS to a Payee hereunder (including, without limitation, the Monthly
Contingent Payments and the Final Payment Amount) shall be made without any
setoff, abatement, withholding, deduction, counter claim or reduction in
respect of, or otherwise affected by, any claim or dispute related to the
Option Agreement, any Servicing Agreement or any Subsequent Designated
Agreement, that the Option Holder or SPS or any of their respective parents,


 


13





















 


subsidiaries or Affiliates may have with any of the Payees or their
respective parents, subsidiaries or Affiliates. 
For the avoidance of doubt:


 


(i)            the
Monthly Contingent Payment may be reduced by the Aggregate Unit Cost,
Designated Litigation Expense Adjustment or Cumulative Shortfall Deductible
Amount (as applicable), Customer Accommodation Amount, Customer Reversal Amount,
Designated Nonrecoverable Advances and Interest Expense, as provided herein;


 


(ii)           the
Final Payment Amount may be reduced by the Aggregate Unit Cost and the Interest
Expense, as contemplated by Section 3(c); and


 


(iii)          nothing
in the immediately preceding sentence shall preclude the Option Holder from
seeking indemnification pursuant to and in accordance with the provisions of Section 11.2(d) of
the Option Agreement.


 


(h)                                 No Sale of
Servicing Rights.  SPS shall
not sell, transfer or assign, and the Option Holder shall not permit the direct
or indirect sale, transfer or assignment of, its respective right, title or
interest in and to the Servicing Agreements and Designated Servicing
Agreements.  SPS shall, and the Option
Holder shall cause SPS to, maintain its corporate existence until this
Agreement is terminated in accordance with Section 10 hereof.


 


Section 4.  Effective Date.


 


This Agreement shall become effective on the
Option Closing Date.


 


Section 5.  Representations and Warranties of SPS


 


SPS represents and warrants to each Payee and
the Option Holder that, as of the date hereof and the Option Closing Date:


 


(a)                                  SPS
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.  SPS
has all requisite power and authority to own its properties and carry on its
business as and where now being conducted. 
SPS has all requisite power and authority to enter into this Agreement,
and the agreements to which it is or will become a party as contemplated by
this Agreement, and to carry out the transactions contemplated hereby.


 


(b)                                  The
execution and delivery by SPS of this Agreement, and of the agreements to be
entered into pursuant hereto, and the consummation of the transactions
contemplated hereby have each been duly and validly authorized by all necessary
action, and this Agreement and such other agreements constitute valid and
legally binding agreements enforceable in accordance with their respective
terms.


 


(c)                                  The
execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby will not violate, conflict with, result in a breach of,
constitute a default under or be prohibited by, or require any additional
approval, waiver


 


14





















 


or consent under SPS’s charter or other agreement relating to its
organization or any instrument or agreement to which it is a party or by which
it is bound or any federal or state law, rule or regulation or any
judicial or administrative decree, order, ruling or regulation applicable to
it.


 


(d)                                  There
is no litigation or action at law or in equity pending, or, to SPS’s knowledge,
threatened against SPS and no proceeding or investigation of any kind is
pending or, to its knowledge, threatened, by any federal, state or local
governmental or administrative body, which could reasonably be expected to
materially affect SPS’s ability to consummate the transactions contemplated
hereby.


 


(e)                                  SPS
holds and maintains all required permits, licenses, approvals and registrations
for the servicing of the Mortgage Loans, except where the failure to hold any
such permit, license, approval or registration would not have a material
adverse effect on the servicing of the Mortgage Loans or the ability of SPS to
perform its obligations hereunder.


 


Section 6.  Representations and Warranties of the Option
Holder


 


The Option Holder represents and warrants to
the Payees and to SPS that, as of the date hereof and the Option Closing Date:


 


(a)                                  The Option Holder is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.  The
Option Holder has all requisite power and authority to own its properties and
carry on its business as and where now being conducted.  The Option Holder has all requisite power and
authority to enter into this Agreement, and the agreements to which it is or
will become a party as contemplated by this Agreement, and to carry out the
transactions contemplated hereby.


 


(b)                                  The
execution and delivery by the Option Holder of this Agreement, and of the
agreements to be entered into pursuant hereto, and the consummation of the
transactions contemplated hereby have each been duly and validly authorized by
all necessary action, and this Agreement and such other agreements constitute
valid and legally binding agreements enforceable in accordance with their
respective terms.


 


(c)                                  The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not violate, conflict with, result in a
breach of, constitute a default under or be prohibited by, or require any
additional approval, waiver or consent under the Option Holder’s charter or
other agreement relating to its organization or any instrument or agreement to
which it is a party or by which it is bound or any federal or state law, rule or
regulation or any judicial or administrative decree, order, ruling or
regulation applicable to it.


 


(d)                                  There is no
litigation or action at law or in equity pending, or, to the Option Holder’s
knowledge, threatened against the Option Holder and no proceeding or
investigation of any kind is pending or, to its knowledge, threatened, by any
federal, state or local governmental or administrative body, which could
reasonably be expected to


 


15





















 


materially affect the Option Holder’s ability to consummate the
transactions contemplated hereby.


 


Section 7.  Servicing of the Mortgage Loans


 


(a)                                  Compliance
with Servicing Agreements.  From and
after the Option Closing Date, SPS shall service the Mortgage Loans in
accordance with the Servicing Requirements, and in compliance with the Consent
Order, the Curry Settlement, all consent agreements or similar documents to
which SPS is a party with any other federal, state, or local regulatory
authority or any other similar agreement, and applicable laws, rules and
regulations and shall have full power and authority, acting alone, to do any
and all things in connection with such servicing and administration that SPS
may deem reasonably necessary or desirable, consistent with the terms of this
Agreement and the Servicing Requirements. 
From and after the Option Closing Date, with respect to the Mortgage
Loans, SPS shall apply the Servicing Requirements, consistent with the
practices employed by SPS during the six month period prior to the Option Closing
Date, unless prohibited by applicable law.


 


(b)                                  Ancillary
Income.  Notwithstanding anything
herein to the contrary, all components of Servicing Income and Professional
Services Income for any calendar month based on fees or charges billed directly
to borrowers shall be determined as if the rate for each such fee or charge utilized
by SPS is the same as the rate for such fee or charge utilized by SPS during
the six months prior to the Option Closing Date (regardless of whether SPS
actually continues to impose such fees or charges at such rates) or, if
greater, the highest rate for such fee or charge actually utilized by SPS in
the applicable jurisdiction during such calendar month for the Portfolio
Mortgage Loans; provided, however, that:


 


(i)            if
any such fee or charge is shown to, or due to a change in law will, violate
applicable law, the rate deemed to be used for the jurisdiction subject to such
law shall be limited to amounts that do not violate applicable law;


 


(ii)           if
a regulator with jurisdiction over SPS requires that SPS reduce such fee or
charge, or indicates that SPS might face adverse regulatory consequences for
failing to reduce such fee or charge, the rate deemed to be used in such
jurisdiction shall be limited to the rate required, or requested in order to
avoid adverse regulatory consequences, by the regulator; and


 


(iii)          subject
to Sections 7(b)(i) and 7(b)(ii), if any Regulatory Fee
Scrutiny exists with respect to a particular fee or charge billed directly to
borrowers that is included in the Fee Matrix in effect on the Option Closing
Date, the rate of such particular fee or charge used for all Mortgage Loans within
the jurisdiction of the applicable regulator shall be deemed to be equal to the
greater of:


 


(x)                       the highest
rate for such fee or charge actually utilized by SPS in the applicable
jurisdiction during such calendar month for the Portfolio Mortgage Loans, and


 


16





















 


(y)                     (1) the
amount shown by the Option Holder to be the average of the top two (2) rates
at which members of the Peer Group impose such fee or charge in the applicable
jurisdiction, if it has obtained such information from at least two (2) members
of the Peer Group, or (2) if the Option Holder obtains information from
only one (1) member of the Peer Group, 98% of the rate at which such
member imposes such fee or charge; provided, however, that for
purposes of this clause (y), (a) the Option Holder shall use its commercially
reasonable efforts to obtain the amount of such fee or charge billed by each
member of the Peer Group in such jurisdiction, (b) if the Option Holder
has been unable to obtain information from a member of the Peer Group (after
using its commercially reasonable efforts to do so), the average described in
clause (y)(1) shall be based on only the Peer Group members’ fees or
charges as to which the Option Holder has obtained such information, and (c) for
the avoidance of doubt, if the top two (or more) rates of Peer Group members
are identical, the fee or charge to be used hereunder shall be equal to 98% of such
rate.


 


(c)                                  Standard
of Care.  From and after the Option Closing
Date, SPS shall assure that the Mortgage Loans are generally serviced with the
same degree of care, attention and skill as the other Portfolio Mortgage Loans.


 


(d)                                  Termination
of Servicing Agreements.  SPS will
not waive any material right which it may have under a Servicing Agreement
without the prior written consent of the Payee Designated Representatives,
unless such waiver will not adversely affect the Payees’ right to or interest
in the Monthly Contingent Payments or the Final Payment Amount.


 


(e)                                  Quarterly
Accounting Forecast.  Not later than
15 days before the end of any calendar quarter (any such date being a “Forecast
Date”), beginning with the calendar quarter in which the Closing occurs and
ending with the last quarter of 2007, the Company shall deliver to the Payees a
forecast (each such forecast being a “Forecast”) prepared as follows: for each calendar
quarter beginning with the quarter immediately following the Forecast Date and
ending with the last quarter of 2009, the Company shall estimate the amounts to
be realized on account of Servicing Income, Interest Income, Professional
Services Income, Interest Expense and Aggregate Unit Costs (the “Forecasted
Items”), as those terms are used in, and with the supporting detail provided
by, Exhibit A hereto.  The
estimates will be prepared using substantially the same procedures that the
Company used in the six months prior to the Option Closing Date hereof to
derive the cash flow projections used in its determination of the GAAP balance
sheet values for the Servicing Rights.  The
Payees acknowledge that (i) the Forecasts are being prepared by the Company
only as an accommodation to certain reporting requirements of the Payees and (ii) SPS
shall not be deemed to make any representations or warranties as to whether the
Forecasts will reflect the future performance of SPS or its business or whether
the Forecasts will be achieved.  Monthly
Contingent Payments paid to the Payees from time to time shall be determined
from amounts actually received or paid on account of the Forecasted Items and
not from the amounts shown in any of the


 


17





















 


Forecasts.  SPS shall reasonably
promptly provide each Payee with any additional information reasonably
requested by such Payee in order for such Payee to prepare its audited
financial statements and to satisfy any financial reporting obligations
applicable to it.  Notwithstanding
anything to the contrary contained herein, in no event shall the Option Holder
nor SPS have any liability for the accuracy of the information that it provides
pursuant to this Section 7(e).


 


Section 8.  Monitoring and Consultation Rights


 


(a)                                  Monthly
Reporting.  SPS agrees that from and
after the Option Closing Date, to the extent not prohibited by applicable law or
the Servicing Requirements, SPS shall provide the Payees with: (i) access
to all loan-level and pool-level monthly servicing reports and all other
reports, notices and certifications that are delivered by SPS with respect to the
Servicing Agreements, together with copies of such reports, notices and
certifications upon request, and (ii) all documentation and information
reasonably requested in writing by any Payee Designated Representative to
verify the accuracy of any Monthly Contingent Payment report delivered pursuant
to Section 3(a).


 


(b)                                  Access
to Information.  Upon reasonable written
prior notice to SPS, SPS shall provide the Payees and their respective counsel,
accountants and other representatives with reasonable access during normal
business hours to all of SPS’s files, books and records relating to the Mortgage
Loans; provided, however, that SPS shall be entitled to take
reasonable and appropriate actions to assure that the Payees maintain the
confidentiality of the names and addresses of the borrowers under the Mortgage
Loans and all non-public information obtained in any such investigation that
could reasonably be construed to be of a confidential or proprietary
nature.  SPS shall provide the Payees
with access to and reasonable cooperation of SPS’s officers and employees in
connection with any such investigation.


 


(c)                                  On-site
Monitoring.  PMI and FSA shall have
the collective right, but not the obligation, to designate one individual to conduct
onsite monitoring, to the extent not prohibited by law, of SPS’s compliance
with this Agreement.  PMI and FSA shall
have the collective right, exercisable in their sole discretion at any time, to
remove any individual designated to conduct onsite monitoring pursuant to this Section 8(c) and
may, if they collectively so elect, designate a new individual to conduct
onsite monitoring pursuant to this Section 8(c).  SPS shall provide (without cost to the Payees)
such individual with an assigned workspace, reasonably requested support from
SPS’s Information Technology Department and access, during normal business
hours, to all of SPS’s files, books and records relating to the Mortgage Loans,
with such access subject to SPS’s normal security procedures for third party
access to such information.  It is
expressly understood and agreed that the designated individual shall in no
event be deemed an officer or employee of SPS.


 


(d)                                  Designated
Representatives.  SPS shall designate
two individuals (each an “SPS Designated Representative”) and PMI and
FSA shall each designate one individual (each a “Payee Designated
Representative”, and together with the SPS Designated Representatives, the “Designated
Representatives”) as contacts for SPS, PMI


 


18





















 


and FSA, respectively, for all communications relating to this
Agreement.  Each of PMI and FSA shall
have the individual right, exercisable in its sole discretion at any time, to
remove any individual designated by it pursuant to the preceding sentence and
to designate a new individual as a contact for such Payee.  Each of the Payee Designated Representatives and
at least one of the SPS Designated Representatives shall meet in person not
less frequently than monthly during the first 18 months following the Option
Closing Date, and beginning in the 19th month following the Option
Closing Date and each quarter thereafter until the payment
of the Final Payment Amount and conclusion of any dispute resolution
proceedings pursuant to Section 3(e) hereof with respect
thereto, to review any issues identified by SPS or the Payees with
respect to this Agreement.


 


(e)                                  Designated
Litigation Expense and Regulatory Matters Review. In addition to the
meetings referred to in Section 8(d) hereof, each of the Payee
Designated Representatives and at least one of the SPS Designated
Representatives (together with, if appropriate, one or more officers of SPS
responsible for litigation and regulatory procedures) shall meet in person (except
as otherwise mutually agreed to by such Designated Representatives) not less
frequently than monthly to review (i) all Regulatory Actions (other than
routine examinations, except to the extent that the applicable regulator
identifies any matters which may give rise to matters subject to the indemnity
provided in Section 11.2(f) of the Option Agreement), (ii) any
action initiated by or on behalf of a consumer in any federal, state or
arbitral forum in respect of a Mortgage Loan which is classified as a “Risk
Rated 5” action by SPS, and (iii) any Designated Litigation Expenses which
were used to reduce prior Contingent Monthly Payments or resulted in a
Cumulative Shortfall Deductible Amount. 
The meetings referred to in this Section 8(e) and Section 8(d) shall
be held at a mutually convenient location in New York, New York (with
telephonic access provided upon request to each Payee Designated Representative
and SPS Designated Representative), or via teleconference.


 


(f)                                    Payees’
Consultation Rights.  Each Payee may
(but has no obligation to) provide SPS with advice regarding the management of
specific Mortgage Loans, which advice may be made in writing, in the form of electronic
mail or orally.  Such advice may be based
on observations made in conjunction with the information provided pursuant to Section 8(a),
8(b), 8(c), 8(d) and 8(e) of this
Agreement, or in conjunction with any Payee’s general review of SPS’s operations.  Each party to this Agreement acknowledges
that (i) such advice is made in the form of recommendations, and that the
Payees do not have the right (nor any obligation) to direct SPS in performing
its duties under the Servicing Agreements and (ii) SPS has no obligation
to follow or adopt such recommendation.


 


(g)                                 Confidentiality.  The Payees shall keep confidential and shall
not divulge to any party, without the prior written consent of SPS, any
documents, files or other information pertaining to the Mortgage Loans or any
mortgagor thereunder (“Customer Information”), except to the extent that
it is appropriate for the Payees to do so in enforcing their rights hereunder
or working with their respective legal counsel, auditors, taxing authorities,
other governmental agencies, insurance carriers, any property inspector, or
other person necessary to fulfill such Payee’s obligations hereunder.  To the extent that the Customer Information
includes information which constitutes “nonpublic


 


19





















 


personal information” under 16 C.F.R. 314 (2002), the Payees will
maintain appropriate safeguards to safeguard such Customer Information in
accordance with the “Standards for Safeguarding Customer Information” as
required by 16 C.F.R., Chapter I, Part 314.  Notwithstanding any provision of this
Agreement, the trademarks, trade secrets, know-how, business methods and
practices, internal procedures and other intellectual property and confidential
information of SPS (“Proprietary Information”) shall remain vested in SPS,
and are not hereby transferred to the other party, and SPS shall have the right
to take all actions necessary to protect the Proprietary Information.  Notwithstanding any provision of this
Agreement, this Agreement and its terms may be disclosed by the Payees without
restriction.


 


Section 9.  Option Holder


 


(a)                                  Compliance
with Agreement.  From and after the Option
Closing Date, the Option Holder shall cause SPS to fully and completely perform
each of SPS’s obligations under the Agreement in the manner and at the times
set forth herein.


 


(b)                                  Subsequent
Designated Agreements.  With respect
to any mortgage servicing rights acquired or to be acquired by SPS after November 30,
2004 and prior to the Option Closing Date from any third party not affiliated
with the Option Holder, SPS may request that the Option Holder indicate whether
the purchase price to be bid by SPS for such servicing rights is acceptable to
the Option Holder.  The Option Holder
shall respond to any such request within three (3) Business Days.  If the Option Holder shall have notified SPS
that the purchase price is acceptable, then such servicing rights will not
constitute Subsequent Designated Agreements for purposes of the Cash Payment.  If the Option Holder shall not have notified
SPS that the purchase price is acceptable, but SPS proceeds with the
transaction, then the related pooling and servicing agreement, whole loan
servicing agreement, subservicing agreement or similar agreement shall be
considered a “Subsequent Designated Agreement”.  Nothing in this Section 9(b) shall
be deemed to limit SPS’s ability to acquire mortgage servicing rights from any
third party not affiliated with the Option Holder.  The Subsequent Designated Agreements in
effect as of the date hereof are identified on Schedule 1 hereto.  On the Option Closing Date, SPS shall deliver
to the Payees a revised Schedule 1 that identifies all of the
Subsequent Designated Agreements as of such date.


 


Section 10.  Termination of the Agreement


 


Except as otherwise specifically set forth
herein, the obligations and responsibilities of the parties to this Agreement
shall terminate upon the date (the “Termination Date”) which is the earliest to
occur of: (i) the date on which all Monthly Contingent Payments and the
Final Payment Amount have been paid in full to the Payees in the manner
required hereunder and are not subject to dispute under Section 3(e) hereof;
and (ii) such other date as shall have been agreed upon by all of the
parties hereto.  Section 8(g) of
this Agreement shall survive any termination of this Agreement.  Section 11 of this Agreement
shall survive any termination of this Agreement until the date (the “Indemnification
Expiration Date”) that is 18 months after the Termination Date; provided,
however, that, notwithstanding the foregoing, the Option Holder shall remain


 


20





















 


obligated under Section 11 with respect to any matter
giving rise to indemnification thereunder as to which an Indemnified Party
shall have given written notice to the Option Holder prior to the
Indemnification Expiration Date.


 


Section 11.  Indemnification


 


(a)                                  Indemnification
Obligations.  Option Holder (the “Indemnifying
Party”) shall indemnify, defend and hold harmless each of the Payees and their
respective parents, subsidiaries, Affiliates, directors, officers, shareholders,
representatives, successors and assigns (each an “Indemnified Party”),
from and against, without duplication, any and all actual losses, costs,
obligations, liabilities, damages, settlement payments, awards, judgments,
fines, penalties, damages, deficiencies or other charges (including without
limitation reasonable attorneys’ fees and expenses and reasonable accountants’
fees and expenses), whether or not arising out of any claims by or on behalf of
a third party, to the extent arising from: (i) the willful misconduct or
gross negligence of the Indemnifying Party, SPS (from and after the Closing
Date) or any of their respective agents in the performance of the duties and
obligations of SPS (from and after the Closing Date) or the Option Holder hereunder;
or (ii) the breach by the Indemnifying Party or SPS (from and after the
Closing Date) of any of the representations, warranties or covenants of SPS or
the Option Holder set forth herein; provided, however, that, in
the event that the loss giving rise to such indemnification results from a
Mortgage Loan Servicing Error occurring both before and after the Option
Closing Date, then (i) such indemnity shall not apply to the portion of
any such loss that results solely from a Mortgage Loan Servicing Error that
occurred before the Option Closing Date and continues for no more than 180 days
after the Option Closing Date; and (ii) the amount of loss indemnified shall
be reduced by 50% of the portion of any such loss that results solely from a
Mortgage Loan Servicing Error that occurred before the Option Closing Date and continues
for more than 180 days after the Option Closing Date.  Notwithstanding anything to the contrary
contained herein, the Option Holder agrees that a Mortgage Loan Servicing Error
that occurs solely after the Option Closing Date shall not adversely affect or
otherwise diminish the foregoing indemnity in any respect.


 


(b)                                  Indemnification
Procedures.  (i)  Within ten (10) days
after receipt by an Indemnified Party of any claim or the commencement of any
action, the Indemnified Party shall, if a claim in respect thereof is to be
made against the Indemnifying Party under this Agreement, deliver a claim
notice to the Indemnifying Party; provided, however, that the
omission to so notify the Indemnifying Party shall not relieve the Indemnifying
Party from any liability that the Indemnifying Party may have to the
Indemnified Party unless such delay has materially prejudiced the Indemnifying
Party.  In the event that such claim is
made or action brought against the Indemnified Party and the Indemnified Party
notifies the Indemnifying Party of the commencement thereof, the Indemnifying
Party shall be entitled to participate therein and, to the extent that it shall
wish, to assume the defense thereof with counsel reasonably satisfactory to the
Indemnified Party.  The Indemnifying
Party shall give prompt notice to the Indemnified Party of whether it intends
to participate and/or assume the Indemnified Party’s defense.


 


21





















 


(ii)  The Indemnified Party may also
employ separate counsel in any action or claim and to participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless: 
(i) the employment thereof has been specifically authorized by the Indemnifying
Party in writing; (ii) the named parties to such action (including any
impleaded parties) include both the Indemnified Party and the Indemnifying Party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them; or (iii) the Indemnifying
Party has failed to assume the defense of such action and employ counsel
reasonably satisfactory to the Indemnified Party.  If such Indemnified Party notifies the Indemnifying
Party in writing that it elects to employ separate counsel at the expense of
the Indemnifying Party in accordance with the preceding sentence, the Indemnifying
Party shall not have the right to assume the defense of such action on behalf
of such Indemnified Party, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to local counsel) at any
time for all Indemnified Parties.


 


(iii)  Upon the payment in full of any
claim hereunder, the Indemnifying Party shall be subrogated to the rights of
the Indemnified Party against any person with respect to the subject matter of
such claim.  In the event of a dispute,
the parties shall proceed in good faith to negotiate a resolution of such
dispute.


 


(iv)  The Indemnifying Party shall not be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action, the Indemnifying Party agrees to indemnify and hold harmless any Indemnified
Party from and against any loss or liability by reason of such settlement or
judgment.  The Indemnifying Party shall not,
without prior written consent of the Indemnified Party, effect any settlement
of any pending or threatened action in respect of which such Indemnified Party
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party unless such settlement includes an unconditional release
of such Indemnified Party from all liability on any claims that are the subject
matter of such action.


 


(v)  In the event that the Indemnifying
Party reimburses the Indemnified Party with respect to any third party claim
and the Indemnified Party subsequently receives reimbursement from another
person with respect to that third party claim, then the Indemnified Party shall
remit such reimbursement from such other person to the Indemnifying Party
within fifteen (15) business days of receipt thereof.


 


(c)                                  Tax
Treatment of Indemnification Payments.  The
parties agree to treat any indemnification payment made pursuant to this
Agreement as an adjustment to the Exercise Price (as defined in the Option
Agreement) for tax purposes.


 


22





















 


Section 12.  Miscellaneous


 


(a)                                  Amendments.  This Agreement may be amended from time to
time by the parties hereto only by written agreement signed by all of the
parties hereto.


 


(b)                                  Further
Assurances.  Each party hereto
covenants and agrees that, subsequent to the execution of this Agreement, and
without any additional consideration, such party will execute and deliver any
further legal instruments and perform any acts which are or may become
necessary to effectuate the purposes of this Agreement.


 


(c)                                  GOVERNING
LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.


 


(d)                                  WAIVER
OF JURY TRIAL.  EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.  EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (1) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (2) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (3) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (4) EACH
PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


 


(e)                                  Notices.  Any notices or other communications permitted
or required hereunder shall be in writing and shall be deemed conclusively to
have been given if delivered by overnight courier (delivery being evidenced by
a written receipt) to, personally delivered at, mailed by registered mail,
postage prepaid, and return receipt requested to or transmitted by confirmed facsimile,
to (i) in the case of SPS, if by overnight courier, personal delivery or
registered mail, 3815 South West Temple, Salt Lake City, Utah 84115-4412, Attn:
General Counsel or, if by facsimile (801) 293-2555, or such other address or
telecopy number as may hereafter be furnished to the other parties hereto in
writing by SPS; (ii) in the case of FSA, if by overnight courier, personal
delivery or registered mail, 31 West 52nd Street, New York, New York
10019, Attn: General Counsel, if by e-mail to generalcounsel@fsa.com or, if by facsimile
[(212) 339-3560, or such other address or telecopy number as may hereafter be
furnished to the other parties hereto in writing by FSA; provided, however,
that the Notification Summary to be delivered to FSA shall be delivered via
telecopy or e-mail to the Payee Designated Representative of FSA at such
telecopy or e-mail address as such Payee Designated


 


23





















 


Representative may specify; (iii) in the case of PMI, if by
overnight courier, personal delivery or registered mail, 3003 Oak Road, Walnut
Creek, California 94597, Attn: General Counsel, or, if by facsimile (925) 658-6384,
or such other address or telecopy number as may hereafter be furnished to the
other parties hereto in writing by PMI; provided, however, that the
Notification Summary to be delivered to PMI shall be delivered via telecopy or
e-mail to the Payee Designated Representative of PMI at such telecopy or e-mail
address as such Payee Designated Representative may specify; (iv) in the
case of Greenrange, if by registered mail, P.O. Box 975, Darien
Connecticut  06820, Attn: James H.
Ozanne, and if by overnight courier or personal delivery to 114 Goodwives River
Road, Darien, Connecticut  06820 or, if
by facsimile (203) 655-6044, or such other address or telecopy number as may
hereafter be furnished to the other parties hereto in writing by Greenrange;
and (v) in the case of the Option Holder, if by overnight courier,
personal delivery or registered mail, 11 Madison Avenue, 4th Floor,
New York, NY  10010, Attn: Bruce
Kaiserman, or, if by facsimile (917) 326-7936, with a copy to One Madison
Avenue, 9th Floor, New York, NY 
10010, Attn:  Colleen A. Graham, Esq.,
or if by facsimile (212) 325-8282, or such other address or telecopy number as
may hereafter be furnished to the other parties hereto in writing by the Option
Holder.


 


(f)                                    Exhibits
and Schedules.  The Exhibits and Schedules
to this Agreement are hereby incorporated and made a part hereof and are an
integral part of this Agreement.


 


(g)                                 Severability.  Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.  Any part, provision, representation or
warranty of this Agreement which is prohibited or unenforceable or is held to
be void or unenforceable in any jurisdiction shall be ineffective, as to such
jurisdiction, to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void
or unenforceable any provision hereof. 
If the invalidity of any part, provision, representation or warranty of
this Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good-faith, to
develop a structure the economic effect of which is as close as possible to the
economic effect of this Agreement without regard to such invalidity.


 


(h)                                 General
Interpretive Principles.      For
purposes of this Agreement, except as otherwise expressly provided or unless
the context otherwise requires:


 


(i)                                     the
terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular;


 


(ii)                                  accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;


 


24





















 


(iii)                               references
herein to “Sections,” “Subsections” and other subdivisions without reference to
a document are to designated Sections, Subsections and other subdivisions of
this Agreement;


 


(iv)                              the
words “herein,” “hereof,” “hereunder” and other words of similar import refer
to this Agreement as a whole and not to any particular provision; and


 


(v)                                 the
term “include” or “including” shall mean without limitation by reason of
enumeration.


 


(i)                                    Reproduction
of Documents.  This Agreement and all
documents relating thereto, including, without limitation, (i) consents,
waivers and modifications which may hereafter be executed, (ii) documents
received by any party at the closing, and (iii) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. 
The parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such reproduction
was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.


 


(j)                                    Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one instrument.  It shall not be necessary in making proof of
this Agreement or any counterpart thereof to produce or account for any other
counterpart.  Telecopy signatures shall
be deemed valid and binding to the same extent as originals.


 


(k)                                Expenses.  Each of the parties hereto shall bear its
own expenses incurred in connection with the transactions contemplated by this
Agreement.


 


(l)                                    Entire
Agreement, Successors and Assigns.  This
Agreement and the Option Agreement constitute the entire agreement between the
parties hereto and supersedes all rights and prior agreements and
understandings, oral and written, between the parties hereto with respect to
the subject matter hereof.  This
Agreement shall not be assignable, directly or indirectly, in whole or in part by
any party hereto without the prior written consent of the other parties hereto.  Notwithstanding the foregoing, in the case of
any assignment by the Payees, consent shall not be unreasonably withheld or
delayed by the Option Holder or SPS; provided, however, that such
consent may be unreasonably withheld or delayed by the Option Holder or SPS if
the assignee is a competitor of one or more of the mortgage or mortgage-related
businesses conducted by the Option Holder or any of its Affiliates or any of
the businesses conducted by SPS; and provided, further, that the
Payees may assign their rights under this Agreement to any of their respective
Affiliates without the consent of any other party hereto.  This Agreement and any rights, remedies,
obligations or liabilities under or by reason of the Agreement shall inure to
the


 


25





















 


benefit of and be binding on the parties hereto and on their respective
successors and permitted assigns.


 


 


Rest of Page left
Blank Intentionally


 


26





















 


IN WITNESS WHEREOF, the parties have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, as of the dates set forth below.


 


	
   

  	
  SELECT PORTFOLIO SERVICING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matt Hollingsworth

  	
   

  
	
   

  	
   

  	
  Name: Matt Hollingsworth

  
	
   

  	
   

  	
  Title: CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON (USA), INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Healy

  	
   

  
	
   

  	
   

  	
  Name: James
  P. Healy

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE PMI GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Victor J. Bacigalupi

  	
   

  
	
   

  	
   

  	
  Name: Victor J. Bacigalupi

  
	
   

  	
   

  	
  Title: Executive Vice President, Chief
  Administrative Officer and General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald P. Lofe, Jr.

  	
   

  
	
   

  	
   

  	
  Name: Donald P. Lofe, Jr.

  
	
   

  	
   

  	
  Title: Executive Vice President and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FSA PORTFOLIO MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce E. Stern

  	
   

  
	
   

  	
   

  	
  Name: Bruce E. Stern

  
	
   

  	
   

  	
  Title: General Counsel and Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GREENRANGE PARTNERS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James H. Ozanne

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


Signature Page to
Contingent Payment Agreement


 





















 


Exhibit A

to

Contingent Payment Agreement


 


Monthly Contingent
Payment Calculation


 


Prepared
for Calendar Month                  ,
20


 


	
  1. 
  Servicing Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Servicing
  fees and subservicing fees, earned

  	
   

  	
  $

  	
  xxxxxx

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Plus
  Ancillary Income

  	
   

  	
  $

  	
  xxxxxx

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Less BofA
  Mortgage Loan demand fee applied against outstanding receivable on balance
  sheet

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Less
  compensating interest paid by SPS under the related Servicing Agreement

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Subtotal
  Servicing Income

  	
   

  	
   

  	
   

  	
  $

  	
  xxxxxx

  	
   

  
																		



 


2. 
Professional Services Income (PSI)


 


	
   

  	
   

  	
  ARS

  	
   

  	
  RRR

  	
   

  	
  MWR

  	
   

  	
  PIA

  	
   

  	
  PIL

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All income
  earned from professional services

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Divided by #
  Units(1) and Portfolio Mortgage Loans generating income from
  professional services

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unit Margin

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Multiplied
  by # of Mortgage Loans generating income from professional services

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  	
  xxx

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Calculated
  PSI by business

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
  $

  	
  xxx

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subtotal
  calculated PSI

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  xxxxxx

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.  Recovery Amount

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  xxxxxx

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.  Interest Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  xxxxxx

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2a.  Subtotal Monthly Net Cash Flow Revenues

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  xxxxxx

  	
   

  



 










(1) When
the income earned from professional services is derived from both Portfolio
Mortgage Loans and other sources, those other sources will be measured in units
assigned so that the effort required to obtain income earned from professional
services for the unit is comparable to the effort so required for a Portfolio
Mortgage Loan.


 





















 


	
  5. 
  Aggregate Unit Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Unit Cost
  for Mortgage Loans less than 90 days Delinquent

  	
  $

  	
  18.35

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Number of
  Mortgage Loans less than than 90 days Delinquent

  	
  Xxxx

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Costs
  for Mortgage Loan less than 90 days Delinquent

  	
   

  	
   

  	
  $

  	
  xxxxxx

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Unit Cost
  for Mortgage Loan 90 days or more Delinquent

  	
  $

  	
  50.96

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Number of
  Mortgage Loans 90 days or more Delinquent

  	
  xxxx

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Costs
  for Mortgage Loans 90 days or more Delinquent

  	
   

  	
   

  	
  $

  	
  xxxxxx

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Subtotal
  Aggregate Unit Costs

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6. 
  Designated Litigation Expense Adjustment

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OR (if
  the Litigation Reserve Amount has been

  reduced to zero and a Cumulative Shortfall exists):

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6. 
  Cumulative Shortfall Deductible Amount

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7. 
  Designated Nonrecoverable Advances

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8. 
  Customer Accommodation Amount

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9. 
  Customer Reversal Amount

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10. 
  Interest Expense

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Average
  outstanding Advances during the calendar month

  	
   

  	
   

  	
  $

  	
  xxxx

  	
   

  	
   

  	
   

  
	
   

  	
  One-month
  LIBOR as of the first Business Day of the immediately preceding calendar
  month

  	
   

  	
   

  	
   

  	
          

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10a.  Subtotal Monthly Net Cash Flow Expenses

  	
   

  	
  $

  	
  (xxxxx

  	
  )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly Net Cash Flow

  	
   

  	
  $

  	
  xxxxxx

  	
   

  
												



 





















 


	
  For your information:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1. 
  The remaining Litigation Reserve Amount at the end of the calendar
  month was

  	
   

  	
  $

  	
  xxxxxxx

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. 
  The Shortfall for the calendar month and all prior months was

  	
   

  	
  $

  	
  xxxxxxx 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3. 
  The Cumulative Shortfall Deductible Amount for all prior months was

  	
   

  	
  $

  	
  xxxxxxx 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4. 
  The Cumulative Shortfall at the end of the calendar month was

  	
   

  	
  $

  	
  xxxxxxx

  	
   

  



 





















 


Exhibit B

to

Contingent Payment Agreement


 


Sample
Timeline


 


For purposes of illustration only, assuming that on August 12,
2005 the Option Holder delivered notice of its intent to exercise the Option and
close the purchase of the Option Shares on September 30, 2005, the
following dates would become relevant under this Agreement.


 


 


	
  August 12, 2005

  	
   

  	
  Option Exercise Date

  
	
   

  	
   

  	
   

  
	
  September 30, 2005

  (month end for SPS)

  	
   

  	
  Measurement Date

  
	
   

  	
   

  	
   

  
	
  October 3, 2005 (first

  Business Day after the

  Measurement Date)

  	
   

  	
  Option Closing Date

  
	
   

  	
   

  	
   

  
	
  October 1, 2005 (first

  day of the first calendar

  month following the

  Measurement Date)

  	
   

  	
  Commencement of the Payment Period under
  the Contingent Payment Agreement

  
	
   

  	
   

  	
   

  
	
  November 21, 2005

  (first Business Day

  following the 20th day

  of such calendar month)

  	
   

  	
  The initial Notification Date under the
  Contingent Payment Agreement (relating to payment accruing during the month
  of October)

  
	
   

  	
   

  	
   

  
	
  November 25, 2005

  	
   

  	
  The initial Payment Date under the
  Contingent Payment Agreement (relating to payment accruing during the month
  of October)