EX-10.1






EXHIBIT 10.1




SECOND AMENDED AND RESTATED




ASSET PURCHASE AGREEMENT




by and among




CARRINGTON CAPITAL MANAGEMENT, LLC,




CARRINGTON MORTGAGE SERVICES, LLC,




NEW CENTURY FINANCIAL CORPORATION




and




NEW CENTURY MORTGAGE CORPORATION




dated as of




May 21, 2007




	 	 	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS AND INTERPRETATION 2
	 	 	 	 
	Section 1.1
	 	Definitions
	 	 	2	 
	Section 1.2
	 	Interpretation
	 	 	20	 
	ARTICLE II PURCHASE AND SALE OF ASSETS
	 	 	 	 	 	 	21	 
	Section 2.1
	 	Purchase and Sale of Assets
	 	 	21	 
	Section 2.2
	 	Excluded Assets
	 	 	22	 
	Section 2.3
	 	Post-Closing Asset Deliveries
	 	 	23	 
	Section 2.4
	 	Conveyance of Assets by Affiliates of Sellers
	 	 	23	 
	Section 2.5
	 	Non-Assignable Permits and Contracts; Servicing Licenses
	 	 	23	 
	Section 2.6
	 	Shared Contracts
	 	 	25	 
	Section 2.7
	 	Assumption of Certain Liabilities
	 	 	26	 
	Section 2.8
	 	Retained Liabilities
	 	 	29	 
	Section 2.9
	 	Closing
	 	 	29	 
	Section 2.10
	 	Ancillary Agreements
	 	 	29	 
	Section 2.11
	 	Deliveries by Purchaser
	 	 	29	 
	Section 2.12
	 	Deliveries by Sellers
	 	 	30	 
	Section 2.13
	 	Limited Representations
	 	 	30	 
	ARTICLE III TRANSFERRED EMPLOYEES
	 	 	 	 	 	 	30	 
	Section 3.1
	 	Transferred Employees
	 	 	30	 
	Section 3.2
	 	Employee Benefit Plans
	 	 	31	 
	Section 3.3
	 	COBRA
	 	 	31	 
	Section 3.4
	 	WARN
	 	 	32	 
	Section 3.5
	 	Cooperation
	 	 	32	 
	Section 3.6
	 	No Third Party Rights
	 	 	32	 
	ARTICLE IV PURCHASE PRICE; ADJUSTMENT; ALLOCATION
	 	 	32	 
	Section 4.1
	 	Purchase Price
	 	 	32	 
	Section 4.2
	 	Purchase Price Adjustments
	 	 	32	 
	Section 4.3
	 	Post-Closing Adjustments
	 	 	34	 
	Section 4.4
	 	Deposit Amount
	 	 	35	 
	Section 4.5
	 	Allocation of the Purchase Price
	 	 	35	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLER
	 	 	36	 
	Section 5.1
	 	Authorization; Validity of Agreement; Seller Action
	 	 	36	 
	Section 5.2
	 	Capitalization
	 	 	37	 
	Section 5.3
	 	Organization and Good Standing
	 	 	37	 
	Section 5.4
	 	Consents and Approvals; No Violations
	 	 	37	 
	Section 5.5
	 	[Reserved.]	 	 	37	 
	Section 5.6
	 	Absence of Certain Changes
	 	 	37	 
	Section 5.7
	 	Confidentiality
	 	 	38	 
	Section 5.8
	 	Title to Assets and Properties; Liens
	 	 	38	 
	Section 5.9
	 	Sufficiency of Purchased Assets
	 	 	38	 
	Section 5.10
	 	Real Property
	 	 	38	 
	Section 5.11
	 	Leases
	 	 	38	 
	Section 5.12
	 	Environmental Matters
	 	 	38	 







	 	 	 	Section 5.13 Description of Mortgage Servicing Portfolio; Servicing Agreements;
Mortgage Loans 39	 





	 	 	 	 	 	 	 	 	 
	Section 5.14
	 	Contracts and Commitments
	 	 	40	 
	Section 5.15
	 	Litigation and Claim
	 	 	42	 
	Section 5.16
	 	Compliance with Laws; Regulatory Approvals
	 	 	42	 
	Section 5.17
	 	Permits
	 	 	42	 
	Section 5.18
	 	Employee Benefit Plans
	 	 	42	 
	Section 5.19
	 	Tax Matters
	 	 	42	 
	Section 5.20
	 	Intellectual Property
	 	 	43	 
	Section 5.21
	 	Brokers or Finders
	 	 	45	 
	Section 5.22
	 	Affiliate Transactions
	 	 	45	 
	Section 5.23
	 	Operation of the Business
	 	 	45	 
	Section 5.24
	 	PTO Liability
	 	 	46	 
	ARTICLE VI COVENANTS
	 	 	 	 	 	 	46	 
	Section 6.1
	 	Interim Operations of Seller
	 	 	46	 
	Section 6.2
	 	Access
	 	 	47	 
	Section 6.3
	 	Cooperation; Efforts and Actions to Cause Closing
	 	 	48	 
	Section 6.4
	 	Confidentiality
	 	 	49	 
	Section 6.5
	 	Subsequent Actions
	 	 	49	 
	Section 6.6
	 	Procedures for Transfer of Servicing
	 	 	50	 
	Section 6.7
	 	Bankruptcy Actions
	 	 	51	 
	Section 6.8
	 	Maintenance of Insurance
	 	 	52	 
	Section 6.9
	 	Schedules and Exhibits
	 	 	52	 
	Section 6.10
	 	Orders
	 	 	52	 
	Section 6.11
	 	Servicing
	 	 	52	 
	ARTICLE VII TAX MATTERS
	 	 	 	 	 	 	52	 
	Section 7.1
	 	Transfer Taxes
	 	 	52	 
	Section 7.2
	 	Liability for Taxes and Related Matters
	 	 	53	 
	Section 7.3
	 	Cooperation
	 	 	53	 
	Section 7.4
	 	Tax Benefits
	 	 	54	 
	ARTICLE VIII CONDITIONS
	 	 	 	 	 	 	54	 
	Section 8.1
	 	Conditions to Obligations of Purchaser and Sellers
	 	 	54	 
	Section 8.2
	 	Conditions to Obligations of Sellers
	 	 	55	 
	Section 8.3
	 	Conditions to Obligations of Purchaser
	 	 	55	 
	ARTICLE IX TERMINATION
	 	 	 	 	 	 	57	 
	Section 9.1
	 	Termination
	 	 	57	 
	Section 9.2
	 	Break-Up Fee; Expense Reimbursement
	 	 	59	 
	Section 9.3
	 	Procedure and Effect of Termination
	 	 	59	 
	ARTICLE X BIDDING PROCEDURES
	 	 	60	 
	Section 10.1
	 	Bidding Procedures
	 	 	60	 
	ARTICLE XI INDEMNIFICATION
	 	 	 	 	 	 	60	 
	Section 11.1
	 	Survival
	 	 	60	 
	Section 11.2
	 	Sellers’ Agreement to Indemnify
	 	 	60	 
	Section 11.3
	 	Limitations on Sellers’ Agreements to Indemnify
	 	 	61	 
	Section 11.4
	 	Purchaser’s Agreement to Indemnify
	 	 	61	 
	Section 11.5
	 	Limitations on Purchaser’s Agreement to Indemnify
	 	 	62	 







	 	 	 	Section 11.6 Other Limitations on and Treatment of Certain Claims for
Indemnification 63	 





	 	 	 	 	 	 	 	 	 
	Section 11.7
	 	Claims
	 	 	63	 
	Section 11.8
	 	Third Party Indemnification
	 	 	64	 
	Section 11.9
	 	Set Off Against Indemnification Holdback Amount
	 	 	65	 
	Section 11.10
	 	Release of Indemnification Holdback Amount
	 	 	65	 
	Section 11.11
	 	Purchase Price Adjustments
	 	 	65	 
	ARTICLE XII REPRESENTATIONS AND WARRANTIES OF PURCHASER
	 	 	66	 
	Section 12.1
	 	Legal Power; Organization; Qualification of Purchaser
	 	 	66	 
	Section 12.2
	 	Binding Agreement
	 	 	66	 
	Section 12.3
	 	No Conflict or Default
	 	 	66	 
	Section 12.4
	 	Brokers
	 	 	66	 
	ARTICLE XIII MISCELLANEOUS
	 	 	 	 	 	 	67	 
	Section 13.1
	 	Fees and Expenses
	 	 	67	 
	Section 13.2
	 	Amendment; Waiver
	 	 	67	 
	Section 13.3
	 	Publicity
	 	 	67	 
	Section 13.4
	 	Notices
	 	 	67	 
	Section 13.5
	 	Counterparts
	 	 	69	 
	Section 13.6
	 	Entire Agreement; No Third Party Beneficiaries
	 	 	69	 
	Section 13.7
	 	Severability
	 	 	69	 
	Section 13.8
	 	Governing Law
	 	 	69	 
	Section 13.9
	 	Venue and Retention of Jurisdiction
	 	 	69	 
	Section 13.10
	 	Time of Essence
	 	 	70	 
	Section 13.11
	 	No Consequential Damages
	 	 	70	 
	Section 13.12
	 	Assignment
	 	 	70	 
	Section 13.13
	 	Fulfillment of Obligations
	 	 	70	 
	Section 13.14
	 	Specific Performance
	 	 	70	 
	Section 13.15
	 	Waiver of Bulk Transfer Laws
	 	 	70	 
	Section 13.16
	 	Personal Liability
	 	 	70	 
	Section 13.17
	 	No Right of Setoff
	 	 	70	 








1






SCHEDULES*




	 	 	 
	Schedule 1.1(a)

Schedule 1.1(b)

Schedule 1.1(c)

Schedule 1.1(d)

Schedule 1.1(e)

Schedule 1.1(f)

Schedule 1.1(g)

Schedule 1.1(h)

Schedule 1.1(i)

Schedule 2.1(c)

Schedule 2.1(m)

Schedule 2.6(a)

Schedule 2.6(b)

Schedule 2.7(e)

Schedule 2.7(g)

Schedule 3.1

Schedule 3.2

Schedule 4.5(a)

Schedule 5.6

Schedule 5.8

Schedule 5.9

Schedule 5.11

Schedule 5.13(a)

Schedule 5.13(b)

Schedule 5.13(d)

Schedule 5.14

Schedule 5.14(e)

Schedule 5.15

Schedule 5.16

Schedule 5.17

Schedule 5.20(a)

Schedule 5.20(b)

Schedule 5.22

Schedule 5.23

Schedule 6.1(e)(i)

Schedule 6.1(e)(ii)

Schedule 6.7(d)

Schedule 8.3(i)

Schedule 8.3(l)

	 	Knowledge of Sellers

Assigned Leases

Assumed Liabilities

Leased Real Property

Servicing Licenses

Filing Subsidiaries

Computer Equipment

Software Contracts

Servicing Agreements

Assumed Contracts

Permits

Separation Shared Contracts

Transferred Shared Contracts

Ancillary Servicing-Related Agreements

Servicing Agreement Indemnification Sections

Business Employees

Plans

Allocation Schedule

Absence of Certain Changes

Title to Assets and Properties; Liens

Sufficiency of Purchased Assets

Leases

Mortgage Loan Schedule

Servicing Agreements Exceptions

Advances

Contracts

Contracts Related to the Business

Litigation

Compliance with Laws; Regulatory Approvals

Permits

IT Assets

Transferred Intellectual Property

Affiliate Transactions

Operation of the Business

Employment Matters

Conduct of Business

[Reserved.]

Other Consents

Amounts Owing Under Service Advance Facility






* The exhibits and schedules to this Second Amended and Restated Asset Purchase Agreement have
been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Registrant will
furnish copies of any of the exhibits and schedules to the Securities and Exchange Commission upon
request.



2



EXHIBITS*




	 	 	 
	Exhibit A

Exhibit B

Exhibit C

Exhibit D

Exhibit E

Exhibit F

Exhibit G

Exhibit H

	 	Bidding Procedures Order

Form of Assignment and Assumption Agreement

Form of Assignment and Assumption of Lease Agreements

Form of Escrow Agreement

Form of Sale Approval Order

Form of Copyright Assignment

Form of Bill of Sale

Deposit Escrow Agreement






* The exhibits and schedules to this Second Amended and Restated Asset Purchase Agreement have
been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Registrant will
furnish copies of any of the exhibits and schedules to the Securities and Exchange Commission upon
request.



3




SECOND AMENDED AND RESTATED ASSET PURCHASE AGREEMENT




This Second Amended and Restated Asset Purchase Agreement (this “Agreement”), dated as
of May 21, 2007, is entered into by and among CARRINGTON CAPITAL MANAGEMENT, LLC, a Delaware
limited liability company (“Carrington”), CARRINGTON MORTGAGE SERVICES, LLC, a Delaware
limited liability company (“Purchaser”), NEW CENTURY FINANCIAL CORPORATION, a Maryland
corporation, as a debtor and debtor-in-possession (“Parent”), and NEW CENTURY MORTGAGE
CORPORATION, a California corporation, as a debtor and debtor-in-possession (the “Company”
and together with Parent, the “Sellers”).



WHEREAS, Sellers are engaged in the Business (as hereinafter defined).



WHEREAS, Sellers are also engaged in the business of originating Mortgage Loans (as
hereinafter defined) and other businesses and, together with certain of its Affiliates, the
business of reselling Mortgage Loans (the “Origination Business”).



WHEREAS, on April 2, 2007 (the “Petition Date”), the Filing Subsidiaries (as
hereinafter defined) filed voluntary petitions (“Petitions”) for relief (the
“Bankruptcy Cases”) under Chapter 11 of Title 11, U.S.C. §§101 et seq. (as amended) (the
“Bankruptcy Code”), in the United States Bankruptcy Court for the District of Delaware
(together with any court having proper jurisdiction under the Bankruptcy Code, the “Bankruptcy
Court”).



WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, and as
authorized under Sections 105, 363 and 365 of the Bankruptcy Code, Sellers wish to sell to
Purchaser, and Purchaser wishes to purchase from Sellers, all of the Purchased Assets (as
hereinafter defined), and Purchaser is willing to assume all of the Assumed Liabilities (as
hereinafter defined), relating to or used in connection with the Business (as hereinafter defined).



WHEREAS, Sellers, as debtors and debtors-in-possession, have continued in the possession of
their respective assets and in the management of the Business pursuant to Sections 1107 and 1108 of
the Bankruptcy Code.



WHEREAS, on April 2, 2007, Carrington, Purchaser, Parent and the Company entered into that
certain Asset Purchase Agreement (the “Original Agreement”) and on April 19, 2007,
Carrington, Purchaser, Parent and the Company agreed to amend and restate the Original Agreement
and, accordingly, entered into that certain Amended and Restated Asset Purchase Agreement dated as
of April 19, 2007 (the “First Amended and Restated Agreement”).



WHEREAS, Section 13.2 of the First Amended and Restated Agreement provides that the First
Amended and Restated Agreement may be amended, modified and supplemented, but only by a written
instrument signed by all of the parties thereto.



WHEREAS, Carrington, Purchaser, Parent and the Company have agreed to amend and restate the
First Amended and Restated Agreement as set forth in this Agreement.



NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:



ARTICLE I




DEFINITIONS AND INTERPRETATION




Section 1.1 Definitions. As used in this Agreement, the following terms have the
meanings set forth below:



“Accepted Contract” has the meaning specified in Section 2.7(b) hereof.



“Accepted Contracts” has the meaning specified in Section 2.7(b) hereof.



“Additional Contract” has the meaning specified in Section 2.7(d) hereof.



“Additional Contracts” has the meaning specified in Section 2.7(d) hereof.



“Advances” means, with respect to each Servicing Agreement, the aggregate outstanding
amount that as of any date of determination has been advanced directly by Sellers from their own
funds or funds borrowed by Sellers or its Affiliates from a third party (but not with funds
borrowed from any custodial or other accounts under a Servicing Agreement) in connection with
servicing the Mortgage Loans in accordance with the terms of such Servicing Agreement, including
with respect to principal, interest, Taxes, insurance premiums and other advances made pursuant to
the applicable Servicing Agreement.



“Advances Amount” means the First Lien Advances Amount and the Second Lien Advances
Amount.



“Advances Amount Difference” has the meaning specified in Section 4.3(a)
hereof.



“Affiliate” means a Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with the Person specified.
For purposes of this definition, the term “control” of a Person means the possession, direct or
indirect, of the power to (i) vote 50% or more of the voting securities of such Person or (ii)
direct or cause the direction of the management and policies of such Person, whether by contract or
otherwise, and the terms and phrases “controlling,” “controlled by” and “under common control with”
have correlative meanings. For purposes of this Agreement, neither Carrington nor Purchaser shall
be considered an Affiliate of either Seller.



“Affiliate Purchased Assets” has the meaning specified in Section 2.4 hereof.



“Affiliate Seller” has the meaning specified in Section 2.4 hereof.



“Agreement” or “this Agreement” means this Asset Purchase Agreement, together
with the schedules and exhibits hereto.



“Allocation Schedule” has the meaning specified in Section 4.5(a) hereof.



“Alternative Bidder” has the meaning specified in the Bidding Procedures Order.



“Alternative Transaction” has the meaning specified in Section 9.2(a) hereof.



“Ancillary Agreements” has the meaning specified in Section 2.10 hereof.



“Ancillary Income” means any and all income, revenue, fees, expenses, charges or other
moneys that Sellers are entitled to receive, collect or retain as servicer pursuant to the
Servicing Agreements (other than servicing fees).



“Ancillary Servicing-Related Agreements” means the ancillary Contracts designated by
Purchaser, in its sole discretion, as set forth on Schedule 2.7(e) that are related to, and
were entered into by Sellers and various non-debtor counterparties in connection with, the
Servicing Agreements.



“Applicable Requirements” means, with respect to each Seller all applicable
requirements of Law relating to servicing, insuring or filing of claims in connection with Mortgage
Loans, and all contractual obligations of Sellers.



“Arbitrating Accountants” has the meaning specified in Section 4.2(d) hereof.



“Assigned Contracts” means the Assumed Contracts (other than the Servicing
Agreements).



“Assigned Leases” means those Leases used or leased by the Business owned by Persons
(other than Sellers or any of their Affiliates) engaged primarily in the Business and listed on
Schedule 1.1(b).



“Assignment and Assumption Agreement” means the assignment and assumption agreement to
be executed by Sellers in favor of Purchaser in respect of the Assumed Liabilities, in
substantially the form set forth in Exhibit B hereto.



“Assignment and Assumption of Lease Agreements” means the assignment and assumption of
lease agreements to be executed by Sellers in favor of Purchaser in respect of the Real Property
Leases, in substantially the form set forth in Exhibit C hereto.



“Assumed Contracts” has the meaning set forth in Section 2.1(c) hereof.



“Assumed Liabilities” means the obligations arising under (i) any Servicing Agreement,
Assigned Lease or Assumed Contract after the assignment to Purchaser of the Liabilities of Sellers
set forth on Schedule 1.1(c) and (ii) Section 3.1(d) with respect to the PTO for
the Transferred Employees.



“Assumed Rights and Claims” has the meaning specified in Section 2.1(k)
hereof.



“Auction” has the meaning specified in the Bidding Procedures Order.



“Audit Reports” has the meaning specified in Section 4.2(c) hereof.



“Balance Sheet” means the consolidated balance sheet of the Parent dated as of
December 31, 2005 and included in the Financial Statements.



“Bankruptcy Cases” has the meaning specified in the Recitals.



“Bankruptcy Code” has the meaning specified in the Recitals.



“Bankruptcy Court” has the meaning specified in the Recitals.



“Basket Amount” has the meaning specified in Section 11.6 hereof.



“Bidding Procedures” has the meaning specified in the Bidding Procedures Order.



“Bidding Procedures Order” means the Order of the Bankruptcy Court (including all
schedules thereto) entered by the Bankruptcy Court on April 20, 2007, a copy of which is attached
as Exhibit A.



“Bills of Sale” means the bills of sale to be executed by Sellers in favor of
Purchaser in respect of the Purchased Assets, substantially in the form set forth in Exhibit
G.



“Books and Records” means all books, ledgers, files, reports, plans, records, manuals
and other materials (in any form or medium) Related to the Business.



“Break-Up Fee” has the meaning specified in Section 9.2(a) hereof.



“Business” means the business (whether existing now or existing at or before the
Closing, direct or indirect) of providing servicing (including master servicing, subservicing,
special servicing and property management servicing) for residential real estate Mortgage Loans
underlying the RMBS Transactions, and shall not include the Excluded Businesses.



“Business Day” means a day other than Saturday, Sunday or any day on which banks
located in the State of California, Delaware or Connecticut are authorized or obligated to close.



“Business Employee” means each employee of Sellers whose sole responsibility is to
provide services Related to the Business and each other employee of Sellers identified by Sellers
as having significant responsibility Related to the Business, including as set forth on
Schedule 3.1.



“Business Portion” has the meaning specified in Section 2.6(a) hereof.



“Carrington” has the meaning specified in the preamble.



“Carrington-Related Assets” means the RMBS Transactions numbered 1 through 12 in the
definition thereof.



“Carrying Costs” has the meaning specified in Section 2.7(b) hereof.



“Cash Purchase Price” means an amount equal to (i) the Purchase Price, as adjusted,
minus (ii) $32,300,000.



“Claims” means, with respect to the period prior to the Closing Date, any right to
payment from Sellers, whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, known or unknown; or any right to an equitable remedy for breach of performance if such
breach gives rise to a right of payment from Seller, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.



“Closing” has the meaning specified in Section 2.9 hereof.



“Closing Adjustment Difference” has the meaning specified in Section 4.3(a)
hereof.



“Closing Carrington-Related Assets Amount” means an amount equal to the product of (i)
the scheduled principal balance of the Mortgage Loans under the applicable Servicing Agreements for
the Carrington-Related Assets as of the close of business on the Closing Date, after application of
all scheduled payments due on such date, whether or not received, multiplied by (ii) 0.69%.



“Closing Date” means the date upon which the Closing occurs.



“Closing Date Audit Report” has the meaning specified in Section 4.2(c)
hereof.



“Closing Date Mortgage Loan Schedule” has the meaning specified in
Section 5.13(a) hereof.



“Closing Date Purchase Price” has the meaning specified in Section 4.1(a)
hereof.



“Closing First Lien Advances Amount” means, as of the Closing Date with respect to the
Servicing Agreements, an amount equal to 95% of the aggregate amount of Advances relating to
Mortgage Loans under the Servicing Agreements secured by first liens on the Mortgaged Property,
which amount shall be determined pursuant to the audit described in Section 4.2(c).



“Closing New Century Portfolio-Related Assets Amount” means an amount equal to the
product of (i) the scheduled principal balance of the Mortgage Loans under the applicable Servicing
Agreements for the New Century Portfolio-Related Assets as of the close of business on the Closing
Date, after application of all scheduled payments due on such date, whether or not received,
multiplied by (ii) 0.69%.



“Closing Servicing Agreement Amount” means the Closing Carrington-Related Assets
Amount and the Closing New Century Portfolio-Related Assets Amount.



“COBRA” means the U.S. Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, or any similar State or Local Law.



“Code” means the Internal Revenue Code of 1986, as amended.



“Computer Equipment” means all equipment and devices (including data processing
hardware and related telecommunications equipment, media, and tools) used by Sellers in the conduct
of the Business, including Sellers’ rights under all related warranties. As of the date hereof,
the Computer Equipment consists of all items listed in Schedule 1.1(g).



“Confidentiality Agreement” has the meaning specified in Section 9.3 hereof.



“Consent” means any consent, approval, license, waiver or authorization.



“Contract Determination Date” means: (i) for each Assigned Contract that is
designated by Purchaser as an Accepted Contract pursuant to Section 2.7, the date upon
which such Contract is assigned to Purchaser, provided that the Cure Amounts for such contract
shall have been paid and performed when due; and (ii) for each Assigned Contract that is an
Excluded Contract pursuant to Section 2.7, the earlier of (A) the date that Sellers’
rejection of such Contract is effective as set forth in an Order of the Bankruptcy Court; or (B) 15
Business Days after the earlier of (x) the date on which Purchaser shall have delivered notice to
Sellers of its determination that such Contract shall be an Excluded Contract pursuant to
Section 2.7 or (y) the Contract Notification Deadline for such Contract; provided,
that Purchaser shall no longer be in possession of the premises or property subject to a lease or
otherwise accepting the performance of the non-debtor party to the Contract after such date; and
provided, further, that Purchaser shall be entitled to (and/or Sellers shall, at
Purchaser’s cost and direction) seek entry of an Order of the type described in clause (A)
rejecting any Excluded Contract effective retroactively to the Petition Date or such later date as
Purchaser may deem appropriate.



“Contract Notification Deadline” has the meaning specified in Section 2.7(b)
hereof.



“Contracts” means all agreements, contracts, leases and subleases, purchase orders,
arrangements, commitments and licenses (other than this Agreement and the Ancillary Agreements)
that are Related to the Business as of the Closing, or to which any of the Purchased Assets are
subject, whether written or oral, including the Software Contracts, except to the extent included
in Excluded Assets.



“Copyright Assignments” means the copyright assignments to be executed by Sellers in
favor of Purchaser in respect of the Copyrights, in substantially the form set forth in Exhibit
F hereto.



“Copyrights” has the meaning specified in the “Intellectual Property” definition.



“Cure Amount” has the meaning specified in Section 2.7(f) hereof.



“Cure Finding” has the meaning specified in Section 2.7(f) hereof.



“Cut-Off Carrington-Related Assets Amount” means an amount equal to the product of (i)
the scheduled principal balance of the Mortgage Loans under the applicable Servicing Agreements for
the Carrington-Related Assets as of the Cut-Off Date, after application of all scheduled payments
due on the Cut-Off Date, whether or not received, multiplied by (ii) 0.69%.



“Cut-Off Date” means the first day of the calendar month in which the Closing occurs,
or such other date as shall be agreed by Sellers and Purchaser.



“Cut-Off Date Audit Report” has the meaning specified in Section 4.2(c)
hereof.



“Cut-Off Date Mortgage Loan Schedule” has the meaning specified in Section
5.13(a) hereof.



“Cut-Off First Lien Advances Amount” means, as of the Cut-Off Date with respect to the
Servicing Agreements, an amount equal to 95% of the aggregate amount of Advances relating to
Mortgage Loans under the Servicing Agreements secured by first liens on the Mortgaged Property,
which amount shall be determined pursuant to the audit described in Section 4.2(c).



“Cut-Off New Century Portfolio-Related Assets Amount” means an amount equal to the
product of (i) the scheduled principal balance of the Mortgage Loans under the applicable Servicing
Agreements for the New Century Portfolio-Related Assets as of the Cut-Off Date, after application
of all scheduled payments due on the Cut-Off Date, whether or not received, multiplied by
(ii) 0.69%.



“Cut-Off Servicing Agreement Amount” means the Cut-Off Carrington-Related Assets
Amount and the Cut-Off New Century Portfolio-Related Assets Amount.



“Deposit Amount” has the meaning specified in Section 4.4 hereof.



“Deposit Escrow Agreement” means that certain Deposit Escrow Agreement dated as of May
10, 2007, by and among Purchaser, Parent, the Company and JPMorgan Chase Bank, N.A., as escrow
agent, a copy of which is attached as Exhibit H.



“Deposit Escrow Agent” means JPMorgan Chase Bank, N.A.



“DIP Financing Agreement” means the Debtor-in-Possession Loan and Security Agreement,
dated as of April 13, 2007, by and among New Century Financial Corporation, certain of its
Affiliates, Greenwich Capital Financial Products, Inc., The CIT Group/Business Credit, Inc. and the
lenders party thereto, as amended.



“Enforceability Exceptions” has the meaning specified in Section 5.1 hereof.



“Environmental Claim” means any claim, action, cause of action, investigation or
notice (written or oral) by any Person alleging actual or potential Liability for investigatory,
cleanup or governmental response costs, or natural resources or property damages, or personal
injuries, attorney’s fees or penalties relating to (i) the presence, or release into the
environment, of any Materials of Environmental Concern, now or in the past, or (ii) circumstances
forming the basis of any violation, or alleged violation, of any Environmental Law.



“Environmental Law” means each federal, state, local and foreign Law and regulation
relating to pollution, protection or preservation of human health or the environment, including
ambient air, surface water, ground water, land surface or subsurface strata, and natural resources,
and including each Law and regulation relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the manufacturing,
processing, distribution, use, treatment, generation, storage, containment (whether above ground or
underground), disposal, transport or handling of Materials of Environmental Concern, or the
preservation of the environment or mitigation of adverse effects thereon and each Law and
regulation with regard to record keeping, notification, disclosure and reporting requirements
respecting Materials of Environmental Concern.



“Equal Credit Opportunity Act” means the Equal Opportunity Act promulgated under
Chapter 41 of Title 15, U.S.C. Subchapter IV.



“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



“ERISA Affiliate” means any trade or business, whether or not incorporated, that
together with Seller would be deemed a “single employer” within the meaning of Section 4001(b) of
ERISA or Section 414 of the Code.



“Escrow Agent” means the escrow agent under the Escrow Agreement, as mutually agreed
by Sellers and Purchaser.



“Escrow Agreement” means the escrow agreement to be entered into by and between
Purchaser, Parent, the Company and an escrow agent, substantially in the form set forth in
Exhibit D.



“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.



“Excluded Assets” has the meaning specified in Section 2.2 hereof.



“Excluded Businesses” means the businesses (whether existing now or existing at or
before the Closing, direct or indirect) of providing servicing for residential real estate mortgage
loans, other than in connection with or relating to the RMBS Transactions, and any other businesses
of Sellers other than the Business. Excluded Businesses shall include any Origination Business or
forced placed business or title insurance business.



“Excluded Contract” has the meaning specified in Section 2.7(b) hereof;
provided, that no Servicing Agreement shall be an Excluded Contract.



“Excluded Contracts” has the meaning specified in Section 2.7(b) hereof;
provided, that none of the Servicing Agreements shall be Excluded Contracts.



“Expense Reimbursement” has the meaning specified in Section 9.2(b) hereof.



“Fair Housing Act” means the Fair Housing Act promulgated under Title VIII of the
Civil Rights Act of 1968.



“Filing Subsidiaries” means Parent and the Company and the Affiliates of the Company
set forth on Schedule 1.1(f).



“Final Determination” means (i) with respect to federal income Taxes, a
“determination” as defined in Section 1313(a) of the Code or execution of an Internal Revenue
Service Form 870AD, and (ii) with respect to other Taxes, any final determination of liability in
respect of a Tax that, under applicable Law, is not subject to further appeal, review or
modification through proceedings or otherwise (including the expiration of a statute of limitations
or a period for the tiling of claims for refunds, amended returns or appeals from adverse
determinations).



“Final Determination Date” means the date upon which (i) the parties mutually agree
upon the Audit Reports prepared pursuant to Section 4.2(c) or (ii) the Arbitrating
Accountants enter into their final and binding decision regarding the audit report pursuant to
Section 4.2(d).



“Final Disclosure Schedules” means the disclosure schedules as provided in this
Agreement and required to be delivered by Sellers to Purchaser as set forth in Section 6.9.



“Final Order” means an order or judgment: (i) as to which the time to appeal, petition
for certiorari or move for review or rehearing has expired and as to which no appeal, petition for
certiorari or other proceeding for review or rehearing is pending or (ii) if an appeal, writ of
certiorari, reargument or rehearing has been filed or sought, the order or judgment has been
affirmed by the highest court to which such order or judgment was appealed or certiorari has been
denied, or reargument or rehearing shall have been denied or resulted in no modification of such
order or judgment, and the time to take any further appeal or to seek certiorari or further
reargument or rehearing has expired; provided, that the theoretical possibility that a
motion under Rule 59 or Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule
under the Bankruptcy Rules, may be filed with respect to such order or judgment shall not prevent
such order or judgment from being considered a Final Order.



“Financial Statements” means the audited consolidated balance sheets of the Parent as
of December 31, 2005, together with the consolidated statements of income, shareholders’ equity and
cash flow for the year then ended.



“First Amended and Restated Agreement” has the meaning set forth in the Recitals.



“First Lien Advances Amount” means, as of any date with respect to the Servicing
Agreements, an amount equal to 95% of the aggregate amount of Advances relating to Mortgage Loans
under the Servicing Agreements secured by first liens on the Mortgaged Property, which amount shall
be determined pursuant to the audit described in Section 4.2(c).



“Fixtures and Equipment” means all furniture, furnishings, vehicles, equipment,
Computer Equipment, tools and other tangible personal property Related to the Business, wherever
located, including any of the foregoing purchased subject to any conditional sales or title
retention agreement in favor of any other Person.



“GAAP” means United States generally accepted accounting principles, applied on a
consistent basis.



“Governmental Authorizations” means all licenses, permits, certificates and other
authorizations and approvals related to the Business and issued by or obtained from a Government
Entity.



“Government Entity” means any federal, state or local court, administrative body or
other governmental or quasi-governmental entity with competent jurisdiction, including the
Department of Housing and Urban Development, the Federal National Mortgage Association, the
Government National Mortgage Association, the Federal Home Loan Mortgage Corporation and the
Federal Trade Commission.



“Government Requirements” has the meaning specified in Section 5.4 hereof.



“Holdback Release Amount” has the meaning specified in Section 11.10(a)
hereof.



“Holdback Release Date” has the meaning specified in Section 11.10(a) hereof.



“HSR Act” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.



“Indebtedness” means (i) all indebtedness for borrowed money or for the deferred
purchase price of property or services (other than current trade Liabilities incurred in the
Ordinary Course of Business and payable in accordance with customary practices), (ii) any other
indebtedness that is evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations under financing leases, (iv) all obligations in respect of acceptances issued or
created, (v) all Liabilities secured by any lien on any property and (vi) all guarantee
obligations.



“Indemnification Holdback Amount” means an amount initially equal to $5,000,000.



“Indemnitee” means the Person or Persons entitled to, or claiming a right to,
indemnification under Article XI hereof.



“Indemnitor” means the Person or Persons claimed by the Indemnitee to be obligated to
provide indemnification.



“Independent Accounting Firm” has the meaning specified in Section 4.5(a)
hereof.



“Intellectual Property” means (i) trademarks, service marks, brand names,
certification marks, collective marks, d/b/a’s, domain names, logos, symbols, trade dress, assumed
names, fictitious names, trade names and other indicia of origin, all applications and
registrations for the foregoing, including all renewals of same (collectively,
“Trademarks”); (ii) inventions and discoveries, whether patentable or not, and all patents,
registrations, invention disclosures and applications therefor, including divisions, continuations,
continuations-in-part and renewal applications, and including renewals, extensions and reissues
(collectively, “Patents”); (iii) trade secrets, confidential information and know-how,
including processes, schematics, business methods, formulae, drawings, prototypes, models, designs,
customer lists and supplier lists (collectively, “Trade Secrets”); (iv) published and
unpublished works of authorship, whether copyrightable or not (including without limitation
databases and other compilations of information), including mask rights and IT Inventories,
copyrights therein and thereto, registrations and applications therefor, and all renewals,
extensions, restorations and reversions thereof (collectively, “Copyrights”); and (v) any
other intellectual property or proprietary rights.



“Intellectual Property License” means a license or other right to use any Intellectual
Property set forth on Schedule 5.20(a)(v).



“IRS” means the Internal Revenue Service.



“IT Assets” means IT Inventories, Technical Documentation, Software Contracts and
Computer Equipment, in each case Related to the Business.



“IT Inventories” means (i) computer software code (in all media) and materials,
including all software programs; (ii) computer software documentation, including user materials;
and (iii) all other unused or reusable materials, stores, and supplies related to computer
software, in each case to the extent used in, relating to, or arising out of the Business, as set
forth on Schedule 5.20(a).



“Knowledge of Sellers” concerning a particular subject, area or aspect of the Business
or the affairs of Seller, means the actual (and not constructive or imputed) knowledge of any
individual listed on Schedule 1.1(a).



“Law” means any Law, statute, ordinance, rule, regulation, code, order, judgment,
writ, injunction, decree, enacted, issued, promulgated, enforced, or entered by a Government
Entity.



“Lease” means each lease or other Contract pursuant to which Seller leases any Real
Property or personal property, either as lessor or lessee.



“Lease and Subservicing Agreement” means a Lease and Subservicing Agreement, to be
dated as of the Closing Date, between Purchaser and the Company, in form and substance acceptable
to Sellers and Purchaser.



“Leased Real Property” means all real property, including leasehold improvements, that
is the subject of the Assigned Leases, as set forth on Schedule 1.1(d).



“Liabilities” means any and all debts, liabilities, commitments and obligations of any
kind, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated,
accrued or not accrued, asserted or not asserted, known or unknown, determined, determinable or
otherwise, whenever or however arising (including whether arising out of any contract or tort based
on negligence or strict Liability) and whether or not the same would be required by GAAP to be
reflected in financial statements or disclosed in the notes thereto.



“Lien” means any lien, charge, claim, pledge, security interest, conditional sale
agreement or other title retention agreement, lease, mortgage, security interest, option or other
encumbrance (including the filing of, or agreement to give, any financing statement under the
Uniform Commercial Code of any jurisdiction).



“Loss” or “Losses” means any and all losses, liabilities, costs, claims,
damages, penalties and expenses (including all reasonable attorneys’ fees and expenses and costs of
investigation, enforcement and litigation).



“Material Adverse Effect” means any change, effect, event or circumstance, that,
individually or in the aggregate, is materially adverse to the Purchased Assets, the Business or
the ability of Sellers to perform their obligations under this Agreement, except for any change,
effect, event, or circumstance relating to (i) the economy or the financial markets in general,
(ii) the industry in which the Business operate in general and not specifically relating to the
Business, (iii) the announcement of this Agreement or the transaction contemplated hereby or the
identity of Purchaser, (iv) changes in applicable Laws after the date hereof, (v) the fact that
Sellers will be operating as a debtors-in-possession under the Bankruptcy Code, (vi) changes in
GAAP or regulatory accounting principles after the date hereof, or (vii) changes in the value of
the Mortgage Loans or the securities issued in the RMBS Transactions.



“Materials of Environmental Concern” means chemicals, pollutants, contaminants,
wastes, toxic or hazardous substances, materials and wastes, petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated hiphenyls, lead and lead-based paints
and materials, and radon.



“Mortgage Loans” means any residential mortgage loan or other extension of credit
secured by a Lien on real property of a borrower originated or purchased by Sellers or any of their
Affiliates or purchased by Sellers or their Affiliates and included in or relating to the RMBS
Transactions, including the related REO Properties.



“Mortgage Loan Documents” means, for each Mortgage Loan, all documents pertaining to
such Mortgage Loan, including the Mortgage Note, the mortgage or deed of trust and all assignments
of the mortgage or deed of trust, all endorsements and allonges to the Mortgage Note, the title
insurance policy with all endorsements thereto, any security agreement and financing statements,
any account agreements, and any assignments, assumptions, modifications, continuations or
amendments to any of the foregoing.



“Mortgage Loan Schedule” has the meaning specified in Section 5.13(a) hereof.



“Mortgage Note” means, with respect to a Mortgage Loan, a promissory note or notes, or
other evidence of indebtedness, with respect to such Mortgage Loan secured by a mortgage or
mortgages, together with any assignment, reinstatement, extension, endorsement or modification
thereof.



“Mortgaged Property” means a fee simple property (or such other estate in real
property as is commonly accepted as collateral for Mortgage Loans that are subject to secondary
mortgage sales or securitizations) that secures a Mortgage Note and that is subject to a mortgage.



“Multiemployer Plan” means any plan that is a “multiemployer plan,” as defined in
Section 3(37) or Section 4001(a)(3) of ERISA, which is maintained or contributed to for employees
of Seller or any ERISA Affiliate or with respect to which Sellers or any ERISA Affiliate has any
Liability or reasonable expectation of Liability.



“New Century Portfolio-Related Assets” means the RMBS Transactions numbered 13 through
28 in the definition thereof.



“New Century Portfolio-Related Assets Deduction” has the meaning specified in
Section 4.2 hereof.



“Non-Business Portion” has the meaning specified in Section 2.6(a) hereof.



“Non-Competition Covenants” has the meaning specified in Section 6.9(c)
hereof.



“Non-Governmental Authorizations” means all licenses, permits, certificates and other
authorizations and approvals other than Governmental Authorizations that are (i) held by Seller or
any of their Affiliates and (ii) related to the Business.



“Non-Transferred Asset” has the meaning specified in Section 2.5(a) hereof.



“Order” means, with respect to any Person, any award, decision, injunction, judgment,
stipulation, order, ruling, subpoena, writ, decree, consent decree or verdict entered, issued, made
or rendered by any Government Entity affecting such Person or any of its properties.



“Ordinary Course of Business” means the ordinary course of business of the Business,
consistent with past custom and practice of the Business.



“Organizational Documents” means, with respect to a limited partnership, the
certificate of limited partnership, limited partnership agreement and subscription agreements with
such partnership’s partners then in effect; with respect to a limited liability company, the
certificate of formation, limited liability company agreement and subscription agreements with such
company’s members then in effect; with respect to a corporation, the articles or certificate of
incorporation and by-laws of such corporation then in effect; and, with respect to any other
entity, comparable organizational documents of such entity, in each case, as then in effect.



“Original Agreement” has the meaning specified in the Recitals.



“Origination Business” has the meaning specified in the Recitals.



“Parent” has the meaning specified in the preamble.



“Patents” has the meaning specified in the “Intellectual Property” definition.



“Pending Claims” has the meaning specified in the Escrow Agreement.



“Permits” means permits, concessions, grants, franchises, licenses and other
authorizations and approvals required or issued by any Government Entity and primarily used or held
for use in connection with the Business.



“Person” means a natural person, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, Government
Entity or other entity or organization.



“Petition” has the meaning specified in the Recitals.



“Petition Date” has the meaning specified in the Recitals.



“Plan” means each deferred compensation and each bonus, retention, incentive
compensation, stock purchase, stock option, restricted stock, phantom stock and other equity
compensation plan, program, agreement or arrangement; each severance or termination pay, medical,
surgical, hospitalization, life insurance and other “welfare” plan, fund or program (within the
meaning of Section 3(1) of ERISA); each profit-sharing, stock bonus or other “pension” plan, fund
or program (within the meaning of Section 3(2) of ERISA); each employment, consulting, retention,
change in control, termination or severance agreement; and each other employee benefit plan, fund,
program, agreement or arrangement, in each case, that is sponsored, maintained or contributed to or
required to be contributed to by Seller or by any ERISA Affiliate, or to which Seller or an ERISA
Affiliate is party, whether written or oral, for the benefit of any director, employee or former
employee of Seller or any Seller Subsidiary, or with respect to which Sellers or any ERISA
Affiliate otherwise has Liability or reasonable expectation of Liability.



“Post-Closing Purchase Price Adjustment” has the meaning specified in Section
4.3(b) hereof.



“Post-Petition Contracts” means the Contracts of the Filing Subsidiaries entered into
by the Filing Subsidiaries, other than in the Ordinary Course of Business or approved by the
Bankruptcy Court, in either case after April 2, 2007 and prior to or on the date of the delivery of
the Final Disclosure Schedules.



“Pre-Closing Audit Report” has the meaning specified in Section 4.2(c).



“Pre-Closing Period” means any taxable period (or portion thereof) ending on or before
the close of business on the Closing Date.



“Proximate Cause Party” has the meaning specified in Section 9.1(b) hereof.



“PTO” has the meaning specified in Section 3.1(d) hereof.



“PTO Policy” has the meaning specified in Section 3.1(d) hereof.



“Purchased Asset” has the meaning specified in Section 2.1 hereof.



“Purchase Price” has the meaning specified in Section 4.1(b) hereof.



“Purchase Price Adjustment Statement” has the meaning specified in Section
4.3(a) hereof.



“Purchaser” has the meaning specified in the preamble.



“Purchaser Damages” has the meaning specified in Section 11.2 hereof.



“Purchaser Indemnified Parties” means Purchaser and each of its Affiliates.



“Qualified Topping Bid” has the meaning specified in the Bidding Procedures Order.



“Real Property” means all real property that is leased or owned by Sellers or that is
reflected as an asset of the Company (or the Parent, as the case may be) on the Balance Sheet and
used primarily in connection with the Business.



“Real Property Leases” means the leases described in Schedule 1.1(b) pursuant
to which a Seller occupies the Leased Real Property.



“Regulatory Approvals” means any and all certificates, permits, licenses, franchises,
concessions, grants, consents, approvals, orders, registrations, authorizations, waivers, variances
or clearances from, or filings or registrations with, a Government Entity.



“Related to the Business” means required for, or primarily used in connection with,
the Business as conducted by Sellers prior to the Closing.



“REO Property” means a Mortgaged Property acquired under a Servicing Agreement through
foreclosure, acceptance of a deed in lieu of foreclosure or otherwise in connection with the
default or imminent default of a Mortgage Loan.



“Representatives” means, with respect to any Person, the directors, officers,
employees, accountants, agents, counsel, insurance brokers, insurance companies, lenders and other
financing sources and other representatives of such Person.



“Retained Liabilities” means any and all Claims and Liabilities of any kind or nature
whatsoever of a Seller or any of its Affiliates other than the Assumed Liabilities, including, any
Claims and Liabilities (i) arising from any early payment default claims with respect to any
Mortgage Loans or from any deficiency with respect to any existing loan facilities of Sellers, (ii)
any Claims or Liabilities relating to any and all Plans, Multiemployer Plans or Title IV Plans
(except as set forth in Section 3.1(d) with respect to certain PTO of Transferred
Employees), or (iii) relating to any action, event, circumstance or condition occurring or existing
on or prior to the Closing Date, including (a) any Claims and Liabilities arising under WARN, COBRA
or any other Law pertaining to current and former employees (or their beneficiaries) generally, (b)
any employee severance Claims or Liabilities relating to the employment or termination of
employment by Sellers of any employees of Sellers, (c) any Claims and Liabilities relating to any
Liens on the Purchased Assets, (d) any Liabilities and obligations arising under Contracts between
Sellers, on the one hand, and any of their Affiliates, on the other hand, (e) any and all Claims
and Liabilities for or resulting from any and all lawsuits or governmental examinations, audits or
investigations pertaining to the period prior to the Closing Date, (f) any and all Claims and
Liabilities for or resulting from Taxes attributable to the Purchased Assets for any Pre-Closing
Period or the income or operations of the Business for any Pre-Closing Period, (g) any and all
Transfer Taxes in connection with the Closing of the transactions contemplated hereby, (h) any and
all Liabilities for or resulting from Environmental Claims or under any Environmental Laws, and (i)
any and all Liabilities for or resulting from any action, suit, proceeding or investigation brought
against a Seller or any of its Affiliates by any Government Entity based upon a Seller’s or any of
its Affiliate’s conduct of the Business prior to the Closing Date or a Seller’s or any of its
Affiliate’s failure, or alleged failure, to comply with all applicable Laws prior to the Closing
Date.



“RMBS Transactions” mean the following residential mortgage-backed securities
transactions:




	 	1.	 	Carrington Mortgage Loan Trust, Series 2004-NC1






	 	2.	 	Carrington Mortgage Loan Trust, Series 2004-NC2






	 	3.	 	Carrington Mortgage Loan Trust, Series 2005-NC1






	 	4.	 	Carrington Mortgage Loan Trust, Series 2005-NC2






	 	5.	 	Carrington Mortgage Loan Trust, Series 2005-NC3






	 	6.	 	Carrington Home Equity Loan Trust, Series 2005-NC4






	 	7.	 	Carrington Mortgage Loan Trust, Series 2005-NC5






	 	8.	 	Carrington Mortgage Loan Trust, Series 2006-NC1






	 	9.	 	Carrington Mortgage Loan Trust, Series 2006-NC2






	 	10.	 	Carrington Mortgage Loan Trust, Series 2006-NC3






	 	11.	 	Carrington Mortgage Loan Trust, Series 2006-NC4






	 	12.	 	Carrington Mortgage Loan Trust, Series 2006-NC5






	 	13.	 	New Century Home Equity Loan Trust, Series 2003-2






	 	14.	 	New Century Home Equity Loan Trust, Series 2003-3






	 	15.	 	New Century Home Equity Loan Trust, Series 2003-4






	 	16.	 	New Century Home Equity Loan Trust, Series 2003-5






	 	17.	 	New Century Home Equity Loan Trust, Series 2003-6






	 	18.	 	New Century Home Equity Loan Trust, Series 2004-1






	 	19.	 	New Century Home Equity Loan Trust, Series 2004-2






	 	20.	 	New Century Home Equity Loan Trust, Series 2004-3






	 	21.	 	New Century Home Equity Loan Trust, Series 2004-4






	 	22.	 	New Century Home Equity Loan Trust, Series 2005-1






	 	23.	 	New Century Home Equity Loan Trust, Series 2005-2






	 	24.	 	New Century Home Equity Loan Trust, Series 2005-3






	 	25.	 	New Century Home Equity Loan Trust, Series 2005-4






	 	26.	 	New Century Home Equity Loan Trust, Series 2006-1






	 	27.	 	New Century Home Equity Loan Trust, Series 2006-2






	 	28.	 	New Century Home Equity Loan Trust, Series 2006-S1





“Sale” means the sale of the Purchased Assets in accordance with the Bidding
Procedures Order.



“Sale Approval Order” means an Order or Orders of the Bankruptcy Court issued pursuant
to Sections 363 and 365 of the Bankruptcy Code, substantially in the form set forth in Exhibit
E.



“Sale Hearing” has the meaning specified in the Bidding Procedures Order.



“Sale Motion” means the motion filed by Parent with the Bankruptcy Court for the
approval of the Sale Approval Order in the form of a Final Order.



“SEC” means the U.S. Securities and Exchange Commission.



“Second Lien Advances Amount” means, as of any date, an amount equal to (i) 95% of the
aggregate amount of Advances relating to Mortgage Loans under the Servicing Agreements secured by
second liens on the Mortgaged Property, which amount shall be determined pursuant to the audit
described in Section 4.2(c), minus (ii) any amounts previously collected and paid
pursuant to Section 4.1(b) to Sellers in a previous collection period under the Servicing
Agreements after the Closing Date.



“Second Lien Advances Purchase Price” has the meaning specified in Section
4.1(b) hereof.



“Securities Act” means the Securities Act of 1933, as amended.



“Seller Damages” has the meaning specified in Section 11.4 hereof.



“Seller Indemnified Parties” means Sellers and each of their Affiliates.



“Sellers” has the meaning specified in the preamble.



“Separation Shared Contracts” means those Shared Contracts set forth on Schedule
2.6(a).



“Servicer” means the “Servicer” or “Master Servicer” as defined in any Servicing
Agreement.



“Servicer Advance Facility” means the Servicer Advance Financing Facility Agreement,
dated as of August 28, 2003, by and between Citigroup Global Markets Realty Corp., a New York
corporation, and the Company.



“Servicer Advance Facility Amount” means all Obligations (as defined in the Servicer
Advance Facility) due and owing under the Servicer Advance Facility as of the Closing Date, as
determined and agreed to by Citigroup Global Markets Realty Corp. or by the Bankruptcy Court and
set forth on the Servicer Advance Facility Schedule or all Obligations (as such term is defined in
the DIP Financing Agreement) that are due and owing under Tranche B of the DIP Financing Agreement
on the Closing Date, as applicable.



“Servicer Advance Facility Schedule” means the schedule setting forth the Servicer
Advance Facility Amount and delivered by Sellers pursuant to Section 8.3(d).



“Servicer Indemnity” means the Servicer’s express indemnity obligations under the
sections of the Servicing Agreements set forth on Schedule 2.7(g).



“Servicing Agreements” means the servicing agreements, pooling and servicing
agreements, subservicing agreements, master servicing agreements, interim servicing agreements and
related agreements which are identified on Schedule 1.1(i), including all documents
attached as an exhibit or schedule to or incorporated by reference into any Servicing Agreement.



“Servicing Fees” means the sum of (i) the servicing fees (excluding any Ancillary
Income) paid to a Seller as set forth in a Servicing Agreement and (ii) any Ancillary Income.



“Servicing File” means, for each Mortgage Loan, copies of the Mortgage Loan Documents
and all other documents, files and other items related thereto required to be maintained by the
servicer pursuant to the applicable Servicing Agreement, and, if not specifically set forth in the
applicable Servicing Agreement, pursuant to the applicable servicing standard.



“Servicing Licenses” means the licenses required by Law or a Government Entity in
order to engage in the Business, including the licenses listed on Schedule 1.1(e).



“Servicing Litigation” has the meaning specified in Section 6.6(d) hereof.



“Servicing Rights” means all right, title and interest of Sellers in and to: (i) the
right to service the Mortgage Loans under the Servicing Agreements, including the right to receive
the Servicing Fees and Ancillary Income; (ii) the related master servicing and/or servicing
obligations as specified in each Servicing Agreement, including the obligations to administer and
collect the payments of or relating to the Mortgage Loans, and to remit all amounts and provide
information reporting to others in accordance with the Servicing Agreements; (iii) the right of
ownership, possession, control and use of any and all Servicing Files and Mortgage Loan Documents
pertaining to the servicing of the Mortgage Loans as provided in the Servicing Agreements; (iv) the
rights with respect to, and obligations to make, any advances required pursuant to any Servicing
Agreement, including obligations to reimburse funds borrowed from any custodial or other accounts
under a Servicing Agreement; (v) the “clean-up call” right, if any, to purchase the related
Mortgage Loans upon the aggregate principal balance thereof being reduced below a specified amount
to the extent provided for in the Servicing Agreement; and (vi) all other rights, powers and
privileges of Sellers as the master servicer, servicers or subservicer under the Servicing
Agreements as expressly set forth therein; provided, that all indemnification rights and
obligations of Sellers under the Servicing Agreements arising prior to the Closing Date and
relating to the operation of the Business prior to the Closing Date, shall not be transferred to
Purchaser.



“Shared Contract” means any Contract or arrangement (i) that is set forth on
Schedule 2.6(a) and 2.6(b) and (ii) under which (A) the Business and (B) at least
one other business unit of Sellers or their Affiliates purchase or sell goods or services or
otherwise have rights or obligations.



“Software Contracts” means all Contracts, agreements, licenses, and other commitments
and arrangements, with the exception of generally available or off-the-shelf shrink wrap licenses
acquired for under $5,000, with any person or entity respecting the ownership, license,
acquisition, design, development, distribution, marketing, development, use, outsourcing or
maintenance of computer program code, related technical or user documentation, and databases, in
each case relating to or arising out of the Business, other than such of the foregoing as are
identified in the Excluded Assets. As of the date hereof, the Software Contracts consist of the
items set forth on Schedule 1.1(h) as (i) licenses from third parties (development and/or
marketing); (ii) licenses from third parties (internal use only); (iii) development contracts,
work-for-hire agreements, information technology outsourcing agreements, and consulting and
employment agreements; (iv) distributorships, dealerships, franchises, and manufacturer’s
representative contracts; (v) licenses and sublicenses to others; and (vi) maintenance, support, or
enhancement agreements.



“Straddle Period” has the meaning specified in Section 7.2(b) hereof.



“Straddle Period Taxes” has the meaning specified in Section 7.2(b) hereof.



“Subsidiary” means, with respect to any Person, any corporation or other organization,
whether incorporated or unincorporated, of which (i) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the board of directors
or others performing similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Person and/or by any one or more of its
Subsidiaries, or (ii) such Person or any other Subsidiary of such Person is a general partner
(excluding any such partnership where such Person or any Subsidiary of such Person does not have a
majority of the voting interest in such partnership).



“Supplemental Motion” has the meaning specified in Section 2.7(d) hereof.



“Supplemental Order” has the meaning specified in Section 2.7(d) hereof.



“Tax” or “Taxes” means all taxes, charges, fees, duties, levies, penalties or
other assessments imposed by any federal, state, local or foreign governmental authority, including
income, gross receipts, excise, property, sales, gain, use, license, custom duty, unemployment,
capital stock, transfer, franchise, payroll, withholding, social security, minimum estimated,
profit, gift, severance, value added, disability, premium, recapture, credit, occupation, service,
leasing, employment, stamp and other taxes, any amounts attributable thereto or attributable to any
failure to comply with any requirement regarding Tax Returns and any transferee or secondary
Liability in respect of taxes, including, in each case, any interest, penalty, or addition thereto,
whether disputed or not.



“Tax Return” means any return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any such document prepared on a consolidated,
combined or unitary basis and also including any schedule or attachment thereto, and including any
amendment thereof.



“Technical Documentation” means all technical and descriptive materials (other than
Inventory) relating to the acquisition, design, development, use, or maintenance of computer code,
program documentation, Computer Equipment and materials in Sellers’ Business.



“Third Party Claim” has the meaning specified in Section 11.8(a) hereof.



“Title IV Plan” means a plan that is subject to Section 302 or Title IV of ERISA or
Section 412 of the Code.



“Trademarks” has the meaning specified in the “Intellectual Property” definition.



“Trade Secrets” has the meaning specified in the “Intellectual Property” definition.



“Transfer Instructions” means the transfer instructions agreed by Sellers and
Purchaser pursuant to Section 6.6(a).



“Transfer Taxes” means any federal, state, county, local, foreign and other sales,
use, transfer, conveyance, documentary transfer, recording or other similar Tax, fee or charge
imposed upon the sale, transfer or assignment of property or any interest therein or the recording
thereof, and any penalty, addition to Tax or interest with respect thereto.



“Transferred Employee” has the meaning specified in Section 3.1(b) hereof.



“Transferred Intellectual Property” means all the Intellectual Property Related to the
Business owned by, or licensed to, Sellers or their Affiliates, including all invoices, shipping
documents, purchase orders and other preprinted business forms that have any Trademark thereon, and
as set forth on Schedule 5.20(b).



“Transferred Shared Contract” means those Shared Contracts that are set forth on
Schedule 2.6(b).



“Transition Services Agreement” means a transition services agreement to be dated as
of the Closing Date, between Purchaser and the Company, in form and substance acceptable to Sellers
and Purchaser.



“TRS” has the meaning specified in Section 5.2 hereof.



“Unresolved Portion” has the meaning specified in Section 11.10(a) hereof.



“WARN” means the U.S. Worker Adjustment and Retraining Notification Act of 1988, as
amended or any similar state or local Law (including, for the avoidance of doubt, the California
Worker Adjustment and Retraining Notification Act, as amended).



Section 1.2 Interpretation. When a reference is made in this Agreement to a section or
article, such reference shall be to a section or article of this Agreement unless otherwise clearly
indicated to the contrary.




(a) Whenever the words “include” “includes” or “including” are used in this Agreement they
shall be deemed to be followed by the words “without limitation.”




(b) The words “hereof,” “herein” and “herewith” and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and schedule references arc
to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.




(c) The meaning assigned to each term defined herein shall be equally applicable to both the
singular and the plural forms of such term. Where a word or phrase is defined herein, each of its
other grammatical forms shall have a corresponding meaning.




(d) A reference to any party to this Agreement or any other agreement or document shall
include such party’s successors and permitted assigns.




(e) A reference to any legislation or to any provision of any legislation shall include any
amendment to, and any modification or reenactment thereof, any legislative provision substituted
therefor and all regulations and statutory instruments issued thereunder or pursuant thereto.



ARTICLE II




PURCHASE AND SALE OF ASSETS




Section 2.1 Purchase and Sale of Assets. On the terms and subject to the conditions
set forth herein and except as provided in Section 2.7, at the Closing, Sellers shall sell,
convey, transfer, assign and deliver to Purchaser, and Purchaser shall purchase from Sellers, free
and clear of all “claims” (as defined in the Bankruptcy Code) and Liens, all of the right, title
and interest of all Sellers in and to the following assets, whether tangible or intangible, real,
personal or mixed, except for the Excluded Assets (collectively, the “Purchased Assets”):




(a) all of Sellers’ Servicing Rights and rights to receive Servicing Fees with respect to
the Carrington-Related Assets on and after the Closing Date;




(b) all of Sellers’ Servicing Rights and rights to receive Servicing Fees with respect to
the New Century Portfolio-Related Assets on and after the Closing Date;




(c) except for Contracts included in the Excluded Assets, all (i) Contracts set forth in
Schedule 2.1(c), (ii) Real Property Leases, (iii) Intellectual Property Licenses, (iv)
subject to Section 2.6, rights under Separation Shared Contracts that relate primarily to
the conduct of the Business, (v) Transferred Shared Contracts, (vi) the Assigned Leases and (vii)
Contracts entered into or made by any Seller Related to the Business after April 2, 2007 and
before the Closing; provided that, in the case of any such Contract referred to in this
clause (vii), Sellers shall have furnished Purchaser a true, correct and complete copy of
such Contract and, after a reasonable opportunity to review such Contract, Purchaser shall have
consented in writing to assume such Contract (all contracts described in clauses (i) through
(vii) of this Section 2.1(c), collectively, the “Assumed Contracts”), which Consent shall
not be unreasonably withheld or delayed;




(d) all Transferred Intellectual Property;




(e) all Books and Records Related to the Business that are not Excluded Assets;




(f) all Fixtures and Equipment Related to the Business;




(g) all IT Assets Related to the Business;




(h) the Leased Real Property, including all easements and other rights and interests
appurtenant thereto;




(i) all Advances;




(j) all credits, prepaid expenses, deferred charges, security deposits, prepaid items and
duties to the extent primarily related to a Servicing Agreement or a Purchased Asset;




(k) all causes of action, lawsuits, judgments, claims, refunds, choses in action, rights of
recovery, rights of set-off, rights of recoupment, demands and any other rights or Claims of any
nature available to or being pursued by Sellers or any of their Affiliates to the extent
primarily related to the Purchased Assets and arising or accruing from and after the Closing or
to the extent primarily related to the Assumed Liabilities, whether arising by way of
counterclaim or otherwise (“Assumed Rights and Claims”);




(l) all guaranties, warranties, indemnities and similar rights in favor of Sellers or any of
their Affiliates to the extent related to any Servicing Agreement or Purchased Asset, other than
any guaranties, warranties, indemnities and similar rights in favor of Sellers or any of their
Affiliates arising prior to the Closing Date; and




(m) to the extent permitted by Law, all Permits held by Sellers Related to the Business or
any of the Purchased Assets, including those listed on Schedule 2.1(m).



Section 2.2 Excluded Assets. Notwithstanding anything herein to the contrary, from and
after the Closing, Sellers shall retain all of their existing right, title and interest in and to
any and all assets that are not Purchased Assets, and there shall be excluded from the sale,
conveyance, assignment or transfer to Purchaser hereunder, and the Purchased Assets shall not
include, the following (collectively, the “Excluded Assets”):




(a) any asset or class of assets excluded from the defined terms set forth in Sections
2.l(a) through (m) by virtue of the limitations expressed or implied therein;




(b) all cash and cash equivalents, including Sellers’ bank accounts, but excluding cash
flows under, and any accounts created pursuant to, any Servicing Agreements or any net profits
generated by operation of the Business on or after the Closing Date;




(c) all Tax Returns of Sellers or any of their Affiliates and all Books and Records
(including working papers) related thereto, other than any such Tax documents related to the
Purchased Assets, and any Books and Records which Sellers are required by Law to retain;




(d) all causes of action, lawsuits, judgments, claims, refunds, choses in action, rights of
recovery, rights of set-off, rights of recoupment, demands and any other rights or Claims of any
nature other than the Assumed Rights and Claims, including to any claims of any nature relating
to early payment default claimants;




(e) the Plans and all rights or Liabilities in connection with and assets of the Plans;




(f) any rights, demands, claims, actions and causes of action constituting avoidance actions
of Sellers’ estate under Chapter 5 of the Bankruptcy Code, including any and all proceeds of the
foregoing;




(g) all of Sellers’ rights and causes of action arising under Section 502 and 503 of the
Bankruptcy Code and Rule 3007 thereunder;




(h) all of the rights and claims of the Filing Subsidiaries available to Filing Subsidiaries
under the Bankruptcy Code, of whatever kind or nature, as set forth in Sections 544 through 551,
inclusive, and any other applicable provisions of the Bankruptcy Code, and any related claims and
actions arising under such sections by operation of Law or otherwise, including any and all
proceeds of the foregoing;




(i) any of the rights of Sellers under this Agreement (or any agreements between either
Seller, on the one hand, and Purchaser or any of its Affiliates, on the other hand, entered into
on or after the date of this Agreement);




(j) all insurance policies and insurance proceeds that Sellers or any of their Affiliates
have a right to receive as of the Closing and that relate to events, circumstances or occurrences
prior to the Closing (it being understood that none of Sellers or their Affiliates have a right
to receive insurance proceeds belonging to the trusts related to the RMBS Transactions);




(k) Tax refunds (i) Related to the Business to the extent related to any taxable period (or
portion thereof) ending on or prior to the Closing Date and (ii) not Related to the Business
related to any taxable period (or portion thereof);




(l) the Purchase Price and any rights Sellers may have to the Indemnification Holdback
Amount pursuant to this Agreement and the Escrow Agreement;




(m) all rights, claims and causes of action relating to any Excluded Asset or any Retained
Liability; and




(n) all Excluded Contracts.



Section 2.3 Post-Closing Asset Deliveries. If either Seller, in its reasonable
discretion, determines after the Closing that books, records or other materials constituting
Purchased Assets are still in the possession of such Seller or any of its Affiliates, such Seller
shall, or shall cause such Affiliates to, promptly deliver them to Purchaser at no cost or expense
to Purchaser (other than Consents pursuant to Section 2.5(a) which shall be at the cost and
expense of Purchaser). If any Seller or Purchaser, in its reasonable discretion, determines after
the Closing that books, records or other materials constituting Excluded Assets were delivered to
Purchaser, Purchaser shall promptly return them to the applicable Seller at Sellers’ sole cost and
expense.



Section 2.4 Conveyance of Assets by Affiliates of Sellers. Notwithstanding anything to
the contrary contained in this Agreement, if it is determined before, at or after the Closing that
any Affiliate of any Seller (an “Affiliate Seller”) owns or possesses any Purchased Assets
Related to the Business if such Affiliate Seller were deemed to be a Seller under this Agreement
(such assets and properties, the “Affiliate Purchased Assets”), then Sellers shall, upon
Purchaser’s request, promptly cause such Affiliate Seller to transfer, assign, convey and deliver
to Purchaser such Affiliate Purchased Assets in accordance with the terms and conditions of this
Agreement; provided, that Purchaser shall not be obligated to pay any amounts to Sellers in
consideration for the transfer of such Affiliate Purchased Assets to Purchaser other than those
amounts that Purchaser is obligated to pay to Sellers pursuant to Section 4.1.



Section 2.5 Non-Assignable Permits and Contracts; Servicing Licenses.




(a) Non-Assignability. Notwithstanding anything to the contrary contained in this
Agreement or in any Ancillary Agreement, to the extent that any Contract included in the
Purchased Assets is not capable of being assigned to Purchaser as contemplated by this Agreement
without the Consent of the other party or parties thereto or the issuer thereof or any other
third party (including a Government Entity), or if such assignment or attempted assignment
without such Consent would constitute a breach thereof or a violation of any Law, this Agreement
shall not constitute an assignment or transfer of any claim, right, benefit or obligation
thereunder, or any such attempted assignment, unless any such Consent is obtained at or prior to
the date of such attempted assignment (any such Contract that is not capable of being assigned to
Purchaser at the Closing as contemplated by this Section 2.5(a), a “Non-Transferred
Asset”).




(b) Efforts to Obtain Consents and Waivers. At Purchaser’s request, and at
Purchaser’s cost and expense, each Seller shall use commercially reasonable efforts, and
Purchaser shall provide reasonable cooperation to each Seller, to obtain the Consents referred to
in Section 2.5(a) with respect to any Non-Transferred Asset after the Closing.




(c) If Waivers or Consents Cannot be Obtained. Except with respect to the Servicing
Licenses, which are covered under Section 2.5(e), until the Consents referred to in
Section 2.5(a) with respect to any Non-Transferred Assets are obtained, Sellers’ sole
responsibility with respect to such Non-Transferred Assets, notwithstanding Section 2.1,
shall be to use all commercially reasonable efforts, at the cost and expense of Purchaser, for
the period ending on the earlier of the one-year anniversary of the Closing Date or the effective
date of any plan of reorganization of Sellers confirmed in the Bankruptcy Cases, to: (i) provide
to Purchaser the benefits of such Non-Transferred Asset; (ii) cooperate in any reasonable and
lawful arrangement designed to provide such benefits to Purchaser; and (iii) enforce for the
account of Purchaser any rights of Sellers arising from such Non-Transferred Asset against the
other party or parties thereto or the issuer thereof. Purchaser shall indemnify and hold
harmless Sellers against and from any Loss incurred by Sellers arising from or related to any and
all actions taken by either Seller pursuant to this Section 2.5(c) at the direction of
Purchaser.




(d) Obligation of Purchaser to Perform. Other than with respect to Servicing
Licenses, to the extent that Purchaser is provided the benefits pursuant to Section
2.5(c) of any Non-Transferred Asset, Purchaser shall perform, on behalf of Sellers, for the
benefit of Sellers and the other party or parties thereto or the issuer thereof the obligations
of Sellers thereunder or in connection therewith and if Purchaser shall fail to perform to the
extent required herein, Sellers, without waiving any rights or remedies that they may have under
this Agreement or applicable Laws, may suspend their performance under Section 2.5(c) in
respect of the instrument that is the subject of such failure to perform unless and until such
situation is remedied, at either Sellers’ option, or Sellers may perform at Purchaser’s sole cost
and expense such obligations, in which case Purchaser shall reimburse Sellers’ reasonable costs
and expenses of such performance as promptly as practicable following receipt of an invoice
therefor. Purchaser shall indemnify and hold harmless Sellers against and from any Loss incurred
by Sellers arising from or related to any and all actions taken by either Seller pursuant to this
Section 2.5(d) at the direction of Purchaser.




(e) Servicing Licenses. Purchaser shall use all commercially reasonable efforts to
obtain all Servicing Licenses required in connection with the Business as promptly as possible,
and Sellers shall cooperate with, and provide assistance to, Purchaser in all such efforts. If
and to the extent Purchaser shall not have obtained all such Servicing Licenses prior to the
Closing, (i) the Company shall perform such activities under the Servicing Agreements as are
required from time to time to be performed by a Person with such Servicing Licenses in compliance
with Law, in each case for a servicing fee to be mutually agreed by Purchaser and the Company
(which fee shall not be less than the Company’s actual costs incurred in performing such
activities), (ii) Purchaser and the Company shall enter into the Lease and Subservicing
Agreement, which may include a lease back to the Company of any Purchased Assets and Assumed
Liabilities, including any employees, Servicing Rights, IT Assets or Permits required in order to
conduct the Business in compliance with Law or (iii) Purchaser and the Company shall enter into
another arrangement mutually satisfactory to Purchaser and Sellers. The Lease and Subservicing
Agreement or other arrangement shall terminate on the six-month anniversary of the Closing Date,
unless earlier terminated by mutual agreement of the parties thereto. As of the date hereof,
Purchaser has contacted and shall continue to contact the state regulators in all states where
Servicing Licenses are required in order to ascertain if any state regulator will object to such
arrangements, and shall use all commercially reasonable efforts to inform and consult with all
such state regulators as to such arrangements contemplated in this Section 2.5(e) and to
avoid any objection thereto.



Section 2.6 Shared Contracts.




(a) Separation of Certain Shared Contracts for Benefit of Purchaser. Prior to the
Closing, Sellers and Purchaser shall use commercially reasonable efforts to work together (and,
if necessary and desirable, to work with the third parties to the Separation Shared Contracts) in
an effort to (i) divide, modify and/or replicate (in whole or in part) the respective rights and
obligations under and in respect of the Separation Shared Contracts and (ii) if reasonably
feasible, novate the respective rights and obligations under and in respect of the Separation
Shared Contracts, such that, effective as of the Closing, (A) Purchaser is the beneficiary of the
rights and is responsible for the obligations related to that portion of the Separation Shared
Contract Related to the Business and included in the Purchased Assets (the “Business
Portion”) so that, subsequent to the Closing, Sellers shall have no rights or obligations
with respect to the Business Portion of the Separation Shared Contract, and (B) the applicable
Seller is the beneficiary of the rights and is responsible for the obligations related to that
portion of the Separation Shared Contract other than the Business Portion (the “Non-Business
Portion”) so that, subsequent to the Closing, Purchaser shall have no rights or obligations
with respect to the Non-Business Portion of the Separation Shared Contract. If the applicable
parties are not able to enter into an arrangement to formally divide, modify and/or replicate one
or more Separation Shared Contracts prior to the Closing as contemplated by the previous
sentence, then (i) Purchaser shall be entitled to the benefits of the Business Portion of any
such Separation Shared Contract accruing on or after the Closing Date to the extent (and only to
the extent) that Sellers may provide such benefits (A) without violating the terms of such
Separation Shared Contract and (B) without incurring any material expense (and any such expense
shall be reimbursed by Purchaser) and (ii) to the extent Purchaser receives such benefits,
Purchaser shall perform at its sole cost and expense the obligations of the applicable Seller to
be performed after the Closing under the Business Portion of such Separation Shared Contract as
in effect on the Closing Date until the earliest of (i) such time as separate Contracts for such
goods or services have been agreed between such Seller and the other party to such Contracts,
(ii) the election by Seller to terminate such arrangement, (iii) the termination of such
Separation Shared Contract and (iv) the date which is 12 months after the Closing Date.




(b) Other Shared Contracts. With respect to any Transferred Shared Contract that is,
at Sellers’ sole option, transferred to Purchaser at the Closing, Purchaser shall provide the
applicable Seller with the benefits of such Transferred Shared Contract in substantially the
manner described in Section 2.6(a) above (subject to the limitations set forth therein),
and such Seller shall reimburse Purchaser for such benefits in substantially the manner described
in Section 2.6(a) above (subject to the limitations set forth therein), until the
earliest of (i) such time as separate Contracts for such goods or services have been agreed
between such Seller and the other party to such Contracts, (ii) the election by Seller to
terminate such arrangement, (iii) the termination of such Transferred Shared Contract and (iv)
the date which is 12 months after the Closing Date.



Section 2.7 Assumption of Certain Liabilities.




(a) On the terms of and subject to the conditions set forth herein, Purchaser shall
(i) assume at the Closing and discharge or perform when due the Assumed Liabilities on and after
the Closing Date and (ii) assume all obligations for and pay and discharge when due the Cure
Amounts relating to each Assigned Contract at the respective Contract Determination Date for such
Assigned Contract; provided, that, except as set forth in Section 2.7(b), in no
event shall Purchaser assume and discharge when due the Cure Amounts relating to the Excluded
Contracts. Except as set forth in this Section 2.7, Purchaser shall not assume or have
any Liability or responsibility with respect to any Liability of any nature or kind whatsoever
relating to the Business or the Purchased Assets that exists, or arises out of the operation or
ownership of the Purchased Assets or the Business, prior to, at or after, the Closing and that is
not an Assumed Liability. Except as set forth in this Section 2.7, other than the
Assumed Liabilities, Purchaser shall not assume any Liability of any nature or kind whatsoever of
Sellers.




(b) From time to time after the date hereof, but in no event later than 60 days following
the Closing Date or, if such date does not fall on a Business Day, the next succeeding Business
Day (the “Contract Notification Deadline”), Purchaser shall, in its sole discretion,
notify Sellers of (i) each Assigned Contract that Purchaser has agreed to assume (each, an
“Accepted Contract” and, collectively, the “Accepted Contracts”) and (ii) each
Assigned Contract that Purchaser does not desire to assume (each, an “Excluded Contract”
and, collectively, the “Excluded Contracts”); provided, that any Assigned
Contract that has not been designated by Purchaser as either an Accepted Contract or an Excluded
Contract by the Contract Notification Deadline shall be deemed to be an Excluded Contract; and
provided, further, that Sellers shall not be deemed in breach under this
Agreement (whether as a result of an inaccuracy in a representation or warranty or breach of a
covenant) or otherwise if Sellers shall reject an Excluded Contract. Purchaser shall be
responsible for and shall pay to each applicable Person that is a party to an Accepted Contract
the respective Cure Amount for such Accepted Contract on the Contract Determination Date for such
Accepted Contract. In furtherance of the foregoing, the Sale Approval Order shall provide that
the assignment and assumption to Purchaser of the Assigned Contracts is approved, subject only to
(A) payment by Purchaser of the Cure Amounts for each Assigned Contract, (B) resolution of any
assumption objection under Section 365(c)(1) or (c)(2) of the Bankruptcy Code and (C) Purchaser’s
right to designate any Assigned Contract an Excluded Contract in accordance with the terms of
this Section 2.7(b). From the date hereof until the Contract Notification Deadline,
Sellers shall not reject any Assigned Contract unless such contract has been designated an
Excluded Contract by Purchaser; provided, that Sellers shall not be deemed in breach
under this Agreement (whether as a result of an inaccuracy in a representation or warranty or
breach of a covenant) or otherwise if Sellers shall reject an Excluded Contract. Purchaser shall
be responsible for, and shall pay in accordance with Section 2.7(c), all costs incurred
by Sellers with respect to, and all amounts due by or on behalf of Sellers under, each Assigned
Contract, together with all of Sellers’ reasonable, necessary, ordinary course, post-Closing
obligations that are specifically attributable to each such Assigned Contract (the “Carrying
Costs”) during the period from the Closing Date through the Contract Determination Date for
each such Assigned Contract. Except as set forth in this Section 2.7, Purchaser’s
Carrying Costs shall not include any attorneys’ or financial advisory fees arising from and
directly related to the Bankruptcy Cases or Sellers and their Affiliates status as
debtors-in-possession under Chapter 11 of the Bankruptcy Code. With respect to each Assigned
Contract, between the Closing Date and such Assigned Contract’s respective Contract Determination
Date, Sellers shall provide, to the extent reasonably necessary for Purchaser to operate the
Business after the Closing Date and at Purchaser’s sole cost and expense, a subcontract, sublease
or sublicense, as may be applicable, to Sellers’ rights Related to the Business pursuant to such
Assigned Contract.




(c) With respect to each Assigned Contract, Sellers shall, within 60 days after the later of
(i) the Contract Determination Date for such Assigned Contract or (ii) the Contract Notification
Deadline, advise Purchaser in writing of the amount of the Carrying Costs with respect to such
Assigned Contract in sufficiently reasonable detail; provided, that, without limiting the
foregoing, Sellers, in their sole discretion, may advise Purchaser in writing of the amount of
Carrying Costs at any time with respect to any Assigned Contract the Carrying Costs of which are
equal to or greater than $100,000. Purchaser shall pay the Carrying Costs as so indicated within
10 Business Days after such notification; provided, that Purchaser may object to the
Carrying Costs within such 10 Business Day period. If Purchaser makes such an objection, Sellers
and Purchaser shall first use good faith efforts to resolve such objection and, absent resolution
within 10 Business Days of Purchaser’s objection, the matter shall be submitted to the Bankruptcy
Court, whose determination shall be final and binding upon the parties.




(d) Sellers shall file a motion (the “Supplemental Motion”) with the Bankruptcy
Court for entry of an Order of the Bankruptcy Court (the “Supplemental Order”) to assume
and assign to Purchaser any additional Contracts or any Separation Shared Contracts, in each case
that have not been previously rejected by Sellers, as identified by Purchaser and approved by
Sellers in their sole discretion (each, an “Additional Contract” and, collectively, the
“Additional Contracts”) that, for any reason, are not assumed and assigned to Purchaser
pursuant to the Sale Approval Order, with the same effect as if such Contracts had been Assigned
Contracts (i) under the Sale Approval Order, including setting a proposed cure amount and seeking
a Cure Finding therefor, and (ii) under this Section 2.7, including with respect to the
obligation to pay the Cure Amount and Carrying Costs with respect to each such Additional
Contract; provided, that Purchaser’s obligation to pay the Carrying Costs for any
Additional Contract shall commence upon the date that Sellers approve Purchaser’s request to
treat such contract as an Additional Contract hereunder. The Sale Approval Order shall provide
that a motion to assume and assign an Additional Contract shall be on notice only to Purchaser
and to the non-debtor party or parties to such Contract. If the non-debtor party to any such
Additional Contract objects to the assumption and assignment of such Contract or to Sellers’
proposed cure amount, then Sellers shall either settle, at Purchaser’s cost, the objection of
such party (subject to approval of Purchaser) or shall litigate, at Purchaser’s cost, such
objection under such procedures as the Bankruptcy Court shall approve and proscribe. The
Contract Notification Deadline for any Additional Contract shall be deemed to be, and shall be
extended until, the later of (x) the date that is 45 days after the date that such Additional
Contract is identified by Purchaser to Sellers, subject to the approval of Sellers in their sole
discretion; and (y) the date that is three Business Days after the date that the Bankruptcy Court
makes a Cure Finding for such Contract (in each case if such date would be after the date that
would otherwise be the Contract Notification Deadline). The Sale Approval Order shall provide
that with respect to any action required or permitted to be taken by Sellers pursuant to this
Section 2.7(d), Purchaser shall pay the legal fees of Sellers involved in any such
litigation.




(e) Prior to the Closing Date, Sellers shall file a Supplemental Motion with the Bankruptcy
Court for entry of a Supplemental Order to assume and assign to Purchaser any Ancillary
Servicing-Related Agreements that have not otherwise been assumed by Sellers and assigned to
Purchaser by agreement of the parties thereto in accordance with the terms of the Sale Approval
Order. Sellers shall retain all liabilities and obligations with respect to the Cure Amount
relating to any such Ancillary Servicing-Related Agreement.




(f) The term “Cure Finding” as used herein shall mean a finding by the Bankruptcy
Court in a Final Order determining the amount required to be paid to cure any outstanding
defaults under an Assigned Contract so that Sellers may assume and assign such Contract to
Purchaser pursuant to Section 365 of the Bankruptcy Code. Upon objection by the non-debtor party
to any such Contract, on behalf of Sellers, Purchaser shall, in its sole discretion, either
settle or litigate, in each case at Purchaser’s cost, the objection of such party under such
procedures as the Bankruptcy Court shall approve and proscribe; provided,
however, that if Purchaser decides not to settle or litigate any such objection,
Purchaser shall provide Sellers prompt written notice of such decision and Sellers shall either
settle or litigate, in each case at Purchaser’s direction and reasonable cost, the objection of
such party under such procedures as the Bankruptcy Court shall approve and proscribe. The term
“Cure Amount” as used herein means all cure amounts payable in order to cure any defaults
or otherwise effectuate, pursuant to the Bankruptcy Code, the assumption by and assignment to
Purchaser of an Assigned Contract and assigned to Purchaser under the Sale Approval Order, as
determined pursuant to a Cure Finding, a settlement or litigation (in each case at Purchaser’s
cost), as provided in this Section 2.7(f). The Sale Approval Order shall provide that
with respect to any action, including the preparation, negotiation and filing of any motions or
other papers regarding a Cure Finding, required or permitted to be taken by Sellers pursuant to
this Section 2.7, Purchaser shall pay the legal fees of Sellers involved in any such
litigation.




(g) Nothing contained herein shall be construed to limit Purchaser’s obligation to perform
the obligations of the Servicer under the Servicing Agreements from and after the Closing Date
based on the status of the Mortgage Loans at that time, although such performance obligation
shall not be deemed to cause Purchaser to assume any liability for any act or omission of Sellers
(whether as originator, Servicer or otherwise), the indenture trustee or any other Person arising
on or before the Closing Date with respect to such Servicing Agreements; provided,
however, and for the avoidance of doubt, nothing contained in the preceding sentence is
intended to relieve Purchaser from its indemnification obligations under the Servicer Indemnity
arising after the Closing Date.



Section 2.8 Retained Liabilities. Sellers shall retain and be liable and responsible
for all Retained Liabilities.



Section 2.9 Closing. Subject to the terms and conditions of this Agreement, the
closing (the “Closing”) of the transactions contemplated hereby shall take place at the
offices of O’Melveny & Myers LLP, 7 Times Square Plaza, New York, New York 10036, on the second
Business Day following the date on which the conditions set forth in Article VIII (other
than those conditions that by their nature can be satisfied only at the Closing but subject to the
fulfillment or waiver of those conditions) have been satisfied or waived or at such other time and
place as the parties hereto may mutually agree. At the Closing, the appropriate parties shall take
all actions required under Sections 2.10, 2.11 and 2.12 and all other
actions not previously taken but required to be taken hereunder at or prior to the Closing.



Section 2.10 Ancillary Agreements. At the Closing, Sellers shall duly execute and
deliver to Purchaser, and Purchaser shall duly execute and deliver to Sellers, each of the
following agreements to which they are to be a party (the “Ancillary Agreements”):




(a) Copyright Assignments;




(b) the Escrow Agreement;




(c) the Transition Services Agreement;




(d) the Bills of Sale;




(e) subject to Section 2.7 (to the extent applicable), the Assignment and Assumption
Agreements;




(f) subject to Section 2.7, the Assignment and Assumption of Lease Agreements; and




(g) the Lease and Subservicing Agreement, if required pursuant to Section 2.5(e).



Section 2.11 Deliveries by Purchaser.




(a) At the Closing, Purchaser shall deliver to Sellers the following:




(i) the Purchase Price, in accordance with Section 4.1, in immediately
available funds by wire transfer to an account or accounts which have been
designated by Sellers at least two Business Days prior to the Closing Date;




(ii) the certificate to be delivered pursuant to Section 8.2(c);




(iii) subject to Section 2.7, such instruments of assumption and other
instruments or documents, in form and substance reasonably acceptable to Sellers, as
may be necessary to effect Purchaser’s assumption of the Assumed Liabilities and the
effective assignment of any Assumed Contracts, Assigned Leases or other Purchased
Assets; and




(iv) such other customary instruments of transfer, assumptions, filings or
documents, in form and substance reasonably satisfactory to Sellers, as may be
required to give effect to this Agreement or any Ancillary Agreement.



Section 2.12 Deliveries by Sellers.




(a) Subject to Section 2.7, at the Closing, Sellers shall deliver, or cause to be
delivered, to Purchaser the following:




(i) a certified copy of (A) the Sale Approval Order, which shall not have been
modified or amended in any manner that has not been agreed to in writing by
Purchaser in its sole discretion and shall have become a Final Order, and (B) all
other Orders of the Bankruptcy Court pertaining to the transactions contemplated by
this Agreement and the Ancillary Agreements;




(ii) the certificates to be delivered pursuant to Section 8.3(c);




(iii) a master copy of each proprietary software program Related to the
Business (in both object code, and to the extent available, source code form); and




(iv) such other customary instruments of transfer, assumptions, filings or
documents, in form and substance reasonably satisfactory to Purchaser, as may be
required to give effect to this Agreement or any Ancillary Agreement.



Section 2.13 Limited Representations. Purchaser hereby acknowledges and agrees that,
notwithstanding anything to the contrary contained herein, except as expressly set forth in this
Agreement, Sellers make no representations or warranties whatsoever, express or implied, with
respect to any matter relating to the Purchased Assets. Without in any way limiting the foregoing,
Sellers hereby disclaim any warranty (express or implied) of merchantability or fitness for any
particular purpose as to any portion of the Purchased Assets.



ARTICLE III




TRANSFERRED EMPLOYEES




Section 3.1 Transferred Employees. With respect to each Business Employee,
Schedule 3.1 lists, to the extent such information is permitted to be disclosed under
applicable Law: (i) each such person’s title or job/position; (ii) each such person’s job
designation (i.e., salaried or hourly); (iii) each such person’s location of employment; (iv) each
such person’s employment status (i.e., actively employed or not actively at work (due to, e.g.,
illness, short-term disability, sick leave, authorized leave or absence, etc.)); (v) each such
person’s annual base rate of compensation, target level of 2007 bonus amounts and bonuses received
in 2006; and (vi) if applicable, any material, individual specific provisions relating to such
person’s employment (e.g., non-compete agreement, golden parachute, etc.).




(a) Not later than 20 days prior to the Closing Date, Sellers will provide Purchaser with an
updated Schedule 3.1.




(b) Not later than 15 days prior to the Closing Date, and effective as of the Closing Date,
Purchaser shall offer employment to substantially all Business Employees identified on
Schedule 3.1 (as updated in accordance with clause (a) of this Section
3.1); provided, that each such offer shall provide that it shall not become effective
with respect to a Business Employee unless the applicable Business Employee is actively at work
as of the Closing Date. Each such offer of employment shall comply with the requirements of this
Section 3.1. The new employment of each Business Employee who accepts a Purchaser’s
offer of employment shall commence with effect from the later of the Closing or the date of
acceptance. Each Business Employee who accepts a Purchaser’s offer of employment and who becomes
an employee of such Purchaser as of the Closing shall be a “Transferred Employee.”




(c) Purchaser’s offer of employment will be at a level of base compensation not less than
the level of base compensation as applied to such Person immediately prior to the Closing and
with benefits that are substantially similar in the aggregate to those provided by Sellers
immediately prior to the Closing Date.




(d) With respect to any accrued but unused paid time off (“PTO”) to which any
Transferred Employee is entitled pursuant to the PTO policy applicable to such Transferred
Employee immediately prior to the Closing Date (the “PTO Policy”), Purchaser shall assume
the liability for accrued PTO of Transferred Employees and shall permit such Transferred
Employees to use such PTO; provided, however, that if Purchaser deems it
necessary or if otherwise required by applicable Law, Purchaser shall be liable for and pay in
cash to each such Transferred Employee an amount equal to the wages relating to such PTO. During
the period between the date hereof and the Closing Date, Sellers shall not modify or amend the
PTO Policy with respect to any Transferred Employee.



Section 3.2 Employee Benefit Plans. Schedule 3.2 sets forth a true, complete
and correct list of each material Plan that covers any Business Employee. Purchaser and its
Affiliates shall not assume any Plans or any Liabilities under or with respect to the Plans
(except, in Purchaser’s sole discretion, as to any permitted “rollover” accepted by the applicable
plan of Purchaser or one of its Affiliates that is elected by a Transferred Employee under a Plan
intended to be qualified under Section 401(a) of the Code). Effective as of the Closing, each
Business Employee shall be 100% fully vested in his benefits under any Plan that is intended to be
qualified under Section 401(a) of the Code.



Section 3.3 COBRA. Sellers and their Affiliates shall retain all obligations relating
to compliance with the continuation health care coverage requirements of Section 4980B of the Code
and Sections 601 through 608 of ERISA under the Plans, regardless of whether a qualifying event
occurs prior to, on or after the Closing Date. This Agreement shall not, however, limit the
ability of Sellers to amend or terminate any Plan at any time.



Section 3.4 WARN. Sellers agree to provide any required notice under and to otherwise
retain all Liabilities relating to WARN, or any similar Laws, with respect to any event affecting
Business Employees on or prior to the Closing Date. Purchaser agree to provide any required notice
under and to otherwise assume all Liabilities relating to WARN, or any similar Laws, with respect
to any event affecting Transferred Employees after the Closing Date.



Section 3.5 Cooperation. Sellers and Purchaser shall provide each other with such
records and information as may be reasonably necessary, appropriate and permitted under applicable
Law to carry out their obligations under this Article III.



Section 3.6 No Third Party Rights. No provision of this Agreement confers rights or
remedies upon any Person, including any Business Employee or any Transferred Employee, other than
the Parties.



ARTICLE IV




PURCHASE PRICE; ADJUSTMENT; ALLOCATION




Section 4.1 Purchase Price.




(a) The aggregate consideration for the Purchased Assets (the “Closing Date Purchase
Price”) to be paid on the Closing Date shall, subject to the terms and conditions of this
Article IV, equal (i) the sum of (A) the Cut-Off Carrington-Related Assets Amount (which
amount would equal approximately $57,600,000 if calculated as of April 30, 2007 (instead of the
Cut-Off Date) and shall be subject to audit and adjustment as provided in this Article
IV), plus (B) the Cut-Off New Century Portfolio-Related Assets Amount (which amount
would equal approximately $66,300,000 if calculated as of April 30, 2007 (instead of the Cut-Off
Date) and shall be subject to audit and adjustment as provided in this Article IV),
plus (C) the Cut-Off First Lien Advances Amount (which amount excludes funds borrowed
from any custodial or other accounts under a Servicing Agreement and shall be subject to audit
and adjustment as provided in this Article IV), a portion of which Cut-Off First Lien
Advances Amount shall be used to pay the Servicer Advance Facility Amount in full, minus
(ii) the sum of (A) the Indemnification Holdback Amount, which shall be paid to the Escrow Agent,
plus (B) the New Century Portfolio-Related Assets Deduction, if any.




(b) After the Closing, Purchaser shall also, subject to the terms and conditions of this
Article IV, pay Sellers an amount up to the Second Lien Advances Amount (the “Second
Lien Advances Purchase Price” and, collectively with the Closing Date Purchase Price, the
“Purchase Price”), which amounts shall be payable to Sellers on each Distribution Date
(as defined in the related Servicing Agreement) as and to the extent the amounts underlying the
Second Lien Advances Amounts are actually collected from the obligors under the related Mortgage
Loans.



Section 4.2 Purchase Price Adjustments.




(a) On the Closing Date, the Servicer Advance Facility Amount shall be set forth on the
Servicer Advance Facility Schedule and shall equal all Obligations (as defined in the Servicer
Advance Facility) due and owing under the Servicer Advance Facility as of the close of business
on the Business Day prior to the Closing Date.




(b) If it is reasonably determined by Purchaser, in Purchaser’s sole discretion, no earlier
than 5 Business Days prior to the Closing Date, that Sellers are unable to transfer, assign and
convey good, valid and marketable title to all of the Servicing Rights with respect to the New
Century Portfolio-Related Assets, free and clear of any and all Liens, Purchaser shall have the
right, in Purchaser’s sole discretion, to reduce the Purchase Price by the New Century
Portfolio-Related Assets Amount (the “New Century Portfolio-Related Assets Deduction”),
in which event (i) Purchaser shall not purchase from Sellers and Sellers shall not sell, convey,
transfer, assign and deliver to Purchaser the Servicing Rights with respect to the New Century
Portfolio-Related Assets or any Purchased Assets or Assumed Liabilities relating solely to the
New Century Portfolio-Related Assets on the Closing Date, (ii) the defined terms “Purchased
Assets,” “Business” and “Assumed Liabilities” shall be deemed to exclude the Servicing Rights
with respect to the New Century Portfolio-Related Assets and any Purchased Assets or Assumed
Liabilities relating solely to the New Century Portfolio-Related Assets and (iii) any (A)
representations or warranties made by either Seller in this Agreement and (B) any covenant of
either Seller in this Agreement, in each case that are applicable to the Servicing Rights with
respect to the New Century Portfolio-Related Assets and any Purchased Assets or Assumed
Liabilities relating solely to the New Century Portfolio-Related Assets, shall no longer be
applicable thereto. If Purchaser does not purchase the Servicing Rights with respect to the New
Century Portfolio-Related Assets at the Closing and Purchaser and Sellers elect to continue to
attempt to effect the purchase of such assets, Purchaser and Sellers shall use all commercially
reasonable efforts to resolve the issues causing Sellers to be unable to transfer the Servicing
Rights with respect to the New Century Portfolio-Related Assets as promptly as possible and, if
all such issues are resolved, Sellers shall sell such assets to Purchaser after the Closing Date.




(c) As of the date hereof, Purchaser has retained and shall continue to retain, at its own
cost, an independent accounting firm to audit prior to the Closing Date the calculation, as of
fifteen days prior to the Closing Date (the “Pre-Closing Audit Report”), as of the
Cut-Off Date (the “Cut-Off Date Audit Report”) and as of the Closing Date (the
“Closing Date Audit Report” and, together with the Pre-Closing Audit Report and the
Cut-Off Date Audit Report, the “Audit Reports”), of (i) the outstanding stated principal
balance of all Mortgage Loans under the Servicing Agreements in the Mortgage Loan Schedule, the
Cut-off Date Mortgage Loan Schedule and the Closing Date Mortgage Loan Schedule, (ii) the
Servicer Advance Facility Amount, and (iii) the Advances Amount, in each case including the
calculation of collections and distributions pursuant to the Servicing Agreements and the
Servicer Advance Facility used in calculating such amounts. Purchaser shall provide Sellers with
each of the Audit Reports as promptly as possible after Purchaser receives such Audit Reports
from the auditor, and Sellers shall have the right to dispute all matters included in each Audit
Report. Purchaser and Sellers shall negotiate in good faith to resolve all disputed matters with
respect to each Audit Report as promptly as possible. If no Seller disputes the Closing Date
Audit Report, such Closing Date Audit Report shall be deemed final by Sellers and Purchaser, and
the Purchase Price on the Closing Date pursuant to Section 4.1, as adjusted after the
Closing Date pursuant to Section 4.3, shall be increased or decreased to reflect the
results of such Closing Date Audit Report, as shall have been agreed by Sellers and Purchaser.




(d) If Sellers dispute any of the Audit Reports (or any item included therein) set forth in
Section 4.2(c) above, such dispute shall be resolved in the following manner: (i) Sellers
shall notify Purchaser within 10 days after Sellers’ receipt of the Audit Report, which notice
shall specify in reasonable detail the nature of the dispute; (ii) during the 15-day period
following Purchaser’s receipt of such notice, Sellers and Purchaser shall use their commercially
reasonable efforts to resolve such dispute in good faith; and (iii) if at the end of such 15-day
period Sellers and Purchaser shall have failed to resolve such dispute in writing, Sellers and
Purchaser shall submit the item(s) in dispute as promptly as practicable to a national accounting
or consulting firm (the “Arbitrating Accountants”) with experience in the mortgage loan
business and that is independent of Sellers and Purchaser and their respective Affiliates to be
selected by mutual agreement between Sellers and Purchaser. The Arbitrating Accountants shall
act as an arbitrator and shall resolve the dispute as to the Audit Report within 30 days after
such dispute is referred to it. Each of the parties hereto shall bear all costs and expenses
incurred by it in connection with such arbitration, except that the cost of the Arbitrating
Accountants hereunder shall be borne equally by Sellers and Purchaser. This provision for
arbitration shall be specifically enforceable by the parties hereto. The decision of the
Arbitrating Accounts in accordance with the provisions hereof shall be final and binding (absent
manifest error), and there shall be no right of appeal therefrom.



Section 4.3 Post-Closing Adjustments.




(a) Not later than the 15th day following the Closing Date, Purchaser shall
prepare (after consultation with Sellers) and deliver to Sellers a statement based on the Closing
Date Audit Report (the “Purchase Price Adjustment Statement”) setting forth for the
Servicing Agreements: (i) the Closing Servicing Agreement Amounts and the amount (the
“Closing Adjustment Difference”), positive or negative, equal to (A) the Cut-Off
Servicing Agreement Amounts for such Servicing Agreements transferred from Sellers to Purchaser
hereunder as paid for such Servicing Agreements at the Closing, minus (B) the Closing
Servicing Agreement Amounts for such Servicing Agreements; and (ii) the Closing First Lien
Advances Amount and the amount (the “Advances Amount Difference”), positive or negative,
equal to (A) the Cut-Off First Lien Advances Amount for such Servicing Agreements transferred
from Sellers to Purchaser hereunder as paid at the Closing, minus (B) the Closing First
Lien Advances Amount. Sellers shall provide reasonable cooperation, including reasonable access
to books, records, employees in connection with the preparation of the Purchase Price Adjustment
Statement.




(b) If the sum of (i) the Closing Adjustment Difference, plus (ii) the Advances
Amount Difference (such sum, the “Post-Closing Purchase Price Adjustment”) is a positive
number, then (A) Sellers shall, within three Business Days of delivery of the Purchase Price
Adjustment Statement, pay to Purchaser an amount in cash, by wire transfer of immediately
available funds to an account or accounts designated by Purchaser, equal to 90% of the Cash
Purchase Price portion of the Post-Closing Purchase Price Adjustment and (B) shall cause the
Escrow Agent to, within three Business Days of delivery of the Purchase Price Adjustment
Statement, pay to Purchaser an amount in cash, by wire transfer of immediately available funds to
an account or accounts designated by Purchaser, equal to 10% of the Cash Purchase Price portion
of the Post-Closing Purchase Price Adjustment. If the Post-Closing Purchase Price Adjustment is
a negative number, then Purchaser shall, within three Business Days of delivery of the Purchase
Price Adjustment Statement, (1) pay to Sellers an amount in cash, by wire transfer of immediately
available funds to an account designated by Sellers, equal to 90% of the Cash Purchase Price
portion of the Post-Closing Purchase Price Adjustment and (2) pay to the Escrow Agent an amount
in cash, by wire transfer of immediately available funds, equal to 10% of the Cash Purchase Price
portion of the Post-Closing Purchase Price Adjustment.



Section 4.4 Deposit Amount. Purchaser represents and warrants that it has delivered
to the Deposit Escrow Agent, pursuant to the terms of the Deposit Escrow Agreement, $10,000,000 in
immediately available funds (such amount, together with the interest accrued thereon prior to the
Closing, the “Deposit Amount”) to be held by the Deposit Escrow Agent in an interest
bearing account reasonably acceptable to Purchaser and Sellers to serve as an earnest money deposit
under this Agreement, and to be released in accordance with the following procedures:




(a) Deposit Instructions. If the Closing shall occur, on the Closing Date, Sellers
and Purchaser shall jointly instruct the Deposit Escrow Agent to deliver the Deposit Amount, by
wire transfer of immediately available funds, to an account of Sellers as set forth in the
Deposit Escrow Agreement (and such Deposit Amount shall be applied toward the payment of the
Purchase Price).




(b) Violation of Agreement. If this Agreement is validly terminated by Sellers
pursuant to Section 9.1.(d)(i) or 9.1(d)(ii), the Deposit Escrow Agent shall
deliver the Deposit Amount, in accordance with the terms of the Deposit Escrow Agreement, by wire
transfer of immediately available funds, to an account of Sellers as set forth in the Deposit
Escrow Agreement, to be retained by Sellers.




(c) Other Reason. If this Agreement is validly terminated in accordance with the
terms and conditions of Article IX other than by Sellers pursuant to Section
9.1(d)(i) or 9.1(d)(ii), Sellers and Purchaser shall jointly instruct the Deposit
Escrow Agent to deliver the Deposit Amount, by wire transfer of immediately available funds, to
an account of Purchaser as set forth in the Deposit Escrow Agreement, to be retained by
Purchaser.



Section 4.5 Allocation of the Purchase Price.




(a) The Purchase Price and the value of any Assumed Liabilities shall be allocated among the
Business, the Purchased Assets and the agreements provided herein for transfer of the Business to
Purchaser in a manner consistent with the allocation schedule set forth in Schedule
4.5(a) (the “Allocation Schedule”), which Allocation Schedule shall be mutually
agreed upon by Purchaser and Sellers within 120 days after the Closing Date to the extent
reasonably possible, in compliance with Section 1060 of the Code and the regulations promulgated
thereunder. If the Allocation Schedule is not mutually agreed upon within such period, the
parties shall submit such dispute to a nationally recognized independent accounting firm mutually
chosen by the parties (the “Independent Accounting Firm”) for a decision that shall be
rendered in a timely manner in order to permit the timely filing of all applicable forms with the
IRS and other Tax authorities. The Independent Accounting Firm’s review shall be final and
binding on all parties. The fees and expenses of the Independent Accounting Firm shall be borne
50% by Sellers, on the one hand, and 50% by Purchaser, on the other hand.




(b) Each of Sellers and Purchaser shall (i) timely file all forms (including IRS Form 8594)
and Tax Returns required to be filed in connection with the Allocation Schedule, (ii) be bound by
such allocation for purposes of determining Taxes, (iii) prepare and file, and cause its
Affiliates to prepare and file, its Tax Returns on a basis consistent with such allocation and
(iv) take no position, and cause its Affiliates to take no position, inconsistent with such
allocation on any applicable Tax Return. Each of Purchaser, on the one hand, and Sellers, on the
other hand, will provide the other with copies of IRS Form 8594 and any required exhibits
thereto, consistent with the allocation determined pursuant to this Section 4.5 upon
request. In the event that the allocation set forth on the Allocation Schedule is disputed by
any taxing authority, the party receiving notice of such dispute shall promptly notify the other
party hereto concerning the existence of, material developments regarding, and resolution of such
dispute.



ARTICLE V




REPRESENTATIONS AND WARRANTIES OF THE SELLER




Except as set forth in the Final Disclosure Schedules, Sellers represent and warrant to
Purchaser that the statements contained in this Article V are true and correct as of the
date of the delivery of the Final Disclosure Schedules, except that the statements contained in
Sections 5.1 (other than with respect to the Ancillary Agreements), 5.2, and
5.3(a) are true and correct as of the date of this Agreement and the date of the delivery
of the Final Disclosure Schedules.



Section 5.1 Authorization; Validity of Agreement; Seller Action. Subject to entry and
effectiveness of the Sale Approval Order, each Seller has the corporate power and authority (a) to
execute and deliver this Agreement and each Ancillary Agreement to which such Seller is or will be
a party, (b) to perform its obligations hereunder and thereunder (subject to entry and
effectiveness of the Bidding Procedures Order), and (c) to consummate the transactions contemplated
hereby and thereby. Subject to entry and effectiveness of the Sale Approval Order, the execution,
delivery and performance of this Agreement by each Seller and of each Ancillary Agreement by each
Seller that is or will be a party thereto, and the consummation by each Seller of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the
part of each Seller and no other corporate actions or proceedings on the part of such Seller are
necessary to authorize this Agreement, any Ancillary Agreement or any of the transactions
contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered
by or on behalf of each Seller and (assuming this Agreement constitutes a valid and binding
obligation of Purchaser) constitutes the legal, valid and binding obligation of each Seller,
enforceable against such Seller in accordance with its terms, except (i) as enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium and other Laws affecting
the enforcement of creditors’ rights generally from time to time in effect and by general equitable
principles relating to enforceability (the “Enforceability Exceptions”), (ii) that
enforceability of the provisions hereof requiring consummation of the transactions contemplated
hereby is subject to entry and effectiveness of the Sale Approval Order or any other action by the
Bankruptcy Court and (iii) that enforceability of all other provisions hereof is subject to entry
and approval of the Bidding Procedures Order or any other action by the Bankruptcy Court. Subject
to entry and effectiveness of the Sale Approval Order, each Ancillary Agreement will be duly and
validly executed and delivered by each Seller that will be a party thereto at or prior to the
Closing, and upon such execution and delivery (assuming such Ancillary Agreement constitutes a
valid and binding obligation of each other party thereto) will constitute the legal, valid and
binding obligation of such Seller, enforceable against such Seller in accordance with its
respective terms, subject to the Enforceability Exceptions.



Section 5.2 Capitalization. Parent owns 100% of the issued and outstanding shares of
capital stock of New Century TRS Holdings, Inc. (“TRS”), and TRS owns 100% of the issued
and outstanding shares of the capital stock of the Company.



Section 5.3 Organization and Good Standing. Except as a result of the commencement of
the Bankruptcy Cases, each Seller (a) is a legal entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or organization, and (b) has all
requisite corporate or other organizational power and, subject to any required Bankruptcy Court
approval, authority to own, lease, hold and operate its properties and assets and to carry on the
Business as presently conducted, except as would not reasonably be expected to have a Material
Adverse Effect. Each Seller is qualified to do business as a corporation or foreign corporation,
as applicable, and is in good standing in all jurisdictions where it owns or leases real property
in connection with the Business or otherwise conducts the Business, except where the failure to so
qualify or to so be in good standing has not had and would not reasonably be expected to have a
Material Adverse Effect.



Section 5.4 Consents and Approvals; No Violations. Subject to the approval of the
Bankruptcy Court, no Consent of, or declaration, filing or registration with, any Government Entity
is required to be obtained or made, as applicable, by either Seller in connection with the
execution, delivery and performance of this Agreement or any Ancillary Agreement, or the
consummation of the transactions contemplated by this Agreement or by any Ancillary Agreement,
except for: (a) Consents of, and declarations, filings and registrations with, the Bankruptcy
Court; (b) the filing of a notification and report form under the HSR Act and the expiration or
earlier termination of the applicable waiting period thereunder and (c) Consents, declarations,
filings and registrations the failure to have which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The items referred to in clauses
(a) and (b) of this Section 5.4 are hereinafter referred to as the
“Governmental Requirements.”



Section 5.5 [Reserved.]



Section 5.6 Absence of Certain Changes. As of the date hereof, except (a) as set forth
on Schedule 5.6; (b) as a result of the commencement of the Bankruptcy Cases; and (c) as
contemplated by this Agreement, since December 31, 2006, Sellers have performed their duties and
obligations under the Servicing Agreements in the Ordinary Course of Business.



Section 5.7 Confidentiality. To the Knowledge of Sellers, Sellers have taken all steps
reasonably necessary to preserve the confidential nature of all material confidential information
(including any trade secrets and other proprietary information) Related to the Business.



Section 5.8 Title to Assets and Properties; Liens. Subject to entry and effectiveness
of the Sale Approval Order and except as provided in Section 2.7, at the Closing, Sellers
shall transfer to Purchaser good title to, or a valid lease or license interest in, all of the
Purchased Assets, free and clear of all Liens. Except as set forth on Schedule 5.8, no
Affiliate of Seller has any right, title or interest in or to the Purchased Assets, other than as a
stockholder of the Company.



Section 5.9 Sufficiency of Purchased Assets. Except as expressly set forth on
Schedule 5.9 and except for the Shared Contracts and the Excluded Contracts, the Purchased
Assets, whether real or personal, tangible or intangible (a) comprise all of the assets, properties
and rights that are necessary to conduct the Business as it is currently conducted consistent with
past practice and (b) comprise all of the assets, properties and rights that are currently used by
Sellers and their Affiliates to conduct the Business.



Section 5.10 Real Property. Sellers do not own any real property that is used
primarily in the conduct of the Business. Sellers have delivered true, correct and complete copies
of all Leases Related to the Business, and any amendments, supplements, schedules or exhibits
thereto.



Section 5.11 Leases. Schedule 5.11 sets forth a true and complete list of each
Lease, as of the date hereof, copies of which have heretofore been delivered to Purchaser. Subject
to the approval of the Bankruptcy Court pursuant to the Sale Approval Order, each Lease is in full
force and effect and, except as limited by the Bankruptcy Code, is a valid and binding obligation
of Sellers, enforceable against Sellers in accordance with its terms. Following the assumption,
cure and upon the assignment of such leases by Sellers to Purchaser in accordance with the
provisions of Section 365 of the Bankruptcy Code and the requisite Order of the Bankruptcy Court,
there shall be no existing monetary defaults by any Seller under any of the Assigned Leases and no
events that (whether with or without notice, lapse of time or the happening or occurrence of any
other event) would constitute a material default under any Assigned Lease by any Seller.



Section 5.12 Environmental Matters. To the Knowledge of Sellers and except as would
not have a Material Adverse Effect:




(a) neither any Seller nor any third party, has engaged in the generation, use, manufacture,
treatment, transportation, storage or disposal of any hazardous material on the Leased Real
Property;




(b) the Leased Premises, as currently used and occupied, comply with applicable
Environmental Laws or do not have thereon, therein or thereunder any hazardous materials;




(c) each Seller and the Purchased Assets are in compliance with all Environmental Laws
(including the possession by Sellers of all Permits and other Governmental Authorizations
required under all applicable Environmental Laws, and compliance with the terms and conditions
thereof); and




(d) there is no Environmental Claim Related to the Business, pending or threatened, that
seeks to impose, or that would reasonably be expected to result in the imposition on Sellers of,
any obligation or liability under any Environmental Law.



Section 5.13 Description of Mortgage Servicing Portfolio; Servicing Agreements; Mortgage
Loans.




(a) Mortgage Servicing Portfolio. Sellers have delivered to Purchaser in a
spreadsheet attached as Schedule 5.13(a) a schedule dated as of March 31, 2007 that
provides information with respect to the Mortgage Loans and all REO Properties underlying the
RMBS Transactions (the “Mortgage Loan Schedule,” which term includes, except where the
context requires otherwise, an updated schedule (the “Cut-Off Date Mortgage Loan
Schedule”) to be prepared as of the Cut-Off Date and delivered pursuant to Section
8.3(d) and an updated schedule (the “Closing Date Mortgage Loan Schedule”) to be
prepared as of the close of business on the Closing Date and delivered pursuant to Section
8.3(d)). The Mortgage Loan Schedules shall contain the information included in, and be
prepared in accordance with, the Mortgage Loan Schedules as defined in the Servicing Agreements.
The information set forth in the Mortgage Loan Schedule is true, complete and correct as of the
date thereof and the information in the Cut-Off Date Mortgage Loan Schedule and the Closing Date
Mortgage Loan Schedule to be prepared and delivered to Purchaser in accordance with Section
8.3(d) will be true complete and correct as of the Cut-Off Date and the Closing Date,
respectively.




(b) Servicing Agreements. Except as set forth on Schedule 5.13(b), the
Servicing Agreements set forth all of the provisions with respect to fees and other income and
set forth in all material respects all of the other terms and conditions of Sellers’ rights and
obligations relating to the servicing of the Mortgage Loans, and there are no other agreements,
written or oral, that modify or affect the Servicing Agreements or the Servicing Fees and the
Servicing Rights thereunder. The Company and Parent, as applicable, own the entire right, title
and interest in and to the Servicing Rights and the sole right to service the Mortgage Loans,
subject to the Servicing Agreements but free and clear of all Liens, except for the rights of
subservicers disclosed on Schedule 5.13(b). Except as set forth on Schedule
5.13(b): (i) the transfer, assignment and delivery of the Servicing Rights in accordance with
the terms and conditions of this Agreement and in accordance with the provisions of Section 365
of the Bankruptcy Code and the requisite Order of the Bankruptcy Court shall, upon execution and
delivery of the applicable Assignment and Assumption Agreements by the parties thereto, grant to
Purchaser all of Sellers’ Servicing Rights; (ii) each Servicing Agreement is in full force and
effect, is the valid, binding and enforceable agreement of Sellers, except for the Enforceability
Exceptions, and, upon the assignment of each such Servicing Agreement to Purchaser in accordance
with this Agreement and the Sale Approval Order, will be enforceable by Purchaser, except for the
Enforceability Exceptions; (iii) neither Sellers nor, to the Knowledge of Sellers, any of the
other parties thereto, is in default under, nor has any triggering event occurred under, any
Servicing Agreement, and no event has occurred that, by itself or with notice or the passage of
time or both, would constitute a default or triggering event under any Servicing Agreement; (iv)
none of the other parties to any of the Servicing Agreements or certificate holders have provided
written notice to any of Sellers that such party will be terminating, modifying or amending any
of the Servicing Agreements (or otherwise seeking to terminate, modify or amend, or reduce
Sellers’ benefits or the Servicing Rights under, any of the Servicing Agreements), and neither
Seller has any knowledge to the contrary; (v) no written claim has been made against a Seller for
indemnification pursuant to any Servicing Agreement; and (vi) Sellers have not engaged any
subservicers, subcontractors or other agents to perform any of Sellers’ duties pursuant to the
Servicing Agreements, other than engagements that are pursuant to agreements permitted by, and in
compliance in all material respects with the requirements of, the applicable Servicing Agreements
and have not been terminated, and all fees and expenses in connection therewith have been paid
when due, except in each of clauses (i) through (vi) as would not reasonably be
expected to have a Material Adverse Effect.




(c) Compliance with Applicable Servicing Agreements and Law. Except as set forth on
the 1122 Servicer’s Assessments of Compliance provided pursuant to Regulation AB with respect to
Sellers’ servicing platform, the servicing of the Mortgage Loans has been performed by the
applicable Seller in compliance in all material respects with all provisions of the related
Mortgage Loan Documents, the applicable Servicing Agreements and Law. From and after the time a
Mortgage Loan became subject to the applicable Servicing Agreements, such Mortgage Loan was
serviced in material compliance with such Servicing Agreement and applicable Law.




(d) Advances. Except as set forth on Schedule 5.13(d) (which schedule shall
be updated as of the Cut-Off Date and the Closing Date), (i) all Advances made by Sellers prior
to and through and including the date set forth on Schedule 5.13(d), the Cut-Off Date and
the Closing Date have been made in compliance in all material respects with the terms of the
applicable Servicing Agreement and the Servicer Advance Facility; (ii) the amount of each
Advance, in each case in accordance with the applicable Servicing Agreement, are set forth on
Schedule 5.13(d) as of the date set forth on such schedule, the Cut-Off Date and the
Closing Date, and (iii) all Advances are valid and subsisting amounts owing to Sellers, payable
at the times and in accordance with the provisions of the applicable Servicing Agreement, free
and clear of all Liens other than Liens arising under the Servicer Advance Facility.



Section 5.14 Contracts and Commitments.




(a) Sellers have made available to Purchaser true and complete copies of all Assumed
Contracts. Schedule 5.14 sets forth a true and complete list of all the Contracts (other
than Intellectual Property Licenses and Real Property Leases) of the following types to which
either Seller is a party and that are Related to the Business:




(i) any Contract that either (A) requires a payment by any party in excess of,
or a series of payments that in the aggregate exceed, $100,000 or provides for the
delivery of goods or performance of services, or any combination thereof, having a
value in excess of $100,000, (B) has a term of, or requires the performance of any
obligations by any party over a period in excess of, 12 months or (C) is not
cancelable by a Seller on notice of not longer than 90 days;




(ii) any Shared Contract;




(iii) any Contract with a licensor, developer, remarketer, distributor, and
supplier of IT Assets or information technology services to a Seller Related to the
Business pursuant to which a Seller paid, was billed or billed in the aggregate
$100,000 or more during the most recent fiscal year;




(iv) any material Contract pursuant to which either Seller has made or will
make loans or advances in an amount in excess of $100,000, other than in the
Ordinary Course of Business;




(v) any Contract involving a partnership, joint venture or other cooperative
undertaking;




(vi) any Contract containing commitments of suretyship, guaranty or
indemnification by a Seller Related to the Business except in the Ordinary Course of
Business;




(vii) any Contract for any material capital expenditures or material leasehold
improvements;




(viii) any power of attorney or agency agreement or arrangement with any Person
pursuant to which such Person is granted the authority to act for or on behalf of
either Seller in connection with the Business;




(ix) any Software Contract;




(x) any Post-Petition Contract;




(xi) any other Contract not made in the Ordinary Course of Business that is to
be performed in whole or in part at or after the date of this Agreement; and




(xii) any Contract not specified above the termination of which would result in
a Material Adverse Effect.




(b) No Seller is subject to a non-competition agreement or similar Contract with respect to
the Business.




(c) No Seller has outstanding any material Contract Related to the Business to acquire any
debt obligations of others, other than acquisitions of delinquent and defaulted receivables and
Advances (including the reimbursement thereof) or in the Ordinary Course of Business.




(d) Except to the extent that Advances may be deemed to be loans, no Seller has any material
outstanding loan to any Person Related to the Business, it being understood that obligations to
reimburse employees for relocation, business, travel, entertainment or similar expenses incurred
in the Ordinary Course of Business shall not be deemed loans for such purposes.




(e) Except as set forth on Schedule 5.14(e), all Contracts Related to the Business
to which a Seller is a party and to which the Purchased Assets or Assumed Liabilities are subject
are in full force and effect and, subject to the Enforceability Exceptions, are enforceable
against each party thereto in accordance with the express terms thereof. To the Knowledge of
Sellers, there are no material disputes pending or threatened under any Contract included in the
Purchased Assets or Assumed Liabilities.



Section 5.15 Litigation and Claim. Except as set forth on Schedule 5.15, as of
the date hereof, there is no material action, suit, demand, inquiry, proceeding, claim, hearing or
investigation by or before any Government Entity pending or, to the Knowledge of Sellers,
threatened against or involving either Seller and Related to the Business or involving any of the
Purchased Assets. Except as set forth on Schedule 5.15, Sellers and the Purchased Assets
are not subject to any judgment, writ, award, injunction, Order or decree that is Related to the
Business and is expected to have a Material Adverse Effect.



Section 5.16 Compliance with Laws; Regulatory Approvals. Except as set forth on forth
on Schedule 5.16, Sellers are in compliance in all material respects with all Laws that are
Related to the Business or the Purchased Assets, and no notice, charge, claim, action or assertion
has been received by any Seller or has been filed, commenced or, to the Knowledge of Sellers,
threatened against either Seller alleging any material violation of any of the foregoing. Except
as set forth on forth on Schedule 5.16, Sellers have in place policies and procedures to
enable them to comply with the material terms of any applicable federal and state consent Orders
Related to the Business and class action settlements Related to the Business; to the Knowledge of
Sellers, no events have occurred that would preclude Sellers from being able to comply with the
material terms of any such consent orders or settlements.



Section 5.17 Permits. Except as set forth on forth on Schedule 5.17, Sellers
hold all material Permits and other Government Authorizations of all Government Entities that are
necessary for the operation of the Business, taken as a whole, and no such Permit or other
Government Authorization is subject to any pending or, to the Knowledge of Sellers, threatened
proceeding seeking impairment, revocation or forfeiture. Sellers are in compliance in all material
respects with the terms of all such Permits and other Government Authorizations.



Section 5.18 Employee Benefit Plans. No Seller or any ERISA Affiliate has in the last
six years maintained, or has any Liability or potential or contingent Liability with respect to,
any Title IV Plans. No Seller or any ERISA Affiliate has in the last six years been an employer
under, or has any Liability or potential or contingent Liability with respect to, any Multiemployer
Plan.



Section 5.19 Tax Matters.




(a) (i) Each Seller has timely filed or caused to be timely filed, and with respect to Tax
Returns due between the date of this Agreement and the Closing Date will timely file (taking into
account any applicable extensions), all material Tax Returns required to be filed by the Code or
by applicable state, local or foreign Tax Laws, (ii) all such Tax Returns are, or in the case of
such Tax Returns not yet filed, will be, true, complete and correct in all material respects, and
(iii) all material Taxes payable by Sellers have been timely paid, or in the case of Taxes due
between the date of this Agreement and the Closing Date will be timely paid.




(b) There are no liens for a material amount of Taxes upon the assets of Sellers except
liens for current Taxes not yet due and payable and for which adequate reserves are maintained in
the Financial Statements in accordance with GAAP.




(c) (i) No Tax Return of any Seller or any Affiliate of any Seller is currently under audit
or examination by any taxing authority, and (ii) no notice of such an audit or examination has
been received by any Seller.




(d) Each deficiency resulting from any audit or examination relating to Taxes by any taxing
authority has been timely paid.




(e) Other than this Agreement, no Seller is a party to or is bound by any Tax sharing
agreement, Tax indemnity obligation or similar agreement, arrangement or practice with respect to
Taxes (including, without limitation, any advance pricing agreement, closing agreement or other
agreement relating to Taxes with any taxing authority), other than any such customary agreements
with customers, vendors, lessors or other similar parties entered into in the Ordinary Course of
business.




(f) None of the Purchased Assets (i) is “tax exempt use property” within the meaning of
Section 168(h) of the Code, (ii) is subject to a least under Section 7701(h) of the Code or under
any predecessor section thereof, (iii) is property which is required to be treated as being owned
by any other person pursuant to the so-called “safe harbor lease” provisions of former Section
168(1)(8) of the Code, or (iv) directly or indirectly secures any indebtedness of the interest on
which is exempt under Section 103(a) of the Code.




(g) Sellers have filed a Tax Return relating to state and local income, franchise, license,
excise, net worth, property or sales and use taxes for each state, county, local, municipal or
foreign jurisdiction in which they are required to do so, other than any failure to file that
would not result in a liability for a material amount of Taxes.




(h) No Seller has constituted a “distributing corporation” or a “controlled corporation” in
a distribution of stock purported to or intended to be governed by Section 355 or Section 361 of
the Code.




(i) No Seller has participated in, or is currently participating in, a “reportable
transaction” within the meaning of Treas. Reg. §§1.6011-4(b) or any transaction requiring
disclosure under a corresponding or similar provision of state or local Law.



Section 5.20 Intellectual Property. To the Knowledge of Sellers:




(a) Schedule 5.20(a) sets forth a true and complete list of all IT Assets and
Schedule 5.20(b) sets forth a true and complete list of all Transferred Intellectual
Property as of the date hereof. Sellers are the exclusive owners or valid licensees of all
Transferred Intellectual Property, free and clear of all Liens.




(b) All registrations and applications for the Transferred Intellectual Property (including
without limitation registrations with, filed in or issued by, as the case may be, the United
States Patent and Trademark Office or such other filing offices, domestic or foreign) that are
owned by Sellers and that are used in and are material to the conduct of the Business as
currently conducted are (i) valid, subsisting, in proper form and enforceable, and have been duly
maintained, including the submission of all necessary filings and fees in accordance with the
legal and administrative requirements of the appropriate jurisdictions, and (ii) have not lapsed,
expired or been abandoned, and no Transferred Intellectual Property or any registration or
application therefore is the subject of any opposition, interference, cancellation proceeding or
other legal proceeding (including litigation) or governmental proceeding before any Government
Entity in any jurisdiction, or of any outstanding Order, judgment, decree or agreement adversely
affecting the ownership, validity, registrability, or enforceability of the Intellectual Property
of Sellers’ use thereof or rights thereto.




(c) With respect to the Transferred Intellectual Property: (i) Sellers own and possess all
right, title and interest in and to, or have a valid, binding and enforceable license to use,
such Transferred Intellectual Property, subject to the Enforceability Exceptions; (ii) no claim
by any third party contesting the validity, enforceability, use or ownership of any of the
Transferred Intellectual Property has been made or is threatened; (iii) none of the Transferred
Intellectual Property is being infringed upon or violated by any other person; (iv) Sellers have
not received any notices of any infringement or misappropriation by any third party with respect
to the Transferred Intellectual Property; and (v) Sellers have not infringed, misappropriated or
otherwise conflicted with any proprietary rights of any third parties.




(d) Each of the IT Assets used by either Seller in the conduct of the Business was either:
(i) developed by employees of either Seller within the scope of their employment, or (ii)
developed on behalf of either Seller by a third party, and all ownership rights therein have been
assigned or otherwise transferred to or vested in either Seller, as the case may be, pursuant to
written agreements; or with respect to all Software Contracts identified as licenses, from third
parties in Schedule 5.20(a). Sellers have validly and effectively obtained the right and
license to use, copy, modify, and distribute the third-party programming and materials contained
in the software programs and the Technical Documentation. The software programs and Technical
Documentation contain no other programming or materials in which any third party may claim
superior, joint, or common ownership, including any right or license. The software programs and
Technical Documentation do not contain derivate works of any programming or materials not owned
in their entirety by either Seller and included in the Assets. Sellers have not received any
notices of any infringement or misappropriation by any third party licensor with respect to any
IT Assets. Subject to the entry of the Sale Approval Order, Sellers have the legal power to
convey to Purchaser under this Agreement the rights granted to either Seller (as applicable)
under any license or assignment for any IT Assets, and neither Seller is subject to any
contractual, legal or other restriction on the use of IT Assets that is owned by or licensed to
either Seller. Sellers shall promptly execute, acknowledge and deliver any other assurances or
documents or instruments of transfer reasonably requested by Purchaser and necessary for the
transfer or assignment of such IT Assets to Purchaser.




(e) Sellers have taken all reasonable measures to protect the secrecy, confidentiality and
value of all trade secrets required for, Related to and used in the Business, and such trade
secrets have not been used, disclosed to or discovered by any Person except pursuant to valid and
appropriate non-disclosure and/or license agreements, which have not been breached. No employee
has any patents issued or applications pending for any device, process, design or invention of
any kind now used or needed by either Seller in the furtherance of the Business that have not
been assigned to either Seller.




(f) All current employees of Sellers have executed valid intellectual property and
confidentiality agreements for the benefit of Sellers pursuant to which, among other things, each
such employee has assigned each of his or her inventions to Sellers. All assignments of
inventions by such employees to Sellers have been properly filed. No such employee’s performance
of his or her employment activities violates the intellectual property or other rights of any
Person.




(g) Neither Seller is in breach of any (i) Software Contract, or (ii) any license,
sublicense or other agreement relating to the IT Assets or Transferred Intellectual Property, and
the execution and delivery of this Agreement, or the performance of its obligations hereunder
will not result in the breach of, or give rise to the termination, cancellation or acceleration
(whether after the filing of notice or the lapse of time or both) of any right of either Seller
under, or a loss of any benefit to which either Seller is entitled under, or the imposition of
any obligation under, or a Lien on, any Software Contract, or license, sublicense or other
agreement relating to the IT Assets or Transferred Intellectual Property.




(h) Neither Seller has granted, transferred, or assigned any right or interest in the
software programs, the Technical Documentation, or the Transferred Intellectual Property to any
person or entity, except as identified as Excluded Assets.



Section 5.21 Brokers or Finders. Other than Lazard Freres & Co. LLC, no agent, broker,
investment banker, financial advisor or other firm or Person is or will be entitled to any brokers’
or finder’s fee or any other commission or similar fee in connection with the transactions
contemplated hereby as a result of any action taken by Sellers.



Section 5.22 Affiliate Transactions. Except as set forth on Schedule 5.22 and
other than Plans, there are no contracts, agreements, commitments or other continuing transactions
Related to the Business between (a) a Seller, on the one hand, and (b) the other Seller, any
Affiliate of either Seller or any present or former director, officer or management employee of
either Seller or any Affiliate of either Seller or any member of such director’s, officer’s or
employee’s family.



Section 5.23 Operation of the Business. Except as set forth on Schedule 5.23,
(a) the Business is conducted only through Sellers and not through any other Person, division or
any direct or indirect Subsidiary or Affiliate of either Seller, (b) no material part of the
Business is operated by any Person other than Sellers, (c) no Person other than Sellers owns or
possesses any material assets or properties that are primarily used or held for use in connection
with, primarily arising from or primarily relating to the Business (other than Excluded Assets),
and (d) neither Sellers nor any of their Affiliates engages, directly or indirectly, in any
business activities that are competitive with the Business.



Section 5.24 PTO Liability. To the Knowledge of Sellers, as of May 21, 2007, the
liability for accrued PTO of Business Employees is not greater than $1,100,000.



ARTICLE VI




COVENANTS




Section 6.1 Interim Operations of Seller. Subject to any obligations as debtors or
debtors-in-possession under the Bankruptcy Code, or any Order of the Bankruptcy Court, Sellers
covenant and agree that, after the date hereof and prior to the Closing Date, except as expressly
provided in this Agreement or as may be agreed in writing by Purchaser:




(a) except as set forth on Schedule 6.1(e), the Business shall be conducted
substantially in the same manner as heretofore conducted, and Sellers shall use commercially
reasonable efforts to preserve the business organization of the Business intact, keep available
the services of the current officers and employees of the Business and maintain the existing
relationships with customers, suppliers, creditors, business partners and others having business
dealings with the Business; provided, that this clause (a) shall not limit
Sellers’ right to amend or terminate any Plan;




(b) prior to the Closing, Sellers or their Affiliates shall not modify, amend or terminate
any of the Assumed Contracts, except in the Ordinary Course of Business or as necessary to assume
and assign the Assumed Contracts pursuant to Section 365 of the Bankruptcy Code;




(c) Sellers or their Affiliates shall not terminate or permit to lapse any material Permits
or other Government Authorizations of any Government Entities that are necessary for the
operation of the Business and the failure to have which would cause a Material Adverse Effect,
except when such termination or lapse results from any Order or other proceeding instituted by
any Government Entity;




(d) Sellers or their Affiliates shall not lease, license, mortgage, pledge or encumber any
Purchased Assets other than in the Ordinary Course of Business and under the DIP Agreement
(provided that Sellers shall be able to transfer the Purchased Assets to Purchaser free and clear
of all such liens and claims upon the Closing) or purchase, transfer, sell or dispose of any
Purchased Assets other than in the Ordinary Course of Business or dispose of or permit to lapse
any rights to any Transferred Intellectual Property other than in the Ordinary Course of
Business;




(e) Sellers or their Affiliates shall not fire any Business Employee other than for cause
and except as set forth on Schedule 6.1(e);




(f) Sellers or their Affiliates shall not make any change to increase the rate of base
compensation or, other than in connection with a sale-related incentive or retention plan as such
sale-related incentive or retention plan is approved by a Bankruptcy Court Order, bonus
opportunity of any Business Employee;




(g) Sellers or their Affiliates shall not enter into any Contract or transaction relating to
the Purchased Assets, or enter into any Software Contracts Related to the Business, other than in
the Ordinary Course of Business;




(h) Sellers or their Affiliates shall not take, or agree to or commit to take, any action
that would or is reasonably likely to result in any of the conditions to the Closing, as
applicable, set forth in Article VIII, not being satisfied, or would make any
representation or warranty of Sellers contained herein inaccurate in any material respect at, or
as of any time prior to, the Closing Date or that would materially impair the ability of Sellers
or Purchaser to consummate the Closing in accordance with the terms hereof or materially delay
such consummation;




(i) Sellers shall conduct the Business in accordance with applicable Law and Applicable
Requirements in all material respects and shall maintain in full force and effect all material
Permits and other Government Authorizations, except where the failure to remain in full force and
effect results from any Order or other proceeding instituted by any Governmental Entity; and




(j) no Seller nor any Affiliate of a Seller shall enter into any agreement, Contract,
commitment or arrangement (i) to do any of the foregoing, or authorize, recommend, propose or
announce an intention to do, any of the foregoing or (ii) that would violate any of the
provisions of Section 5.6.



Section 6.2 Access.




(a) Between the date of this Agreement and the Closing, Sellers shall (i) afford Purchaser
and its authorized representatives reasonable access to all Books and Records, offices and other
facilities Related to the Business, as well as management and other employees Related to the
Business, of Sellers, (ii) permit Purchaser to make reasonable inspections and to make copies of
such Books and Records as it may require and (iii) furnish Purchaser with such financial and
operating data Related to the Business and other information which is Related to the Business as
Purchaser may from time to time reasonably request; provided, however, that such
access shall not unreasonably disrupt the business of Sellers.




(b) Purchaser and its authorized representatives (including its designated advisors or
consultants) may during normal business hours and upon reasonable advance notice, enter into and
upon all or any portion of Sellers’ properties Related to the Business (including all Real
Property) in order to investigate and assess, as Purchaser deems necessary or appropriate in its
reasonable discretion, the environmental and other condition of such properties or the business
conducted thereat. Sellers shall, and shall cause its employees, counsel and financial advisors
to, cooperate with Purchaser and its authorized representatives in conducting such investigation,
shall allow Purchaser and its authorized representatives full access during normal business
hours, upon reasonable advance notice, to their properties Related to the Business, together with
full permission to conduct such investigation.




(c) Purchaser shall preserve for a period of six years after the Closing Date all Books and
Records relating to the Business prior to the Closing Date. After the Closing Date, where there
is a legitimate purpose, Purchaser shall provide Sellers with access, upon prior reasonable
written request specifying the need therefor, during regular business hours, to (i) the officers
and employees of Purchaser and (ii) the books of account and records of Purchaser, but, in each
case, only to the extent relating to the conduct Business prior to the Closing Date, and Sellers
and their representatives shall have the right to make copies of such books and records;
provided, however, that the foregoing right of access shall not be exercisable in
such a manner as to interfere unreasonably with the normal operations and business of Purchaser;
and provided, further, that such information shall be held by Purchaser in
confidence to the extent required by, and in accordance with, the Confidentiality Agreement and
Law. Such records may nevertheless be destroyed by Purchaser if (x) Purchaser sends to Sellers a
written request to destroy records, specifying with particularity the contents of the records to
be destroyed, and (y) Sellers, in their sole discretion, provide their written consent to such
request. Such records may then be destroyed after the 30th day after such written consent is
provided by Sellers; provided, however, that if such written consent is not provided by Sellers,
then Purchaser shall deliver such records to Sellers.



Section 6.3 Cooperation; Efforts and Actions to Cause Closing.




(a) Following the date hereof and until the Closing, upon the terms and subject to the
conditions of this Agreement, Purchaser and Sellers shall cooperate in good faith and use their
respective commercially reasonable efforts to take, or cause to be taken, all actions, and to do,
or cause to be done and cooperate with each other in order to do, all things necessary, proper or
advisable (subject to any applicable Laws) to satisfy the conditions to the Closing, as
applicable, set forth in Article VIII and to consummate the Closing and the transactions
contemplated hereby as promptly as practicable, including the preparation and filing of all
forms, registrations and notices required to be filed to consummate the Closing and the
transactions contemplated hereby and the taking of such actions as are necessary to obtain all
requisite approvals, authorizations, consents, Orders, licenses, Permits, qualifications,
exemptions or waivers by any third party or Government Entity, including the Sale Approval Order.




(b) Following the date hereof and until the Closing, each party shall promptly consult with
the other parties hereto with respect to, provide any necessary information with respect to, and
provide the other parties (or their respective counsel) with copies of, all filings made by such
party with any Government Entity or any other information supplied by such party to a Government
Entity in connection with this Agreement and the transactions contemplated hereby. Each party
hereto shall promptly provide the other parties with copies of any communication (including any
written objection, litigation or administrative proceeding that challenges the transactions
contemplated hereby or the entry of the Sale Approval Order) received by such party from any
Government Entity or any other Person regarding the transactions contemplated hereby. If any
party hereto or Affiliate thereof receives a request for additional information or documentary
material from any such Government Entity with respect to the transactions contemplated hereby,
then such party shall endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other parties, an appropriate response in compliance
with such request. To the extent that transfers, amendments or modifications of Permits are
required as a result of the execution of this Agreement or consummation of the transactions
contemplated hereby, Sellers shall use their commercially reasonable efforts to effect such
transfers, amendments or modifications.




(c) Sellers shall use their commercially reasonable efforts to obtain, prior to the Closing
Date, all approvals and consents necessary under all Servicing Agreements in order to consummate
of the transactions contemplated hereby, including executing all such documents as required by
the Servicing Agreements and reasonably required by any trustee, rating agency, insurer or other
third party to evidence the assignment of the Servicing Rights by Sellers to Purchaser and
assumption of the servicing responsibilities by Purchaser related to such Servicing Rights;
provided, that such agreements and documents do not materially increase the duties or
obligations of the servicer under the related Servicing Agreements or materially decrease the
benefits associated with the Servicing Rights under the related Servicing Agreements and do not
materially decrease the Servicing Rights thereunder. All costs associated with obtaining such
consents and approvals (whether before or after the Closing), including costs of counsel incurred
in connection with obtaining legal opinions required for consents or approvals, shall be borne by
Purchaser. Sellers and Purchaser agree to cooperate with each other in executing and delivering
promptly such other documents, certificates, agreements and other writings, and in taking such
other actions, as are necessary or desirable in order to consummate the transfer of Servicing
Rights and the other transactions contemplated hereby.



Section 6.4 Confidentiality. Except as otherwise required by Law or regulation as
advised by counsel or as may be necessary or appropriate in connection with the Bankruptcy Case,
Sellers shall treat as confidential and shall safeguard any and all information, knowledge and data
included in the Purchased Assets and Assumed Liabilities, in each case by using the same degree of
care, but no less than a reasonable standard of care, to prevent the unauthorized use,
dissemination or disclosure of such information, knowledge and data as Sellers used with respect
thereto prior to the execution of this Agreement. The confidentiality obligations set forth herein
shall not extend to information, knowledge and data that is publicly available or becomes publicly
available through no act or omission of Sellers.



Section 6.5 Subsequent Actions.




(a) Each of the parties shall use commercially reasonable efforts to take, or cause to be
taken, all appropriate action to do, or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable. If at any time before or after the
Closing, Purchaser shall consider or be advised that any deeds, bills of sale, instruments of
conveyance, assignments, assurances or any other actions or things are necessary or desirable (i)
to vest, perfect or confirm ownership (of record or otherwise) in Purchaser, its right, title or
interest in, to or under any or all of the Purchased Assets, (ii) to vest, perfect or confirm
ownership (of record or otherwise) in a Seller, any of its rights, properties or assets or (iii)
otherwise to carry out this Agreement, Sellers shall use reasonable efforts to execute and
deliver all deeds, bills of sale, instruments of conveyance, powers of attorney, assignments and
assurances and take and do all such other actions and things as may be reasonably requested by
Purchaser in order to vest, perfect or confirm any and all right, title and interest in, to and
under such rights, properties or assets in Purchaser or Sellers, in each case at Purchaser’s cost
and expense. As set forth in Section 2.5, any related Consents shall be at Purchaser’s
cost and expense.




(b) [Reserved.]



Section 6.6 Procedures for Transfer of Servicing.




(a) Transfer. Without limiting any other provision of this Agreement, on the Closing
Date, Sellers shall, in accordance with the Transfer Instructions, take all steps, and execute
and deliver all such agreements, letters or other documents, as are reasonably requested by
Purchaser to effect the transfer of the Servicing Agreements (and the related Purchased Assets)
from Sellers to Purchaser such that, after the Closing Date, Purchaser has all of the Servicing
Rights, the Servicing Files and any and all assets and rights necessary to perform its
obligations under such Servicing Agreements.




(b) Name Changes. As soon as practicable after the Closing Date, each of Sellers and
Purchaser agree to take all such actions as are required, in accordance with the Transfer
Instructions, to change the named party to Purchaser on documents related the Servicing
Agreements that are currently in the name of Sellers, in their capacity as Servicer, including on
all financing statements and insurance policies.




(c) Invoices. All invoices (including legal, tax and insurance invoices) pertaining
to the servicing of the Mortgage Loans that Sellers receive after the Closing Date shall be
promptly forwarded by Sellers to Purchaser by reputable overnight courier for a period of not
less than 90 days after the Closing Date and thereafter by regular mail within a reasonable time
after receipt for a period of not less than 180 days. Purchaser agrees to pay each such invoice
promptly upon the receipt of such invoice from Sellers together with an officer’s certificate
from Sellers stating that Seller has received no benefit under such invoice and that such
invoices should be paid by Purchaser and constitute expenses of the applicable trust pursuant to
the applicable Servicing Agreements.




(d) Existing Litigation and Indemnities. Sellers and Purchaser shall cooperate and
agree upon mechanics and procedures (i) to identify and schedule all litigation (the
“Servicing Litigation”) presently being handled by Sellers as servicer under the
Servicing Agreements and to arrange for transferring responsibility for such litigation to
Purchaser, and (ii) to identify and allocate any indemnification claims arising under the
Servicing Agreements.




(e) Compliance Costs; Reporting Obligations. Sellers shall be responsible for all
costs of compliance related to the operation of the Business and the Purchased Assets prior to
the Closing Date, except as provided in Section 2.5. After the Closing Date, Sellers
shall be responsible for completing any requested compliance and/or servicer certificate related
to the operation of the Business and the Purchased Assets prior to the Closing Date, including
pursuant to Regulation AB under the Exchange Act. If requested by Sellers, Purchaser shall be of
reasonable assistance to Sellers in connection with the foregoing so long as (i) Sellers pay to
Purchaser a mutually agreeable nominal fee in connection with such assistance and (ii) Sellers
provide to Purchaser all information needed by Purchaser in connection with such assistance.
Sellers shall indemnify and hold Purchaser harmless for any Liability incurred by Purchaser in
connection with Purchaser utilizing the information provided to Purchaser by Sellers pursuant to
the previous sentence.



Section 6.7 Bankruptcy Actions.




(a) As soon as practicable after the execution of this Agreement, Parent shall, and shall
cause Sellers that are Filing Subsidiaries to, file a motion or motions (and related notices and
proposed Orders) with the Bankruptcy Court seeking entry of the Sale Approval Order. Sellers
hereby agree that, without limiting any provision of the Bidding Procedures Order, the Bidding
Procedures Order (i) shall authorize and provide for, and obligate Sellers, jointly and
severally, to pay, the Break-Up Fee and the Expense Reimbursement, (ii) shall permit Purchaser to
credit bid the Break-Up Fee and the Expense Reimbursement in any ensuing Auction, and (iii) shall
obligate Sellers (and upon entry of such Order, Sellers shall be obligated), if Sellers do not
receive at least one Qualified Topping Bid in accordance with the Bidding Procedures Order that
Sellers reasonably determine constitutes a higher and better bid for the Purchased Assets than
the bid represented by this Agreement, to then not conduct an Auction, but instead to immediately
seek at the Sale Hearing the entry by the Bankruptcy Court of the Sale Approval Order. No
Purchaser shall have any obligation to consent to any modification to the Bidding Procedures
Order or Sale Approval Order from the form set forth as an exhibit to this Agreement.




(b) Sellers hereby agree that they shall, and Sellers shall cause all of their Affiliates
to, comply with all of the obligations of Sellers under (i) the Bidding Procedures Order (after
the entry of such Order by the Bankruptcy Court) and (ii) the Sale Approval Order (after the
entry of such Order by the Bankruptcy Court).




(c) Sellers shall use commercially reasonable efforts to comply (or obtain an Order from the
Bankruptcy Court waiving compliance) with all requirements under the Bankruptcy Code and Federal
Rules of Bankruptcy Procedure in connection with obtaining approval of the sale of the Purchased
Assets under this Agreement, including serving on all required Persons in the Bankruptcy Cases
(including (i) all Persons who are known to possess or assert a Lien against any of the Purchased
Assets, (ii) the Internal Revenue Service, (iii) all applicable state attorneys general, local
realty enforcement agencies and local Government Entities, (iv) all applicable state and local
Government Entities with taxing authority and (v) all other Persons required by any Order of the
Bankruptcy Court (including any omnibus notice or case management Order entered in the Bankruptcy
Cases), notice of the Sale Motion, the Sale Hearing and the objection deadline in accordance with
Rules 2002, 6004, 6006 and 9014 of the Federal Rules of Bankruptcy Procedure, the Bidding
Procedures Order or other Orders of the Bankruptcy Court, and any applicable local rules of the
Bankruptcy Court).




(d) [Reserved.]




(e) Notwithstanding anything to the contrary contained in this Agreement, and for the
avoidance of doubt, no Purchaser nor any of its Affiliates shall have any liabilities or
obligations under this Agreement until the closing condition set forth in this Section
6.7 shall have been satisfied.



Section 6.8 Maintenance of Insurance. From the date of this Agreement until the
Closing Date, Sellers, in connection with the Business, (a) shall use commercially reasonable
efforts to continue to carry its existing insurance through the Closing Date, and (b) shall use
commercially reasonable efforts to not allow any breach, default, termination or cancellation of
such insurance policies or agreements to occur or exist.



Section 6.9 Schedules and Exhibits. On the date hereof, (a) Sellers shall deliver or
cause to be delivered to Purchaser the Final Disclosure Schedules, except for Schedule
2.7(e), which shall be prepared by the parties as soon as reasonably practicable after the date
hereof, and Schedule 2.7(g), which shall be prepared by the parties within 3 Business Days
after the date hereof, and (b) Sellers and Purchaser shall prepare and attach mutually acceptable
forms of Exhibits to this Agreement. The Final Disclosure Schedules relating to Articles
I, II and VIII delivered by Sellers shall be in form and substance reasonably
satisfactory to Purchaser.



Section 6.10 Orders. From the date of this Agreement until the Closing Date, Sellers
shall promptly notify Purchaser concerning the existence of any new Order against Sellers or the
Purchased Assets, which materially restricts, prevents, prohibits, makes illegal, enjoins or
otherwise affects the operation of the Business.



Section 6.11 Servicing.




(a) If Purchaser, pursuant to Section 4.2(b), does not purchase the Servicing Rights
with respect to the New Century Portfolio-Related Assets at the Closing, and if Sellers so
request, Purchaser shall enter into a subservicing agreement with Sellers pursuant to which
Purchaser shall provide servicing to Sellers with respect to the New Century Portfolio-Related
Assets for the servicing fee set forth in the related Servicing Agreements, provided that such
subservicing agreement shall be for a minimum period of three collection periods and Purchaser
shall provide 15 days prior written notice to Sellers of Purchaser’s intent to terminate such
subservicing agreement.




(b) At Sellers’ request, Purchaser shall provide servicing in accordance with Sellers’
obligations under Section 8.1 of that certain Asset Purchase Agreement, dated May 2, 2007, by and
among Parent and certain of its subsidiaries and Ellington Management Group, L.L.C. (on behalf of
its client funds), as such obligations in such agreement exist as of the date hereof, for a
servicing fee and upon terms and conditions to be mutually agreed upon by Purchaser and Ellington
Management Group, L.L.C. (on behalf of its client funds).



ARTICLE VII




TAX MATTERS




Section 7.1 Transfer Taxes. Unless Sellers have obtained an Order of the Bankruptcy
Court exempting the transactions contemplated by this Agreement from all Transfer Taxes, all
Transfer Taxes attributable to the transfer of the Purchased Assets and any Transfer Taxes required
to effect any recording or filing with respect thereto shall be Retained Liabilities and shall be
borne by Sellers, and Sellers shall indemnify Purchaser for any such Taxes imposed on Purchaser.
All such Transfer Taxes shall be paid by Sellers no later than the due date for paying such Taxes.
Sellers and Purchaser shall cooperate to timely prepare, and Sellers shall file or cause to be
filed any returns or other filings relating to such Transfer Taxes (unless Purchaser is required by
applicable Law to file the return), including any claim for exemption or exclusion from the
application or imposition of any Transfer Taxes. With respect to any such returns or filings
required to be filed by Sellers, Sellers shall provide Purchaser with a copy of such return or
other filing and a copy of a receipt showing payment of any such Transfer Tax. With respect to any
such returns or filings required to be filed by Purchaser, Sellers shall pay to Purchaser, not
later than five Business Days before the due date for payment of such Transfer Taxes, an amount
equal to the Transfer Taxes shown on such return or other filing for which Sellers are liable under
this Section 7.1, and Purchaser shall, following the filing thereof, provide Sellers with a
copy of such return or other filing and a copy of a receipt showing payment of any such Transfer
Tax.



Section 7.2 Liability for Taxes and Related Matters.




(a) Sellers shall prepare or cause to be prepared all Tax Returns relating to the Purchased
Assets for periods ending on or prior to the Closing Date.




(b) Purchaser shall prepare and file all Tax Returns relating to all real property Taxes,
personal property Taxes or similar ad valorem obligations levied with respect to the Purchased
Assets for any taxable period beginning on or before and ending after the Closing Date (a
“Straddle Period,” and such Taxes, “Straddle Period Taxes”), whether imposed or
assessed before or after the Closing Date. The liability for payment of each such Straddle
Period Tax shall be pro-rated between Purchaser and Sellers at the Closing Date based on 100% of
the amount of such Straddle Period Tax imposed for the prior taxable period. The portion of each
such Straddle Period Tax that is allocable to Sellers shall be the product of (i) 100% of the
amount of such tax for the prior taxable period and (ii) a fraction, the numerator of which is
the number of days in the Tax period ending on the Closing Date and the denominator of which is
the number of days in the entire Tax period. The amount of Tax allocable to Sellers pursuant to
this Section 7.2(b) shall be withheld from the Purchase Price, and Purchaser shall be
responsible for remitting all Straddle Period Taxes to the appropriate taxing authority when due.



Section 7.3 Cooperation. Purchaser and Sellers agree to furnish or cause their
Affiliates to furnish to each other upon request, as promptly as practicable, such information and
assistance relating to the Purchased Assets or the Business (including access to books and records)
as is reasonably necessary for the filing of all Tax Returns and other Tax filings, the making of
any election related to Taxes, the preparation for any audit by any taxing authority, and the
prosecution or defense of any claim, suit or proceeding relating to any Tax Return. Purchaser and
Sellers shall cooperate, or cause their Affiliates to cooperate, with each other in the conduct of
any audit or other proceeding related to Taxes and each shall execute and deliver such other
documents as arc necessary to carry out the intent of this Section 7.3. Purchaser and
Sellers shall provide, or cause their Affiliates to provide, timely notice to each other in writing
of any pending or threatened Tax audits, assessments or litigation with respect to the Purchased
Assets or the Business for any taxable period for which the other party may have liability under
this Agreement. Purchaser and Sellers shall furnish, or cause their respective Affiliates to
furnish, to each other copies of all correspondence received from any taxing authority in
connection with any Tax audit or information request with respect to any taxable period for which
the other party or its Affiliates may have liability under this Agreement.



Section 7.4 Tax Benefits. Except as otherwise required by applicable Law, the parties
agree that any indemnity payments hereunder shall be treated as an adjustment to the Purchase Price
for income Tax purposes. The amount of Taxes for which indemnification is provided hereunder shall
be increased to take account of any Tax cost incurred (including any loss of deduction) by the
indemnified party as a result of the receipt of such indemnity payments, and shall be reduced to
take account of any Tax benefit realized by the indemnified party arising from such Loss;
provided, however, that, in the case of any Tax benefit that is not recognized
until a subsequent taxable period, the amount of the reduction under this Section 7.4 shall
be the net present value of such Tax benefit as determined by the parties in good faith.



ARTICLE VIII




CONDITIONS




Section 8.1 Conditions to Obligations of Purchaser and Sellers. The respective
obligations of each party to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, or waiver by Purchaser and Sellers, on or prior to the Closing Date of
all of the following conditions precedent:




(a) Sale Approval Order.




(i) [Reserved.]




(ii) The Sale Approval Order (A) shall have been entered by the Bankruptcy
Court, (B) shall not have been modified or amended in any manner unless agreed to in
writing by Purchaser in its sole discretion, and (C) shall have become a Final
Order.




(b) No Law, Judgments, Etc. No Government Entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any Law or any decree, judgment,
injunction or other Order which is in effect and which restricts, prevents, prohibits, makes
illegal or enjoins the consummation of the transactions contemplated by this Agreement, , except
for the Servicing Licenses and except as would not reasonably be expected to have a Material
Adverse Effect and other than (i) such as have been issued, promulgated, enforced or entered as
of the date of this Agreement and (ii) such Servicing Licenses as Purchaser shall be required to
obtain to continue the operation of the Business after the Closing.




(c) Hart-Scott-Rodino; Competition Approvals. The applicable waiting period under
the HSR Act shall have expired or been earlier terminated without action by the Department of
Justice or the Federal Trade Commission to prevent consummation of the transactions contemplated
by this Agreement.




(d) Additional Governmental Consents. All filings with or Consents of any Government
Entity legally required for the consummation of the transactions contemplated by this Agreement
(other than those required by the HSR Act, which are addressed by Section 8.1(c)) shall
have been made or obtained and be in full force and effect, except for the Servicing Licenses,
except as would not reasonably be expected to have a Material Adverse Effect and other than (i)
such as have been issued, promulgated, enforced or entered as of the date of this Agreement and
(ii) such Servicing Licenses as Purchaser shall be required to obtain to continue the operation
of the Business after the Closing.



Section 8.2 Conditions to Obligations of Sellers. The obligations of Sellers to
consummate the transactions contemplated by this Agreement shall be subject to the satisfaction or
waiver, at or prior to the Closing Date, of the following conditions:




(a) Representations and Warranties. The representations and warranties of Purchaser
contained in this Agreement shall be true and correct (without regard to any materiality or
Material Adverse Effect qualifier contained therein) on the date of this Agreement and on the
Closing Date as though made on the Closing Date, except to the extent such representations and
warranties speak as of an earlier date, and except to the extent that any such failure of a
representation or warranty to be true and correct, individually or in the aggregate, would not
have a Material Adverse Effect.




(b) Covenants. Each of the covenants and agreements of Purchaser to be performed on
or prior to the Closing Date shall have been duly performed in all material respects.




(c) Certificate. Sellers shall have received a certificate, signed by a duly
authorized officer of the sole member of Purchaser and dated the Closing Date, to the effect that
the conditions set forth in Sections 8.2(a) and 8.2(b) have been satisfied.



Section 8.3 Conditions to Obligations of Purchaser. The obligations of Purchaser to
consummate the transactions contemplated by this Agreement shall be subject to the satisfaction or
waiver, at or prior to the Closing Date, of each of the following conditions:




(a) Representations and Warranties. The representations and warranties of Sellers
contained in this Agreement shall be true and correct (without regard to any materiality or
Material Adverse Effect qualifier contained therein) (i) on the date of this Agreement with
respect to Sections 5.1 (other than with respect to the Ancillary Agreements),
5.2, and 5.3(a), (ii) on the date of the delivery of the Final Disclosure
Schedules with respect to all other representations and warranties, (except to the extent cured
prior to the Closing Date) and (iii) on the Closing Date as though made on the Closing Date,
except to the extent such representations and warranties speak as of an earlier date, and except
to the extent that any such failure of a representation or warranty to be true and correct,
individually or in the aggregate, would not have a Material Adverse Effect.




(b) Covenants. Each of the covenants and agreements of Sellers to be performed on or
prior to the Closing Date shall have been duly performed in all material respects.




(c) Certificate. Purchaser shall have received a certificates, signed by duly
authorized officers of Sellers and dated the Closing Date, to the effect that the conditions set
forth in Sections 8.3(a) and 8.3(b) have been satisfied.




(d) Schedules. Sellers shall have delivered (i) the Cut-Off Date Mortgage Loan
Schedule as promptly as possible after the Cut-Off Date (but in no event later than the close of
business on the day preceding the Closing Date), and (ii) the Closing Date Mortgage Loan Schedule
and the Servicer Advance Facility Schedule as soon as possible after the Closing Date (but in no
event later than the close of business on the 10th day following the Closing Date),
each such updated schedule to be prepared as of the date set forth in the applicable
representation.




(e) Cash Flow Relating to New Century Portfolio-Related Assets. Purchaser shall have
received written evidence from Sellers reasonably satisfactory to Purchaser that, as of the
Closing Date, the cash flow streams related to the New Century Portfolio-Related Assets are not
less than the amounts set forth in the applicable Servicing Agreements included in the New
Century Portfolio-Related Assets.




(f) Bidding Procedures Order. Sellers shall have complied with all of their
obligations under the Bidding Procedures Order.




(g) Sale Approval Order. Sellers shall have complied with all of their obligations
under the Sale Approval Order.




(h) Employees. At least 75% of the Business Employees set forth on Schedule
3.1 (as such Schedule shall be updated pursuant to Section 3.1(a)) shall have
accepted employment with Purchaser or an Affiliate of Purchaser on the terms and conditions
offered by Purchaser or such Affiliate in accordance with the terms and conditions of this
Agreement.




(i) Other Consents. Purchaser shall have received written evidence satisfactory to
Purchaser that all Consents and other approvals set forth on Schedule 8.3(i) have been
obtained and are in full force and effect, to the extent such Consents are required with respect
to the consummation of the transactions contemplated by this Agreement after giving effect to the
Sale Approval Order.




(j) [Reserved.]




(k) Release of Liens. Any and all Liens on the Purchased Assets shall have been
terminated and released pursuant to documentation reasonably satisfactory to Purchaser.




(l) Servicer Advance Facility. Simultaneously with the Closing, Sellers shall use
the proceeds of the Sale to pay in full all Obligations (as defined in the Servicer Advance
Facility) due and owing under the Servicer Advance Facility as set forth on Schedule
8.3(l) and the Servicer Advance Facility shall have terminated and all Liens thereunder shall
no longer be of any force and effect.




(m) Documents. Purchaser shall have received each of the agreements, documents and
items to be delivered by Sellers to Purchaser as set forth in Sections 8.2 and
8.3, duly executed and delivered by each party thereto (other than Purchaser).




(n) Lease and Subservicing Agreement. If required pursuant to Section
2.5(e), the Company shall have executed and delivered the Lease and Subservicing Agreement.




(o) Audit. The audit report required under Section 4.2(c) shall have been
delivered and all matters included therein shall have been agreed or otherwise resolved pursuant
to Section 4.2(c) or 4.2(d).



ARTICLE IX




TERMINATION




Section 9.1 Termination. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement may be terminated and the transactions contemplated hereby abandoned at
any time on or prior to the Closing Date:




(a) by the mutual written consent of Sellers and Purchaser;




(b) by either Sellers or Purchaser, upon written notice to the other:




(i) [Reserved.];




(ii) if the closing condition set forth in Section 8.1(a)(ii)(A) and
(B) shall not have been satisfied on or before May 30, 2007 (unless such
deadline is extended with the written consent of Purchaser); provided,
however, that the party proposing to terminate (and its Affiliates) shall
not have breached in any material respect any of their respective representations,
warranties, covenants or agreements contained in this Agreement in any manner that
shall have proximately contributed to such failure (such breaching party, a
“Proximate Cause Party”);




(iii) if the Closing Date shall not have occurred on or before the later of
June 7, 2007 and the date that is 2 Business Days after the Sale Approval Order has
become a Final Order (but in no event later than June 13, 2007) (unless such
deadline is extended with the consent of Purchaser or unless the Closing Date has
not occurred as a result of a dispute between Sellers and Purchaser as set forth in
Section 4.2(d), in which event such deadline shall be the date that is 10
days after the Final Determination Date); provided, however, that
neither the party proposing to terminate nor any of its Affiliates is a Proximate
Cause Party;




(iv) if a Government Entity shall have issued a Final Order or taken any other
action permanently restricting, preventing, prohibiting, making illegal or enjoining
the transactions contemplated by this Agreement, unless such Final Order or action
was issued or taken at the request or with the support of the party seeking to
terminate this Agreement (or any of its Affiliates) and except (A) as would not
reasonably be expected to have a Material Adverse Effect, (B) such as has been
issued, promulgated, enforced or entered as of the date of this Agreement and (C)
that relates to any failure to obtain such Servicing Licenses as Purchaser is
required to obtain to continue the operation of the Business after the Closing; or




(v) if an Alternative Transaction is consummated by Sellers;




(c) by Purchaser, upon written notice to Sellers:




(i) if either Seller shall have failed to comply in any material respect with
any of its covenants or agreements in this Agreement required to be complied with
prior to the date of such termination, which failure to comply has not been cured
within 30 days following receipt by Sellers of written notice from Purchaser of such
failure to comply and such failure has caused a Material Adverse Effect;
provided, however, that neither Purchaser nor any of its Affiliates
is a Proximate Cause Party;




(ii) if there has been (A) a breach by or inaccuracy of either Seller of any
representation or warranty in this Agreement that is not qualified as to materiality
which has the effect of making such representation or warranty not accurate, true
and correct in all material respects or (B) a breach by or inaccuracy of any Seller
of any representation or warranty in this Agreement that is qualified as to
materiality, in each case which breach or inaccuracy has not been cured within 30
days following receipt by Sellers from Purchaser of such breach or inaccuracy and
such breach or inaccuracy has caused a Material Adverse Effect; provided,
however, that neither Purchaser nor any of its Affiliates is a Proximate
Cause Party; or




(iii) not sooner than four Business Days following the Sale Hearing in the
event Sellers elect to pursue an Alternative Transaction; provided that this clause
shall not apply if Purchaser was the second place bidder in the Auction and prior to
the end of the third Business Day following such Sale Hearing, Sellers elect instead
to effectuate the sale of the Purchased Assets to Purchaser.




(d) by Sellers, upon written notice to Purchaser:




(i) if Purchaser shall have failed to comply in any material respect with any
of its covenants or agreements in this Agreement required to be complied with prior
to the date of such termination, which failure to comply has not been cured within
30 days following receipt by Purchaser of written notice from Sellers of such
failure to comply and such failure has caused a Material Adverse Effect;
provided, however, that neither Purchaser nor any of its Affiliates
is a Proximate Cause Party; or




(ii) if there has been (A) a breach by or inaccuracy of Purchaser of any
representation or warranty in this Agreement that is not qualified as to materiality
which has the effect of making such representation or warranty not accurate, true
and correct in all material respects or (B) a breach by or inaccuracy of any
Purchaser of any representation or warranty in this Agreement that is qualified as
to materiality, in each case which breach or inaccuracy has not been cured within 30
days following receipt by Purchaser from Sellers of such breach or inaccuracy and
such breach or inaccuracy has caused a Material Adverse Effect; provided,
however, that neither Sellers nor any of their Affiliates is a Proximate
Cause Party.



Section 9.2 Break-Up Fee; Expense Reimbursement.




(a) If one or more Sellers sell, transfer, lease or otherwise dispose of, directly or
indirectly, including through an asset sale, stock sale, merger or other similar transaction, all
or substantially all of the Business or the Purchased Assets in a transaction or a series of
transactions with one or more Persons other than Purchaser in any circumstance, including in
accordance with the Bidding Procedures (such event being an “Alternative Transaction”),
Sellers shall pay to Purchaser, within two Business Days after the consummation of the
Alternative Transaction, an amount in cash equal to $2,000,000 (the “Break-Up Fee”).




(b) If this Agreement is terminated in accordance with 9.1(b)(iii) (and neither
Purchaser nor any of its Affiliates is a Proximate Cause Party), 9.1(b)(v),
9.1(c)(i) (and neither Purchaser nor any of its Affiliates is a Proximate Cause Party),
9.1(c)(ii) (and neither Purchaser nor any of its Affiliates is a Proximate Cause Party),
or 9.1(c)(iii) (and neither Purchaser nor any of its Affiliates is a Proximate Cause
Party), then promptly upon receipt by Sellers of an invoice delivered by Purchaser to Sellers
itemizing Purchaser’s reasonable, actual out-of-pocket fees and expenses, including reasonable
attorneys’ fees, expenses of its financial advisors, and expenses of other consultants, incurred
in connection with the transactions contemplated by this Agreement (the aggregate amount of such
out-of-pocket fees and expenses, the “Expense Reimbursement”), which invoice Purchaser
shall deliver to Sellers within 10 Business Days after the date of such termination, as
applicable, Sellers shall pay to Purchaser in cash an amount equal to the Expense Reimbursement;
provided, that the Expense Reimbursement payable by Sellers to Purchaser shall, under no
circumstances, exceed $2,000,000 in the aggregate.



Section 9.3 Procedure and Effect of Termination. If this Agreement is terminated in
accordance with Section 9.1, this Agreement shall become void and of no further force and
effect (subject to the provisions of this Article IX) and the transactions contemplated by
this Agreement shall be abandoned, without further action by any party, and no party shall have any
Liability or further obligation to any other party resulting from such termination (a) except for
the provisions of: (i) the parties’ obligations under that certain Confidentiality Agreement, dated
November 22, 2006, between Parent and Carrington (the “Confidentiality Agreement”), (ii)
Article IX (Termination); and (iii) Sections 13.1 (Fees and Expenses), 13.2
(Amendment; Waiver), 13.3 (Publicity), 13.4 (Notices), 13.6 (Entire
Agreement; No Third Party Beneficiaries), 13.8 (Governing Law), 13.9 (Venue and
Retention of Jurisdiction), and 13.12 (Assignment), all of which shall remain in full force
and effect; and (b) except that no such termination shall relieve any party from any Liability
(other than for special, incidental, punitive, exemplary or consequential damages and lost profits)
which such party may have to another party for Losses arising out of any breach of this Agreement
by such party which occurs upon or prior to the termination of this Agreement. In connection with
any termination of this Agreement, each party shall use its commercially reasonable efforts to
cause all filings, applications and other submissions made by such party to any Government Entity
or Person pursuant to this Agreement, to the extent practicable, to be withdrawn from such
Government Entity or Person to which made.



ARTICLE X




BIDDING PROCEDURES




Section 10.1 Bidding Procedures. Without limiting the other provisions of this
Agreement, the Bidding Procedures (in the form of Schedule 1 to Exhibit A hereto), shall be
a schedule to the Bidding Procedures Order and thus, together with the other schedules thereto,
shall constitute a part of the Bidding Procedures Order, and references herein to the Bidding
Procedures Order shall be deemed to include all of the schedules thereto, including the Bidding
Procedures.



ARTICLE XI




INDEMNIFICATION




Section 11.1 Survival. The representations and warranties of the parties in this
Agreement, any Ancillary Agreement or any certificate or other instrument delivered pursuant to
this Agreement, and the right to assert a claim under this Article XI with respect to any
such representations and warranties, shall survive the Closing for a period of nine months, except
that if written notice asserting any bona fide claim for indemnification under this Article
XI shall have been given within the applicable survival period, the representations and
warranties that are the subject of such claim shall survive until such claim is fully and finally
resolved.



Section 11.2 Sellers’ Agreement to Indemnify. If the Closing occurs, subject to the
terms of this Article XI, from and after the Closing, Sellers shall jointly and severally
indemnify and hold harmless the Purchaser Indemnified Parties from and against all Losses
(collectively, the “Purchaser Damages”) suffered or incurred by the Purchaser Indemnified
Parties as a result of or arising out of any of the following:




(a) any breach of or any inaccuracy in any representation or warranty made by either Seller
in this Agreement, any Ancillary Agreement or any certificate or other instrument delivered by
either Seller at the Closing; or




(b) any breach by either Seller of or failure by either Seller to perform any covenant or
agreement of such Seller contained in this Agreement, any Ancillary Agreement or any certificate
or other instrument delivered by such Seller at the Closing; or




(c) the ownership or operation of the Purchased Assets or the Business prior to the Closing
Date; or




(d) the Excluded Assets or the Retained Liabilities.



Purchaser agrees that, from and after the Closing, the indemnification provided by Sellers as set
forth in this Article XI is the exclusive remedy of the Purchaser Indemnified Parties for a
breach by either Seller of any representation, warranty, covenant or agreement contained in this
Agreement, any Ancillary Agreement or any certificate or other instrument delivered by either
Seller at the Closing, except with respect to (i) Purchaser Damages arising from fraud,
intentional misstatements or intentional misconduct of any Seller or its Affiliates and (ii) the
equitable remedies set forth in Section 13.14.



Section 11.3 Limitations on Sellers’ Agreements to Indemnify. The obligations of
Sellers to indemnify and hold harmless the Purchaser Indemnified Parties pursuant to Section
11.2 are subject to the following limitations:




(a) In calculating amounts payable to Purchaser, the amount of any indemnified Purchaser
Damages shall be determined without duplication of any other Purchaser Damages for which a claim
by any Purchaser Indemnified Party has been made.




(b) The amount of any Purchaser Damages shall be reduced by any amount actually received by
any Purchaser Indemnified Party with respect thereto under any third party insurance coverage.
If a Purchaser Indemnified Party makes a claim for indemnification under Section 11.2,
such Purchaser Indemnified Party shall use its commercially reasonable efforts to collect any
amounts available under such insurance coverage. If the Purchaser Indemnified Party receives an
amount under insurance coverage with respect to Purchaser Damages at any time subsequent to any
indemnification provided by either Seller pursuant to Section 11.2, then such Purchaser
Indemnified Party shall promptly reimburse such Seller for any payment made or expense incurred
by such Seller in connection with providing such indemnification up to such amount received by
such Purchaser Indemnified Party, but net of any expenses incurred by the Purchaser Indemnified
Parties in collecting such amount. Such amounts shall not be deemed to constitute Losses for the
purposes of determining whether any Losses exceeded the Basket Amount. To the extent either
Seller makes any indemnification payment pursuant to Section 11.2 in respect of Purchaser
Damages for which any Purchaser Indemnified Party has a right to recover against an insurance
company, such Seller shall be subrogated to the right of the applicable Purchaser Indemnified
Party to seek and obtain recovery from such insurance company.




(c) Any written notice delivered by a Purchaser Indemnified Party to either Seller seeking
indemnification pursuant to this Agreement with respect to Purchaser Damages shall set forth,
with as much specificity as is reasonably practicable, the basis of the claim for Purchaser
Damages, the sections of this Agreement which form the basis for the claim, copies of all
material written materials relating to such claim and, to the extent reasonably practicable, a
reasonable estimate of the amount of the Purchaser Damages that have been or may be sustained by
the Purchaser Indemnified Party.



Section 11.4 Purchaser’s Agreement to Indemnify. If the Closing occurs, subject to the
terms of this Article XI, from and after the Closing, Purchaser shall jointly and severally
indemnify and hold harmless the Seller Indemnified Parties from and against all Losses
(collectively, the “Seller Damages”) incurred by the Seller Indemnified Parties as a result
of or arising out of any of the following:




(a) any breach of or any inaccuracy in any representation or warranty made by any Purchaser
in this Agreement, any Ancillary Agreement or any certificate or other instrument delivered by
any Purchaser at the Closing; or




(b) any breach by any Purchaser of or failure by any Purchaser to perform any covenant or
obligation of such Purchaser contained in this Agreement, any Ancillary Agreement or any
certificate or other instrument delivered by such Purchaser at the Closing; or




(c) the ownership or operation of the Purchased Assets or the Business after the Closing
Date; or




(d) the Assumed Liabilities.



Sellers agree that, from and after the Closing, the indemnification provided by Purchaser as
set forth in this Article XI is the exclusive remedy of the Seller Indemnified Parties for
a breach by any Purchaser of any representation, warranty, covenant or agreement contained in this
Agreement, any Ancillary Agreement or any certificate or other instrument delivered by any
Purchaser at the Closing, except with respect to (i) Seller Damages arising from fraud,
intentional misstatements or intentional misconduct of any Purchaser or its Affiliates and (ii) the
equitable remedies set forth in Section 13.14.



Section 11.5 Limitations on Purchaser’s Agreement to Indemnify. The obligations of
Purchaser to indemnify and hold harmless the Seller Indemnified Parties pursuant to Section
11.4 are subject to the following limitations:




(a) In calculating amounts payable to Sellers, the amount of any indemnified Seller Damages
shall be determined without duplication of any other Seller Damages for which a Claim by any
Seller Indemnified Party has been made.




(b) The amount of any Seller Damages shall be reduced by any amount actually received by any
Seller Indemnified Party with respect thereto under any third party insurance coverage. If a
Seller Indemnified Party makes a claim for indemnification under Section 11.4, such
Seller Indemnified Party shall use its commercially reasonable efforts to collect any amounts
available under such insurance coverage. If the Seller Indemnified Party receives an amount
under insurance coverage with respect to Seller Damages at any time subsequent to any
indemnification provided by any Purchaser pursuant to Section 11.4, then such Seller
Indemnified Party shall promptly reimburse any Purchaser for any payment made or expense incurred
by such Purchaser in connection with providing such indemnification up to such amount received by
such Seller Indemnified Party, but net of any expenses incurred by the Seller Indemnified Parties
in collecting such amount. To the extent any Purchaser makes any indemnification payment
pursuant to Section 11.4 in respect of Seller Damages for which any Seller Indemnified
Party has a right to recover against an insurance company, such Purchaser shall be subrogated to
the right of the applicable Seller Indemnified Party to seek and obtain recovery from such
insurance company.




(c) Any written notice delivered by a Seller Indemnified Party to any Purchaser seeking
indemnification pursuant to this Agreement with respect to Seller Damages shall set forth, with
as much specificity as is reasonably practicable, the basis of the claim for Seller Damages, the
sections of this Agreement which form the basis for the claim, copies of all material written
materials relating to such claim and, to the extent reasonably practicable, a reasonable estimate
of the amount of the Seller Damages that have been or may be sustained by the Seller Indemnified
Party.



Section 11.6 Other Limitations on and Treatment of Certain Claims for Indemnification.




(a) Basket. Sellers shall not have any liability pursuant to Section 11.2(a)
unless and until the aggregate amount of all Losses incurred or suffered by the Purchaser
Indemnified Parties for which they are entitled to indemnification pursuant to Section
11.2(a) exceeds 1% of the Cash Purchase Price (the “Basket Amount”), but in the event
such Losses exceed the Basket Amount, Sellers shall be liable and responsible to the Purchaser
Indemnified Parties for the full amount of such Losses (subject to Section 11.6(b)),
without reduction for the Basket Amount. Purchaser shall not have any liability pursuant to
Section 11.4(a) unless and until the aggregate amount of all Losses incurred or suffered
by the Seller Indemnified Parties for which they are entitled to indemnification pursuant to
Section 11.4(a) exceeds the Basket Amount, but in the event such Losses exceed the Basket
Amount, Purchaser shall be liable and responsible to the Seller Indemnified Parties for the full
amount of such Losses (subject to Section 11.6(b)), without reduction for the Basket
Amount.




(b) Maximum. In no event shall Sellers’ aggregate liability pursuant to Section
11.2 for Losses incurred or suffered by the Purchaser Indemnified Parties exceed the
Indemnification Holdback Amount. In no event shall Purchaser’s aggregate liability pursuant to
Section 11.4 for Losses incurred or suffered by the Seller Indemnified Parties exceed the
Indemnification Holdback Amount.




(c) Claims Based on Fraud or Intentional Misrepresentation. Notwithstanding anything
to the contrary contained in this Agreement or in any Ancillary Agreement, nothing shall be
deemed to limit any party’s rights to recover any or all Losses incurred or suffered by it
relating to or arising out of or in connection with fraud or intentional misrepresentation, it
being understood and agreed that (i) Purchaser’s right to recover such Losses shall not be
limited to the Indemnification Holdback Amount, and any claim hereunder against Sellers not
satisfied pursuant to Section 11.9 hereof shall constitute an allowed administrative
expense claim arising in the Bankruptcy Cases and shall be treated with such priority in any
subsequent or superseding bankruptcy case (including any bankruptcy case under Chapter 7 of the
Bankruptcy Code) and (ii) any claims under this Section 11.6(c) shall be satisfied from
the Indemnification Holdback Amount only after payment in full of (or reserving for) all of
Purchaser’s other claims for Purchaser Damages under the other provisions of this Article
XI.



Section 11.7 Claims. As soon as is reasonably practicable after becoming aware of a
claim for indemnification under this Agreement involving a claim (or the commencement of any
proceeding or investigation) of the type described in Section 11.2 or 11.4, the
Indemnitee shall give written notice to the Indemnitor of such claim; provided, that the
failure of the Indemnitee to give such written notice shall not relieve the Indemnitor of its
obligations under this Article XI except to the extent (if any) that the Indemnitor shall
have been prejudiced thereby. If the Indemnitor does not object in writing to such indemnification
claim within 30 calendar days of receiving written notice thereof, the Indemnitee shall be entitled
to recover promptly (subject to Sections 11.6(a) and (b)) from the Indemnitor and
the Indemnitor shall promptly pay (subject to Sections 11.6(a) and (b)) to the
Indemnitee the amount of such claim (but such recovery shall not limit the amount of any additional
indemnification to which the Indemnitee may be entitled pursuant to Section 11.2 or
11.4), and no later objection by the Indemnitor shall be permitted with respect thereto.
If within such 30-day period the Indemnitor agrees that it has an indemnification obligation but
objects that it is obligated to pay only a lesser amount, the Indemnitee shall, pursuant to
Sections 11.2, 11.4 and 11.9, nevertheless be entitled to recover from the
Indemnitor and the Indemnitor shall promptly pay to the Indemnitee the lesser amount, without
prejudice to the Indemnitee’s claim for the difference.



Section 11.8 Third Party Indemnification. The obligations of any Indemnitor to
indemnify any Indemnitee under this Article XI with respect to Purchaser Damages or Seller
Damages, as the case may be, resulting from the assertion of liability by third parties (including
Government Entities), shall be subject to the following terms and conditions:




(a) Notice of Third Party Claims; Assumption of Defense. The Indemnitee shall give
notice as promptly as is reasonably practicable to the Indemnitor of the assertion of any claim
or the commencement of any Proceeding or investigation by any Person not a party hereto (a
“Third Party Claim”) in respect of which indemnity may be sought under this Agreement,
which notice shall contain reasonable details concerning such Third Party Claim;
provided, that the failure of the Indemnitee to give notice shall not relieve the
Indemnitor of its obligations under this Article XI except to the extent (if any) that
the Indemnitor shall have been prejudiced thereby. The Indemnitor may, at its own expense, (i)
participate in the defense of any such Third Party Claim and (ii) upon written notice to the
Indemnitee and the Indemnitor’s delivering to the Indemnitee a written agreement that the
Indemnitee is entitled to indemnification pursuant to Section 11.2 or 11.4 for
all Losses arising out of such Third Party Claim and that the Indemnitor shall be liable for the
entire amount of any Loss resulting therefrom, at any time during the course of any such Third
Party Claim assume the defense thereof; provided, that (A) the Indemnitor shall provide
written evidence reasonably satisfactory to the Indemnitee demonstrating that the Indemnitor has
a sufficient amount of assets for purposes of such assumption of defense, (B) the Indemnitor’s
counsel is reasonably satisfactory to the Indemnitee and (C) the Indemnitor shall thereafter
consult with the Indemnitee upon the Indemnitee’s reasonable request for such consultation from
time to time with respect to such Third Party Claim. If the Indemnitor assumes such defense, the
Indemnitee shall have the right (but not the duty) to participate in the defense thereof and to
employ counsel, at its own cost and expense, separate from the counsel employed by the
Indemnitor. If, however, the Indemnitee reasonably determines in its judgment that
representation by the Indemnitor’s counsel of both the Indemnitor and the Indemnitee would
present such counsel with a conflict of interest, then such Indemnitee may employ separate
counsel to represent or defend it in any such Third Party Claim and the Indemnitor shall pay the
reasonable fees and disbursements of such separate counsel. Whether or not the Indemnitor
chooses to defend or contest any such Third Party Claim, upon the request of the Indemnitee, the
other Parties shall provide reasonable cooperation to the Indemnitee with respect thereto.




(b) Settlement or Compromise. Any settlement or compromise made or caused to be
made by the Indemnitee or the Indemnitor, as the case may be, of any Third Party Claim shall also
be binding upon the Indemnitor or the Indemnitee, as the case may be, in the same manner as if a
final judgment or decree had been entered by a court of competent jurisdiction in the amount of
such settlement or compromise; provided, that (i) no obligation, restriction or Loss
shall be imposed on the Indemnitee as a result of such settlement without its prior written
consent, and (ii) the Indemnitee shall not compromise or settle any Third Party Claim without the
prior written consent of the Indemnitor, which consent shall not be unreasonably withheld,
conditioned or delayed.




(c) Failure of Indemnitor to Act. If the Indemnitor does not elect to assume the
defense of any Third Party Claim, then any failure of the Indemnitee to defend or to participate
in the defense of any such Third Party Claim, or to cause the same to be done, shall not relieve
the Indemnitor of its obligations hereunder.



Section 11.9 Set Off Against Indemnification Holdback Amount. Subject to Sections
11.6(a) and (b), if any Purchaser Indemnified Party is entitled to receive any amount
from any Seller under Section 11.2 of this Agreement, the Purchaser Indemnified Party shall
only seek recovery from the Indemnification Holdback Amount for, and shall retain from the
Indemnification Holdback Amount, as much of such amount as is possible.



Section 11.10 Release of Indemnification Holdback Amount.




(a) On the date that is nine months after the Closing Date (the “Holdback Release
Date”), the Escrow Agent shall pay to Sellers, from the Indemnification Holdback Amount, an
amount (the “Holdback Release Amount”) equivalent to (i) the Indemnification Holdback
Amount, minus (ii) all prior amounts distributed to Purchaser pursuant to and in
accordance with the Escrow Agreement, minus (iii) any amounts necessary (as determined by
Purchaser in its reasonable judgment) to satisfy any Pending Claims theretofore asserted by any
Purchaser Indemnified Party pursuant to Article XI (such amounts relating to such Pending
Claims are collectively referred to hereinafter as the “Unresolved Portion”), together
with a sum equivalent to interest on such Holdback Release Amount accruing from the Closing Date
to and including the Holdback Release Date.




(b) If there is an Unresolved Portion of the Indemnification Holdback Amount as of the
Holdback Release Date, the Escrow Agent shall continue to retain the Unresolved Portion from and
after the Holdback Release Date until the resolution of such Pending Claims giving rise to the
Unresolved Portion, and following the final settlement in accordance with the Escrow Agreement of
all such Pending Claims and the retention of all amounts from the Unresolved Portion payable to
the Purchaser Indemnified Parties with respect to such Pending Claims, the Escrow Agent shall pay
to Sellers the balance, if any, of the Indemnification Holdback Amount, together with a sum
equivalent to interest on such balance accruing from the Closing Date to and including the date
of payment of such balance to Sellers.



Section 11.11 Purchase Price Adjustments. Any amounts payable under Section
11.2 or Section 11.4 shall be treated by Purchaser and Sellers as an adjustment to the
Purchase Price.



ARTICLE XII




REPRESENTATIONS AND WARRANTIES OF PURCHASER




Purchaser represents and warrants to Sellers that all of the statements contained in this
Article XII, are true and correct as of the date of this Agreement.



Section 12.1 Legal Power; Organization; Qualification of Purchaser. Purchaser has been
duly incorporated, and is validly existing and in good standing under the Laws of its jurisdiction
of incorporation, has all requisite power and authority to execute and deliver this Agreement and
the Ancillary Agreements and to consummate the transactions contemplated hereby, and has taken all
necessary corporate or other action to authorize the execution, delivery and performance of this
Agreement.



Section 12.2 Binding Agreement. This Agreement has been duly executed and delivered by
Purchaser and, assuming due and valid authorization, execution and delivery by Sellers, this
Agreement constitutes a legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar Laws of general application
affecting enforcement of creditors’ rights generally and (b) the availability of the remedy of
specific performance or injunctive or other forms of equitable relief may be subject to equitable
defenses and. would be subject to the discretion of the court before which any proceeding therefor
may be brought. Each Ancillary Agreement will be duly and validly executed and delivered by
Purchaser at or prior to the Closing, and upon such execution and delivery (assuming such Ancillary
Agreement constitutes a valid and binding obligation of each other party thereto) will constitute
the legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance
with its respective terms.



Section 12.3 No Conflict or Default. Neither the execution and delivery of this
Agreement nor the consummation by Purchaser of the transactions contemplated hereby will result in
a violation of, or a default under, or conflict with, or require any consent, approval or notice
under, any material contract, trust, commitment, agreement, obligation, understanding, arrangement
or restriction of any kind to which Purchaser is a party or by which Purchaser is bound or to which
any properties or assets owned by Purchaser are subject. Consummation by Purchaser of the
transactions contemplated hereby will not violate, or require any consent, approval or notice
under, any provision of any material judgment, order, decree, statute, Law, rule or regulation
applicable to such Purchaser.



Section 12.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Purchaser.



ARTICLE XIII




MISCELLANEOUS




Section 13.1 Fees and Expenses. Except as set forth in this Agreement, all costs and
expenses incurred in connection with this Agreement and the consummation of the Transaction shall
be paid by the party incurring such expenses.



Section 13.2 Amendment; Waiver. This Agreement may be amended, modified and
supplemented only by a written instrument signed by all of the parties hereto expressly stating
that such instrument is intended to amend, modify or supplement this Agreement. No failure or delay
by any party in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies provided by Law.



Section 13.3 Publicity. The initial press release with respect to the execution of
this Agreement shall be a joint press release reasonably acceptable to Purchaser and Sellers.
Thereafter, until the Closing, or the date the transactions contemplated hereby are terminated or
abandoned pursuant to Article IX, none of Sellers, Purchaser nor any of their respective
Affiliates shall issue or cause the publication of any press release or other public announcement
with respect to this Agreement or the transactions contemplated hereby without prior consultation
with the other party, except as may be required by Law or by any listing agreement with a national
securities exchange or trading market.



Section 13.4 Notices. All notices and other communications hereunder shall be in
writing and shall be delivered personally by hand, by facsimile (which is confirmed) or sent by an
overnight courier service to the parties at the following addresses (or at such other address for a
party as shall be specified by such party by like notice):



if to Purchaser, to:



Carrington Mortgage Services, LLC


c/o Carrington Capital Management, LLC


599 Putnam Avenue


Greenwich, CT 06830


Attn: Bruce Rose


Facsimile: (203) 661-6378



with copies to (which copies shall not constitute notice):



Carrington Mortgage Services, LLC


c/o Carrington Capital Management, LLC


599 Putnam Avenue


Greenwich, CT 06830


Attn: Diane Citron


Facsimile: (203) 661-6378



and



Mayer, Brown, Rowe & Maw LLP


71 South Wacker Drive


Chicago, IL 60606


Attn: Elizabeth Raymond


Facsimile: (312)706-8192



if to Sellers, to:



New Century Financial Corporation


184000 Von Karman, Suite 1000


Irvine, CA 92612


Attn: Brad Morrice


Facsimile: (949) 224-5703



with copies to (which copies shall not constitute notice):



New Century Financial Corporation


184000 Von Karman, Suite 1000


Irvine, CA 92612


Attn: Terry Theologides


Facsimile: (949) 471-8135



and



O’Melveny & Myers LLP


275 Battery Street, Suite 2600


San Francisco, CA 94111


Attn: C. Brophy Christensen, Jr.


Facsimile: (415) 984-8701



and



Hahn & Hessen LLP


488 Madison Avenue


New York, New York 10022


Attn: Mark Power


Facsimile: (212) 478-7400



and



Hahn & Hessen LLP


488 Madison Avenue


New York, New York 10022


Attn: Mark S. Indelicato


Facsimile: (212) 478-7400



All notices given pursuant to this Section 13.4 shall be deemed to have been given (i)
if delivered personally on the date of delivery or on the date delivery was refused by the
addressee, (ii) if delivered by facsimile transmission, when transmitted to the applicable number
so specified in (or pursuant to) this Section 13.4 and an appropriate answerback is
received or (iii) if delivered by overnight courier, on the date of delivery as established by the
return receipt or courier service confirmation (or the date on which the courier service confirms
that acceptance of delivery was refused by the addressee).



Section 13.5 Counterparts. This Agreement may be executed in two or more counterparts,
all of which shall be considered one and the same agreement and shall become effective when two or
more counterparts have been signed by each of the parties and delivered to the other parties.
Copies of executed counterparts transmitted by telecopy or other electronic transmission service
shall be considered original executed counterparts, provided receipt of such counterparts is
confirmed.



Section 13.6 Entire Agreement; No Third Party Beneficiaries. This Agreement and the
Sale Approval Order (a) constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter hereof
and thereof, except for the Confidentiality Agreement, which shall remain in full force and effect
until the Closing, and (b) is not intended to confer any rights or remedies upon any Person other
than the parties hereto and thereto.



Section 13.7 Severability. Any term or provision of this Agreement that is held by a
court of competent jurisdiction or other authority to be invalid, void or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof is invalid, void or
unenforceable, the parties agree that the court making such determination shall have the power to
reduce the scope, duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.



Section 13.8 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO RULES GOVERNING
THE CONFLICT OF LAWS AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.



Section 13.9 Venue and Retention of Jurisdiction. All actions brought, arising out of
or related to the transactions contemplated in this Agreement shall be brought in the Bankruptcy
Court, and the Bankruptcy Court shall retain jurisdiction to determine any and all such actions



Section 13.10 Time of Essence. Each of the parties hereto hereby agrees that, with
regard to all dates and time periods set forth or referred to in this Agreement, time is of the
essence.



Section 13.11 No Consequential Damages. In no event will any party to this Agreement
be liable to any other party for any punitive, exemplary, indirect, special, incidental or
consequential damages, including lost profits or savings, damage to business reputation or loss of
opportunity.



Section 13.12 Assignment. This Agreement shall be binding upon, inure to the benefit
of and be enforceable by the parties and their respective successors and assigns; provided,
that neither this Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior
written consent of the other parties, except that on or after the Closing Date, Purchaser may
assign its rights and obligations hereunder to an Affiliate or Affiliates of Carrington. No
assignment of rights or obligations pursuant to this Section 13.12 shall relieve the
assigning party of its obligations hereunder.



Section 13.13 Fulfillment of Obligations. Any obligation of any party to any other
party under this Agreement, which obligation is performed, satisfied or fulfilled completely by an
Affiliate of such party, shall be deemed to have been performed, satisfied or fulfilled by such
party.



Section 13.14 Specific Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed that Purchaser
shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in Delaware state court, this being in addition to any other
remedy to which they are entitled at Law or in equity.



Section 13.15 Waiver of Bulk Transfer Laws. Seller and Purchaser agree to waive
compliance with Article 6 of the Uniform Commercial Code as adopted in each of the jurisdictions in
which any of the Purchased Assets are located to the extent that such Article is applicable to the
transactions contemplated hereby.



Section 13.16 Personal Liability. This Agreement shall not create or be deemed to
create or permit any personal liability or obligation on the part of any officer, director,
employee, Representative or investor of any party hereto.



Section 13.17 No Right of Setoff. Except as otherwise provided herein, including the
Indemnification Holdback Amount as contemplated in Articles IV and XI, no party nor
any Affiliate thereof may deduct from, set off, holdback or otherwise reduce in any manner
whatsoever any amount owed to it hereunder or pursuant to any Ancillary Agreement against any
amounts owed hereunder or pursuant to any Ancillary Agreement by such Person to any other party or
any of such other party’s Affiliates.



[SIGNATURES ON FOLLOWING PAGE]






4






IN WITNESS WHEREOF, Purchaser and Sellers have executed this Agreement or caused this
Agreement to be executed by their respective officers thereunto duly authorized as of the date
first written above.



CARRINGTON CAPITAL MANAGEMENT, LLC



	 	 	 
	By

Name:

Title:

	 	/s/Bruce Rose

Bruce Rose

President






CARRINGTON MORTGAGE SERVICES, LLC



	 	 	 
	By:

	 	Carrington Capital Management, LLC, its managing member
	By

Name:

Title:

	 	/s/Bruce Rose

Bruce Rose

President






NEW CENTURY FINANCIAL CORPORATION



     as Seller and Debtor and Debtor-in-Possession



	 	 	 
	By

Name:

Title:

	 	/s/Stergios Theologides

Stergios Theologides

Executive Vice President and General Counsel






NEW CENTURY MORTGAGE CORPORATION



     as Seller and Debtor and Debtor-in-Possession



	 	 	 
	By

Name:

Title:

	 	/s/Stergios Theologides

Stergios Theologides

Executive Vice President and General Counsel
	 
	 	 







5