Document:

EX-10.1

ASSET PURCHASE AGREEMENT

DATED AS OF OCTOBER 10, 2006

BY AND AMONG

BEAR STEARNS RESIDENTIAL MORTGAGE CORPORATION

ENCORE CREDIT CORP.

AND

ECC CAPITAL CORPORATION

1

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1. CERTAIN DEFINITIONS
	 	 
	 
	 	 	 	 
	1.01

	 	Certain Definitions
	 	

	 	 	 
	ARTICLE 2. PURCHASE AND SALE OF ASSETS
	2.01

2.02

2.03

	 	Purchase and Sale of Assets; Additional Assets

Assumption of Liabilities

Consideration

	 	 	 
	ARTICLE 3. CLOSING	 	 
	3.01

3.02

3.03

	 	Closing

ECC’s and Seller’s Closing Deliveries

Acquirer’s Closing Deliveries

	 	 	 
	ARTICLE 4. CONDUCT OF THE PARTIES PENDING CLOSING
	4.01

4.02

4.03

	 	Conduct of Business by Seller

Conduct of ECC

Conduct of Acquirer

	 	 	 
	ARTICLE 5. REPRESENTATIONS AND WARRANTIES
	5.01

5.02

5.03

5.04

	 	Disclosure Letter

Representations and Warranties of Seller

Representations and Warranties of ECC

Representations and Warranties of Acquirer

	 	 	 
	ARTICLE 6. COVENANTS	 	 
	6.01

6.02

6.03

6.04

6.05

6.06

6.07

6.08

6.09

6.10

6.11

6.12

6.13

6.14

	 	Access to Information; Confidentiality

Acquisition Proposals.

Further Action; Reasonable Best Efforts

Public Announcements

Hiring by Acquirer

Payment of Taxes

Mail Received After Closing

Non-Competition; Non-solicitation

Confidentiality

Reserves for Liabilities

Retention of Proceeds; Corporate Existence

Seller Capital Stock

HMDA Reports

Use of Encore and Bravo Names

	 	 	 
	ARTICLE 7. PRE-CLOSING RELATIONSHIP
	7.01

7.02

7.03

	 	Transition Plan

Repo Agreement

Disposition of Mortgage Loans

	 	 	 
	ARTICLE 8. CONDITIONS	 	 
	8.01

8.02

8.03

	 	Conditions to the Obligations of Each Party

Conditions to the Obligations of Acquirer

Conditions to the Obligations of Seller and ECC

	 	 	 
	ARTICLE 9. TERMINATION	 	 
	9.01

9.02

9.03

	 	Termination

Effect of Termination

Fees and Expenses

	 	 	 
	ARTICLE 10. INDEMNIFICATION
	10.01

10.02

10.03

10.04

10.05

	 	Survival Periods

Indemnification by ECC and Seller

Indemnification by Acquirer

Indemnification Procedure

Exclusive Sole Remedy

	 	 	 
	ARTICLE 11. GENERAL PROVISIONS
	11.01

11.02

11.03

11.04

11.05

11.06

11.07

11.08

11.09

11.10

11.11

11.12

	 	Notices

Severability

Amendment

Entire Agreement; Assignment

Parties in Interest

Specific Performance

Governing Law

Waiver of Jury Trial

Headings

Counterparts

Mutual Drafting

Reliance and Cooperation

2

ASSET PURCHASE AGREEMENT, dated as of October 10, 2006 (this “Agreement”), by and among
Bear Stearns Residential Mortgage Corporation (“Acquirer”), Encore Credit Corp. (“Seller”) and ECC
Capital Corporation (“ECC”).

RECITALS

A. Seller. Seller is a California corporation that originates and purchases
nonconforming residential mortgage loans, primarily on a wholesale basis, through a network of
independent mortgage brokers and mortgage lenders (the “Business”).

B. ECC. ECC is a Maryland corporation which has elected to be treated for United
States federal (and applicable state and local) income tax purposes as a real estate investment
trust, or REIT, having its principal place of business in Irvine, California. ECC owns all of the
outstanding capital stock of Seller.

C. Acquirer. Acquirer is a Delaware corporation that develops and underwrites home
loan programs that enable professional mortgage brokers and bankers to sell loans directly to Wall
Street.

D. The Acquisition. In accordance with the terms and subject to the conditions set
forth in this Agreement, Seller desires to sell, assign and transfer to Acquirer, and Acquirer
desires to purchase and acquire from Seller, all of the Transferred Assets (the “Acquisition”).

E. Non-Solicit Agreement. Concurrently with the execution and delivery of this
Agreement, Steven G. Holder has entered into an agreement with Acquirer, dated as of the date
hereof, pursuant to which, among other things, subject to the terms and conditions set forth
therein, Mr. Holder has agreed not to solicit or hire certain employees of Acquirer and not to
solicit certain clients of the Business following the Closing.

F. Employment Agreement. Concurrently with the execution and delivery of this
Agreement, Shabi S. Asghar has entered into an employment agreement with Acquirer, dated as of the
date hereof, setting forth the terms of his employment with Acquirer following the Closing.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound hereby, the parties
agree as follows:

ARTICLE 1.

CERTAIN DEFINITIONS

1.01 Certain Definitions. The following terms are used in this Agreement with the meanings
set forth below:

“Acquirer” has the meaning set forth in the preamble to this Agreement.

“Acquirer Indemnified Parties” has the meaning set forth in Section 10.02(a).

“Acquirer Plans” means those plans, policies and programs of Acquirer set forth on
Schedule 6.05(c).

“Acquisition” has the meaning set forth in the recitals to this Agreement.

“Acquisition Proposal” has the meaning set forth in Section 6.02(b).

“Action” means any claim, action, suit, proceeding, arbitration, mediation or other
investigation, including, without limitation, any investigation by any Governmental Authority.

“Additional MLPA” means the Mortgage Loan Purchase Agreement between Seller and EMC Mortgage
Corporation, dated as of February 1, 2004, for Residential Fixed and Adjustable Rate Mortgage Loans
(performing and non-performing).

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly
controls, is controlled by or is under common control with such Person. For purposes of the
immediately preceding sentence, the term “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or cause the direction
of the management and policies of such Person, whether through ownership of voting securities, by
contract or otherwise.

“Agency” means HUD or a state banking department, state attorney general or other state
agency, as applicable.

“Agreement” means this Agreement, as amended or modified from time to time in accordance with
Section 11.03.

“Allocation Schedule” has the meaning set forth in Section 2.03(b).

“Applicable Permits” has the meaning set forth in Section 5.02(d)(i).

“Approved Applications” has the meaning set forth in Section 8.02(e).

“Asset Price” has the meaning set forth in Section 2.03(a).

“Assumed Contracts” means those contracts (and only those contracts) specified on Schedule
1.01A to this Agreement.

“Assumed Liabilities” has the meaning set forth in Section 2.02(a).

“Average Pull-Through Factor” has the meaning set forth in Section 8.02(e).

“Benefit Plans” has the meaning set forth in Section 5.02(i)(i).

“Bill of Sale, Assignment and Assumption Agreement” has the meaning set forth in Section
3.02(a).

“Business” has the meaning set forth in the recitals to this Agreement.

“Business Day” means Monday through Friday of each week, except a legal holiday recognized as
such by the U.S. Government or any day on which banking institutions in the State of New York are
authorized or obligated to close.

“Business Records” means all books, records, files and paper related to the Business.

“BSMCC” has the meaning set forth in Section 7.02.

“Cap” has the meaning set forth in Section 10.02(c).

“Closed Loans” has the meaning set forth in Section 8.02(e).

“Closing” and “Closing Date” have the meanings set forth in Section 3.01.

“Closing Date Pre-Paid Fees Amount” means the aggregate amount of all accrued revenue, income,
pre-paid fees, third-party fees and expenses relating to the Assumed Contracts estimated as of the
Closing Date by Acquirer and Seller and set forth on Schedule 1.01B to this Agreement,
which schedule will be updated by Seller and delivered by Seller to Acquirer at the Closing.

“COBRA” has the meaning set forth in Section 5.02(i)(iv).

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

“Comparable Servicer” means a servicer of residential subprime mortgage Loans that has a
servicing rating by Moody’s Investors Service, Inc. and Standard & Poor’s, a division of The
McGraw-Hill Companies, Inc., equal to or higher than EMC Mortgage Corporation.

“Confidentiality Agreement” has the meaning set forth in Section 6.01(d).

“Competitive Business Activity” has the meaning set forth in Section 6.08(a).

“Deferred Compensation Plan” has the meaning set forth in Section 5.02(i)(v).

“Disclosure Letter” has the meaning set forth in Section 5.01.

“ECC” has the meaning set forth in the preamble to this Agreement.

“ECC Charter” means the charter of ECC as in effect on the date hereof.

“ECC Board” means the Board of Directors of ECC.

“ECC Common Stock” means the common stock, $0.001 par value per share, of ECC.

“ECC Special Committee” means the committee of the ECC Board comprised of the four
non-employee members of the ECC Board.

“Employee Retention Agreements” has the meaning set forth in Section 6.05(i).

“Environmental Laws” means any United States federal, state or local Laws in existence on the
date hereof relating to pollution or protection of the environment.

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

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

“Excluded Assets” means all of the assets of Seller other than the Transferred Assets,
including, without limitation, those set forth on Schedule 1.01C to this Agreement.

“Exclusivity Letter” has the meaning set forth in Section 6.02(a).

“GAAP” means accounting principles generally accepted in the United States of America.

“Governmental Authority” means any federal, state or local court, administrative agency or
commission or other governmental authority or instrumentality or Agency.

“Grant Thornton” means Grant Thornton LLP.

“Hazardous Substance” means (i) those substances defined in or regulated under the following
federal statutes and their state counterparts, as each may be amended from time to time, and all
regulations thereunder: the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking
Water Act, the Atomic Energy Act and the Clean Air Act; (ii) petroleum and petroleum products,
including crude oil and any fractions thereof; (iii) polychlorinated biphenyls, friable asbestos
and radon; and (iv) any substance, material, or waste regulated by any Governmental Authority
pursuant to any Environmental Law.

“HMDA” means the Home Mortgage Disclosure Act, as amended.

“HUD” means the United States Department of Housing and Urban Development or any successor
thereto.

“Indemnified Party” has the meaning set forth in Section 10.04(a).

“Indemnifying Party” has the meaning set forth in Section 10.04(a).

“Insurance Policies” has the meaning set forth in Section 5.02(p).

“Intellectual Property” means patents (including any continuations, divisionals,
continuations-in-part, renewals and reissues), trademarks, trade names, service marks, domain names
and other indicators of source or origin, database rights, copyrights, mask works, technology,
know-how, trade secrets, inventory, ideas, algorithms, processes, computer software programs or
applications (in both source code and object code form), tangible or intangible proprietary
information or material and all other intellectual property or proprietary rights, together with
all goodwill symbolized by any of the foregoing, registrations and applications for the foregoing,
and rights to sue for past infringement thereof.

“IRS” has the meaning set forth in Section 5.02(i)(i).

“knowledge of ECC” or “to ECC’s knowledge” means the actual knowledge of Steven Holder, Shabi
Asghar, Roque Santi, Alanna Darling, Greg Lubushkin, Troy Gotschall, Larry Moretti, Steven Szyptek,
Margaret Payne or Robyn Zieper.

“knowledge of Seller” or “to Seller’s knowledge” means the actual knowledge of Steven Holder,
Shabi Asghar, Roque Santi, Alanna Darling, Greg Lubushkin, Troy Gotschall, Larry Moretti, Steven
Szyptek, Margaret Payne or Robyn Zieper.

“Law” has the meaning set forth in Section 5.02(c)(i).

“Liens” means any lien, charge, encumbrance or security interest of any kind and nature
whatsoever.

“Loan Property” means any property in which Seller holds a security interest and, where
required by the context, said term means the owner or operator of such property.

“Loans” means any loan, including any mortgage loan, loan agreement, note, borrowing
arrangement or extension of credit, including, without limitation, letters of credit, leases,
credit enhancements, guarantees and similar interest-bearing assets, as well as commitments to
extend any of the same.

“Losses” means any and all claims, losses, liabilities, costs, penalties, fines, amounts paid
in settlement, expenses (including, without limitation, attorneys’, accountants’, consultants’ and
experts’ reasonable fees and expenses), damages, obligations to third parties, expenditures,
proceedings, judgments, awards or demands, including, without limitation, any of the foregoing
relating to enforcement of any party’s rights to indemnification hereunder.

“Master MLPA” means the Mortgage Loan Purchase and Interim Servicing Agreement, dated as of
October 1, 2003, by and between EMC Mortgage Corporation and Seller, as amended.

“Material Adverse Effect” means any event, circumstance, change or effect that is, or with the
passage of time will be, materially adverse to the Business, the financial condition or results of
operations of the Business or the Transferred Assets; provided, however, that none
of the following shall be deemed to constitute or shall be taken into account in determining
whether there has been a “Material Adverse Effect”: (i) any event, circumstance, change or effect
arising out of or attributable to (a) any decrease in the market price of ECC Common Stock (but not
any event, circumstance, change or effect underlying such decrease), (b) any events, circumstances,
changes or effects that affect the mortgage lending business generally, except to the extent any
such event, circumstance, change or effect adversely affects the Business to a materially greater
degree than other companies engaged in the mortgage lending business, (c) any changes in the United
States or global economy or capital, financial or securities markets generally, including changes
in interest or exchange rates, except to the extent any such change adversely affects the Business
to a materially greater degree than other companies engaged in the mortgage lending business, (d)
any changes in general economic, legal, regulatory or political conditions in the geographic
regions in which ECC and its Subsidiaries operate, except to the extent any such change adversely
affects the Business to a materially greater degree than other companies engaged in the mortgage
lending business in such geographic regions, (e) any events, circumstances, changes or effects
arising from the consummation or anticipation of the Acquisition or the announcement of the
execution of this Agreement, (f) any events, circumstances, changes or effects arising from the
compliance with the terms of, or the taking of any action required by, this Agreement, (g) changes
in Law or GAAP, except to the extent any such change adversely affects the Business to a materially
greater degree than other companies engaged in the mortgage lending business, or (h) a failure by
ECC to report earnings or revenue results in any quarter ending on or after the date hereof
consistent with ECC’s historic earnings or revenue results in any previous fiscal quarter or any
continuation of an adverse trend or condition, except for any such failure or continuation
attributable to an event, circumstance, change or effect that has materially adversely affected (or
through the passage of time will materially adversely affect) the Business or the Transferred
Assets, or (ii) any existing event, circumstance, change or effect with respect to which Acquirer
has knowledge as of the date hereof.

“MGCL” means the Maryland General Corporation Law.

“Mortgage Loans” means each Loan sold, assigned and transferred to Acquirer or its Affiliates
pursuant to this Agreement and the Other Agreements, which Mortgage Loans include all rights,
benefits, proceeds and obligations arising from or in connection with such Loans.

“Net Equity” has the meaning set forth in Section 6.11(a).

“Notice of Superior Proposal” has the meaning set forth in Section 6.02(c).

“Offer” has the meaning set forth in Section 7.03(a).

“Other Agreements” means the Master MLPA, the Additional MLPA and the Repo Agreement.

“Outside Date” has the meaning set forth in Section 9.01(b)(ii).

“Payroll Taxes” has the meaning set forth in Section 6.05(d).

“Permitted Liens” means (i) Liens for Taxes not yet due; (ii) inchoate mechanics’ and
materialmen’s Liens for construction in progress; and (iii) inchoate workmen’s, repairmen’s,
warehousemen’s and carriers’ Liens arising in the ordinary course of the Business.

“Person” means any individual, bank, corporation, partnership, association, joint-stock
company, business trust, limited liability company or unincorporated organization.

“Property Restrictions” has the meaning set forth in Section 5.02(k)(ii).

“Pro Rata Portion” has the meaning set forth in Section 6.05(i).

“Pull-Through Factor” has the meaning set forth in Section 8.02(e).

“REIT” means a real estate investment trust within the meaning of Section 856-860 of the Code.

“Representatives” has the meaning set forth in Section 6.02(a).

“Repo Agreement” has the meaning set forth in Section 7.02.

“Requisite Regulatory Approvals” means those approvals and consents set forth on Schedule
1.01D to this Agreement.

“Retained Liabilities” has the meaning set forth in Section 2.02(b).

“Retention Period” has the meaning set forth in Section 6.05(i).

“SEC” means the Securities and Exchange Commission.

“SEC Reports” has the meaning set forth in Section 5.03(e)(i).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
thereunder.

“Seller” has the meaning set forth in the Preamble to this Agreement.

“Seller Indemnified Parties” has the meaning set forth in Section 10.03(a).

“Seller Financial Statements” means (a) the consolidated balance sheet of the Business as of
December 31 for each of the fiscal years 2003, 2004, and 2005, together with consolidated
statements of income, shareholders’ equity and cash flows for each of the years then ended, and (b)
the consolidated balance sheet of the Business as of the most recently completed fiscal quarter,
together with consolidated statements of income, shareholders’ equity and cash flows from the end
of the prior fiscal year to the end of the quarterly period then ended.

“Seller Property” or “Seller Properties” has the meaning set forth in Section
5.02(k)(ii).

“Seller’s Assumed December Volume” has the meaning set forth in Section 8.02(e).

“Subsidiary” and “Significant Subsidiary” have the meanings ascribed to those terms in Rule
l-02 of Regulation S-X promulgated by the SEC.

“Superior Proposal” has the meaning set forth in Section 6.02(b).

“Tax” or “Taxes” shall mean any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, stock, franchise, profits, withholding, social security,
unemployment, disability, real property, personal property, sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.

“Tax Certificates” shall mean affidavits, in form and substance reasonably satisfactory to
Acquirer, to the effect that Acquirer is not required to withhold from the Asset Price under
Section 1445 of the Code.

“Tax Returns” shall mean any return, declaration, report, claim for refund, transfer pricing
report or information return or statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.

“Technology Upgrades” has the meaning set forth on Schedule 1.01E to this Agreement.

“Termination Date” has the meaning set forth in Section 9.01.

“Termination Fee” has the meaning set forth in Section 9.03(b).

“Third Party Claim” has the meaning set forth in Section 10.04(a).

“Threshold Amount” has the meaning set forth in Section 10.02(c).

“Transferred Assets” has the meaning set forth in Section 2.01(a).

“Transferred Employee” has the meaning set forth in Section 6.05(a).

“Transferred IP” means all Intellectual Property included in the Transferred Assets.

“Transferred Properties” has the meaning set forth in Section 5.02(k)(iv).

“Volume Requirement” has the meaning set forth in Section 8.02(e).

“Waiver Agreement” has the meaning set forth in Section 5.02(i)(v).

“WARN” has the meaning set forth in Section 5.02(i)(iv).

ARTICLE 2.

PURCHASE AND SALE OF ASSETS

2.01 Purchase and Sale of Assets; Additional Assets.

(a) Purchase and Sale of Assets. On the terms and subject to the conditions set forth
herein, at the Closing (as defined below), Seller shall sell and convey, and Acquirer shall
purchase and accept, all of Seller’s right, title and interest in and to all of the assets, rights,
privileges, claims and properties of every kind, nature, character and description, real, personal
and mixed, tangible and intangible, absolute or contingent, wherever located, used in or relating
to the operation of the Business, including, without limitation, those assets identified on
Schedule 2.01(a) to this Agreement and the Assumed Contracts (collectively, the
“Transferred Assets”), free and clear of all Liens, other than Permitted Liens. Notwithstanding
any provision of this Agreement to the contrary, Seller shall not sell and deliver to Acquirer its
right, title and interest in and to the Excluded Assets.

(b) Additional Assets. From the date hereof until the Closing, Acquirer may designate
for purchase additional assets of ECC and its Subsidiaries as mutually agreed by the parties
hereto, and such assets shall constitute Transferred Assets hereunder.

2.02 Assumption of Liabilities.

(a) On the terms and subject to the conditions set forth herein, at the Closing, Acquirer
shall assume from Seller and thereafter pay, perform or otherwise discharge in accordance with
their terms, and shall hold Seller and its Affiliates harmless from, those liabilities (and only
those liabilities) of Seller specified on Schedule 2.02(a) to this Agreement (the “Assumed
Liabilities”).

(b) Seller shall retain, and shall be responsible for paying, performing and discharging when
due, and shall hold Acquirer and its Affiliates harmless from, all liabilities of Seller other than
the Assumed Liabilities, including, without limitation, (i) any liabilities relating to the Benefit
Plans, (ii) any liabilities, including, without limitation, any liabilities arising under WARN,
COBRA or any other Law pertaining to employees generally, and any employee severance liabilities,
relating to the employment or termination of employment by Seller up to and through the Closing
Date of any Transferred Employee, (iii) any liabilities, including, without limitation, any
liabilities arising under WARN, COBRA or any other Law pertaining to employees generally, and any
employee severance liabilities, relating to the employment or termination of employment by Seller,
whether on, prior to or after the Closing Date, of any employee of Seller or any of its Affiliates
who does not become a Transferred Employee, (iv) any liabilities relating to any Liens on the
Transferred Assets, including, without limitation, any Permitted Liens, and (v) those liabilities
and obligations, including, without limitation, liabilities and obligations arising under (A)
contracts between Seller and third parties that are not Assumed Contracts and (B) the Deferred
Compensation Plan, set forth on Schedule 2.02(b) to this Agreement (the “Retained
Liabilities”).

2.03 Consideration.

(a) Asset Price. In consideration for the Transferred Assets, at the Closing,
Acquirer shall pay to Seller an amount in cash (the “Asset Price”) equal to the sum of (i)
$26,000,000 (of which $2,000,000 is expected to be allocated to the fixed assets included in the
Transferred Assets) and (ii) the Closing Date Pre-Paid Fees Amount.

(b) Allocation of Asset Price; Tax Filings. The Asset Price shall be allocated among
the Transferred Assets as set forth in a schedule to be delivered by Seller to Acquirer at the
Closing (the “Allocation Schedule”), which will have been arrived at by arm’s length negotiation
and be mutually acceptable to Seller and Acquirer, in compliance with Section 1060 of the Code and
the regulations promulgated thereunder. Each of Acquirer and Seller shall (i) timely file all
forms (including Internal Revenue Service Form 8594) and Tax Returns required to be filed in
connection with such allocation, (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, in any audit or
proceeding before any taxing authority, in any report made for Tax, financial accounting or any
other purposes, or otherwise, unless otherwise required pursuant to a “determination” within the
meaning of Section 1313(a) of the Code. Each of Acquirer, on the one hand, and Seller, on the
other hand, will provide the other with copies of Internal Revenue Service Form 8594 and any
required exhibits thereto, consistent with the allocation determined pursuant to this Section
2.03(b) 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.

(c) Adjustments to Asset Price.

(i) Pre-Closing Adjustments.

(1) If, upon mutual agreement of the parties, any asset that would otherwise be a Transferred
Asset purchased by Acquirer at the Closing is not so purchased at the Closing, then the Asset Price
shall be reduced by the amount of such Transferred Asset, as mutually agreed by the parties. In
the event that any fixed asset that the parties intended to be included in the Transferred Assets
is not purchased by Acquirer at Closing, then the Asset Price shall be reduced by the dollar amount
of such fixed asset retained by Seller, such amount to be mutually agreed by the parties, it being
understood and agreed that in determining such amount the parties shall assume for this purpose
that the total value of all fixed assets included in the Transferred Assets is $2,000,000.

(2) If, upon mutual agreement of the parties, any Retained Liability is assumed by Acquirer at
the Closing, then the Asset Price shall be reduced by the amount of such Retained Liability, as
mutually agreed by the parties.

(3) If, upon mutual agreement of the parties, any Excluded Asset is transferred by Seller to
Acquirer at the Closing, then the Asset Price shall be increased by the amount of such Excluded
Asset, as mutually agreed by the parties.

(ii) Post-Closing Adjustment. On or prior to the date that is ninety days following
the Closing Date, unless sooner agreed by Acquirer and Seller, Acquirer shall prepare and deliver
to Seller a schedule showing the aggregate amount of all accrued revenue, income, pre-paid fees,
third-party fees and expenses relating to the Assumed Contracts of which it received the full
benefit. If the amount set forth on such schedule exceeds the Closing Date Pre-Paid Fees Amount,
then Acquirer promptly and in no event later than five Business Days following delivery to Seller
of such schedule shall remit such excess to Seller. If the Closing Date Pre-Paid Fees Amount
exceeds the amount set forth on such schedule, then Seller promptly and in no event later than five
Business Days following receipt of such schedule shall remit such excess to Acquirer.

ARTICLE 3.

CLOSING

3.01 Closing. Subject to this Section 3.01, each of the parties hereto shall use
reasonable best efforts to cause the Closing to occur on December 1, 2006. Subject to the terms
and conditions contained in this Agreement (including the satisfaction, or waiver where
permissible, of the conditions set forth in Article VIII), the closing of the Acquisition
(the “Closing”) shall take place within three Business Days after the day on which the condition
set forth in Section 8.02(f) shall have been satisfied (or waived) or on such other date as
the parties hereto shall mutually agree, at 10:00 a.m., Eastern Time, at a location in New York,
New York to be mutually agreed upon by the parties hereto, or at such other place, at such other
time, or on such other date as the parties may mutually agree upon (such date, or the date
determined pursuant to the proviso in this Section 3.01, the “Closing Date”); provided,
however, that in the event that the condition set forth in Section 8.02(f) shall have been
satisfied on or prior to December 25, 2006 and, in the sole judgment of Acquirer, the Technology
Upgrades shall not have been completed as of the date such condition shall have been satisfied,
Acquirer shall have the right to extend the Closing Date to a date that is three Business Days
after the date on which the Technology Upgrades shall have been completed (as determined by
Acquirer in its sole judgment), but in no event beyond December 29, 2006, it being understood and
agreed, however, that if the condition set forth in Section 8.02(f) shall be satisfied on
or after December 26, 2006, then the Closing shall take place within three Business Days after the
satisfaction of such condition (subject to the satisfaction, or waiver where permissible, of the
other conditions set forth in Article VIII) regardless of whether or not the Technology
Upgrades shall have been completed at such time.

3.02 ECC’s and Seller’s Closing Deliveries. At or prior to the Closing, ECC or Seller, as
applicable, shall deliver to Acquirer the following items:

(a) a bill of sale, assignment and assumption agreement duly executed by Seller (the “Bill of
Sale, Assignment and Assumption Agreement”), substantially in the form of Exhibit A hereto,
transferring the Transferred Assets and the Assumed Liabilities to Acquirer;

(b) assignments of all Transferred IP;

(c) all Business Records; provided, however, that in the event Seller is
required by Law to keep originals of any Business Records, Seller will provide copies of such
materials to Acquirer and to the extent any Business Records are in a computer format, Seller
either will provide hard copies or file transfers of such materials to Acquirer;

(d) the officer’s certificate referred to in Section 8.02(d);

(e) all Tax Certificates;

(f) a schedule of the estimated Closing Date Pre-Paid Fees Amount;

(g) the Allocation Schedule pursuant to Section 2.03(b) of this Agreement;

(h) a balance sheet of Seller, prepared in accordance with GAAP, as of the latest practicable
date; and

(i) all other documents, certificates, instruments or writings reasonably requested by
Acquirer in connection herewith.

3.03 Acquirer’s Closing Deliveries. At or prior to the Closing, Acquirer shall deliver to
Seller the following items:

(a) the Asset Price by wire transfer of immediately available funds to an account or accounts
designated no later than three Business Days prior to the Closing by Seller;

(b) the Bill of Sale, Assignment and Assumption Agreement duly executed by Acquirer;

(c) the officer’s certificate referenced in Section 8.03(d); and

(d) all other documents, certificates, instruments or writings reasonably requested by Seller
in connection herewith.

ARTICLE 4.

CONDUCT OF THE PARTIES PENDING CLOSING

4.01 Conduct of Business by Seller. From the date hereof until the earlier of the Closing
and the termination of this Agreement pursuant to and in accordance with Article IX, except as
expressly contemplated or permitted by this Agreement or as disclosed in the Disclosure Letter,
without the prior written consent of Acquirer, not to be unreasonably withheld, Seller will not:

(a) Ordinary Course. Conduct the Business other than in the ordinary and usual course
consistent with past practice or fail to use reasonable efforts to (i) preserve its business
organization, (ii) maintain its current regulatory authorizations, permits and licenses, (iii)
preserve its current relationships with suppliers, business partners and other Persons with which
it has material business relations and (iv) keep available the present services of its employees;
provided that the parties acknowledge and agree that various occurrences outside of
Seller’s control, including without limitation, changes in Seller’s relationships with its
suppliers, business partners and employees, may occur as a result of the announcement of the
execution of this Agreement or in anticipation of the Acquisition, and the fact that such
occurrences have taken place shall not affect the determination of whether Seller has used
reasonable efforts to comply with its obligations under this Section 4.01(a).

(b) Assets of Seller. Transfer, sell, lease or otherwise mortgage, pledge, dispose of
or subject to any Lien (other than Permitted Liens) any of the Transferred Assets.

(c) Compensation; Employment Agreements; Etc. Except as may be required by
contractual commitments or corporate policies in existence on the date of this Agreement or by
applicable Law, materially increase the compensation or benefits payable or to become payable to
its directors, executive officers or employees (except for increases in the ordinary course of
business consistent with past practices).

(d) Indebtedness. (i) Incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible
for, the obligations of any Person for borrowed money, except (1) indebtedness for borrowed money
incurred in the ordinary course of business pursuant to the existing credit facilities of ECC or
its Subsidiaries, or new credit facilities that do not require commitment fees or non-usage fees in
excess of $1,000,000 in the aggregate and are for aggregate borrowings not in excess of
$75,000,000, provided that ECC gives five days prior written notice to Acquirer prior to entry into
any such new credit facility, (2) indebtedness for borrowed money incurred in connection with the
amendment, extension, modification, refunding, renewal, refinancing or replacement of existing
indebtedness after the date of this Agreement, but only if the aggregate principal amount thereof
is not increased thereby, the term thereof is not extended thereby (or, in the case of replacement
indebtedness, the term of such indebtedness is not for a longer period of time than the period of
time applicable to the indebtedness so replaced), or (ii) enter into or amend any contract,
agreement, commitment or arrangement that, if fully performed, would not be permitted under this
Section 4.01(d).

(e) Governing Documents. Amend its articles of incorporation or bylaws (or equivalent
documents) except as may be required by this Agreement.

(f) Accounting Methods. Change in any material respect any of the accounting
principles or practices used by it (except as required by GAAP or change in Law, or as recommended
by ECC’s independent auditors, or pursuant to written instructions, comments or orders from the
SEC).

(g) Loans. Except at the request of Acquirer or as required by changes in GAAP or any
applicable Law, make any material change in its practices and policies relating to the pricing,
credit policies, monitoring or collection procedures with respect to Loans; provided,
however, that Seller shall continue to comply in all material respects with all federal,
state, and local Laws to which it is subject, including, but not limited to, Laws pertaining to
usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal
credit opportunity, disclosure and unfair and deceptive practices, and shall change its practices
and policies as may be required from time to time in order to comply with any changes in the
requirements of such Laws.

(h) Contracts. Except in the ordinary course of business consistent with past
practice or as otherwise permitted under this Section 4.01, (i) terminate any Assumed
Contract or amend or modify in any material respect any of the Assumed Contracts or (ii) enter into
any contract that would materially affect the Business or the Transferred Assets.

(i) Claims. Except as disclosed on the Disclosure Letter, settle or compromise any
claim or litigation related to the Business, the Transferred Assets or the Assumed Liabilities, in
each case, material to Seller, the Business, the Transferred Assets or the Assumed Liabilities,
other than (i) the settlement or compromise in the ordinary course of business consistent with past
practice or in accordance with their terms, of liabilities reflected or reserved against in, or
contemplated by, the consolidated balance sheet of ECC as of June 30, 2006 included in ECC’s SEC
Reports, or (ii) settlements involving payments that are not in excess of $500,000 individually or
$2,000,000 in the aggregate.

(j) Dividends. Declare or pay any dividends on or make other distributions (whether
in cash, stock or property) in respect of its capital stock; provided, however,
that Seller shall be permitted to make distributions in respect of its capital stock solely to the
extent necessary to permit ECC to maintain its qualification as a REIT under the Code, in which
case, at least five Business Days prior to making any such distribution, Seller shall explain in
writing to Acquirer, in reasonable detail, the reasons why such distributions must be made.

(k) Insurance. Cancel or terminate any material insurance policy naming Seller as a
beneficiary or loss payee, except those that expire according to their terms.

(l) Employee Communications. Provide any information, whether written or oral, to any
employee of Seller regarding Acquirer employee benefit plans or arrangements or other
employment-related matters, including, without limitation, the right to participate in Acquirer’s
employee benefit plans or receive service or vesting credit under such plans, employment
opportunities with Acquirer or the terms and conditions of employment with Acquirer.

(m) Interference or Delay. Take, or cause to be taken, any action that would
interfere with the consummation of Acquisition and the other transactions contemplated by this
Agreement, or delay the consummation of such transactions.

(n) Adverse Actions. Take any action that is intended or is reasonably likely to
result in (i) any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time at or prior to the Closing or (ii) any of the
conditions set forth in Article VIII not being satisfied.

(o) Other Actions. Authorize or enter into any agreement or otherwise make any
commitment to do any of the foregoing.

4.02 Conduct of ECC. From the date hereof until the earlier of the Closing and the
termination of this Agreement pursuant to and in accordance with Article IX, except as
expressly contemplated or permitted by this Agreement, without the prior written consent of
Acquirer, not to be unreasonably withheld, ECC will not:

(a) Dividends. Declare or pay any dividends on or make other distributions (whether
in cash, stock or property) in respect of its capital stock; provided, however,
that ECC shall be permitted to make distributions in respect of its capital stock solely to the
extent necessary to permit it to maintain its qualification as a REIT under the Code, in which
case, at least five Business Days prior to making any such distribution, ECC shall explain in
writing to Acquirer, in reasonable detail, the reasons why such distributions must be made.

(b) Employee Communications. Provide any information, whether written or oral, to any
employee of Seller regarding Acquirer employee benefit plans or arrangements or other
employment-related matters, including, without limitation, the right to participate in Acquirer’s
employee benefit plans or receive service or vesting credit under such plans, employment
opportunities with Acquirer or the terms and conditions of employment with Acquirer.

(c) Interference or Delay. Take, or cause to be taken, any action that would
interfere with the consummation of Acquisition and the other transactions contemplated by this
Agreement, or delay the consummation of such transactions.

(d) Adverse Actions. Take any action that is intended or is reasonably likely to
result in (i) any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time at or prior to the Closing or (ii) any of the
conditions set forth in Article VIII not being satisfied.

(e) Other Actions. Authorize or enter into any agreement or otherwise make any
commitment to do any of the foregoing.

4.03 Conduct of Acquirer. From the date hereof until the earlier of the Closing and the
termination of this Agreement pursuant to and in accordance with Article IX, except as expressly
contemplated or permitted by this Agreement, without the prior written consent of Seller, not to be
unreasonably withheld, Acquirer will not:

(a) Interference or Delay. Take, or cause to be taken, any action that would
interfere with the consummation of the Acquisition and the other transactions contemplated by this
Agreement, or delay the consummation of such transactions.

(b) Adverse Actions. Take any action that is intended or is reasonably likely to
result in (i) any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time at or prior to the Closing or (ii) any of the
conditions set forth in Article VIII not being satisfied.

(c) Commitments. Enter into any contract with respect to, or otherwise agree or
commit to do, any of the foregoing.

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES

5.01 Disclosure Letter. Prior to the execution and delivery of this Agreement, Seller has
delivered to Acquirer a Disclosure Letter with numbered sections corresponding to the relevant
sections in this Agreement (the “Disclosure Letter”). Any exception, qualification, limitation,
document or other item described in any provision, subprovision, section or subsection of any
Section of the Disclosure Letter with respect to a particular representation or warranty contained
in Section 5.02 herein shall be deemed to be an exception or qualification with respect to
all other representations or warranties contained in Section 5.02 herein to which the
relevance of such item is reasonably apparent. Nothing in the Disclosure Letter is intended to
broaden the scope of any representation or warranty contained in Section 5.02 herein.

5.02 Representations and Warranties of Seller. Subject to the exceptions and qualifications
set forth in the Disclosure Letter, Seller hereby represents and warrants to Acquirer, as of the
date of this Agreement and as of the Closing Date (except for those representations and warranties
made as of a specific date, which representations and warranties are made as of such date), that:

(a) Existence; Good Standing; Authority; Compliance with Law.

(i) Seller is a corporation duly incorporated, validly existing and in good standing under the
laws of the State of California. The articles of incorporation of Seller are in full force an
effect. Seller is duly qualified or licensed to do business as a foreign entity and is in good
standing under the laws of any other jurisdiction in which the character of the properties owned,
leased or operated by it therein or in which the transaction of its business makes such
qualification or licensing necessary. Seller has all requisite corporate power and authority to
own, operate, lease and encumber its properties and carry on its business as now conducted.

(ii) Seller has previously made available to Acquirer true and complete copies of its articles
of incorporation and bylaws, each as amended through the date hereof.

(b) Authority Relative to this Agreement.

(i) Seller has all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the Acquisition and the other transactions contemplated hereby. No
other corporate proceedings on the part of Seller are necessary to authorize this Agreement or to
consummate the Acquisition and the other transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Seller and, assuming due authorization, execution and
delivery hereof by Acquirer, constitutes a valid, legal and binding agreement of Seller,
enforceable against Seller in accordance with and subject to its terms and conditions, except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’
rights or by general equity principles.

(ii) Each of the board of directors and the sole stockholder of Seller has duly and validly
authorized the execution and delivery of this Agreement, declared the Acquisition and the other
transactions contemplated hereby advisable and approved, and no other actions are required to be
taken by the board of directors or the sole stockholder of Seller for the consummation of the
Acquisition or the other transactions contemplated hereby.

(c) No Conflict; Required Filings and Consents.

(i) Except as set forth in Section 5.02(c)(i) of the Disclosure Letter, the execution
and delivery by Seller of this Agreement does not, and the performance of its obligations hereunder
will not, (1) conflict with or violate the organizational documents of Seller, (2) assuming that
all consents, approvals, authorizations and other actions described in subsection (ii) have been
obtained and all filings and obligations described in subsection (ii) have been made, conflict with
or violate any foreign or domestic statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or other order (“Law”) applicable to Seller or by which any
property or asset of Seller is bound or affected, or (3) result in any breach of or constitute a
default (or an event which, with notice or lapse of time or both, would become a default) under, or
give to others any right of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien or other encumbrance on any property or asset of Seller pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation.

(ii) The execution and delivery by Seller of this Agreement and does not, and the performance
of its obligations hereunder will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Authority except for such consents, approvals,
authorizations, permits, filings or notifications as may be required under the Laws of any state in
respect of the Business.

(d) Permits; Compliance; Privacy.

(i) Seller is in possession of all franchises, grants, authorizations, licenses, permits,
consents, certificates, approvals and orders of any Governmental Authority necessary for Seller to
own, lease and operate the Transferred Assets and to carry on the Business as it is now being
conducted (the “Applicable Permits”). As of the date hereof, no suspension or cancellation of any
of the Applicable Permits is pending or, to the knowledge of Seller, threatened. Seller is not in
conflict with, or in default, breach or violation of, (1) any Law applicable to Seller or by which
any of its properties or assets, including, without limitation, the Transferred Assets, is bound or
affected, or (2) any note, bond, mortgage, indenture, contract, agreement, lease, license,
Applicable Permit, franchise or other instrument or obligation to which Seller is a party or by
which Seller or any of its properties or assets, including, without limitation, the Transferred
Assets, is bound.

(ii) To the knowledge of Seller, Seller has at all times complied with applicable Laws
relating to privacy, data protection and the collection and use of personal information and user
information gathered or accessed in the course of the operations of Seller. Except as set forth in
Section 5.02(d)(ii) of the Disclosure Letter, no claims have been asserted against Seller,
or to Seller’s knowledge, otherwise threatened, by any Governmental Authority or any Person
alleging a violation of any such Laws by Seller. To the knowledge of Seller, Seller has at all
times complied with all rules, policies and procedures established by it from time to time with
respect to privacy, data protection or collection and use of personal information and user
information gathered or accessed in the course of its operations. Except as set forth in
Section 5.02(d)(ii) of the Disclosure Letter, no claims have been asserted against Seller,
or to Seller’s knowledge, otherwise threatened, by any Person alleging a violation of such Person’s
privacy, personal or confidentiality rights under any such rules, policies or procedures. The
consummation of the transactions contemplated hereby will not breach or otherwise cause any
violation of any Law related to privacy, data protection or the collection and use of personal
information and user information gathered or accessed from then current users (at the time of
consummation of the transactions contemplated hereby) in the course of the operations of Seller.
Seller maintains systems and procedures reasonably intended to respond to complaints received
alleging violations of third-party content rights.

(iii) With respect to all personal and user information described in Section
5.02(d)(ii) above, Seller has, except as set forth in Section 5.02(d)(iii) of the
Disclosure Letter, taken reasonable steps (including, without limitation, implementing and
monitoring compliance with measures it deems adequate with respect to technical and physical
security) to ensure that such information is protected against loss and against unauthorized
access, use, modification, disclosure or other misuse. To Seller’s knowledge, there has been no
unauthorized access to or other misuse of that information.

(iv) To the knowledge of Seller, Seller is in compliance with all applicable federal, state
and local Laws, including, but not limited to, the Truth-in-Lending Act and Regulation Z, the Equal
Credit Opportunity Act and Regulation B, the Real Estate Settlement Procedures Act and Regulation
X, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Fair Housing Act, all
Agency and other investor and mortgage insurance company requirements relating to the origination,
sale and servicing of Loans, and Laws which prohibit unfair and deceptive practices.

(e) Seller Financial Statements. True and complete copies of the Seller Financial
Statements, together with the related auditors reports, are included in Section 5.02(e) of
the Disclosure Letter. The Seller Financial Statements were prepared in accordance with GAAP
applied on a consistent basis throughout the periods indicated and each fairly presents, in all
material respects, the financial position, results of operations and cash flows of Seller as of the
respective dates thereof and for the respective periods indicated therein (subject, in the case of
unaudited statements, to normal and recurring year end adjustments). The books and records of
Seller have been, and are being, maintained in accordance with applicable legal and accounting
requirements and reflect only actual transactions.

(f) No Undisclosed Liabilities. Except (i) as disclosed in the Seller Financial
Statements and (ii) for liabilities and obligations incurred in the ordinary course of business and
consistent with past practice since the date thereof, Seller has no liabilities or obligations
relating to the Business or the Transferred Assets, whether or not accrued, contingent or
otherwise.

(g) Absence of Certain Changes or Events. Except as set forth in Section
5.02(g) of the Disclosure Letter or in the SEC Reports referenced therein, since January 1,
2006, Seller has conducted its business in the ordinary course and, to Seller’s knowledge, there
have not occurred any changes, effects or circumstances that would, individually or in the
aggregate, have a Material Adverse Effect.

(h) Litigation; Enforcement.

(i) Except as listed in Section 5.02(h)(i) of the Disclosure Letter, there are no
Actions pending or, to Seller’s knowledge, threatened against, involving or affecting Seller or any
of its properties or assets, including, without limitation, the Transferred Assets, (1) brought by
or otherwise involving, affecting or relating to any present or former employee or employees of
Seller or any of its Affiliates, (2) as to which there is a reasonable probability of an adverse
determination, and which, if adversely determined, would have, individually or in the aggregate, a
Material Adverse Effect, or (3) that questions the validity of this Agreement or any action to be
taken by Seller in connection with the consummation of the Acquisition or the other transactions
contemplated hereby. Seller is not subject to any order, judgment, writ, injunction or decree,
except as would not, individually or in the aggregate, have a Material Adverse Effect.

(ii) Except as set forth in Section 5.02(h)(ii) of the Disclosure Letter, Seller is
not now nor has it ever been since December 31, 2002 subject to any fine, suspension, settlement or
other agreement or other administrative agreement or sanction by, or any reduction in any Loan
purchase commitment from, any Agency or any other federal or state agency relating to the
origination, sale or servicing of Loans. Seller has not received any notice, nor does it have any
reason to believe, that any Agency proposes to limit or terminate the underwriting authority of
Seller or to increase the guarantee fees payable to any such agency. There is no Action pending,
or to the knowledge of Seller, threatened or likely to be asserted with respect to Loans against or
affecting Seller before or by any Governmental Authority.

(i) Employee Matters.

(i) Section 5.02(i)(i) of the Disclosure Letter lists (1) all employee benefit plans
(as defined in Section 3(3) of ERISA) and all material bonus, stock option, stock purchase,
restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental
executive retirement plans, severance or other benefit plans, programs, trusts or arrangements, and
all material employment, termination, severance, compensation or other contracts or agreements, to
which Seller is a party, or which are sponsored by ECC or any of its Subsidiaries for the benefit
of any employee, officer or director of Seller, and (2) any material contracts, arrangements or
understandings between ECC or any of its Affiliates and any employee of Seller, including, without
limitation, any contracts, arrangements or understandings or change in control arrangements
relating to a sale of ECC (collectively, the “Benefit Plans”). ECC and Seller have made available
to Acquirer a true and correct copy of (A) each written Benefit Plan, (B) the most recent annual
report (Form 5500) filed with the Internal Revenue Service (the “IRS”), if any, (C) the most recent
summary plan description for each Benefit Plan for which a summary plan description is required by
applicable Law, and (D) the most recent determination letter, if any, issued by the IRS with
respect to any Benefit Plan that is intended to qualify under Section 401(a) of the Code.

(ii) Each Benefit Plan has been operated in all material respects in accordance with its terms
and the requirements of all applicable Laws, including, without limitation, ERISA and the Code,
except where such failure to operate such Benefit Plan in accordance with its terms and applicable
Laws would not, individually or in the aggregate, have a Material Adverse Effect. Except as set
forth in Section 5.02(i)(ii) of the Disclosure Letter, no Action, claim or proceeding is
pending or, to the knowledge of Seller, threatened with respect to any Benefit Plan (other than
claims for benefits in the ordinary course) that would, individually or in the aggregate, have a
Material Adverse Effect and, to the knowledge of Seller, no fact or event exists that would give
rise to any such Action, claim or proceeding.

(iii) Except as set forth in Section 5.02(i)(iii) of the Disclosure Letter, (1) the
terms of employment or engagement of all employees, agents and consultants of Seller with respect
to the Business are such that their employment or engagement may be terminated at any time and
without liability for payment of compensation or damages, (2) there are no severance payments which
are or could become payable by Seller to any employee, agent, or consultant of Seller under the
terms of any oral or written agreement or commitment or any custom, trade or practice, and (3)
there are no contracts between Seller and any employee, consultant or independent contractor.

(iv) Seller and each of its Affiliates are and have been in compliance in all respects with
the Worker Adjustment and Retraining Notification Act (“WARN”) and any similar state Law respecting
plant closings and layoffs and all applicable Laws respecting employment and employment practices,
terms and conditions of employment, and wages and hours, including any such Laws regarding
employment discrimination; disability rights and benefits; minimum wage, hours and overtime;
workers’ compensation; family and medical leave; equal employment opportunity; occupational safety
and health; severance or termination of employment; the payment of social security, wage, payroll
and other Taxes; the Immigration Reform and Control Act, as amended; ERISA; and the Consolidated
Omnibus Budget Reconciliation Act, as amended (“COBRA”). All persons classified by Seller or any
of its Affiliates as independent contractors do satisfy and have satisfied the requirements of Law
to be so classified, and Seller and each of its Affiliates has fully and accurately reported their
compensation on IRS Forms 1099 when required to do so.

(v) Section 5.02(i)(v)(A) of the Disclosure Letter sets forth a true and correct list
of each participant in Seller’s Executive Nonqualified “Excess” Plan (the “Deferred Compensation
Plan”) and all liabilities existing as of the date hereof with respect to the Deferred Compensation
Plan (per participant and in the aggregate). Each of the individuals listed on Section
5.02(i)(v)(B) of the Disclosure Letter has executed a waiver agreement, in a form approved by
Acquirer, with respect to the effect of the Acquisition on their rights under the Deferred
Compensation Plan (a “Waiver Agreement”).

(j) Labor Matters. Neither Seller nor any of its Affiliates is a party to any
collective bargaining agreement or other labor union contract applicable to persons employed by
Seller or any of its Affiliates, and to the knowledge of Seller, there are no union organizing
activities, requests for union representation or proceedings by any labor union to organize with
respect to any employees of Seller or any of its Affiliates. Except as would not, individually or
in the aggregate, have a Material Adverse Effect, (i) there are no pending grievance or arbitration
proceedings arising out of collective bargaining agreements, or other agreements with any unions,
to which Seller or any of its Affiliates is a party, (ii) there is no labor strike, dispute,
slowdown, work stoppage or lockout by or with respect to any employees of Seller or any of its
Affiliates, and (iii) there are no unfair labor practice complaints by persons employed by Seller
or any of its Affiliates pending or to Seller’s knowledge, threatened against Seller or any of its
Affiliates, nor, to the knowledge of Seller, does there exist any basis for any such complaint. To
the knowledge of Seller, neither Seller nor any of its Affiliates has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act.

(k) Property and Leases.

(i) Seller owns no real property.

(ii) Section 5.02(k)(ii) of the Disclosure Letter sets forth a correct and complete
list and address of all real property leased by Seller as of the date of this Agreement (all such
real property, together with all buildings, structures and other improvements and fixtures located
on or under such real property and all easements, rights and other appurtenances to such real
property, are individually referred to herein as “Seller Property” and collectively referred to
herein as the “Seller Properties”). As of the date hereof, Seller leases or has the right to use
all Seller Properties, as indicated in Section 5.02(k)(ii) of the Disclosure Letter. As of
the date hereof, Seller leases each of the Seller Properties, in each case, free and clear of any
Liens, title defects, covenants or reservations of interests in title (collectively, “Property
Restrictions”), except for (1) Permitted Liens, (2) Property Restrictions imposed or promulgated by
Law or by any Governmental Authority which are customary and typical for similar properties, and
(3) Property Restrictions which do not interfere with the current use of such property.

(iii) No improvement located on or being part of any Loan Property is in material violation of
any applicable zoning law or regulation, subdivision law or ordinance. All inspections, licenses
and certificates required to be made or issued with respect to all occupied portions of each Loan
Property and, with respect to the use and occupancy of the same, including, without limitation,
certificates of occupancy and fire underwriting certificates, have been made or obtained from the
appropriate authorities, except for such inspections, licenses and certificates, which the failure
to make or obtain would not have a Material Adverse Effect.

(iv) At the Closing, Seller will sell, transfer and assign to Acquirer a valid leasehold
interest with respect to each of the property leases included in the Assumed Contracts or otherwise
included in the Transferred Assets (the “Transferred Properties”), free and clear of all Property
Restrictions, except for (i) Permitted Liens, (ii) Property Restrictions imposed or promulgated by
Law or by any Governmental Authority which are customary and typical for similar properties and
(iii) Property Restrictions which do not interfere with the current use of such property.

(l) Transferred IP. Except as set forth in Section 5.02(l) of the Disclosure
Letter, Seller owns, or is licensed or otherwise possesses legally enforceable rights to use, the
Transferred IP, and the consummation of the Acquisition and the other transactions contemplated
hereby will not alter or impair such ability in any respect. To the knowledge of Seller, there are
no oppositions, cancellations, invalidity proceedings, interferences or re-examination proceedings
presently pending with respect to the Transferred IP. To the knowledge of Seller, the conduct of
the Business does not infringe any Intellectual Property rights or any other proprietary right of
any Person, and Seller has not received any written notice from any other Person pertaining to or
challenging the right of Seller to use any of the Transferred IP. Seller has not made any claim of
a violation or infringement by others of its rights to or in connection with the Transferred IP
that is still pending.

(m) Taxes.

(i) Seller has (1) timely filed (or there have been filed on its behalf) all material Tax
Returns required to be filed by it (after giving effect to any filing extension properly granted by
a Governmental Authority having authority to do so), and such Tax Returns are true, correct and
complete in all material respects, and (2) paid all Taxes shown as due on such Tax Returns, except
where (x) such payments are being contested in good faith by appropriate proceedings or (y) where
failure to pay such Taxes would not, individually or in the aggregate, have a Material Adverse
Effect.

(ii) No audit or other proceeding with respect to any Taxes due from or with respect to Seller
or any Tax Return filed by Seller is being conducted by any Tax authority or other Governmental
Authority, and Seller has not received written notice that any such audit or other proceeding with
respect to Taxes or any Tax Return is pending. No extension of the statute of limitations on the
assessment of any material Taxes has been granted by Seller.

(iii) No claim has been made in writing by a taxing authority or other Governmental Authority
in a jurisdiction where Seller does not file Tax Returns that Seller is or may be subject to
material taxation by that jurisdiction.

(iv) To the knowledge of Seller, there are no Liens for Taxes upon any assets of Seller,
except for Permitted Liens.

(v) The unpaid Taxes of Seller (1) did not, as of the most recent fiscal month-end, exceed by
any material amount the reserve for Taxes set forth in the most recent fiscal month-end balance
sheet, and (2) will not exceed by any material amount that reserve as adjusted for operations and
transactions through the Closing Date consistent with past practice of Seller in filing its Tax
Returns.

(n) Environmental Matters. Except as would not, individually or in the aggregate,
have a Material Adverse Effect:

(i) Seller and, to the knowledge of Seller, each of the Loan Properties, are and have been in
compliance with all Environmental Laws;

(ii) There is no Action pending, or, to the knowledge of Seller, threatened, before any
Governmental Authority or other forum in which Seller, and, to the knowledge of Seller, any Loan
Property, has been or, with respect to threatened proceedings, is reasonably likely to be, named as
a defendant (1) for alleged noncompliance (including by any predecessor) with any Environmental
Laws or (2) relating to the release, threatened release or exposure of any Hazardous Substances
whether or not occurring at or on a site owned, leased or operated by Seller, or any Loan Property;
and

(iii) To the knowledge of Seller, during the period of (1) Seller’s ownership or operation of
any of its current or former properties or (2) Seller’s interest in a Loan Property, there has been
no release of Hazardous Substances in, on, under or affecting any such property, which could
reasonably be expected to require remediation pursuant to any Environmental Law. To the knowledge
of Seller, prior to the period of (x) Seller’s ownership or operation of any of its current or
former properties, (y) Seller’s interest in a Loan Property, there was no release or threatened
release of Hazardous Substances in, on, under or affecting any such property or Loan Property,
which could reasonably be expected to require remediation pursuant to any Environmental Law.

(o) Assumed Contracts. True and complete copies of all Assumed Contracts have been
delivered to Acquirer. Each of the Assumed Contracts is valid, binding and enforceable in
accordance with its terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general
applicability relating to or affecting creditors’ rights or by general equity principles) on Seller
and the other parties thereto and is in full force and effect. Neither Seller, nor, to the
knowledge of Seller, any other party thereto is in default in any material respect under any
Assumed Contract (and no condition exists that, with notice or lapse of time or both, would become
such a default by Seller or, to the knowledge of Seller, any such other party). None of the
Assumed Contracts currently is being renegotiated. No party to any of the Assumed Contracts has
made, asserted or, to the knowledge of Seller, has any defense, setoff or counterclaim under its
Assumed Contract or has exercised any option granted to it to cancel, terminate or shorten the term
of its Assumed Contract. Other than as set forth in Section 5.02(o) of the Disclosure
Letter, there are no prepaid items under any of the Assumed Contracts.

(p) Insurance. Section 5.02(p) of the Disclosure Letter sets forth a correct
and complete list of the insurance policies held by, or for the benefit of, ECC and Seller that
relate to the Business or the Transferred Assets (the “Insurance Policies”), including the
underwriter of such policies and the amount of coverage thereunder. ECC or one of its Affiliates
has paid, or caused to be paid, all premiums due under such policies and has not received written
notice that it is in default with respect to any obligations under such policies other than as
would not, individually or in the aggregate, have a Material Adverse Effect. Furthermore, other
than as would not, individually or in the aggregate, have a Material Adverse Effect, (i) Seller has
not received any written notice of cancellation or termination with respect to any existing
insurance policy set forth in Section 5.02(p) of the Disclosure Letter, (ii) except as set
forth in Section 5.02(p) of the Disclosure Letter, there is no claim pending under any
policy set forth in Section 5.02(p) of the Disclosure Letter as to which coverage has been
questioned, denied or disputed by the underwriters of such policy, and (iii) Seller has not
received any notice from any of its insurance carriers that any insurance premiums will be
increased in the future or that any insurance coverage presently provided for will not be available
to ECC or Seller on substantially the same terms now in effect.

(q) Related Party Transactions. Set forth in Section 5.02(q) of the
Disclosure Letter is a list of all agreements and contracts entered into by Seller under which
continuing obligations exist with any Person who is an officer, director or Affiliate of ECC or any
of its Subsidiaries, any member of the “immediate family” (as such term is defined in Item 404 of
Regulation S-K promulgated under the Securities Act) of any of the foregoing or any entity of which
any of the foregoing is an Affiliate.

(r) Title to and Condition of Assets. Except as set forth in Section 5.02(r)
of the Disclosure Letter, Seller has good title to, or holds by valid lease or license, all of the
Transferred Assets, free and clear of all Liens, other than Permitted Liens. Section
5.02(r) of the Disclosure Letter sets forth a list of all Permitted Liens on the Transferred
Assets, to the knowledge of Seller, existing on the Closing Date. At the Closing, Seller will
transfer to Acquirer good title to, or a valid lease or license interest in, all of the Transferred
Assets, free and clear of all Liens, other than Permitted Liens. The Transferred Assets presently
are being used in the ordinary course of the Business and are the only such assets required to
conduct the Business in the manner conducted on the date hereof. No Affiliate of Seller has any
rights, title or interest in or to any of the Transferred Assets.

(s) Solvency; Ability to Pay Debts. Seller is, and prior to and after giving effect
to the Acquisition and the other transactions contemplated by this Agreement and the Other
Agreements, will be solvent. For purposes of this Agreement, the term “solvent” shall mean, with
respect to Seller, that (i) it is able to pay its debts as they become due, and (ii) the fair
valuation of its property is, on the date of determination, greater than the total amount of its
liabilities, at a fair valuation, as of such date and that the present saleable value of its assets
is, on the date of determination, greater than the amount that will be required to pay its probable
liability on its existing debts as they become absolute and matured. Prior to and after giving
effect to the consummation of the Acquisition, Seller will incur debts only within its ability to
pay as such debts mature.

5.03 Representations and Warranties of ECC. ECC hereby represents and warrants to
Acquirer, as of the date of this Agreement and as of the Closing Date (except for those
representations and warranties made as of a specific date, which representations and warranties are
made as of such date), that:

(a) Existence; Good Standing; Authority; Compliance with Law.

(i) ECC is a corporation duly incorporated and validly existing under the laws of the State of
Maryland and in good standing with the Department of Assessment and Taxation of Maryland. The ECC
Charter is in full force and effect. ECC is duly qualified or licensed to do business as a foreign
entity and is in good standing under the laws of any other jurisdiction in which the character of
the properties owned, leased or operated by it therein or in which the transaction of its business
makes such qualification or licensing necessary. ECC has all requisite corporate power and
authority to own, operate, lease and encumber its properties and carry on its business as now
conducted. ECC owns all of the capital stock of Seller, free and clear of all Liens, other than
Permitted Liens.

(b) Authority Relative to this Agreement.

(i) ECC has all necessary corporate power and authority to execute and deliver this Agreement
and to consummate the Acquisition and the other transactions contemplated hereby. No other
corporate proceedings on the part of ECC are necessary to authorize this Agreement or to consummate
the Acquisition and the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by ECC and, assuming due authorization, execution and delivery hereof by
Acquirer, constitutes a valid, legal and binding agreement of ECC, enforceable against ECC in
accordance with and subject to its terms and conditions, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws
of general applicability relating to or affecting creditors’ rights or by general equity
principles.

(ii) Each of the ECC Special Committee and the ECC Board has duly and validly authorized the
execution and delivery of this Agreement, declared the Acquisition and the other transactions
contemplated hereby advisable and approved, and no other actions are required to be taken by the
ECC Board or the stockholders of ECC for the consummation of the Acquisition or the other
transactions contemplated hereby.

(c) No Conflict; Required Filings and Consents.

(i) Except as set forth in Section 5.02(c)(i) of the Disclosure Letter, the execution
and delivery by ECC of this Agreement does not, and the performance of its obligations hereunder
will not, (1) conflict with or violate the organizational documents of ECC or any or its
Subsidiaries, (2) assuming that all consents, approvals, authorizations and other actions described
in subsection (ii) have been obtained and all filings and obligations described in subsection (ii)
have been made, conflict with or violate any Law applicable to ECC or any of its Subsidiaries or by
which any property or asset of ECC or any of its Subsidiaries is bound or affected, or (3) result
in any breach of or constitute a default (or an event which, with notice or lapse of time or both,
would become a default) under, or give to others any right of termination, amendment, acceleration
or cancellation of, or result in the creation of a Lien or other encumbrance on any property or
asset of ECC or any of its Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation.

(ii) The execution and delivery by ECC of this Agreement does not, and the performance of its
obligations hereunder will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority except for the filing of the Articles of
Transfer with the Department of Assessments and Taxation of Maryland.

(d) Litigation. Except as set forth in Section 5.02(d) of the Disclosure
Letter, there is no Action pending or, to ECC’s knowledge, threatened against, involving or
affecting ECC or any of its or its respective properties or assets (i) brought by or otherwise
involving, affecting or relating to any present or former employee or employees of ECC or any of
its Affiliates, or (ii) that would question the validity of this Agreement or any action to be
taken by ECC in connection with the consummation of the Acquisition or the other transactions
contemplated hereby. ECC is not subject to any order, judgment, writ, injunction or decree, except
as would not, individually or in the aggregate, prevent or delay consummation of the Acquisition or
otherwise prevent it from performing its obligations under this Agreement.

(e) SEC Filings; Financial Statements.

(i) ECC has timely filed all forms, reports and documents (including all exhibits) required to
be filed by it with the SEC since January 1, 2004 and prior to the date of this Agreement (the “SEC
Reports”). The SEC Reports, each as amended prior to the date hereof, (1) have been prepared in
all material respects in accordance with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations promulgated thereunder, and (2) did not,
when filed or as amended prior to the date hereof, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were made, not
misleading. No executive officer of ECC has failed in any respect to make the certifications
required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002 and, to the
knowledge of Seller, no enforcement action has been initiated against ECC by the SEC relating to
disclosures contained in any SEC Report. There has been no formal or informal investigation of ECC
or its Subsidiaries by the SEC.

(ii) Each of the consolidated financial statements (including, in each case, any notes
thereto) contained in the SEC Reports, as amended prior to the date hereof, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may
be indicated in the notes thereto) and each fairly presented, in all material respects, the
consolidated financial position, results of operations and cash flows of ECC and its consolidated
Subsidiaries as at the respective dates thereof and for the respective periods indicated therein
except as otherwise noted therein (subject, in the case of unaudited statements, to normal and
recurring year end adjustments). The books and records of ECC and its Subsidiaries have been, and
are being, maintained in accordance with applicable legal and accounting requirements and reflect
only actual transactions. Grant Thornton has not resigned or been dismissed as independent public
accountants of ECC as a result of or in connection with any disagreements with ECC on a matter of
accounting principles or practices, financial statement disclosure or auditing scope or procedure.
Grant Thornton is, and has been during the course of all audits it has conducted for ECC and its
Subsidiaries, independent of ECC and its Subsidiaries under the rules and regulations of the SEC,
the Public Company Accounting Oversight Board and any other applicable Governmental Authority or
regulatory body.

(f) No Undisclosed Liabilities. Except (i) as disclosed in the SEC Reports and (ii)
for liabilities and obligations incurred in the ordinary course of business and consistent with
past practice since the date thereof, ECC has no liabilities or obligations or any nature, whether
or not accrued, contingent or otherwise.

(g) Employee Matters.

(i) Section 5.02(i)(i) of the Disclosure Letter lists all of the Benefit Plans. ECC
and Seller have made available to Acquirer a true and correct copy of (1) each written Benefit
Plan, (2) the most recent annual report (Form 5500) filed with the IRS, if any, (3) the most recent
summary plan description for each Benefit Plan for which a summary plan description is required by
applicable Law, and (4) the most recent determination letter, if any, issued by the IRS with
respect to any Benefit Plan that is intended to qualify under Section 401(a) of the Code.

(ii) Each Benefit Plan has been operated in all material respects in accordance with its terms
and the requirements of all applicable Laws, including, without limitation, ERISA and the Code,
except where such failure to operate such Benefit Plan in accordance with its terms and applicable
Laws would not, individually or in the aggregate, have a Material Adverse Effect. No Action, claim
or proceeding is pending or, to the knowledge of ECC, threatened with respect to any Benefit Plan
(other than claims for benefits in the ordinary course) that would, individually or in the
aggregate, have a Material Adverse Effect and, to the knowledge of Seller, no fact or event exists
that would give rise to any such Action, claim or proceeding.

(iii) Except as set forth in Section 5.02(i)(iii) of the Disclosure Letter, (1) the
terms of employment or engagement of all employees, agents and consultants of Seller with respect
to the Business are such that their employment or engagement may be terminated at any time and
without liability for payment of compensation or damages, (2) there are no severance payments which
are or could become payable by Seller to any employee, agent, or consultant of Seller under the
terms of any oral or written agreement or commitment or any custom, trade or practice, and (3)
there are no contracts between Seller and any employee, consultant or independent contractor.

(iv) Seller and each of its Affiliates are and have been in compliance in all material
respects with WARN and any similar state Law respecting plant closings and layoffs and all
applicable Laws respecting employment and employment practices, terms and conditions of employment,
and wages and hours, including any such Laws regarding employment discrimination; disability rights
and benefits; minimum wage, hours and overtime; workers’ compensation; family and medical leave;
equal employment opportunity; occupational safety and health; severance or termination of
employment; the payment of social security, wage, payroll and other Taxes; the Immigration Reform
and Control Act, as amended; ERISA; and COBRA. All persons classified by Seller or any of its
Affiliates as independent contractors do satisfy and have satisfied the requirements of Law to be
so classified, and Seller and each of its Affiliates has fully and accurately reported their
compensation on IRS Forms 1099 when required to do so.

(v) Section 5.02(i)(v)(A) of the Disclosure Letter sets forth a true and correct list
of each participant in the Deferred Compensation Plan and all liabilities existing as of the date
hereof with respect to the Deferred Compensation Plan (per participant and in the aggregate). Each
of the individuals listed on Section 5.02(i)(v)(B) of the Disclosure Letter has executed a
Waiver Agreement.

(h) Labor Matters. Neither ECC nor any of its Subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to persons employed by ECC
or any of its Subsidiaries, and to the knowledge of ECC, there are no union organizing activities,
requests for union representation or proceedings by any labor union to organize with respect to any
employees of ECC or any of its Subsidiaries. Except as would not, individually or in the
aggregate, have a Material Adverse Effect, (i) there are no pending grievance or arbitration
proceedings arising out of collective bargaining agreements, or other agreements with any unions,
to which ECC or any of its Subsidiaries is a party, (ii) there is no labor strike, dispute,
slowdown, work stoppage or lockout by or with respect to any employees of ECC or any of its
Subsidiaries, and (iii) there are no unfair labor practice complaints by persons employed by ECC or
any of its Subsidiaries pending or to ECC’s knowledge, threatened against ECC or any of its
Subsidiaries, nor, to the knowledge of ECC, does there exist any basis for any such complaint. To
the knowledge of ECC, neither Seller nor any of its Affiliates has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act.

(i) Related Party Transactions. Set forth in Schedule 5.03(i) is a list of
all agreements and contracts entered into by ECC or any of its Subsidiaries under which continuing
obligations exist with any Person who is an officer, director or Affiliate of ECC or any of its
Subsidiaries, any member of the “immediate family” (as such term is defined in Item 404 of
Regulation S-K promulgated under the Securities Act) of any of the foregoing or any entity of which
any of the foregoing is an Affiliate.

(j) Insurance. Section 5.02(p) of the Disclosure Letter sets forth a correct
and complete list of the Insurance Policies, including the underwriter of such policies and the
amount of coverage thereunder. ECC or one of its Affiliates has paid, or caused to be paid, all
premiums due under such policies and has not received written notice that it is in default with
respect to any obligations under such policies other than as would not, individually or in the
aggregate, have a Material Adverse Effect. Furthermore, other than as would not, individually or
in the aggregate, have a Material Adverse Effect, (i) ECC has not received any written notice of
cancellation or termination with respect to any existing insurance policy set forth in Section
5.02(p) of the Disclosure Letter, (ii) except as set forth in Section 5.02(p) of the
Disclosure Letter, there is no claim pending under any policy set forth in Section 5.02(p)
of the Disclosure Letter as to which coverage has been questioned, denied or disputed by the
underwriters of such policy, and (iii) ECC has not received any notice from any of its insurance
carriers that any insurance premiums will be increased in the future or that any insurance coverage
presently provided for will not be available to ECC or Seller on substantially the same terms now
in effect.

(k) Solvency; Ability to Pay Debts. ECC is, and prior to and after giving effect to
the Acquisition and the other transactions contemplated by this Agreement and the Other Agreements,
will be solvent. For purposes of this Agreement, the term “solvent” shall mean, with respect to
ECC, that (i) it is able to pay its debts as they become due, and (ii) the fair valuation of its
property is, on the date of determination, greater than the total amount of its liabilities, at a
fair valuation, as of such date and that the present saleable value of its assets is, on the date
of determination, greater than the amount that will be required to pay its probable liability on
its existing debts as they become absolute and matured. After giving effect to the consummation of
the Acquisition, ECC will not have unreasonably small capital with which to conduct its business.
Prior to and after giving effect to the consummation of the Acquisition, ECC will incur debts only
within its ability to pay as such debts mature.

(l) Takeover Statutes. ECC has taken all necessary steps so that the Business
Combination Statute (Subtitle 6 of Title 3 of the MGCL) is not applicable to this Agreement and the
transactions contemplated hereby.

(m) Brokers. No broker, finder or investment banker (other than Friedman, Billings,
Ramsey & Co., Inc., Milestone Advisors, LLC and Stifel, Nicolaus & Company, Incorporated) is
entitled to any brokerage, finder’s or other fee or commission in connection with the Acquisition
or the other transactions contemplated by this Agreement and each of the Other Agreements based
upon arrangements made by or on behalf of ECC or Seller.

(n) Opinion of Financial Advisor. The ECC Special Committee has received an opinion
of Stifel, Nicolaus & Company, Incorporated and Friedman, Billings, Ramsey & Co., Inc., to the
effect that the Asset Price to be paid by Acquirer to Seller in connection with the Acquisition
pursuant to this Agreement is fair to Seller, from a financial point of view.

5.04  Representations and Warranties of Acquirer. Acquirer hereby represents and warrants
to ECC and Seller, as of the date of this Agreement and as of the Closing Date (except for those
representations and warranties made as of a specific date, which representations and warranties are
made as of such date), that:

(a) Corporate Organization. Acquirer is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. The certificate of
incorporation of Acquirer is in full force and effect and no dissolution, revocation or forfeiture
proceedings regarding Acquirer have been commenced. Acquirer is in good standing under the Laws of
any other jurisdiction in which the character of the properties owned, leased or operated by it
therein or in which the transaction of its business makes such qualification or licensing
necessary. Acquirer has all requisite power and authority to own, lease and operate its properties
and to carry on its businesses as now conducted and proposed by Acquirer to be conducted.

(b) Authority Relative to this Agreement.

(i) Acquirer has all necessary power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby. No other proceedings on the part of Acquirer
are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Acquirer and, assuming due
authorization, execution and delivery hereof by ECC and Seller, constitutes a valid, legal and
binding agreement of Acquirer, enforceable against Acquirer in accordance with and subject to its
terms and conditions, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating
to or affecting creditors’ rights or by general equity principles.

(ii) The board of directors of Acquirer has duly and validly authorized the execution and
delivery of this Agreement and approved the consummation of the Acquisition and the other
transactions contemplated hereby, and taken all corporate actions required to be taken by the board
of directors of Acquirer for the consummation of the Acquisition and the other transactions
contemplated hereby.

(c) No Conflict; Required Filings and Consents.

(i) The execution and delivery of this Agreement by Acquirer does not, and the performance of
Acquirer’s obligations hereunder will not, (1) conflict with or violate the organizational
documents of Acquirer, (2) assuming that all consents, approvals, authorizations and other actions
described above in subsection (ii) have been obtained and all filings and obligations described
above in subsection (ii) have been made, conflict with or violate any Law applicable to Acquirer or
by which any of its properties or assets is bound or affected, or (3) result in any breach of, or
constitute a default (or an event which, with notice or lapse of time or both, would become a
default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien or other encumbrance on any of its properties
or assets pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which it is a party or by which it or any of
its properties or assets is bound or affected.

(ii) The execution and delivery of this Agreement by Acquirer does not, and the performance of
Acquirer’s obligations hereunder will not, require any consent, approval, authorization or permit
of, or filing with, or notification to, any Governmental Authority, except for (1) such consents,
approvals, authorizations, permits, filings or notifications as may be required under the Laws of
any state in respect of the Business, or (2) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not, individually or in
the aggregate, prevent or delay consummation of the Acquisition, or otherwise prevent Acquirer from
performing its obligations under this Agreement.

(d) Litigation. There is no Action pending or, to Acquirer’s knowledge, threatened
against, involving or affecting Acquirer or any of its properties or assets that questions the
validity of this Agreement or any action to be taken by Acquirer in connection with the
consummation of the Acquisition or the other transactions contemplated hereby.

(e) Brokers. No broker, finder or investment banker is entitled to any brokerage,
finder’s or other fee or commission payable by ECC or Seller in connection with the Acquisition or
the other transactions contemplated by this Agreement and each of the Other Agreements based upon
arrangements made by or on behalf of Acquirer.

(f) Available Funds. Acquirer currently has or has access to, and on the Closing Date
will have available, all funds necessary to pay the Asset Price. Acquirer has received a
commitment from one of its Affiliates to transfer to Acquirer, on or prior to the Closing Date, an
amount in cash reasonably sufficient to provide Acquirer with all funds necessary to pay the Asset
Price. The obligations of Acquirer hereunder are not subject to any conditions regarding the
ability of Acquirer to obtain financing.

ARTICLE 6.

COVENANTS

6.01 Access to Information; Confidentiality.

(a) Upon reasonable notice and subject to applicable Laws relating to the exchange of
information, each of ECC and Seller shall afford to the officers and authorized employees,
accountants, counsel and other representatives of Acquirer, reasonable access during normal
business hours during the period prior to the Closing, to all its properties, books, contracts,
commitments, records, officers, employees, accountants, counsel and other representatives and,
during such period, each of ECC and Seller shall make available to Acquirer all information
concerning its business, properties and personnel as Acquirer may reasonably request. Subject to
Section 6.05, each of ECC and Seller shall permit Acquirer to contact and make arrangements
with employees of the Business regarding prospective employment with Acquirer after the Closing and
neither Seller nor ECC shall discourage in any way any employee of the Business from consulting
with Acquirer or becoming associated with Acquirer after the Closing, and Seller and Acquirer shall
use reasonable best efforts to facilitate this process, including, without limitation, making
available to Acquirer personnel and other information as Acquirer may request with respect to such
employees. Neither ECC nor Seller shall be required to provide access to or disclose information
pursuant to this Section 6.01(a) where such access or disclosure would violate or prejudice
the rights of its customers, jeopardize any attorney-client privilege or contravene any Law,
fiduciary duty or binding agreement entered into prior to the date of this Agreement. The parties
hereto will make appropriate substitute disclosure arrangements under circumstances in which the
restrictions in the preceding sentence apply. Acquirer shall, and cause its representatives to,
use all reasonable efforts to prevent such access and inspection from interfering with the business
operations of ECC and Seller.

(b) For a period of eighteen months following the Closing Date, upon reasonable notice and
subject to applicable Laws relating to the exchange of information, each of ECC and Seller shall
afford to the officers and authorized employees, accountants, counsel and other representatives of
Acquirer, reasonable access during normal business hours to all of its properties, books,
contracts, commitments, records, officers, employees, accountants, counsel and other
representatives and, during such period, each of ECC and Seller shall make available to Acquirer
all such information concerning its business, properties and personnel as Acquirer may reasonably
request; provided, however, that the right of access granted to Acquirer pursuant
to this Section 6.01(b) shall only be available to the extent reasonably necessary for
Acquirer to ascertain whether ECC and Seller are in compliance with Section 6.10 and
Section 6.11 hereof. Neither ECC nor Seller shall be required to provide access to or
disclose information pursuant to this Section 6.01(b) where such access or disclosure would
violate or prejudice the rights of its customers, jeopardize any attorney-client privilege or
contravene any Law, fiduciary duty or binding agreement entered into prior to the date of this
Agreement. The parties hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions in the preceding sentence apply. Acquirer shall, and shall
cause its representatives to, use all reasonable efforts to prevent such access and inspection from
interfering with the business operations of ECC and Seller.

(c) During the period prior to the Closing, Acquirer shall provide Seller and ECC with such
information as Seller or ECC shall reasonably request regarding Acquirer’s progress toward
obtaining the Requisite Regulatory Approvals and the completion of the Technology Upgrades.

(d) All information obtained by Acquirer pursuant to this Section 6.01 shall be kept
confidential in accordance with the confidentiality agreement, dated July 26, 2006 (the
“Confidentiality Agreement”), between Bear, Stearns & Co. Inc. and ECC.

6.02 Acquisition Proposals.

(a) No Solicitation or Negotiation. ECC agrees that except as expressly permitted by
this Section 6.02(a), neither it nor any of its Subsidiaries shall, and that it shall use
its reasonable best efforts to instruct and cause its and its Subsidiaries’ employees, agents,
investment bankers, attorneys, accountants and other advisors or representatives (such employees,
agents, investment bankers, attorneys, accountants and other advisors or representatives,
collectively, “Representatives”) not to, directly or indirectly:

(i) initiate, solicit or encourage any inquiries or the making of any proposal or offer that
constitutes, or could reasonably be expected to lead to, any Acquisition Proposal (as defined
below); or

(ii) engage in, continue or otherwise participate in any discussions or negotiations
regarding, or provide any non-public information or data to any Person relating to, any Acquisition
Proposal; or

(iii) otherwise knowingly facilitate any effort or attempt to make an Acquisition Proposal.

Notwithstanding anything in the foregoing to the contrary, prior to the Closing, ECC may: (1)
provide information in response to a request therefor by a Person who has delivered a bona fide
written Acquisition Proposal that was not solicited by ECC after the date hereof or in violation of
the Exclusivity Letter, dated September 3, 2006, between Bear, Stearns & Co. Inc. and ECC, as
amended (the “Exclusivity Letter”), if ECC receives from the Person so requesting such information
an executed confidentiality agreement on terms not less restrictive to the other party than those
contained in the Confidentiality Agreement, it being understood that such confidentiality agreement
need not prohibit the making, or amendment, of an Acquisition Proposal; and ECC shall promptly
disclose any such information to Acquirer to the extent not previously provided to Acquirer; (2)
engage or participate in any discussions or negotiations with any Person who has made such a bona
fide written Acquisition Proposal, or (3) after having complied with Section 6.02(c),
approve or propose to approve (publicly or otherwise) such an Acquisition Proposal, if and only to
the extent that, (x) prior to taking any action described in clause (1), (2) or (3) above, the ECC
Board determines in good faith after consultation with outside legal counsel that failure to take
such action, in light of the Acquisition Proposal and the terms of this Agreement, would be
inconsistent with the directors’ fiduciary duties under applicable Law, and (y) in each such case
referred to in clause (1) or (2) above, the ECC Board has determined in good faith based on the
information then available and after consultation with its financial advisors that such Acquisition
Proposal constitutes or would reasonably be expected to lead to a Superior Proposal (as defined
below); and (z) in the case referred to in clause (3) above, the ECC Board determines in good faith
(after consultation with its financial advisors and outside legal counsel) that such Acquisition
Proposal is a Superior Proposal.

ECC shall notify Acquirer promptly (but in no event later than 24 hours) after receipt of any
Acquisition Proposal, or any request for information relating to ECC or any of its Subsidiaries by
any Person that informs ECC or any of its Subsidiaries that it is considering making, or has made,
an Acquisition Proposal, or any inquiry from any Person seeking to have discussions or negotiations
with ECC or any of its Subsidiaries relating to a possible Acquisition Proposal. Such notice shall
be made orally and confirmed in writing, and shall indicate the identity of the Person making the
Acquisition Proposal, inquiry or request and the material terms and conditions of any inquiries,
proposals or offers (including a copy thereof and any related documentation or correspondence).
ECC shall also promptly, and in any event within 24 hours, notify Acquirer, orally and in writing,
if it or any of its Subsidiaries enters into discussions or negotiations concerning any Acquisition
Proposal or provides non-public information or data to any Person in accordance with this
Section 6.02 and keep Acquirer informed of the status and terms of any such proposals,
offers, discussions or negotiations on a reasonably current basis, including by providing a copy of
all material documentation or correspondence relating thereto.

(b) Definitions. For purposes of this Agreement:

“Acquisition Proposal” means (i) any proposal or offer with respect to a merger, joint
venture, partnership, consolidation, dissolution, liquidation, tender offer, recapitalization,
reorganization, share exchange, business combination or similar transaction involving ECC or
Seller, (ii) any proposal or offer to acquire in any manner, directly or indirectly, 15% or more of
the total voting power or of any class of equity securities of ECC or Seller, or 15% or more of the
consolidated total assets (including, without limitation, equity securities of its Subsidiaries) of
ECC, (iii) any proposal or offer with respect to the disposition of any of the Transferred Assets
other than in the ordinary course of business of ECC and its Subsidiaries, or (iv) any transaction
that contemplates the hiring of any employees of ECC or any of its Subsidiaries as a group or unit,
in each case other than the transactions contemplated by this Agreement. Notwithstanding the
foregoing, the term “Acquisition Proposal” shall not include any transaction pursuant to which (i)
ECC sells only all or a portion of its residual interests in its securitizations and related
servicing rights to one or more third parties or (ii) Seller sells its equity interests in, or all
or any portion of the assets of, any Subsidiary of Seller; provided, however, that
such transaction specifically excludes the Transferred Assets and any and all employees of the
Business; provided, further, that prior to any such transaction with respect to any
Subsidiary of Seller other than ConquistAmerica, Inc., in the event of a sale of stock, the
applicable Subsidiary of Seller and, in the event of a sale of assets, the purchaser of such
assets, agrees to be bound by the provisions of Section 6.08.

“Superior Proposal” means a bona fide Acquisition Proposal that was not solicited by ECC after
the date hereof or in violation of the Exclusivity Letter involving (i) more than 50% of the assets
(on a consolidated basis) or total voting power of the equity securities of ECC or (ii) all or
substantially all of the assets constituting the Transferred Assets, that the ECC Board has
determined in its good faith judgment, after consultation with its outside financial advisors,
taking into account all legal, financial and regulatory aspects of the proposal and the Person
making the proposal, that (y) if consummated, would result in a transaction more favorable to ECC’s
stockholders from a financial point of view than the transactions contemplated by this Agreement,
and (z) is fully financed or reasonably capable of being fully financed, reasonably likely to
receive all required governmental approvals on a timely basis and otherwise reasonably capable of
being completed on the terms proposed.

(c) No Alternative Transaction. The ECC Board and each committee thereof shall not
cause or permit ECC or any of its Subsidiaries to enter into any written letter of intent,
memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or
other agreement (other than a confidentiality agreement entered into in compliance with Section
6.02(a)) relating to any Acquisition Proposal. Notwithstanding the foregoing, prior to the
Closing, if (i) a Superior Proposal that was not solicited, initiated, encouraged or facilitated in
breach of this Agreement or the Exclusivity Letter is made to ECC and is not withdrawn, (ii) ECC
shall have promptly (but in any event no later than 24 hours after its determination with respect
to the Superior Proposal) provided written notice to Acquirer (a “Notice of Superior Proposal”)
advising Acquirer that ECC has received a Superior Proposal, specifying all of the material terms
and conditions of such Superior Proposal and identifying the Person making such Superior Proposal,
(iii) Acquirer shall not have, within four Business Days of Acquirer’s receipt of the Notice of
Superior Proposal, made a proposal that the ECC Board determines in good faith after consultation
with its outside financial advisors to be at least as favorable, from a financial point of view, to
ECC’s stockholders as such Superior Proposal (it being agreed that (A) the ECC Board shall convene
a meeting to consider any such proposal by Acquirer promptly following the receipt thereof, (B) the
ECC Board will not terminate this Agreement pursuant to Section 9.01(d)(ii) until the
earlier of the meeting required to be held pursuant to clause (A) or four Business Days after
receipt by Acquirer of the Notice of Superior Proposal, and (C) any change to the financial or
other material terms of such Superior Proposal shall require a new Notice of Superior Proposal to
Acquirer and a new four Business Day period under this clause (iii)); and (iv) the ECC Board
determines in good faith after consultation with its outside legal counsel that the failure to take
such action, in light of the Acquisition Proposal and the terms of this Agreement, would be
inconsistent with the directors’ fiduciary duties under applicable Law, then the ECC Board may,
upon termination of this Agreement in accordance with Section 9.02(d)(ii) and the
concurrent payment of the Termination Fee in accordance with Section 9.03(b), approve and
enter into an agreement relating to a Superior Proposal made after the date hereof that was not
solicited, initiated, encouraged or facilitated in breach of this Agreement or the Exclusivity
Letter.

(d) Existing Discussions. ECC agrees that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. ECC agrees that it will take the necessary
steps to promptly inform the individuals or entities referred to in the first sentence hereof of
the obligations undertaken in this Section 6.02 and in the Confidentiality Agreement.

(e) Notice. ECC agrees that it will as promptly as practicable notify Acquirer if any
inquiries, proposals or offers with respect to an Acquisition Proposal are received by it or any of
its Representatives and thereafter shall keep Acquirer reasonably informed of the status and terms
of any such proposals or offers.

6.03 Further Action; Reasonable Best Efforts.

(a) Upon the terms and subject to the conditions hereof, each of the parties hereto shall use
its reasonable best efforts to take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable Law to consummate and
make effective the Acquisition, including, without limitation, using its reasonable best efforts to
make all applicable filings and notifications to and obtain the Requisite Regulatory Approvals, all
Applicable Permits, consents, approvals, authorizations, qualifications and orders of Governmental
Authorities and parties to contracts with Seller and to cause its Subsidiaries to execute all such
documentation as are necessary for the consummation of the Acquisition, the transfer to Acquirer of
the Transferred Assets and to fulfill the conditions to the Closing. In case, at any time after
the Closing, any further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties hereto shall use all reasonable best efforts to cause its respective
officers, employees and agents to take all such action.

(b) The parties hereto shall cooperate and assist one another in connection with all actions
to be taken pursuant to Section 6.03(a), including the preparation and making of the
filings referred to therein and, if requested, amending or furnishing additional information
thereunder, including, subject to applicable Law and the Confidentiality Agreement, providing
copies of all related documents to the non-filing party and their advisors prior to filing, and to
the extent practicable none of the parties will file any such document or have any communication
with any Governmental Authority without prior consultation with the other parties. Each party
shall keep the others apprised of the content and status of any communications with, and
communications from, any Governmental Authority with respect to the Acquisition. To the extent
practicable, and as permitted by a Governmental Authority, each party hereto shall permit
representatives of the other party to participate in meetings (whether by telephone or in Person)
with such Governmental Authority.

(c) Each of the parties hereto agrees to cooperate and use its reasonable best efforts to
defend through litigation on the merits any Action, including administrative or judicial Action,
asserted by any party in order to avoid the entry of, or to have vacated, lifted, reversed,
terminated or overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) that in whole or in part restricts, delays, prevents or prohibits
consummation of the Acquisition, including, without limitation, by vigorously pursuing all
available avenues of administrative and judicial appeal.

6.04 Public Announcements. Acquirer, on the one hand, and ECC and Seller, on the other
hand, agree that no public release or announcement concerning the Acquisition shall be issued by
either without the prior consent of the other party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by Law or the rules or
regulations of any securities exchange, in which case the party required to make the release or
announcement shall use its reasonable best efforts to allow the other party reasonable time to
comment on such release or announcement in advance of such issuance.

6.05 Hiring by Acquirer.

(a) Seller has previously delivered to Acquirer a true and complete list of (i) the names,
addresses and current salaries of all employees of the Business, listed by office location, and the
family relationships known to Seller, if any, among such persons; and (ii) the wage rate for
non-salaried and non-executive salaried employees of the Business by classification. Acquirer
shall extend offers of employment, which shall be conditioned on the Closing, to substantially all
of the employees in the sales and operations groups of the Business and to those employees of
Seller listed on Schedule 6.05(a)(i); provided, however, that (i) Acquirer
shall not be obligated to extend offers of employment to any individual who, following Acquirer’s
standard pre-employment tests and screenings, does not meet Acquirer’s employment rules, standards
or policies, and (ii) with respect to any individual meeting the criteria set forth on Schedule
6.05(a)(ii), Acquirer shall extend an offer of employment in its sole discretion following an
interview or interviews with such individual. Each employee of ECC or its Subsidiaries who is
offered employment by Acquirer, and who accepts employment as of the Closing Date, shall
hereinafter be referred to as a “Transferred Employee.” Notwithstanding anything to the contrary
contained herein, unless otherwise provided under the terms of a written employment agreement that
is expressly assumed by Acquirer or subsequently entered into as between Acquirer and any
Transferred Employee, each Transferred Employee shall be employed by Acquirer on an at will basis
and nothing shall prohibit Acquirer or such Transferred Employee from terminating such employment
at any time after the Closing.

(b) Notwithstanding anything to the contrary set forth in this Agreement, in the event that
this Agreement is terminated for any reason prior to the Closing, Acquirer shall not, for a period
of six months following the termination of this Agreement, directly or indirectly, solicit the
employment of or hire any employee of the Business without the consent of Seller; provided,
however that the foregoing provision shall not prevent Acquirer from soliciting for
employment, hiring or employing, without the consent of Seller, (i) any Person who responds to a
general solicitation or advertisement by Acquirer or any of its Affiliates that is not specifically
directed to Seller, ECC or their employees, (ii) any Person who contacts Acquirer or its directors,
officers, employees, agents, partners, advisors, Subsidiaries, Affiliates and/or divisions
(including, without limitation, attorneys, accountants, consultants, bankers, financial advisors
and financing sources) on his or her own initiative, (iii) any Person who Acquirer or any of its
Affiliates first solicited or entered into discussions with prior to the date of this Agreement, or
(iv) any Person who Acquirer or its Affiliates solicits or enters into discussions with after
termination of his employment with Seller or ECC.

(c) Acquirer shall not assume any Benefit Plans, labor agreements, employment contracts or
covenants, or any liabilities thereunder or the fringe benefit plans or any other liabilities which
ECC or any of its Affiliates may have with respect to any union or any of the employees of ECC or
any of its Subsidiaries (including former employees) either on the date hereof or the date of the
Closing, including liabilities of ECC or any of its Affiliates with respect to payment of wages or
pensions which may have accrued, vested or been earned prior to the Closing and liabilities of ECC
or any of its Affiliates to contribute to pension or other fringe benefit plans with respect to or
on account of service prior to the Closing, and/or any other term or condition of employment
presently enjoyed by employees of ECC or any of its Subsidiaries. Notwithstanding the foregoing,
all Transferred Employees shall receive, for purposes of eligibility for participation in the
Acquirer Plans, credit for service with Seller.

(d) In accordance with Revenue Procedure 2004-53 and comparable state and local payroll Tax
Laws, Acquirer may elect to provide Forms W-2, Wage and Tax Statements, for the 2006 calendar year
setting forth the aggregate amount of wages paid to, and the federal, state and local income,
disability, unemployment, FICA, and similar taxes (“Payroll Taxes”) withheld in respect thereof, to
Transferred Employees for the 2006 calendar year by ECC or its Subsidiaries and Acquirer as
predecessor and successor employers, respectively. Seller shall transfer to Acquirer any records
(including Internal Revenue Service Forms W-4) relating to withholding and payment of income and
Payroll Taxes with respect to wages paid by ECC or its Subsidiaries during the 2006 calendar year
to Transferred Employees and will otherwise reasonably cooperate with Acquirer in connection with
the reporting of such wages and withholdings.

(e) Seller shall be required to pay or cause to be paid, on or before the Closing Date, for
periods up to and through the Closing Date, any wages, vacation pay, bonuses, retention plans,
pension, profit-sharing and welfare benefits and other compensation and fringe benefits, severance,
withholding tax, social security tax, of all Transferred Employees on or before the Closing Date,
including any employment taxes or other fees or assessments attributable thereto.

(f) No later than three (3) days prior to the Closing Date, Seller shall deliver to Acquirer
Schedule 6.05(f), which schedule shall set forth the number of employees of Seller and its
Affiliates who have experienced an “employment loss” as such term is defined under WARN and the
regulations promulgated thereunder during the ninety calendar day period prior to the Closing Date,
and the geographic location and date of each “employment loss.” Seller agrees not to terminate or
lay off employees in such numbers as to trigger the application of or give rise to liability under
WARN or any similar state or local statute or regulation without complying with all of the
obligations of WARN or any similar state or local statute or regulation. In addition, Seller
hereby agrees to indemnify Acquirer and to defend and hold Acquirer harmless from and against any
and all Losses which Acquirer may incur in connection with any Action brought against Acquirer
under WARN or any similar state or local statute or regulation, which relates to (i) actions taken
by Seller with regard to any site of employment of one or more facilities or operating units within
any site of employment of the Business affected by this Agreement; or (ii) employees of Seller or
its Affiliates who have not been offered, or have not accepted, an offer of employment by Acquirer.

(g) Up to and through the Closing Date, Seller shall be responsible for providing any notices
and complying with other administrative requirements of WARN and any other similar state or local
statute or regulation with respect to all employees of Seller. For purposes of this Agreement, the
“Effective Date’ as defined in WARN shall be the same as the Closing Date. Nothing in this
Agreement constitutes an admission that a plant closing or mass layoff, as those terms are defined
by WARN, has occurred or will occur.

(h) Up to and through the Closing Date, ECC and Seller shall use all reasonable best efforts
to obtain Waiver Agreements from each of the participants in the Deferred Compensation Plan who
have not executed a Waiver Agreement as of the date hereof.

(i) Promptly following the date of this Agreement, Seller intends to enter into employee
retention agreements, in form and substance mutually agreed to by Seller and Acquirer, with each of
the employees of Seller and in the respective amounts set forth on Schedule 6.05(i) (the
“Employee Retention Agreements”). With respect to each Employee Retention Agreement, each of
Seller and Acquirer shall be responsible for the payment of its Pro Rata Portion of any retention
payment payable thereunder. With respect to any retention payment under any Employee Retention
Agreement, Seller’s or Acquirer’s, as applicable, “Pro Rata Portion” shall be the percentage
determined by dividing (i) the number of calendar days from the date of such Employee Retention
Agreement to the target employment date set forth in the Employee Retention Agreement entitling
such employee to the payment thereunder (the “Retention Period”) during which an employee is
employed by Seller or Acquirer, as applicable, by (ii) the number of calendar days in the Retention
Period. On or prior to the Closing Date, the parties shall agree to a mutually acceptable process
for their sharing of the retention payments to be made pursuant to the Employee Retention
Agreements (which process shall be consistent with respect to the agreements set forth herein
regarding each party’s Pro Rata Portion), which may include, without limitation, the establishment
of an escrow account.

6.06 Payment of Taxes.

(a) Within ninety days following the Closing Date, Acquirer and Seller shall apportion among
themselves any appropriately proratable Tax attributable to the Transferred Assets, it being
understood and agreed that Seller shall be responsible for any obligations and liabilities accrued
or allocable to periods prior to the close of business on the Closing Date and Acquirer shall be
responsible for any obligations and liabilities accruing or allocable to periods on and after such
date and time. Based on such apportionment, Seller shall pay to Acquirer, or Acquirer shall pay to
Seller, as the case may be, the amount of any such Tax determined in accordance with the foregoing.

(b) Seller shall be responsible for the payment of all sales (including, without limitation,
bulk sales), use, transfer, recording, ad valorem, privilege, documentary, gains, gross receipts,
registration, conveyance, excise, license, stamp, duties or similar Taxes and fees relating to the
Acquisition and the other transactions contemplated hereby.

6.07 Mail Received After Closing. Following the Closing, Acquirer may receive and open all
mail addressed to Seller and deal with the contents thereof in its discretion to the extent that
such mail and the contents thereof relate to the Business or the Transferred Assets or any of the
obligations or liabilities assumed by Acquirer pursuant to this Agreement. ECC and Seller shall
deliver or cause to be delivered to Acquirer all mail received by ECC or Seller after the Closing
that relates to the Business or the Transferred Assets or any liabilities assumed by Acquirer
pursuant to this Agreement. Acquirer shall promptly deliver or cause to be delivered to Seller all
mail received by Acquirer after the Closing that relates to (i) matters relating to ECC, Seller or
their Affiliates that are not related to the Business, the Transferred Assets or any liabilities
assumed by Acquirer pursuant to this Agreement, or (ii) the Retained Liabilities.

6.08 Non-Competition; Non-solicitation.

(a) Beginning on the Closing Date and ending on the second anniversary of the Closing Date,
neither Seller nor ECC shall directly or indirectly, without the prior written consent of Acquirer,
for their benefit or for the benefit of any other Person, engage in a Competitive Business Activity
(as defined below) anywhere in the United States, its territories, possessions, commonwealths,
dependencies or areas subject to its jurisdiction. For all purposes hereof, the term “Competitive
Business Activity” shall mean: (i) engaging in or managing or directing persons engaged in the
wholesale subprime mortgage brokerage and correspondent (on a non-delegated underwriting basis)
business, (ii) acquiring or having an ownership interest in any entity that engages or participates
in the wholesale subprime mortgage brokerage and correspondent (on a non-delegated underwriting
basis) business (except for ownership of two percent or less of the outstanding common equity of
any entity whose securities have been registered under the Securities Act or Section 12 of the
Exchange Act, and the securities owned as of the date of this Agreement); (iii) participating in
the financing, operation, management or control of any firm, partnership, corporation, entity or
business described in clause (ii) of this sentence; or (iv) soliciting, diverting, taking away, or
attempting to solicit, divert or take away any prospective or current customer or employee of the
Business.

(b) Beginning on the Closing Date and ending on the second anniversary of the Closing Date,
neither Seller nor ECC shall, and ECC and Seller shall cause their Subsidiaries not to, directly or
indirectly, without the prior written consent of Acquirer, for their benefit or for the benefit of
any other Person, (i) solicit, encourage or take any other action that is intended to induce or
encourage, or has the effect of inducing of encouraging, any director, officer, employee or other
representative of Acquirer, or any of its Subsidiaries or Affiliates, who was formerly employed by
ECC or Seller or their Subsidiaries or Affiliates, to terminate such director’s, officer’s,
employee’s, consultant’s, advisor’s or other representative’s employment with Acquirer or any of
its respective Subsidiaries or Affiliates or (ii) hire any director, officer, employee, or other
representative of Acquirer, or any of its Subsidiaries or Affiliates, who was formerly employed by
ECC or Seller or their Subsidiaries or Affiliates.

(c) The covenants contained in Section 6.08(a) and Section 6.08(b) hereof
shall be construed as a series of separate covenants, one for each country, province, state, city
or other political subdivision of the world. Except for geographic coverage, each such separate
covenant shall be deemed identical in terms to the covenant contained in Section 6.08(a)
and Section 6.08(b) hereof. If, in any judicial proceeding, a court refuses to enforce any
of such separate covenants (or any part thereof), then such unenforceable covenant (or such part)
shall be eliminated from this Agreement to the extent necessary to permit the remaining separate
covenants (or portions thereof) to be enforced. In the event that the provisions of this
Section 6.08 are deemed to exceed the time, geographic or scope limitations permitted by
applicable Law, then such provisions shall be reformed to the maximum time, geographic or scope
limitations, as the case may be, permitted by applicable Laws.

(d) Each of Seller and ECC acknowledges that (i) the goodwill associated with the Business
prior to the transaction contemplated by this Agreement is an integral component of the value of
the Transferred Assets to Acquirer and is reflected in the Asset Price payable to Seller and (ii)
the agreements set forth in this Section 6.08 are necessary to preserve the value of the
Transferred Assets for Acquirer following the consummation of the transactions contemplated by this
Agreement. Each of Seller and ECC also acknowledges that the limitations of time, geography and
scope of activity agreed to in this Section 6.08 are reasonable because, among other
things, (1) both they and Acquirer are engaged in a highly competitive industry, (2) Seller and ECC
have unique access to the trade secrets and know-how, including, without limitation, the plans and
strategy (and, in particular, the competitive strategy) of the Business, (3) this Section
6.08 provides no more protection than is necessary to protect Acquirer’s interests in the
goodwill, trade secrets, and confidential information related to the Transferred Assets and the
Business, and (4) each of Seller and ECC is receiving significant consideration in connection with
the transactions contemplated by this Agreement.

6.09 Confidentiality. ECC and Seller acknowledge that Acquirer has legitimate and
continuing interests in the protection of confidential information related to the Business and that
Acquirer is investing substantial sums and will continue to invest substantial sums to develop,
maintain and protect such confidential information. From and after the Closing, ECC and Seller
shall not, and shall cause each of their Affiliates not to, disclose, furnish or make accessible to
any Person or use for its own benefit or the benefit of any other Person any trade secrets or other
confidential or proprietary information of the Business, including, without limitation, any
business plans, financial information, strategies, methods and computer programs of the Business;
provided that such protected information shall not include (i) information required to be disclosed
by Law, (ii) information known to the public or otherwise available to the public without violation
of this Agreement by ECC or Seller, and (iii) information of the Business that also relates to a
business of ECC or Seller other than the Business, but only to the extent relating to such other
business.

6.10 Reserves for Liabilities.

(a) From and after the Closing, Seller shall maintain cash reserves established in accordance
with GAAP and applicable Law or residual interests in its securitizations (with an ascribed value
agreed by Seller and Acquirer) which, together with the cash reserves, are adequate to satisfy the
Retained Liabilities.

(b) From and after the Closing, ECC shall maintain cash reserves established in accordance
with GAAP and applicable Law or residual interests in its securitizations (with an ascribed value
agreed by ECC and Acquirer) which, together with the cash reserves, are adequate to satisfy its
liabilities.

6.11 Retention of Proceeds; Corporate Existence.

(a) From the date of this Agreement until twelve months following the Closing Date, in the
event that Seller has made a distribution to ECC at any time after the date of this Agreement, or
ECC shall no longer own of record or beneficially all of the outstanding capital stock of Seller,
then ECC shall not make any distribution, whether by dividend or otherwise, in respect of its
capital stock, unless immediately following such distribution, the value of ECC’s and Seller’s
assets (exclusive of intangibles), on a consolidated basis, will exceed the value of ECC’s and
Seller’s consolidated known and contingent liabilities (the value of such assets and liabilities
being determined in the reasonable good faith estimation of the ECC Board) (“Net Equity”), by at
least $10,000,000; provided, however, that if ECC is no longer required for
purposes of its financial reporting requirements under applicable Law to consolidate Seller in its
financial reports, then the Net Equity of ECC, without regard to the assets and liabilities of
Seller, will be at least $10,000,000.

(b) For the six-month period immediately following the twelve-month period following the
Closing Date, in the event that Seller has made a distribution to ECC at any time after the date of
this Agreement, or ECC shall no longer own of record or beneficially all of the outstanding capital
stock of Seller, then ECC shall not make any distribution, whether by dividend or otherwise, in
respect of its capital stock, unless immediately following such distribution, the Net Equity of ECC
and Seller, on a consolidated basis, will be at least $5,000,000; provided,
however, that if ECC is no longer required for purposes of its financial reporting
requirements under applicable Law to consolidate Seller in its financial reports, then the Net
Equity of ECC, without regard to the assets and liabilities of Seller, will be at least $5,000,000.

(c) For a period of eighteen months following the Closing Date, Seller shall keep in full
force and effect its existence, rights and franchises as a corporation under the laws of its
formation in the State of California, and shall obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, and to enable Seller to
perform its duties under this Agreement; provided, however, nothing in this
Section 6.11(c) shall prohibit ECC from adopting a plan of dissolution and filing a
certificate of dissolution.

(d) For a period of eighteen months following the Closing Date, at Acquirer’s request from
time to time, each of Seller and ECC shall promptly deliver to Acquirer a certificate signed by an
authorized officer of Seller or ECC, as applicable, certifying that it is in compliance with all
covenants applicable to it contained in Section 6.10 and Section 6.11 hereof;
provided, however, that Seller and ECC shall not be required to provide such
certificate more frequently than quarterly.

(e) For a period of eighteen months following the Closing Date, in the event that ECC desires
to make any distribution, whether by dividend or otherwise, in respect of its capital stock, it
shall deliver to Acquirer, no later than five Business Days prior to the declaration date for such
distribution, a certificate, signed by an authorized officer of ECC, certifying that such dividend
will be made in compliance with the covenants contained in Section 6.10(b), Section
6.11(a) and Section 6.11(b) hereof. Attached to any certificate delivered pursuant to
this Section 6.11(e) shall be a balance sheet of ECC as of the most recent practicable
date, illustrating the pro forma effect of such distribution.

(f) As used in this Section 6.11, a “distribution” shall mean, with respect to any
entity, a distribution in respect of such entity’s capital stock and shall not include the
repayment of intercompany debt.

6.12 Seller Capital Stock. From the date of this Agreement until the date that is
eighteen months following the Closing Date, ECC shall not, without the prior written consent of
Acquirer, such consent not to be unreasonably withheld, sell, transfer or otherwise dispose of any
shares of the capital stock of Seller or permit Seller to issue or sell any of its capital stock to
any Person, it being understood and agreed that it shall not be unreasonable for Acquirer to
withhold its consent hereunder if (a) such disposition, issuance or sale occurs from the date of
this Agreement to the date that is twelve months following the Closing Date and immediately
following such disposition, issuance or sale, the Net Equity of ECC shall be less than $10,000,000,
or (b) such disposition, issuance or sale occurs during the six-month period immediately following
the twelve-month period following the Closing Date and immediately following such disposition,
issuance or sale, the Net Equity of ECC shall be less than $5,000,000. The parties acknowledge
that Seller shall be permitted to sell or otherwise transfer the capital stock, or all or a portion
of the assets of, any of Seller’s Subsidiaries; provided, however, that such
transaction specifically excludes the Transferred Assets and any and all employees of the Business;
provided, further, that prior to any such transaction with respect to any
Subsidiary of Seller other than ConquistAmerica, Inc., in the event of a sale of stock, the
applicable Subsidiary of Seller and, in the event of a sale of assets, the purchaser of such
assets, agrees to be bound by the provisions of Section 6.08; provided,
further, that the permission granted in the foregoing shall in no way affect the
requirements of Section 6.11.

6.13 HMDA Reports. Seller shall deliver any reports under the HMDA and any underlying
data needed to conduct an appropriate statistical analysis with respect to issues under the Equal
Credit Opportunity Act and the Fair Housing Act and any related analysis performed by or on behalf
of Seller as soon as reasonably practicable, but in any event within thirty days of the date
hereof.

6.14 Use of Encore and Bravo Names. From and after the Closing, neither ECC nor any
of its Affiliates shall use the Encore name or the Bravo name as part of any of their respective
names or businesses or in any other respect.

ARTICLE 7.

PRE-CLOSING RELATIONSHIP

7.01 Transition Plan. From the date hereof until the Closing, ECC and Seller shall
cooperate with Acquirer with respect to the formulation and implementation of a transition plan
with respect to the Business, which shall include, without limitation, (a) a process for Acquirer
to receive all licenses necessary for the operation of the Business, and (b) a process for Acquirer
or its designees to receive the benefits of certain contracts to which Seller is a party,
including, without limitation, those contracts set forth on Schedule 7.01, it being understood and
agreed that Acquirer shall reimburse Seller and its Affiliates for all reasonable, direct and
out-of-pocket costs they incur in providing the benefits of such contracts (it being further
understood and agreed that Acquirer shall pay only the pro rata share of any contract or
maintenance fees for the period of time during which Acquirer or its designees actually receive the
benefits of such contracts).

7.02 Repo Agreement. Seller agrees, from and after the date hereof until the Closing
Date, to enter into repurchase transactions with respect to all Loans it originates after the date
hereof, meeting the standards of the Repo Agreement, only with Bear Stearns Mortgage Capital
Corporation (“BSMCC”) under that certain Amended and Restated Master Repurchase Agreement, dated as
of the date hereof, between BSMCC and Seller and various of its Affiliates, as the same may be
amended from time to time (the “Repo Agreement”).

7.03 Disposition of Mortgage Loans.

(a) The parties agree that Mortgage Loans repurchased by Seller pursuant to the Repo Agreement
after the date hereof, and eligible for purchase under the Master MLPA, shall be sold directly by
Seller simultaneously to either (i) an Affiliate of Acquirer in connection with the securitization
of such Mortgage Loans by Acquirer’s Affiliate pursuant to the Master MLPA (as modified by the
related Term Sheet attached as Schedule 7.03(a)(i)) or (ii) so long as notice of such
decision has been provided to the individual listed on Schedule 7.03(a)(ii), no later than
twenty-four hours prior to the marketing of the related securitization by Acquirer’s Affiliate, a
third party on a whole Loan basis. In connection with Mortgage Loans sold pursuant to clause (i)
of the preceding sentence, the parties agree that Seller has the option to sell the related
Servicing Rights (as defined in the Master MLPA) to a Comparable Servicer so long as the price
offered to be paid for such Servicing Rights (the “Offer”) is greater then five (5) basis points
over the price that Acquirer’s Affiliate has offered Seller for such Servicing Rights.
Notwithstanding the above, Seller shall notify Acquirer’s Affiliate of the Offer promptly upon
receipt and allow such Affiliate the option of purchasing the related Servicing Rights at a price
equal to the Offer.

(b) The parties further agree that an Affiliate of Acquirer shall be the sole lead underwriter
for all securitizations relating to the Mortgage Loans subject to the Repo Agreement, and in
connection therewith, all parties acknowledge that such securitizations shall occur on a monthly
basis. In the event that Seller desires to delay any proposed securitization, Seller will provide
notice of such decision by telephone, directly to the individual listed on Schedule
7.03(a)(ii), no later then twenty-four hours prior to the marketing of the related
securitization by Acquirer’s Affiliate. In connection with such delay, Seller shall bear all
economic risk relating to the Mortgage Loans or otherwise related to the proposed securitization,
including, but not limited to, defaults, prepayments and breaches of representations and warranties
relating thereto.

(c) Mortgage Loans not eligible for purchase under the Master MLPA shall be repurchased by
Seller in accordance with the Repo Agreement and may be sold, so long as such Loans meet the
standards of the Additional MLPA, at Seller’s option, to Acquirer’s Affiliate, at a mutually agreed
upon price, pursuant to the Additional MLPA.

(d) The parties agree that Seller shall bear all of the economic risk of hedging the Mortgage
Loans subject to the Repo Agreement.

ARTICLE 8.

CONDITIONS

8.01 Conditions to the Obligations of Each Party. The obligations of each party to effect
the Acquisition and the other transactions contemplated hereby shall be subject to the
satisfaction, at or prior to the Closing, of the following conditions:

(a) No Order. No Governmental Authority in the United States shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent)
which is then in effect and has the effect of making the Acquisition illegal or otherwise
restricting, preventing or prohibiting consummation of the Acquisition.

(b) Consents. All consents and approvals required for the consummation of the
Acquisition and the other transactions contemplated hereby shall have been received.

8.02 Conditions to the Obligations of Acquirer. The obligations of Acquirer to consummate
the Acquisition and the other transactions contemplated hereby are subject to the satisfaction or
waiver (where permissible) of the following additional conditions:

(a) Representations and Warranties. The representations and warranties of Seller and
ECC in this Agreement and of Seller, ECC and their Affiliates (to the extent they are parties) in
each Other Agreement that (i) are not made as of a specific date shall be true and correct as of
the date made and as of the Closing, as though made on and as of the Closing, and (ii) are made as
of a specific date shall be true and correct as of such date, in each case except where the failure
of such representations or warranties to be true and correct (without giving effect to any
limitation as to “knowledge,” “materiality” or “Material Adverse Effect” set forth therein) would
not, individually or in the aggregate, have a Material Adverse Effect.

(b) Agreements and Covenants. Each of Seller, ECC and their Affiliates (solely with
respect to the Other Agreements) shall have performed, in all material respects, all obligations
and complied with, in all material respects, all agreements and covenants to be performed or
complied with by it under this Agreement and each Other Agreement on or prior to the Closing.

(c) No Default. Neither Seller, ECC nor any of their Affiliates shall be in default
in any material respect under any of the Other Agreements.

(d) Officer Certificate. ECC shall have delivered to Acquirer a certificate, dated
the date of the Closing, signed by an authorized officer of ECC, certifying as to the satisfaction
of the conditions specified in Sections 8.02(a), 8.02(b) and 8.02(c).

(e) Monthly Volume. Seller’s total origination volume of qualifying Loans for the
three completed calendar months immediately preceding the Closing Date (the “Volume Requirement”)
shall be at least $1,200,000,000; provided, however, that in the event that (i) the
months of January and February are included in such three-month period, then the Volume Requirement
shall be at least $1,100,000,000 and (ii) either January or February (but not both) is included in
such three-month period, then the Volume Requirement shall be at least $1,150,000,000;
provided, further, that if the Closing Date is scheduled to occur on or after December 4,
2006 and on or prior to December 29, 2006, the Volume Requirement will be deemed to have been
satisfied if either (i) Seller’s total origination volume of qualifying Loans for October and
November shall be at least $800,000,000 or (ii) the sum of (A) Seller’s total origination volume of
qualifying Loans for October and November and (B) Seller’s Assumed December Volume shall be at
least $1,200,000,000.  As used herein, “Seller’s Assumed December Volume” shall mean the product of
(i) the Average Pull-Through Factor and (ii) the Approved Applications as of the close of business
on December 1, 2006.  The “Average Pull-Through Factor” shall mean the average of the Pull-Through
Factors as of the first day of August, September, October, and November 2006. The “Pull-Through
Factor” as of any date shall mean the quotient obtained by dividing (i) the total month’s volume of
Closed Loans by (ii) Approved Applications as of such date.  “Approved Applications” as of any date
shall mean the total dollar amount of mortgage applications in Seller’s origination pipeline which
have been approved by Seller.  “Closed Loans” as of any date shall mean the total dollar value of
funded and closed loans within the month. For purposes of this Section 8.02(e),
“qualifying Loans” means those Loans meeting the requirements set forth on Schedule
8.02(e).

(f) Requisite Regulatory Approvals. Seller shall have obtained the Requisite
Regulatory Approvals and all waiting periods in respect thereof, if any, shall have expired.

8.03 Conditions to the Obligations of Seller and ECC. The obligations of ECC and Seller to
consummate the Acquisition and the other transactions contemplated hereby are subject to the
satisfaction or waiver (where permissible) of the following additional conditions:

(a) Representations and Warranties. The representations and warranties of Acquirer in
this Agreement and its Affiliates (to the extent they are parties) in each Other Agreement that (i)
are not made as of a specific date shall be true and correct as of the date made and as of the
Closing, as though made on and as of the Closing, and (ii) are made as of a specific date shall be
true and correct as of such date, in each case except where the failure of such representations or
warranties to be true and correct (without giving effect to any limitation as to “knowledge” or
“materiality” set forth therein), would, individually or in the aggregate, prevent or delay
consummation of the Acquisition or otherwise prevent it from performing its obligations under this
Agreement.

(b) Agreements and Covenants. Acquirer and its Affiliates (solely with respect to the
Other Agreements) shall have performed, in all material respects, all obligations and complied
with, in all material respects, all agreements and covenants to be performed or complied with by it
under this Agreement and each Other Agreement on or prior to the Closing.

(c) No Default. None of Acquirer’s Affiliates shall be in default in any material
respect under any of the Other Agreements.

(d) Officer Certificate. Acquirer shall have delivered to Seller and ECC a
certificate, dated the date of the Closing, signed by an authorized officer of Acquirer, certifying
as to the satisfaction of the conditions specified in Sections 8.03(a), 8.03(b) and
8.03(c).

ARTICLE 9.

TERMINATION

9.01 Termination. This Agreement may be terminated at any time prior to the Closing in
writing (the date of any such termination, the “Termination Date”):

(a) by the mutual written consent of Acquirer, Seller and ECC;

(b) by either ECC, Seller or Acquirer upon written notice to the other parties, if:

(i) any Governmental Authority with jurisdiction over such matters shall have issued a
governmental order permanently restraining, enjoining or otherwise prohibiting the Acquisition, and
such governmental order shall have become final and unappealable; provided,
however, that the terms of this Section 9.01(b)(i) shall not be available to any
party unless such party shall have used its reasonable best efforts to oppose any such governmental
order or to have such governmental order vacated or made inapplicable to the Acquisition;

(ii) the Acquisition shall not have been consummated on or before March 31, 2007 (the “Outside
Date”), unless the failure to consummate the Acquisition on or prior to such date is the result of
any action or inaction under this Agreement by the party (or, in the case of ECC, by Seller, or, in
the case of Seller, by ECC) seeking to terminate the Agreement pursuant to the terms of this
Section 9.01(b)(ii);

(c) by Acquirer, upon written notice to ECC, if:

(i) the ECC Board has authorized or publicly announced its intention to authorize any
Acquisition Proposal with any Person other than Acquirer; or

(ii) Either ECC, Seller or any of their Affiliates (solely with respect to the Other
Agreements) shall have breached any of its representations or warranties or failed to perform any
of its covenants or other agreements contained in this Agreement or any of the Other Agreements, or
shall be in default under any of the Other Agreements, which breach, failure to perform or default
(1) would give rise to the failure of a condition set forth in Section 8.02(a),
8.02(b) or 8.02(c) and (2) is incapable of being cured by ECC, Seller or any such
Affiliate, as applicable, by the Outside Date or, if capable of being cured by ECC, Seller or any
such Affiliate, as applicable, by the Outside Date, ECC, Seller or any such Affiliate, as
applicable, does not commence to cure such breach, failure or default within ten Business Days
after its receipt of written notice thereof from Acquirer and diligently pursue such cure
thereafter;

(d) by ECC or Seller, upon written notice to Acquirer, if:

(i) Acquirer or any of its Affiliates (solely with respect to the Other Agreements) shall have
breached any of its representations or warranties or failed to perform any of its covenants or
other agreements contained in this Agreement or any of the Other Agreements, or shall be in default
under any of the Other Agreements, which breach, failure to perform or default (1) would give rise
to the failure of a condition set forth in Section 8.03(a), 8.03(b) or
8.03(c) and (2) is incapable of being cured by Acquirer or any such Affiliate by the
Outside Date or, if capable of being cured by Acquirer or any such Affiliate by the Outside Date,
Acquirer or any such Affiliate does not commence to cure such breach, failure or default within ten
Business Days after its receipt of written notice thereof from ECC and diligently pursue such cure
thereafter; or

(ii) ECC, having followed the procedures set forth in Section 6.02(c), resolves to
accept a Superior Proposal; provided, however, that such termination shall not be
effective until such time as payment of the Termination Fee required by Section 9.03(b)
shall have been made by ECC or Seller; provided, further, that ECC’s right to
terminate this Agreement under this Section 9.01(d)(ii) shall not be available if ECC is
then in breach of Section 6.02.

9.02 Effect of Termination. In the event of termination of this Agreement and abandonment
of the Acquisition and the other transactions contemplated by this Agreement pursuant to and in
accordance with Section 9.01, this Agreement shall forthwith become void and of no further
force or effect whatsoever and there shall be no liability on the part of any party, or their
respective officers, directors, Subsidiaries or partners, as applicable, to this Agreement;
provided, however, that nothing contained in this Agreement shall relieve any party to this
Agreement from any liability resulting from or arising out of any breach of any agreement or
covenant hereunder; provided, further, that notwithstanding the foregoing, the covenants and other
obligations under this Agreement shall terminate upon the termination of this Agreement, except
that the agreements set forth in Section 6.01(c), Section 6.04, Section
6.05(b), Section 9.03, Section 11.08 and Section 11.09 shall survive
termination indefinitely. If this Agreement is terminated as provided herein, all filings,
applications and other submissions made pursuant to this Agreement, to the extent practicable,
shall be withdrawn from the agency or other Person to which they were made.

9.03 Fees and Expenses.

(a) Except as otherwise explicitly set forth in this Section 9.03 or elsewhere in this
Agreement, all costs and expenses incurred in connection with this Agreement and the Other
Agreements or the transactions contemplated hereby and thereby shall be paid by the party incurring
such expenses, whether or not the transactions contemplated by this Agreement or the Other
Agreements are consummated.

(b) ECC and Seller agree that if this Agreement shall be terminated by ECC or Seller pursuant
to Section 9.01(d)(ii), then ECC and Seller shall be jointly and severally obligated to pay
to Acquirer an amount equal to $6,000,000 (the “Termination Fee”) concurrently with such
termination.

(c) ECC and Seller agree that if this Agreement shall be terminated by Acquirer pursuant to
Section 9.01(c)(i), then ECC and Seller shall be jointly and severally obligated to pay to
Acquirer the Termination Fee within one Business Day following such termination.

(d) The parties acknowledge that the agreements contained in this Section 9.03 are an
integral part of the transactions contemplated hereby and constitute liquidated damages and not a
penalty, and that, without these agreements, the parties would not have entered into this
Agreement.

ARTICLE 10.

INDEMNIFICATION

10.01 Survival Periods.

Each of the representations and warranties made by the parties contained in Article V
shall survive the Closing for a period of ninety days. Except as provided above, the parties
intend to shorten the statute of limitations and agree that no claims or causes of action may be
brought against either ECC, Seller or Acquirer based upon, directly or indirectly, any of the
representations or warranties contained in Article V hereof after the applicable survival
period or any termination hereof. This Section 10.01 shall not limit any covenant or
agreement of the parties that applies or contemplates performance after the Closing.
Notwithstanding any provision herein to the contrary, in the event a party has given a claim for
indemnification pursuant to this Article X with respect to a breach of a representation or
warranty before the end of the applicable survival period, then the survival period for such claim
shall continue until such claim is finally resolved.

10.02 Indemnification by ECC and Seller.

(a) In accordance with the terms and subject to the conditions set forth in this Article
X, from and after the Closing, ECC shall defend, indemnify and hold harmless Acquirer and its
Affiliates and their respective directors, officers, equity holders, employees, agents and
representatives and their respective heirs, successors and assigns (collectively, the “Acquirer
Indemnified Parties”) from and against any and all Losses that are directly or indirectly imposed
on, suffered or incurred by any Acquirer Indemnified Party arising out of or relating to (i) any
breach of any representation or warranty of ECC in Section 5.03 of this Agreement (without
giving effect to any limitation or qualification as to “knowledge,” “materiality” or “Material
Adverse Effect” set forth therein) or (ii) any failure to perform any covenant or agreement of ECC
set forth in this Agreement.

(b) In accordance with the terms and subject to the conditions set forth in this Article
X, from and after the Closing, ECC and Seller shall, jointly and severally, defend, indemnify
and hold harmless the Acquirer Indemnified Parties from and against any and all Losses that are
directly or indirectly imposed on, suffered or incurred by any Acquirer Indemnified Party arising
out of or relating to (i) any breach of any representation or warranty of Seller in Section
5.02 of this Agreement (without giving effect to any limitation or qualification as to
“knowledge,” “materiality” or “Material Adverse Effect” set forth therein), (ii) any failure to
perform any covenant or agreement of Seller set forth in this Agreement, (iii) any of the Retained
Liabilities, or (iv) acts or omissions of Seller or any of its Affiliates prior to the Closing
relating to the Transferred Assets or the operation of the Business; provided,
however, that with respect to the obligations of ECC and Seller to indemnify and hold
harmless the Acquirer Indemnified Parties in respect of Losses arising out of or relating to the
Retained Liabilities pursuant to clause (iii) of this Section 10.03(b), the term “Losses”
shall not include attorneys’, accountants’, consultants’ and experts’ fees incurred by any of the
Acquirer Indemnified Parties from and after the 91st day after the Closing Date in
connection with defending any Third Party Claim relating to any of the Retained Liabilities, it
being understood and agreed, however, that the term “Losses” shall include attorneys’, consultants’
and experts’ fees incurred by any of the Acquirer Indemnified Parties in connection with enforcing
their rights to indemnification hereunder.

(c) Notwithstanding Section 10.02(a) and Section 10.02(b), (i) no
indemnification by ECC under Section 10.02(a)(i) or by ECC or Seller under Section
10.02(b)(i), in each case, in respect of a breach of representation or warranty, shall be
required with respect to any individual item of Loss unless the aggregate of all Losses of the
Acquirer Indemnified Parties described in Section 10.02(a)(i) and Section
10.02(b)(i) shall exceed $500,000 (the “Threshold Amount”), in which case ECC and Seller shall
be liable for all Losses (including the initial $500,000 of Losses) incurred by the Acquirer
Indemnified Parties described in Section 10.02(a)(i) and Section 10.02(b)(i), and
(ii) the cumulative aggregate indemnity obligation of ECC and Seller under Section
10.02(a)(i) and Section 10.02(b)(i) in respect of breaches of representations and
warranties shall in no event exceed $3,000,000 (the “Cap”). Notwithstanding the foregoing, the
Threshold Amount and the Cap shall not apply with respect to any Losses arising from fraud or
intentional misrepresentation by ECC or Seller in respect of any representation or warranty in
Section 5.02 or Section 5.03.

10.03 Indemnification by Acquirer.

(a) In accordance with the terms and subject to the conditions set forth in this Article
X, from and after the Closing, Acquirer shall defend, indemnify and hold harmless ECC, Seller
and their Affiliates and their respective directors, officers, equity holders, employees, agents
and representatives and their respective heirs, successors and assigns (collectively, the “Seller
Indemnified Parties”) from and against any and all Losses that are directly or indirectly imposed
on, suffered or incurred by any Seller Indemnified Party arising out of or relating to (i) any
breach of any representation or warranty of Acquirer in Section 5.04 of this Agreement
(without giving effect to any limitation or qualification as to “knowledge” or “materiality” set
forth therein), (ii) any failure to perform any covenant or agreement of Acquirer set forth in this
Agreement, (iii) the Assumed Liabilities, or (iv) acts or omissions of Acquirer or any of its
Affiliates following the Closing relating to the Transferred Assets or the operation of the
Business.

(b) Notwithstanding Section 10.03(a), (i) no indemnification by Acquirer under
Section 10.03(a)(i) in respect of a breach of representation or warranty shall be required
with respect to any individual item of Loss unless the aggregate of all Losses of the Seller
Indemnified Parties described in Section 10.03(a)(i) shall exceed the Threshold Amount, in
which case Acquirer shall be liable for all Losses (including the initial $500,000 of Losses)
incurred by the Seller Indemnified Parties described in Section 10.03(a)(i), and (ii) the
cumulative aggregate indemnity obligation of Acquirer under Section 10.03(a)(i) in respect
of breaches of representations and warranties shall in no event exceed the Cap. Notwithstanding
the foregoing, the Threshold Amount and the Cap shall not apply with respect to any Losses arising
from fraud or intentional misrepresentation by Acquirer in respect of any representation or
warranty in Section 5.04.

10.04 Indemnification Procedure.

(a) Any party entitled to be indemnified under this Agreement (an “Indemnified Party”) seeking
indemnification for any Losses or potential Losses arising from a claim asserted by a third party
against the Indemnified Party (a “Third Party Claim”) shall give written notice to the party
required to indemnify such Indemnified Party (the “Indemnifying Party”). Written notice to the
Indemnifying Party of the existence of a Third Party Claim shall be given by the Indemnified Party
within five Business Days after its receipt of a written assertion of liability from the third
party; provided, however, that the Indemnified Party shall not be foreclosed from
seeking indemnification pursuant to this Article X by any failure to provide timely notice
of the existence of a Third Party Claim to the Indemnifying Party except and only to the extent
that the Indemnifying Party has been materially prejudiced as a result of such delay.

(b) Except as otherwise provided herein, the Indemnifying Party may elect to compromise or
defend, at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel
(which counsel shall be reasonably satisfactory to the Indemnified Party), any Third Party Claim.
If the Indemnifying Party elects to compromise or defend such Third Party Claim, it shall, within
five Business Days after receiving notice of the Third Party Claim, notify the Indemnified Party of
its intent to do so, and the Indemnified Party shall cooperate, at the expense of the Indemnifying
Party, in the compromise of, or defense against, such Third Party Claim. If the Indemnifying Party
elects not to compromise or defend against the Third Party Claim, or fails to notify the
Indemnified Party of its election to do so as herein provided, or otherwise abandons the defense of
such Third Party Claim, (i) the Indemnified Party may pay (without prejudice of any of its rights
as against the Indemnifying Party), compromise or defend such Third Party Claim and (ii) the costs
and expenses of the Indemnified Party incurred in connection therewith shall be indemnifiable by
the Indemnifying Party pursuant to the terms of this Agreement. Notwithstanding anything to the
contrary contained herein, in connection with any Third Party Claim in which the Indemnified Party
shall reasonably conclude, based upon the advice of its counsel, that (x) there is a conflict of
interest between the Indemnifying Party and the Indemnified Party in the conduct of the defense of
such Third Party Claim or (y) there are specific defenses available to the Indemnified Party which
are different from or additional to those available to the Indemnifying Party, then the Indemnified
Party shall have the right to assume and direct the defense and compromise of such Third Party
Claim. In such an event, the Indemnifying Party shall pay the fees and disbursements of counsel to
each of the Indemnifying Party and the Indemnified Party. The Indemnifying Party may not, without
the prior written consent of the Indemnified Party, settle or compromise any claim which (A) does
not contain an unconditional release of the Indemnified Party, (B) imposes any liabilities on the
Indemnified Party, (C) ascribes any fault on the part of the Indemnified Party or (D) does not
provide solely for monetary relief. In any event, except as otherwise provided herein, the
Indemnified Party and the Indemnifying Party may each participate, at their own expense, in the
defense of such Third Party Claim. If the Indemnifying Party chooses to defend any claim, the
Indemnified Party shall make available to the Indemnifying Party any personnel or any books,
records or other documents within its control that are reasonably necessary or appropriate for such
defense, subject to the receipt of appropriate confidentiality agreements. Notwithstanding
anything to the contrary contained in this Section 10.04(b), in the event prompt action is
required with respect to the defense of a Third Party Claim, the Indemnified Party shall, subject
to the terms and conditions of this Article X, have the right to assume the defense of such
Third Party Claim; provided, however, that in the event that the Indemnifying Party
subsequently elects to assume the defense of such Third Party Claim, then the provisions set forth
in this Section 10.04(b) shall be applicable and the Indemnifying Party shall, subject to
the terms and conditions of this Article X, reimburse the Indemnified Party for any costs
and expenses incurred by the Indemnified Party prior to the date the Indemnifying Party assumes
control of such Third Party Claim.

(c) Any claim on account of Losses which do not involve a Third Party Claim shall be asserted
by written notice given by the party claiming indemnity to the party from which indemnity is
sought. The receiving party shall have a period of five (5) Business Days within which to respond
thereto. If such party does not respond within such period, such party shall be deemed to have
accepted responsibility to make payment, subject to the provisions hereof, and shall have no
further right to contest the validity of such claim. If the receiving party does not respond
within five (5) Business Days or rejects such claim in whole or in part, the party claiming
indemnity shall be free to pursue such remedies as may be available to such party by applicable
Law.

(d) All amounts owing under this Article X shall bear interest at the Federal Funds
Rate computed from the time such Losses were incurred or suffered to the date of payment therefore.
Any amount paid by any party hereto to another party hereto pursuant to this Article X
shall be treated for all U.S. federal, state and local Tax purposes as an adjustment to the Asset
Price, and no party hereto shall take, or permit any of its Affiliates to take any position
inconsistent with such treatment on any applicable Tax Return or in any judicial or administrative
proceeding before any taxing authority or court of law or otherwise.

10.05 Exclusive Sole Remedy. Following the Closing, the sole and exclusive remedy for
any party for claims for monetary damages arising out of a breach of any representation, warranty,
covenant or agreement under this Agreement or in connection with the Transferred Assets shall be a
claim for indemnification pursuant to this Article X; provided, however,
that nothing herein shall prevent an indemnified party from pursuing remedies as may be available
to such party under applicable Law in the event of (i) fraud or willful misconduct, or (ii) the
indemnifying party’s failure to comply with its indemnification obligations hereunder.

ARTICLE 11.

GENERAL PROVISIONS

11.01 Notices. All notices, requests, claims, demands and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt)
by delivery in Person or by a recognized overnight courier service to the respective parties at the
following addresses (or at such other address for a party as shall be specified in a notice given
in accordance with this Section 11.01):

if to Acquirer:

Bear Stearns Residential Mortgage Corporation

9201 East Mountain View Road, Suite 210

Scottsdale, Arizona 85258

Fax No.: (480) 991-6460

Attention: Jeff Walton

with copies to:

Bear, Stearns & Co. Inc.

383 Madison Avenue

New York, New York 10179

Fax No.: (212) 499-6494

Attention: Jeff Verschleiser

Jay Remis

and

Skadden, Arps, Slate, Meagher & Flom LLP

4 Times Square

New York, New York 10021

Fax No.: (212) 735-2000

Attention: Fred B. White, III, Esq.

William S. Rubenstein, Esq.

if to ECC or Seller:

ECC Capital Corporation

1833 Alton Parkway

Irvine, California 92606

Fax No.: (949) 856-4948

Attention: Roque Santi

or

with copies to:

Latham & Watkins LLP

650 Town Center Drive

Costa Mesa, California 92626

Fax No.: (714) 755-8290

Attention: Cary K. Hyden, Esq.

and

Latham & Watkins LLP

633 West Fifth Street, Suite 400

Los Angeles, California 90071

Fax No.: (213) 891-8763

Attention: Paul Tosetti, Esq.

11.02 Severability. If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as closely as possible
in a mutually acceptable manner in order that the transactions contemplated hereby be consummated
as originally contemplated to the fullest extent possible.

11.03 Amendment. This Agreement may be amended by the parties hereto by action taken by
their respective board of directors (or similar governing body or entity) at any time prior to the
Closing. This Agreement may not be amended except by an instrument in writing signed by the
parties hereto.

11.04 Entire Agreement; Assignment. This Agreement, the Confidentiality Agreement and the
documents and instruments delivered in connection herewith constitute the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with respect to the subject
matter hereof and thereof. This Agreement shall not be assigned by operation of law or otherwise;
provided, however, that upon notice to ECC and Seller delivered in accordance with Section
11.01, Acquirer may assign or delegate any or all of its rights or obligations under this
Agreement, including, without limitation, the right to acquire all or part of the Transferred
Assets, to any Affiliate thereof, but only to the extent that at the time of such assignment such
Affiliate has, has access to or has a commitment to receive all funds necessary to pay the Asset
Price.

11.05 Parties in Interest. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement.

11.06 Specific Performance. The parties hereto agree that irreparable damage would occur
in the event any provision of this Agreement were not performed in accordance with the terms hereof
and that the parties shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.

11.07 Governing Law. This Agreement shall be governed by and construed in accordance with,
the laws of the State of New York without regard, to the fullest extent permitted by law, to the
conflicts of laws provisions thereof which might result in the application of the laws of any other
jurisdiction.

11.08 Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent
permitted by applicable Law any right it may have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in connection with this Agreement or the
transactions contemplated hereby. Each of the parties hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this Agreement and the
transactions contemplated hereby, as applicable, by, among other things, the mutual waivers and
certifications in this Section 11.08.

11.09 Headings. The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or interpretation of this
Agreement.

11.10 Counterparts. This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

11.11 Mutual Drafting. Each party hereto has participated in the drafting of this
Agreement, which each party acknowledges is the result of extensive negotiations between the
parties.

11.12

3

Reliance and Cooperation. Each party to this Agreement acknowledges and agrees that it is
not relying on tax or other advice from any other party hereto, and that it has or will consult
with its own advisors. The parties hereto agree to cooperate with each other as may be reasonably
requested in connection with the preparation and filing of any Tax Returns.

[Signature Page to Follow]

4

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in
counterparts by their duly authorized officers, all as of the day and year first above written.

BEAR STEARNS RESIDENTIAL MORTGAGE CORPORATION

By: /s/ Jay L. Remis

Name: Jay L. Remis

Title: Authorized Signatory

ENCORE CREDIT CORP.

By: /s/ Shahid S. Asghar

Name: Shahid S. Asghar

Title: Executive Vice President

ECC CAPITAL CORPORATION

By: /s/ Shahid S. Asghar

Name: Shahid S. Asghar

Title: Chief Executive Officer

[Signature Page to Asset Purchase Agreement]

5EX-10.2

	 
	Amended and Restated
	Master Repurchase Agreement
	 

	September 1996 Version

	 

	Dated as of October 10, 2006

	 

	Between: BEAR STEARNS MORTGAGE CAPITAL CORPORATION, as Buyer

	 

	and ENCORE CREDIT CORP., as Seller jointly and severally with the other Sellers

	 

	and BRAVO CREDIT CORPORATION, as Seller jointly and severally with the other Sellers

	 

	and CONQUISTAMERICA, INC, as Seller jointly and severally with the other Sellers

	 

	and ECC CAPITAL CORPORATION, as Seller jointly and severally with the other Sellers

	1.	 	Applicability

From time to time the parties hereto may enter into transactions in which one party (“Seller”)
agrees to transfer to the other (“Buyer”) securities or other assets (“Securities”) against the
transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such
Securities at a date certain or on demand, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in
writing, shall be governed by this Agreement, including any supplemental terms or conditions
contained in Annex I hereto and in any other annexes identified herein or therein as applicable
hereunder.

	2.	 	Definitions

	 	(a)	 	“Act of Insolvency”, with respect to any party, (i) the commencement by such party as
debtor of any case or proceeding under any bankruptcy, insolvency, reorganization,
liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the
appointment or election of a receiver, conservator, trustee, custodian or similar official
for such party or any substantial part of its property, or the convening of any meeting of
creditors for purposes of commencing any such case or proceeding or seeking such an
appointment or election, (ii) the commencement of any such case or proceeding against such
party, or another seeking such an appointment or election, or the filing against a party of
an application for a protective decree under the provisions of the Securities Investor
Protection Act of 1970, which (A) is consented to or not timely contested by such party,
(B) results in the entry of an order for relief, such an appointment or election, the
issuance of such a protective decree or the entry of an order having a similar effect, or
(C) is not dismissed within 15 days, (iii) the making by such party of a general assignment
for the benefit of creditors, or (iv) the admission in writing by such party of such
party’s inability to pay such party’s debts as they become due;

	 	(b)	 	“Additional Purchased Securities”, Securities provided by Seller to Buyer pursuant to
Paragraph 4 (a) hereof;

	 	(c)	 	“Buyer’s Margin Amount”, with respect to any Transaction as of any date, the amount
obtained by application of the Buyer’s Margin Percentage to the Repurchase Price for such
Transaction as of such date;

	 	(d)	 	“Buyer’s Margin Percentage”, with respect to any Transaction as of any date, a
percentage (which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and
Seller or, in the absence of any such agreement, the percentage obtained by dividing the
Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the
Purchase Date for such Transaction;

	 	(e)	 	“Confirmation”, the meaning specified in Paragraph 3 (b) hereof,

	 	(f)	 	“Income”, with respect to any Security at any time, any principal thereof and all
interest, dividends or other distributions thereon;

	 	(g)	 	“Margin Deficit”, the meaning specified in Paragraph 4 (a) hereof;

	 	(h)	 	“Margin Excess”, the meaning specified in Paragraph 4(b) hereof;

	 	(i)	 	“Margin Notice Deadline”, the time agreed to by the parties in the relevant
Confirmation, Annex I hereto or otherwise as the deadline for giving notice requiring
same-day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof
(or, in the absence of any such agreement, the deadline for such purposes established in
accordance with market practice);

	 	(j)	 	“Market Value”, with respect to any Securities as of any date, the price for such
Securities on such date obtained from a generally recognized source agreed to by the
parties or the most recent closing bid quotation from such a source, plus accrued Income to
the extent not included therein (other than any Income credited or transferred to, or
applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date
(unless contrary to market practice for such Securities);

	 	(k)	 	“Price Differential”, with respect to any Transaction as of any date, the aggregate
amount obtained by daily application of the Pricing Rate for such Transaction to the
Purchase Price for such Transaction on a 360 day per year basis for the actual number of
days during the period commencing on (and including) the Purchase Date for such Transaction
and ending on (but excluding) the date of determination (reduced by any amount of such
Price Differential previously paid by Seller to Buyer with respect to such Transaction);

	 	(l)	 	“Pricing Rate”, the per annum percentage rate for determination of the Price
Differential;

	 	(m)	 	“Prime Rate”, the prime rate of U.S. commercial banks as published in The Wall Street
Journal (or, if more than one such rate is published, the average of such rates);

	 	(n)	 	“Purchase Date”, the date on which Purchased Securities are to be transferred by Seller
to Buyer;

	 	(o)	 	“Purchase Price”, (i) on the Purchase Date, the price at which Purchased Securities are
transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree
otherwise, such price increased by the amount of any cash transferred by Buyer to Seller
pursuant to Paragraph 4 (b) hereof and decreased by the amount of any cash transferred by
Seller to Buyer pursuant to Paragraph 4 (a) hereof or applied to reduce Seller’s
obligations under clause (ii) of Paragraph 5 hereof;

	 	(p)	 	“Purchased Securities”, the Securities transferred by Seller to Buyer in a Transaction
hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof.
The term “Purchased Securities” with respect to any Transaction at any time also shall
include Additional Purchased Securities delivered pursuant to Paragraph 4 (a) hereof and
shall exclude Securities returned pursuant to Paragraph 4(b) hereof;

	 	(q)	 	“Repurchase Date”, the date on which Seller is to repurchase the Purchased Securities
from Buyer, including any date determined by application of the provisions of Paragraph 3
(c) or 11 hereof;

	 	(r)	 	“Repurchase Price”, the price at which Purchased Securities are to be transferred from
Buyer to Seller upon termination of a Transaction, which will be determined in each case
(including Transactions terminable upon demand) as the sum of the Purchase Price and the
Price Differential as of the date of such determination;

	 	(s)	 	“Seller’s Margin Amount”, with respect to any Transaction as of any date, the amount
obtained by application of the Seller’s Margin Percentage to the Repurchase Price for such
Transaction as of such date;

	 	(t)	 	“Seller’s Margin Percentage”, with respect to any Transaction as of any date, a
percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and
Seller or, in the absence of any such agreement, the percentage obtained by dividing the
Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the
Purchase Date for such Transaction.

	3.	 	Initiation; Confirmation; Termination

	 	(a)	 	An agreement to enter into a Transaction may be made orally or in writing at the
initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the
Purchased Securities shall be transferred to Buyer or its agent against the transfer of the
Purchase Price to an account of Seller.

	 	(b)	 	Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as
shall be agreed, shall promptly deliver to the other party a written confirmation of each
Transaction (a “Confirmation”). The Confirmation shall describe the Purchased Securities
(including CUSIP number, if any), identify Buyer and Seller and set forth (i) the Purchase
Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be
terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the
Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent
with this Agreement. The Confirmation, together with this Agreement, shall constitute
conclusive evidence of the terms agreed between Buyer and Seller with respect to the
Transaction to which the Confirmation relates, unless with respect to the Confirmation
specific objection is made promptly after receipt thereof. In the event of any conflict
between the terms of such Confirmation and this Agreement, this Agreement shall prevail.

	 	(c)	 	In the case of Transactions terminable upon demand, such demand shall be made by Buyer
or Seller, no later than such time as is customary in accordance with market practice, by
telephone or otherwise on or prior to the business day on which such termination will be
effective. On the date specified in such demand, or on the date fixed for termination in
the case of Transactions having a fixed term, termination of the Transaction will be
effected by transfer to Seller or its agent of the Purchased Securities and any Income in
respect thereof received by Buyer (and not previously credited or transferred to, or
applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer
of the Repurchase Price to an account of Buyer.

	4.	 	Margin Maintenance

	 	(a)	 	If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Buyer is less than the
aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer
may by notice to Seller require Seller in such Transactions, at Seller’s option, to
transfer to Buyer cash or additional Securities reasonably acceptable to Buyer (“Additional
Purchased Securities”), so that the cash and aggregate Market Value of the Purchased
Securities, including any such Additional Purchased Securities, will thereupon equal or
exceed such aggregate Buyer’s Margin Amount (decreased by the amount of any Margin Deficit
as of such date arising from any Transactions in which such Buyer is acting as Seller).

	 	(b)	 	If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Seller exceeds the aggregate
Seller’s Margin Amount for all such Transactions at such time (a “Margin Excess”), then
Seller may by notice to Buyer require Buyer in such Transactions, at Buyer’s option, to
transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the
Purchased Securities, after deduction of any such cash or any Purchased Securities so
transferred, will thereupon not exceed such aggregate Seller’s Margin Amount (increased by
the amount of any Margin Excess as of such date arising from any Transactions in which such
Seller is acting as Buyer).

	 	(c)	 	If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this
Paragraph at or before the Margin Notice Deadline on any business day, the party receiving
such notice shall transfer cash or Additional Purchased Securities as provided in such
subparagraph no later than the close of business in the relevant market on such day. If any
such notice is given after the Margin Notice Deadline, the party receiving such notice
shall transfer such cash or Securities no later than the close of business in the relevant
market on the next business day following such notice.

	 	(d)	 	Any cash transferred pursuant to this Paragraph shall be attributed to such
Transactions as shall be agreed upon by Buyer and Seller.

	 	(e)	 	Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the
respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this
Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may
be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices
for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller
prior to entering into any such Transactions).

	 	(f)	 	Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the
respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to
require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be
exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single
Transaction hereunder (calculated without regard to any other Transaction outstanding under
this Agreement).

	5.	 	Income Payments

Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in
respect of the Securities that is not otherwise received by Seller, to the full extent it would
be so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may
agree with respect to any Transaction (or, in the absence of any such agreement, as Buyer shall
reasonably determine in its discretion), on the date such Income is paid or distributed either
(i) transfer to or credit to the account of Seller such Income with respect to any Purchased
Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the
Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller
upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant
to the preceding sentence (A) to the extent that such action would result in the creation of a
Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash
or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an
Event of Default with respect to Seller has occurred and is then continuing at the time such
Income is paid or distributed.

	6.	 	Security Interest

Although the parties intend that all Transactions hereunder be sales and purchases and not
loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to have
pledged to Buyer as security for the performance by Seller of its obligations under each such
Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the
Purchased Securities with respect to all Transactions hereunder and all Income thereon and other
proceeds thereof.

	7.	 	Payment and Transfer

Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately
available funds. All Securities transferred by one party hereto to the other party (i) shall be
in suitable form for transfer or shall be accompanied by duly executed instruments of transfer
or assignment in blank and such other documentation as the party receiving possession may
reasonably request, (ii) shall be transferred on the book-entry system of a Federal Reserve
Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer.

	8.	 	Segregation of Purchased Securities

To the extent required by applicable law, all Purchased Securities in the possession of Seller
shall be segregated from other securities in its possession and shall be identified as subject
to this Agreement. Segregation may be accomplished by appropriate identification on the books
and records of the holder, including a financial or securities intermediary or a clearing
corporation. All of Seller’s interest in the Purchased Securities shall pass to Buyer on the
Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall
preclude Buyer from engaging in repurchase transactions with the Purchased Securities or
otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no such
transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller
pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer’s obligation to credit or pay Income to, or
apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof.

	 
	 

1

	 
	 

	Required Disclosure for Transactions in Which the Seller

Retains Custody of the Purchased Securities

Seller is not permitted to substitute other securities for those subject to this Agreement and therefore

must keep Buyer’s securities segregated at all times, unless in this Agreement Buyer grants Seller the right to

substitute other securities. If Buyer grants the right to substitute, this means that Buyer’s securities will

likely be commingled with Seller’s own securities during the trading day. Buyer is advised that, during any

trading day that Buyer’s securities are commingled with Seller’s securities, they [will] * [may] ** be subject

to liens granted by Seller to [its clearing bank] * [third parties] ** and may be used by Seller for deliveries

on other securities transactions. Whenever the securities are commingled, Seller’s ability to resegregate

substitute securities for Buyer will be subject to Seller’s ability to satisfy [the clearing] * [any]** lien or

to obtain substitute securities.

* Language to be used under 17 C.F.R. b403.4 (e) if Seller is a government securities broker

or dealer other than a financial institution.

** Language to be used under 17 C.F.R. b403.5(d) if Seller is a financial institution.

	 

	9.	 	Substitution

	 	(a)	 	Seller may, subject to agreement with and acceptance by Buyer, substitute other
Securities for any Purchased Securities. Such substitution shall be made by transfer to
Buyer of such other Securities and transfer to Seller of such Purchased Securities. After
substitution, the substituted Securities shall be deemed to be Purchased Securities.

	 	(b)	 	In Transactions in which Seller retains custody of Purchased Securities, the parties
expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this
Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of other
Securities for Purchased Securities; provided, however, that such other Securities shall
have a Market Value at least equal to the Market Value of the Purchased Securities for
which they are substituted.

	10.	 	Representations

Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to
execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to
perform its obligations hereunder and has taken all necessary action to authorize such
execution, delivery and performance, (ii) it will engage in such Transactions as principal (or,
if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction
by the other party hereto, as agent for a disclosed principal), (iii) the person signing this
Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such
disclosed principal), (iv) it has obtained all authorizations of any governmental body required
in connection with this Agreement and the Transactions hereunder and such authorizations are in
full force and effect and (v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, by-law or rule applicable
to it or any agreement by which it is bound or by which any of its assets are affected. On the
Purchase Date for any Transaction Buyer and Seller shall each be deemed to repeat all the
foregoing representations made by it.

	11.	 	Events of Default

In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities
upon the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer
Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply
with Paragraph 4 hereof, (iv) Buyer fails, after one business day’s notice, to comply with
Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi) any
representation made by Seller or Buyer shall have been incorrect or untrue in any material
respect when made or repeated or deemed to have been made or repeated, or (vii) Seller or Buyer
shall admit to the other its inability to, or its intention not to, perform any of its
obligations hereunder (each an “Event of Default”):

	 	(a)	 	The nondefaulting party may, at its option (which option shall be deemed to have been
exercised immediately upon the occurrence of an Act of Insolvency), declare an Event of
Default to have occurred hereunder and, upon the exercise or deemed exercise of such
option, the Repurchase Date for each Transaction hereunder shall, if it has not already
occurred, be deemed immediately to occur (except that, in the event that the Purchase Date
for any Transaction has not yet occurred as of the date of such exercise or deemed
exercise, such Transaction shall be deemed immediately canceled). The nondefaulting party
shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting
party of the exercise of such option as promptly as practicable.

	 	(b)	 	In all Transactions in which the defaulting party is acting as Seller, if the
nondefaulting party exercises or is deemed to have exercised the option referred to in
subparagraph (a) of this Paragraph, (i) the defaulting party’s obligations in such
Transactions to repurchase all Purchased Securities, at the Repurchase Price therefor on
the Repurchase Date determined in accordance with subparagraph (a) of this Paragraph, shall
thereupon become immediately due and payable, (ii) all Income paid after such exercise or
deemed exercise shall be retained by the nondefaulting party and applied to the aggregate
unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder, and
(iii) the defaulting party shall immediately deliver to the nondefaulting party any
Purchased Securities subject to such Transactions then in the defaulting party’s possession
or control.

	 	(c)	 	In all Transactions in which the defaulting party is acting as Buyer, upon tender by
the nondefaulting party of payment of the aggregate Repurchase Prices for all such
Transactions, all right, title and interest in and entitlement to all Purchased Securities
subject to such Transactions shall be deemed transferred to the nondefaulting party, and
the defaulting party shall deliver all such Purchased Securities to the nondefaulting
party.

	 	(d)	 	If the nondefaulting party exercises or is deemed to have exercised the option referred
to in subparagraph (a) of this Paragraph, the nondefaulting party, without prior notice to
the defaulting party, may:

	 	(i)	 	as to Transactions in which the defaulting party is acting as Seller, (A)
immediately sell, in a recognized market (or otherwise in a commercially reasonable
manner) at such price or prices as the nondefaulting party may reasonably deem
satisfactory, any or all Purchased Securities subject to such Transactions and apply
the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts
owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of
selling all or a portion of such Purchased Securities, to give the defaulting party
credit for such Purchased Securities in an amount equal to the price therefor on such
date, obtained from a generally recognized source or the most recent closing bid
quotation from such a source, against the aggregate unpaid Repurchase Prices and any
other amounts owing by the defaulting party hereunder; and

	 	(ii)	 	as to Transactions in which the defaulting party is acting as Buyer, (A)
immediately purchase, in a recognized market (or otherwise in a commercially reasonable
manner) at such price or prices as the nondefaulting party may reasonably deem
satisfactory, securities (“Replacement Securities”) of the same class and amount as any
Purchased Securities that are not delivered by the defaulting party to the
nondefaulting party as required hereunder or (B) in its sole discretion elect, in lieu
of purchasing Replacement Securities, to be deemed to have purchased Replacement
Securities at the price therefor on such date, obtained from a generally recognized
source or the most recent closing offer quotation from such a source.

Unless otherwise provided in Annex I, the parties acknowledge and agree that (1) the
Securities subject to any Transaction hereunder are instruments traded in a recognized
market, (2) in the absence of a generally recognized source for prices or bid or offer
quotations for any Security, the nondefaulting party may establish the source therefor in
its sole discretion and (3) all prices, bids and offers shall be determined together with
accrued Income (except to the extent contrary to market practice with respect to the
relevant Securities).

	 	(e)	 	As to Transactions in which the defaulting party is acting as Buyer, the defaulting
party shall be liable to the nondefaulting party for any excess of the price paid (or
deemed paid) by the nondefaulting party for Replacement Securities over the Repurchase
Price for the Purchased Securities replaced thereby and for any amounts payable by the
defaulting party under Paragraph 5 hereof or otherwise hereunder.

	 	(f)	 	For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder
in respect of which the defaulting party is acting as Buyer shall not increase above the
amount of such Repurchase Price for such Transaction determined as of the date of the
exercise or deemed exercise by the nondefaulting party of the option referred to in
subparagraph (a) of this Paragraph.

	 	(g)	 	The defaulting party shall be liable to the nondefaulting party for (i) the amount of
all reasonable legal or other expenses incurred by the nondefaulting party in connection
with or as a result of an Event of Default, (ii) damages in an amount equal to the cost
(including all fees, expenses and commissions) of entering into replacement transactions
and entering into or terminating hedge transactions in connection with or as a result of an
Event of Default, and (iii) any other loss, damage, cost or expense directly arising or
resulting from the occurrence of an Event of Default in respect of a Transaction.

	 	(h)	 	To the extent permitted by applicable law, the defaulting party shall be liable to the
nondefaulting party for interest on any amounts owing by the defaulting party hereunder,
from the date the defaulting party becomes liable for such amounts hereunder until such
amounts are (i) paid in full by the defaulting party or (ii) satisfied in full by the
exercise of the nondefaulting party’s rights hereunder. Interest on any sum payable by the
defaulting party to the nondefaulting party under this Paragraph 11 (h) shall be at a rate
equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate.

	 	(i)	 	The nondefaulting party shall have, in addition to its rights hereunder, any rights
otherwise available to it under any other agreement or applicable law.

	12.	 	Single Agreement

Buyer and Seller acknowledge that, and have entered hereinto and will enter into each
Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions
hereunder constitute a single business and contractual relationship and have been made in
consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of
its obligations in respect of each Transaction hereunder, and that a default in the performance
of any such obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by
them in respect of any Transaction against obligations owing to them in respect of any other
Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of
them in respect of any Transaction shall be deemed to have been made in consideration of
payments, deliveries and other transfers in respect of any other Transactions hereunder, and the
obligations to make any such payments, deliveries and other transfers may be applied against
each other and netted.

	13.	 	Notices and Other Communications

Any and all notices, statements, demands or other communications hereunder may be given by a
party to the other by mail, facsimile, telegraph, messenger or otherwise to the address
specified in Annex II hereto, or so sent to such party at any other place specified in a notice
of change of address hereafter received by the other. All notices, demands and requests
hereunder may be made orally, to be confirmed promptly in writing, or by other communication as
specified in the preceding sentence.

	14.	 	Entire Agreement; Severability

This Agreement shall supersede any existing agreements between the parties containing general
terms and conditions for repurchase transactions. Each provision and agreement herein shall be
treated as separate and independent from any other provision or agreement herein and shall be
enforceable notwithstanding the unenforceability of any such other provision or agreement.

	15.	 	Non-assignability; Termination

	 	(a)	 	The rights and obligations of the parties under this Agreement and under any
Transaction shall not be assigned by either party without the prior written consent of the
other party, and any such assignment without the prior written consent of the other party
shall be null and void. Subject to the foregoing, this Agreement and any Transactions shall
be binding upon and shall inure to the benefit of the parties and their respective
successors and assigns. This Agreement may be terminated by either party upon giving
written notice to the other, except that this Agreement shall, notwithstanding such notice,
remain applicable to any Transactions then outstanding.

	 	(b)	 	Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning,
charging or otherwise dealing with all or any part of its interest in any sum payable to it
under Paragraph 11 hereof.

	16.	 	Governing Law

This Agreement shall be governed by the laws of the State of New York without giving effect to
the conflict of law principles thereof.

	17.	 	No Waivers, Etc.

No express or implied waiver of any Event of Default by either party shall constitute a waiver
of any other Event of Default and no exercise of any remedy hereunder by any party shall
constitute a waiver of its right to exercise any other remedy hereunder. No modification or
waiver of any provision of this Agreement and no consent by any party to a departure herefrom
shall be effective unless and until such shall be in writing and duly executed by both of the
parties hereto. Without limitation on any of the foregoing, the failure to give a notice
pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at
a later date.

	18.	 	Use of Employee Plan Assets

	 	(a)	 	If assets of an employee benefit plan subject to any provision of the Employee
Retirement Income Security Act of 1974 (“ERISA”) are intended to be used by either party
hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other party
prior to the Transaction. The Plan Party shall represent in writing to the other party that
the Transaction does not constitute a prohibited transaction under ERISA or is otherwise
exempt therefrom, and the other party may proceed in reliance thereon but shall not be
required so to proceed.

	 	(b)	 	Subject to the last sentence of subparagraph (a) of this Paragraph, any such
Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most
recent available audited statement of its financial condition and its most recent
subsequent unaudited statement of its financial condition.

	 	(c)	 	By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i)
to represent to Buyer that since the date of Seller’s latest such financial statements,
there has been no material adverse change in Seller’s financial condition which Seller has
not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and
unaudited statements of its financial condition as they are issued, so long as it is a
Seller in any outstanding Transaction involving a Plan Party.

	19.	 	Intent

	 	(a)	 	The parties recognize that each Transaction is a “repurchase agreement” as that term is
defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as
the type of Securities subject to such Transaction or the term of such Transaction would
render such definition inapplicable), and a “securities contract” as that term is defined
in Section 741 of Title 11 of the United States Code, as amended (except insofar as the
type of assets subject to such Transaction would render such definition inapplicable).

	 	(b)	 	It is understood that either party’s right to liquidate Securities delivered to it in
connection with Transactions hereunder or to exercise any other remedies pursuant to
Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in
Sections 555 and 559 of Title 11 of the United States Code, as amended.

	 	(c)	 	The parties agree and acknowledge that if a party hereto is an “insured depository
institution,” as such term is defined in the Federal Deposit Insurance Act, as amended
(“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term
is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as
the type of assets subject to such Transaction would render such definition inapplicable).

	 	(d)	 	It is understood that this Agreement constitutes a “netting contract” as defined in and
subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991
(“FDICIA”) and each payment entitlement and payment obligation under any Transaction
hereunder shall constitute a “covered contractual payment entitlement” or “covered
contractual payment obligation”, respectively, as defined in and subject to FDICIA (except
insofar as one or both of the parties is not a “financial institution” as that term is
defined In FDICIA).

	20.	 	Disclosure Relating to Certain Federal Protections

The parties acknowledge that they have been advised that:

	 	(a)	 	in the case of Transactions in which one of the parties is a broker or dealer
registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the
Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection
Corporation has taken the position that the provisions of the Securities Investor
Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any
Transaction hereunder;

	 	(b)	 	in the case of Transactions in which one of the parties is a government securities
broker or a government securities dealer registered with the SEC under Section 15C of the
1934 Act, SIPA will not provide protection to the other party with respect to any
Transaction hereunder; and

	 	(c)	 	in the case of Transactions in which one of the parties is a financial institution,
funds held by the financial institution pursuant to a Transaction hereunder are not a
deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable.

BEAR STEARNS MORTGAGE CAPITAL

CORPORATION, as Buyer

By: /s/ David S. Marren

Title: Senior Vice President

Date: October 10, 2006

ENCORE CREDIT CORP., as

Seller jointly and severally

with the other Sellers

By: /s/ Shahid S. Asghar

Title: Executive Vice President

Date: October 10, 2006

BRAVO CREDIT CORPORATION, as

Seller jointly and severally

with the other Sellers

By: /s/ Shahid S. Asghar

Title: President and Co-CEO

Date: October 10, 2006

ConquisAmercia, Inc., as

Seller jointly and severally

with the other Sellers

By: /s/ Roque A Santi

Title: Chief Financial Officer

Date: October 10, 2006

ECC Capital Corporation, as

Seller jointly and severally

with the other Sellers

By: /s/ Roque A Santi

Title: Chief Financial Officer

Date: October 10, 2006

2

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