Document:

Exhibit 10.25

 

EXECUTION VERSION

 

 

 

AMENDED AND RESTATED 

MASTER REPURCHASE AGREEMENT

 

 

Between:

 

 

Merrill Lynch Mortgage Capital Inc.,
as Buyer

 

 

and

 

 

MortgageIT, Inc., as Seller

 

 

and

 

 

MortgageIT Holdings, Inc. as Seller

 

 

 

Dated as of August
4, 2004

 

 

Portions of this
Agreement have been omitted pursuant to a confidential treatment request and
filed separately with the Securities and Exchange Commission.

 

 

 

TABLE OF CONTENTS

 

	
  SECTION
  1.

  	
  APPLICABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  INITIATION;
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  MARGIN AMOUNT
  MAINTENANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  INCOME PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  REQUIREMENTS OF LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  TAXES.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  SECURITY INTEREST

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  PAYMENT,
  TRANSFER AND CUSTODY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  10.

  	
  HYPOTHECATION
  OR PLEDGE OF PURCHASED MORTGAGE LOAN

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  REPRESENTATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  12.

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  14.

  	
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  15.

  	
  INDEMNIFICATION
  AND EXPENSES; RECOURSE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  16.

  	
  SERVICING

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 17.

  	
  SINGLE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  18.

  	
  SET-OFF

  	
   

  

 

i

 

	
  SECTION
  19.

  	
  NOTICES
  AND OTHER COMMUNICATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 20.

  	
  ENTIRE
  AGREEMENT; SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 21.

  	
  NON-ASSIGNABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 22.

  	
  TERMINABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  23.

  	
  GOVERNING
  LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  24.

  	
  SUBMISSION
  TO JURISDICTION; WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 25.

  	
  NO WAIVERS, ETC.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  26.

  	
  [RESERVED]

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  27.

  	
  DUE
  DILIGENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 28.

  	
  COMMITMENT FEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  29.

  	
  [RESERVED]

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  30.

  	
  BUYER’S
  APPOINTMENT AS ATTORNEY-IN-FACT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 31.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 32.

  	
  CONFIDENTIALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 33.

  	
  INTENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  34.

  	
  DISCLOSURE
  RELATING TO CERTAIN FEDERAL PROTECTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  35.

  	
  CONFLICTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 36.

  	
  AUTHORIZATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  37. 

  	
  ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING
  POLICIES.

  	
   

  

 

ii

 

EXHIBITS

 

	
  SCHEDULE 1

  	
  Representations and
  Warranties Re:  Mortgage Loans

  
	
   

  	
   

  
	
  SCHEDULE 2

  	
  Existing Indebtedness

  
	
   

  	
   

  
	
  EXHIBIT I

  	
  Form of Confirmation
  Letter

  
	
   

  	
   

  
	
  EXHIBIT II

  	
  Form of Opinion Letter

  
	
   

  	
   

  
	
  EXHIBIT III

  	
  UCC Filing Jurisdiction

  
	
   

  	
   

  
	
  EXHIBIT IV

  	
  Form of Collection
  Account Control Agreement

  
	
   

  	
   

  
	
  EXHIBIT V

  	
  Mortgage Loan Schedule
  Fields

  
	
   

  	
   

  
	
  EXHIBIT VI

  	
  Mortgage File Documents

  
	
   

  	
   

  
	
  EXHIBIT VII

  	
  Reserved

  
	
   

  	
   

  
	
  EXHIBIT VIII

  	
  Form of Seller’s
  Officer’s Certificate

  
	
   

  	
   

  
	
  EXHIBIT IX

  	
  Form of Servicer Notice

  
	
   

  	
   

  
	
  EXHIBIT X

  	
  Authorized
  Representatives

  
	
   

  	
   

  
	
  EXHIBIT XI

  	
  Responsible Officers

  
	
   

  	
   

  
	
  EXHIBIT XII

  	
  Co-op Loan Mortgage
  File

  

 

iii

 

MASTER REPURCHASE
AGREEMENT

 

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

 

Merrill Lynch Commercial
Finance Corp. (“MLCFC”) and MortgageIT previously entered into a Master
Repurchase Agreement, dated June 20, 2003, (the “Existing Master Repurchase
Agreement”) and MLCFC subsequently assigned its rights as Buyer thereunder
to MLMCI.

 

The Buyer and the Sellers
have requested that the Existing Master Repurchase Agreement be amended and
restated on the terms and conditions set forth herein.

 

Accordingly, the parties
hereby agree, in consideration of the mutual promises and mutual obligations
set forth herein, that the Existing Master Repurchase Agreement is hereby
amended and restated as set forth herein.

 

SECTION 1.                                      APPLICABILITY

 

From time to time the
parties hereto shall enter into transactions in which the Sellers agree to
transfer to Buyer, Mortgage Loans against the transfer of funds by Buyer, with
a simultaneous agreement by Buyer to transfer to the Sellers such Mortgage Loans
at a date certain not later than the date 364 days after the related Purchase
Date, against the transfer of funds by the Sellers. Each such transaction shall
be referred to herein as a “Transaction” and shall be governed by this
Repurchase Agreement, unless otherwise agreed in writing. This Repurchase
Agreement is a commitment by Buyer to engage in the Transactions as set forth
herein up to the Maximum Committed Purchase Price; provided, that the
Buyer shall have no commitment to enter into any Transaction requested which
would result in the aggregate Purchase Price of then outstanding Transactions
to exceed the Maximum Committed Purchase Price.

 

SECTION 2.                                      DEFINITIONS

 

As used herein, the
following terms shall have the following meanings (all terms defined in this
Section 2 or in other provisions of this Repurchase Agreement in the
singular to have the same meanings when used in the plural and vice  versa)

 

“Accepted Servicing Practices” shall mean, with
respect to any Mortgage Loan, those mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located.

 

 

“Account Agreement” shall mean a letter
agreement between the Sellers, the Buyer, and a depository institution
acceptable to Buyer in its sole discretion substantially in the form of Exhibit IV
attached hereto.

 

“Additional Purchased Mortgage Loans” shall
mean Mortgage Loans or cash provided by the Sellers to Buyer or its designee
pursuant to Section 4 of this Repurchase Agreement.

 

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

 

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

 

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

 

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

 

“Appraised Value” shall mean the value set
forth in an appraisal made in connection with the origination of the related
Mortgage Loan as the value of the Mortgaged Property.

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

“Capital Lease Obligations” shall mean, for any
Person, all obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) Property to the extent
such obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and, for purposes of this
Repurchase Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.

 

“Cash Equivalents” shall mean
(a) securities with maturities of 90 days or less from the date of
acquisition issued or fully guaranteed or insured by the United States
Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of Buyer or of any commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase
obligations of Buyer or of any commercial bank satisfying the requirements of
clause (b) of this definition, having a term of not more than seven
days with respect to securities issued or fully guaranteed or insured by the United
States Government, (d) commercial paper of a domestic issuer rated at
least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof
by Moody’s and in either case maturing within 90 days after the day of
acquisition, (e) securities with maturities of 90 days or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s, (f) securities with
maturities of 90 days or less from the date of acquisition backed by standby
letters of credit issued by Buyer or any commercial bank satisfying the
requirements of clause (b) of this definition or (g) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this
definition.

 

“Change in Control” shall mean:

 

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

 

(b)                                 the
consummation of a merger or consolidation of a Seller with or into another
entity or any other corporate reorganization, if more than 50.1% of the
combined voting power of the continuing or surviving entity’s stock outstanding
immediately after such merger, consolidation or such other reorganization is
owned by persons who were not stockholders of such Seller immediately prior to
such merger, consolidation or other reorganization.

 

3

 

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

 

“Code” shall mean the Internal Revenue Code of
1986, as amended from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

“Co-op Loan” shall mean a Mortgage Loan secured
by the pledge of stock allocated to a dwelling unit in a residential
cooperative housing corporation and collateral assignment of the related
Proprietary Lease.

 

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

 

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

 

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

 

“Credit Limit” shall mean, with respect to each
HELOC, the maximum amount permitted under the terms of the related Credit Line
Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Disbursement Agreement” shall mean that
certain Amended and Restated Disbursement Agreement, dated as of the date
hereof, among the Disbursement Agent, the Buyer and the Sellers, as the same
may be amended from time to time, setting forth the terms pursuant to which the
Disbursement Agent shall disburse funds related to Wet-Ink Mortgage Loans.

 

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

 

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

 

5

 

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

 

“Due Diligence Review” shall mean the
performance by Buyer of any or all of the reviews permitted under
Section 27 hereof with respect to any or all of the Mortgage Loans, as
desired by the Buyer from time to time.

 

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

 

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

 

“Electronic Tracking Agreement” shall mean that
certain Amended and Restated Electronic Tracking Agreement, dated as of the
date hereof, among Buyer, Sellers, MERS and MERSCORP, Inc., as the same may be
amended from time to time.

 

“Eligible Mortgage Loan” shall mean a Purchased
Mortgage Loan which (i) complies with the representations and warranties set
forth on Schedule 1 to this Repurchase Agreement and (ii) is a
Conforming Mortgage Loan, a Jumbo Mortgage Loan, a Super Jumbo Mortgage Loan, a
HELOC, an EC Mortgage Loan, a Closed End Second Lien Mortgage Loan, a Co-op
Loan or a Sub-prime Mortgage Loan.

 

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

 

“ERISA Affiliate” shall, with respect to any
Person, mean any Person which is a member of any group of organizations
(i) described in Section 414(b) or (c) of the Code of which such
Person is a member, or (ii) solely for purposes of potential liability
under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which
such Person is a member.

 

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

 

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

 

6

 

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

 

“Event of Insolvency” shall mean, for any
Person:

 

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

 

(b) that such Person or any Material Subsidiary shall
fail generally to, or admit in writing its inability to, pay its debts as they
become due; or

 

(c) a proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for relief in
respect of such Person or any Material Subsidiary in an involuntary case under
any applicable bankruptcy, insolvency, liquidation, reorganization or other
similar law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or any Material Subsidiary, or for any
substantial part of its property, or for the winding-up or liquidation of its
affairs; or

 

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

 

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

 

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

 

“Event of Termination” shall, with respect to
any Seller, mean (i) with respect to any Plan, a reportable event, as defined
in Section 4043 of ERISA, as to which the PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, or (ii) the withdrawal of such Seller or any
ERISA Affiliate thereof from a Plan during a plan year in which it is a
substantial employer, as defined in Section 4001(a)(2) of ERISA, or (iii) the
failure by such Seller or any ERISA Affiliate thereof to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA with
respect to any Plan, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, or (iv) the distribution under Section 4041 of ERISA
of a notice of intent to terminate any Plan or any action taken by such Seller
or any ERISA Affiliate thereof to terminate any Plan, or (v) the adoption of an
amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if such Seller or any ERISA Affiliate
thereof fails to timely provide security to the Plan in accordance with the
provisions of said Sections, or (vi) the institution by the PBGC of proceedings
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee

 

7

 

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

 

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

 

“Expenses” shall mean all present and future
reasonable expenses incurred by or on behalf of the Buyer in connection with
this Repurchase Agreement or any of the other Repurchase Documents and any
amendment, supplement or other modification or waiver related hereto or
thereto, whether incurred heretofore or hereafter, which reasonable expenses
shall include the cost of title, lien, judgment and other record searches;
reasonable attorneys’ fees; and costs of preparing and recording any UCC
financing statements or other filings necessary to perfect the security
interest created hereby.

 

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

 

“FHA” shall mean the Federal Housing
Administration, an agency within the United States Department of Housing and
Urban Development, or any successor thereto, and including the Federal Housing
Commissioner and the Secretary of Housing and Urban Development where appropriate
under the FHA Regulations.

 

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

 

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

 

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

 

“FHA Mortgage Insurance Contract” shall mean
the contractual obligation of the FHA respecting the insurance of a Mortgage
Loan.

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

“Freddie Mac” shall mean Freddie Mac, or any
successor thereto.

 

“GAAP” shall mean generally accepted accounting
principles in the United States of America, applied on a consistent basis and
applied to both classification of items and amounts, and shall include, without
limitation, the official interpretations thereof by the Financial Accounting
Standards Board, its predecessors and successors.

 

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

 

“Governmental Authority” shall mean any nation
or the government of any state, county, municipality or other political
subdivision thereof or any governmental body, agency, authority, department or
commission (including, without limitation, any taxing authority) or any
instrumentality or officer of any of the foregoing (including, without
limitation, any court or tribunal) exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
corporation, partnership or other entity directly or indirectly owned by or
controlled by the foregoing.

 

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

 

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

 

9

 

Mortgaged Property, which lien secures the related Credit Line
Agreement, and which is underwritten in conformity with the Underwriting
Guidelines.

 

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

 

“HUD” shall mean the Department of Housing and
Urban Development.

 

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

 

“Indebtedness” shall mean, with respect to any
Person, (a) obligations created, issued or incurred by such Person for borrowed
money (whether by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business, so
long as such trade accounts payable are payable within 90 days of the date the
respective goods are delivered or the respective services are rendered; (c)
Indebtedness of others secured by a Lien on the Property of such Person,
whether or not the respective Indebtedness so secured has been assumed by such
Person; (d) obligations (contingent or otherwise) of such Person in respect of
letters of credit or similar instruments issued or accepted by banks and other
financial institutions for the account of such Person; (e) Capital Lease
Obligations of such Person; (f) obligations of such Person under repurchase
agreements, sale/buy-back agreements or like arrangements; (g) Indebtedness of
others Guaranteed by such Person; (h) all obligations of such Person incurred
in connection with the acquisition or carrying of fixed assets by such Person;
and (i) Indebtedness of general partnerships of which such Person is a general
partner.

 

“Interest Rate Protection Agreement” shall
mean, with respect to any or all of the Purchased Mortgage Loans, any short
sale of a US Treasury Security, or futures contract, or mortgage related
security, or Eurodollar futures contract, or options related contract, or
interest rate swap, cap or collar agreement or Takeout Commitment, or similar
arrangement providing for protection against fluctuations in interest rates or
the exchange of nominal interest obligations, either generally or under
specific contingencies, entered into by a Seller and an Affiliate of the Buyer,
and acceptable to the Buyer.

 

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

 

10

 

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

 

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

 

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

 

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

 

“LIBOR Rate” shall mean, with respect to each
day during the applicable LIBOR Period, the rate per annum equal to the one
month British Bankers Association Rate as reported on the display designated as
“BBAM” “Page DG8 4a” on Bloomberg (or such other display as may replace “BBAM”
“Page DG8 4a on Bloomberg), as of 8:00 a.m., New York City time, on the date
two Business Days prior to the commencement of such LIBOR Period, and if such
rate shall not be so quoted, or if the related LIBOR Period shall be less than
one month, the rate per annum at which the Buyer or its Affiliate is offered
dollar deposits at or about 8:00 a.m., New York City time, on the date two
Business Days prior to the commencement of the such LIBOR Period, by prime
banks in the interbank eurodollar market where the eurodollar and foreign
currency exchange operations in respect of its Transactions are then being
conducted for delivery on such day for a period of one month or such other
period as agreed upon in writing by the Buyer and the Sellers and in an amount
comparable to the amount of the Transactions outstanding on such day.

 

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

 

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

 

“Margin Call” shall have the meaning specified
in Section 4.

 

“Margin Deficit” shall have the meaning
specified in Section 4.

 

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

 

11

 

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

 

(a)                                  such
Purchased Mortgage Loan ceases to be an Eligible Mortgage Loan;

 

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

 

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

 

(d)                                 such
Purchased Mortgage Loan is a Delinquent Mortgage Loan;

 

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

 

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

 

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

 

(h)                                 the
Buyer has determined in its sole good-faith discretion that the Purchased
Mortgage Loan is not eligible for whole loan sale or securitization in a
transaction consistent with the prevailing sale and securitization industry
with respect to substantially similar Mortgage Loans;

 

(i)                                     such
Purchased Mortgage Loan contains a material breach of a representation or
warranty made by a Seller in this Repurchase Agreement or the Custodial
Agreement;

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Material Adverse Effect” shall mean a material
adverse effect on (a) the Property, business, operations, financial
condition or prospects of any Seller or any Material Subsidiary, (b) the
ability of any Seller or any Material Subsidiary to perform its obligations
under any of the Repurchase Documents to which it is a party, (c) the
validity or enforceability of any of the Repurchase Documents, (d) the
rights and remedies of the Buyer or any Affiliate under any of the Repurchase
Documents or (e) the Market Value of the Purchased Mortgage Loans.

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Mortgage Loan Schedule” shall mean with
respect to any Transaction as of any date, a mortgage loan schedule in the form
of a computer tape or other electronic medium generated by a Seller and delivered
to Buyer and the Custodian, which provides information (including, without
limitation, the information set forth on Exhibit V attached hereto)
relating to the Purchased Mortgage Loans in a format acceptable to the Buyer.

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“PBGC” shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its functions under
ERISA.

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

“Price Differential” shall mean, with respect
to any Transaction hereunder as of any date, the aggregate amount obtained by
daily application of the Pricing Rate (or, during the continuation of an Event
of Default, by daily application of the Post-Default 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 Repurchase
Date (reduced by any amount of such Price Differential previously paid by the
Sellers to Buyer with respect to such Transaction).

 

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

 

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

 

	
  Conforming
  Mortgage Loans

  	
   

  	
  [•]

  	
  *%

  
	
  Jumbo Mortgage
  Loans

  	
   

  	
  [•]

  	
  *%

  
	
  EC Mortgage
  Loans

  	
   

  	
  [•]

  	
  *%

  
	
  HELOCs

  	
   

  	
  [•]

  	
  *%

  
	
  Super Jumbo
  Mortgage Loans

  	
   

  	
  [•]

  	
  *%

  
	
  Closed End Second
  Lien Mortgage Loans

  	
   

  	
  [•]

  	
  *%

  
	
  Sub-prime
  Mortgage Loans

  	
   

  	
  [•]

  	
  *%

  
	
  Co-op Loans

  	
   

  	
  [•]

  	
  *%

  
	
  Aged Mortgage
  Loans

  	
   

  	
  [•]

  	
  *%

  

 

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

 

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

 

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

 

* Confidential portions
omitted and filed separately with the Securities and Exchange Commission.

 

16

 

“Purchase Price”
shall mean:

 

(a)                                  on the Purchase Date, the price at which each
Purchased Mortgage Loan is transferred by the Sellers to Buyer which shall
equal the applicable Purchase Price Percentage multiplied by the lesser of (i)
the Market Value of such Mortgage Loan on the Purchase Date and (ii) the
outstanding principal balance of the Mortgage Loan; and

 

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

 

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

 

“Purchase Price
Percentage” shall mean:

 

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

 

	
  Closed End
  Second Lien

  	
   

  	
  [•]

  	
  *%

  
	
  Aged Mortgage
  Loan

  	
   

  	
  [•]

  	
  *%

  
	
  Sub-prime
  Mortgage Loan

  	
   

  	
  [•]

  	
  *%

  
	
  Co-op Loan

  	
   

  	
  [•]

  	
  *%

  
	
  HELOC

  	
   

  	
  [•]

  	
  *%

  
	
  Super Jumbo
  Mortgage Loan

  	
   

  	
  [•]

  	
  *%

  
	
  Conforming
  Mortgage Loan

  	
   

  	
  [•]

  	
  *%

  
	
  Jumbo Mortgage
  Loan

  	
   

  	
  [•]

  	
  *%

  
	
  EC Mortgage Loan

  	
   

  	
  [•]

  	
  *%

  

 

(b)                                 With
respect Mortgage Loans that are Wet-Ink Mortgage Loans, the respective
percentages set forth opposite the applicable type of Wet-Ink Mortgage Loan:

 

* Confidential portions
omitted and filed separately with the Securities and Exchange Commission.

 

17

 

	
  Closed End
  Second Lien

  	
   

  	
  [•]

  	
  *%

  
	
  Sub-prime
  Mortgage Loan

  	
   

  	
  [•]

  	
  *%

  
	
  Co-op Loan

  	
   

  	
  [•]

  	
  *%

  
	
  HELOC

  	
   

  	
  [•]

  	
  *%

  
	
  Super Jumbo
  Mortgage Loan

  	
   

  	
  [•]

  	
  *%

  
	
  Conforming
  Mortgage Loan

  	
   

  	
  [•]

  	
  *%

  
	
  Jumbo Mortgage
  Loan

  	
   

  	
  [•]

  	
  *%

  
	
  EC Mortgage Loan

  	
   

  	
  [•]

  	
  *%

  

 

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

 

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

 

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

 

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

 

“Recognition
Agreement” shall mean, an agreement among a Co-op Corporation, a lender and
a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge
that such lender may make, or intends to make, such Co-op Loan, and (ii) make
certain agreements with respect to such Co-op Loan.

 

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

 

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

 

* Confidential portions
omitted and filed separately with the Securities and Exchange Commission.

 

18

 

“REIT” shall mean
a real estate investment trust, as defined in Section 856 of the Code, as may
be amended from time to time.

 

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

 

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

 

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

 

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

 

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

 

“Repurchase Price”
shall mean the price at which Purchased Mortgage Loans are to be transferred
from Buyer or its designee to the Sellers 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.

 

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

 

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

 

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

 

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

 

“SEC” shall mean
the Securities Exchange Commission.

 

19

 

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

 

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

 

“Servicer” shall
mean the MortgageIT, or any successor or permitted assigns or other Person
which serves as a sub-servicer to any Seller.

 

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

 

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

 

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

 

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

 

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

 

“Stock
Certificate” shall mean, with respect to a Co-op Loan, the certificates
evidencing ownership of the Co-op Shares issued by the Co-op Corporation.

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

“Termination Date”
shall mean August 3, 2005.

 

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

 

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

 

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

 

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

 

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

 

“Underwriting
Guidelines” shall mean the underwriting guidelines of MortgageIT which have
been delivered to the Buyer on or prior to the Effective Date of this
Repurchase Agreement, as such underwriting guidelines may be amended from time
to time in conformity with the terms and conditions of this Repurchase
Agreement.

 

“Uniform Commercial
Code” shall mean the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
security interest in any Repurchase Assets or the continuation, renewal or
enforcement thereof is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than New York, “Uniform Commercial Code” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such perfection or effect of perfection or
non-perfection.

 

21

 

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

 

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

 

“VA Loan” shall
mean a Mortgage Loan which is subject of a VA Loan Guaranty Agreement as
evidenced by a VA Loan Guaranty Agreement, or a Mortgage Loan which is a vender
loan sold by the VA.

 

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

 

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

 

“Wet-Ink Mortgage Loan”
shall mean a Mortgage Loan which any Seller is selling to Buyer simultaneously
with the origination thereof and for which the Mortgage Loan Documents have not
been delivered to the Custodian.

 

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

 

SECTION 3.                                      INITIATION; TERMINATION

 

(a)                                  Conditions
Precedent to Initial Transaction. 
Buyer’s agreement to enter into the initial Transaction hereunder is
subject to the satisfaction, immediately prior to or concurrently with the
making of such Transaction, of the condition precedent that Buyer shall have
received from the Sellers any fees and expenses payable hereunder, and all of
the following documents, each of which shall be satisfactory to Buyer and its
counsel in form and substance:

 

(i)                                     The
following Repurchase Documents delivered to the Buyer:

 

(A)                              Repurchase
Agreement.  This Repurchase
Agreement, duly executed by the parties thereto;

 

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

 

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

 

(D)                               Settlement
Account Agreement.  A Settlement
Account Agreement, duly executed by the parties thereto in form and substance
acceptable to the Buyer;

 

22

 

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

 

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

 

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

 

(iii)                               Seller Organizational
Documents.  A certificate of
corporate existence of each Seller delivered to Buyer prior to the Effective
Date (or if unavailable, as soon as available thereafter) and certified copies
of the charter and by-laws (or equivalent documents) of such Seller and of all
corporate or other authority for such Seller with respect to the execution,
delivery and performance of the Repurchase Documents and each other document to
be delivered by such Seller from time to time in connection herewith.

 

(iv)                              Security
Interest.  Evidence that all other
actions necessary or, in the opinion of Buyer, desirable to perfect and protect
Buyer’s interest in the Purchased Mortgage Loans and other Repurchase Assets
have been taken, including, without limitation, UCC searches and duly
authorized and filed Uniform Commercial Code financing statements on
Form UCC-1.

 

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

 

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

 

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

 

(b)                                 Conditions
Precedent to all Transactions.  Upon satisfaction of the conditions set forth
in this Section 3(b), the Buyer shall enter into a Transaction with a
Seller.  This Repurchase Agreement is a
commitment by Buyer to engage in the Transactions as set forth herein up to the
Maximum Committed Purchase Price; provided, that the Buyer shall have no
commitment to enter into any Transaction requested which would result in the
aggregate Purchase Price of then outstanding Transactions to exceed the Maximum
Committed Purchase Price.  Buyer’s
obligation to enter into each Transaction, provided that the Purchase Price of
the requested Transaction combined with the aggregate amount of the respective
Purchase Prices for all then outstanding Transactions does not exceed the
Maximum Committed Purchase Price (including the initial Transaction) is subject
to the satisfaction of the following further conditions

 

23

 

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

 

(i)                                     Buyer
shall have executed and delivered a Confirmation in accordance with the
procedures set forth in Section 3(c);

 

(ii)                                  No
Termination Event, Default or Event of Default shall have occurred and be
continuing under the Repurchase Documents;

 

(iii)                               Both immediately prior
to the Transaction and also after giving effect thereto and to the intended use
thereof, the representations and warranties made by the each Seller in
Section 11 hereof, shall be true, correct and complete on and as of such
Purchase Date in all material respects with the same force and effect as if
made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date);

 

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

 

(v)                                 After
giving effect to the requested Transaction, the Asset Value of all Purchased
Mortgage Loans exceeds the aggregate Repurchase Price for such Transactions;

 

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

 

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

 

(A)                              At
least one Business Day prior to the related Purchase Date, the Buyer shall have
received a Transaction Request;

 

(B)                                By
12:00 noon (New York time) on the related Purchase Date, the Custodian shall
have received from the Buyer a schedule setting forth the mortgage loan
identification number, the Mortgagor name and the outstanding principal balance
of Wet-Ink Mortgage Loans to be purchased by Buyer on such Purchase Date; and

 

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

 

24

 

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

 

(ix)                                The
Buyer shall have received all fees and expenses of counsel to the Buyer as
contemplated by Sections 15(b) and 27 which amounts, at the Buyer’s
option, may be withheld from the proceeds remitted by Buyer to the Sellers
pursuant to any Transaction hereunder;

 

(x)                                   None
of the following shall have occurred and/or be continuing:

 

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

 

(B)                                there
shall have occurred a material adverse change in the financial condition of the
Buyer which affects (or can reasonably be expected to affect) materially and
adversely the ability of the Buyer to fund its obligations under this
Repurchase Agreement; or

 

(xi)                                Each
Transaction Request delivered by a Seller hereunder shall constitute a
certification by such Seller that all the conditions set forth in this
Section 3(b) (other than clause (x) hereof) have been satisfied (both as
of the date of such notice or request and as of the date of such purchase).

 

(c)                                  Initiation;
Confirmation.

 

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

 

25

 

Purchase Price
Percentages, (F) LIBOR Period and (G) additional terms or conditions not
inconsistent with this Repurchase Agreement.

 

(ii)                                  The
Repurchase Date for each Transaction shall not be later than the date which is
364 days after the related Purchase Date. 
The LIBOR Period for each Transaction shall be one month, unless agreed
to in writing by the Buyer.

 

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

 

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

 

(v)                                 In
no event shall a Transaction be entered into when the Repurchase Date for such
Transaction would be later than the Termination Date.

 

(vi)                              No
later than 3 p.m., New York City time, on the Business Day prior to the
requested Purchase Date, the Sellers shall deliver to the Custodian the
Mortgage Loan File pertaining to each Eligible Mortgage Loan (other than a
Wet-Ink Mortgage Loan) to be purchased by the Buyer.

 

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

 

(A)                              No
later than 5:30 p.m. (New York time) on the Business Day prior to the related
Purchase Date, the Buyer shall have received a report detailing the approximate
outstanding principal balance of Wet-Ink Mortgage Loans to be purchased by the
Buyer on such Purchase Date and the Estimated Purchase Price.

 

(B)                                On
or before the Purchase Date, the Buyer shall have received (a) a schedule
setting forth the mortgage loan identification number, the Mortgagor name and
the approximate outstanding principal balance of Wet-Ink Mortgage Loans to be
purchased by Buyer on such Purchase Date, and (b) an updated report setting
forth the approximate outstanding principal balance of Wet-Ink Mortgage Loans
to be purchased by the Buyer on such Purchase Date and the amount of the Actual
Purchase Price.  On the Purchase Date,
the Buyer shall remit the amount of the Estimated Purchase Price directly to
the Wet-Ink Funding Account to be disbursed by the Disbursement Agent in
accordance with the Disbursement Agreement.

 

26

 

(C)                                With
respect to Wet-Ink Mortgage Loans which are being purchased in whole or in part
by means of wire transfer, on or prior to the related Purchase Date, the
Custodian shall have received the Wiring Schedule related to such Wet-Ink
Mortgage Loans.  Upon receipt by the
Buyer of the Wiring Schedule, the Buyer shall forward the Wiring Schedule and
direct the Disbursement Agent to wire the related funding amount to each
Mortgagor from the Wet-Ink Funding Account.

 

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

 

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

 

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

 

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

 

(d)                                 Repurchase

 

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

 

(ii)                                  On
the Repurchase Date, termination of the Transaction will be effected by
reassignment to a Seller or its designee of the Purchased Mortgage Loans (and
any Income in respect thereof received by Buyer not previously credited or
transferred to, or applied to the obligations of, the Sellers pursuant to
Section 5) against the simultaneous transfer of the Repurchase Price to an
account of Buyer.  The Sellers are
obligated to

 

27

 

obtain the
Mortgage Files from Buyer or its designee at the Sellers’ expense on the
Repurchase Date.

 

SECTION 4.                                      MARGIN AMOUNT MAINTENANCE

 

(a)                                  The
Buyer shall determine the Asset Value of the Purchased Mortgage Loans on a
weekly basis, or at such intervals as determined by the Buyer in its sole good
faith discretion.

 

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

 

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

 

(d)                                 Any
cash transferred to the Buyer pursuant to Section 4(b) above shall be credited
to the Repurchase Price of the related Transactions.

 

SECTION 5.                                      INCOME
PAYMENTS

 

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

 

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

 

28

 

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

 

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

 

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

 

(c)                                  After
the occurrence of an Event of Default, the Sellers shall deposit such Income in
a deposit account (the title of which shall indicate that the funds therein are
being held in trust for Buyer) (the “Collection Account”) with a
financial institution acceptable to Buyer and subject to the Account
Agreement.  All such Income shall be
held in trust for Buyer, shall constitute the property of Buyer and shall not
be commingled with other property of the Sellers or any Affiliate of the
Sellers except as expressly permitted above. 
Funds deposited in the Collection Account during any month shall be held
therein, in trust for the Buyer, until the next Payment Date.  Subject to the terms of the Account
Agreement, the Sellers shall withdraw any funds on deposit in the Collection
Account and apply such funds as follows:

 

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

 

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

 

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

 

(iv)                              fourth,
to the Sellers.

 

(d)                                 To
the extent that the Buyer receives any funds from a Takeout Investor with
respect to the purchase by such Takeout Investor of a Mortgage Loan, the Buyer
shall promptly apply such funds in accordance with the same order of priority
set forth in Section 5(b) hereof.

 

(e)                                  Buyer
shall offset against the Repurchase Price of each such Transaction all Income
and Periodic Advance Repurchase Payments actually received by Buyer pursuant to
Section 5(a), excluding any Late Payment Fees paid pursuant to any Periodic
Advance Repurchase Payments made at the Post-Default Rate pursuant to Section
5(a).

 

SECTION 6.                                      REQUIREMENTS OF LAW

 

(a)                                  If
any Requirement of Law (other than with respect to any amendment made to the
Buyer’s certificate of incorporation and by-laws or other organizational or
governing documents) or any change in the interpretation or application thereof
or compliance by the Buyer with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:

 

29

 

(i)                                     shall
subject the Buyer to any tax of any kind whatsoever with respect to this
Repurchase Agreement or any Transaction (excluding net income taxes, branch
profits taxes, franchise taxes or similar taxes imposed on the Buyer as a
result of any present or former connection between the Buyer and the United
States, other than any such connection arising solely from the Buyer having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Repurchase Agreement) or change the basis of taxation of
payments to the Buyer in respect thereof;

 

(ii)                                  shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or other liabilities in
or for the account of, advances, or other extensions of credit by, or any other
acquisition of funds by, any office of the Buyer which is not otherwise
included in the determination of the LIBOR Rate hereunder;

 

(iii)                               shall impose on the
Buyer any other condition;

 

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

 

(b)                                 If
the Buyer shall have determined that the adoption of or any change in any
Requirement of Law (other than with respect to any amendment made to the
Buyer’s certificate of incorporation and by-laws or other organizational or
governing documents) regarding capital adequacy or in the interpretation or
application thereof or compliance by the Buyer or any corporation controlling
the Buyer with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on the
Buyer’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which the Buyer or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
the Buyer’s or such corporation’s policies with respect to capital adequacy) by
an amount determined in good faith by the Buyer to be material, then from time
to time, the Sellers shall promptly pay to the Buyer such additional amount or
amounts as will compensate the Buyer for such reduction.

 

(c)                                  If
the Buyer becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Sellers of the event by reason of which
it has become so entitled.  A
certificate as to any additional amounts payable pursuant to this Section submitted
by the Buyer to the Sellers shall be conclusive in the absence of manifest
error.

 

(d)                                 No
amount shall be payable by either Seller under this Section 6 with respect
to any period in excess of ninety (90) days prior to the date of demand by the
Buyer unless the effect of a change in the interpretation or application of the
Requirement of Law is retroactive by its terms to a period prior to the date of
the change in interpretation or application of the Requirement of Law, in which
case any additional amount or amounts shall be payable for the

 

30

 

retroactive period but only if the Buyer provides its written demand
not later than ninety (90) days after the change in the interpretation or
application of the Requirement of Law.

 

SECTION 7.                                      TAXES.

 

(a)                                  All
payments made by the Seller under this Repurchase Agreement shall be made free
and clear of, and without deduction or withholding for, or on account of, any
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities (including penalties, interest and additions to tax) with
respect thereto imposed by any Governmental Authority thereof or therein (“Taxes”),
excluding income taxes, branch profits taxes, franchise taxes or similar
taxes imposed on the Buyer as a result of any present or former connection
between the Buyer and the United States, other than any such connection arising
solely from the Buyer having executed, delivered or performed its obligations
or received a payment under, or enforced, this Repurchase Agreement (all such
nonexcluded Taxes, “Non-Excluded Taxes”).  If the Seller shall be required to deduct or withhold any Taxes
from or in respect of any amount payable hereunder, (i) the Seller shall make
such deductions or withholdings, (ii) the Seller shall pay the full amount
deducted or withheld to the relevant Governmental Authority in accordance with
applicable law, and (iii) with respect to any Non-Excluded Taxes, the amount
payable shall be increased by an amount (the “additional amount”)
necessary so that the Buyer, shall receive a net amount equal to the amount it
would have received had no such deductions or withholdings in respect of
Non-Excluded Taxes been made.

 

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

 

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

 

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

 

(e)                                  Without
prejudice to the survival of any other agreement of the Seller hereunder, the
agreements and obligations of the Seller contained in this Section 7 shall
survive the termination of this Repurchase Agreement.  Nothing contained in this Section 7 shall require the Buyer to
make available any of its tax returns or any other information that it deems to
be confidential or proprietary.

 

31

 

SECTION 8.                                      SECURITY INTEREST

 

Although the parties
intend that all Transactions hereunder be sales and purchases (other than for
accounting and tax purposes) and not loans, in the event any such Transactions
are deemed to be loans, each Seller hereby pledges to Buyer as security for the
performance by the Sellers of their Obligations and hereby grants, assigns and
pledges to Buyer a fully perfected first priority security interest in the
Purchased Mortgage Loans, the Records, and all servicing rights related to the
Purchased Mortgage Loans, the Repurchase Documents (to the extent such
Repurchase Documents and such Seller’s right thereunder relate to the Purchased
Mortgage Loans), any Property relating to any Purchased Mortgage Loan or the
related Mortgaged Property, any Takeout Commitments relating to any Purchased
Mortgage Loan, all insurance policies and insurance proceeds relating to any
Purchased Mortgage Loan or the related Mortgaged Property, including but not
limited to any payments or proceeds under any related primary insurance, hazard
insurance, FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if
any), any Income relating to any Purchased Mortgage Loan, the Collection
Account, any Interest Rate Protection Agreements relating to any Purchased
Mortgage Loan, and any other contract rights, accounts (including any interest
of such Seller in escrow accounts), payments, rights to payment (including
payments of interest or finance charges) and general intangibles to the extent
that the forgoing relates to any Purchased Mortgage Loan and any other assets
relating to the Purchased Mortgage Loans or any interest in the Purchased
Mortgage Loans, all collateral under any other secured debt facility between
the Sellers or their Affiliates on the one hand and the Buyer and the Buyer’s
Affiliates on the other, and any proceeds (including the related securitization
proceeds) and distributions and any other property, rights, title or interests
as are specified on a Trust Receipt and Mortgage Loan Schedule and Exception
Report with respect to any of the foregoing, in all instances, whether now
owned or hereafter acquired, now existing or hereafter created (collectively,
the “Repurchase Assets”).

 

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

 

SECTION 9.                                      PAYMENT, TRANSFER AND CUSTODY

 

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

 

(b)                                 On
the Purchase Date for each Transaction, ownership of the Purchased Mortgage
Loans shall be transferred to the Buyer or its designee against the
simultaneous transfer of the Purchase Price to the following account of the
Sellers (or as otherwise directed by the Sellers):  Deutsche Bank National Trust Company, Account
No. 37622, for the account
of

 

32

 

Buyer, ABA#
0021-001-033.  With respect to the
Purchased Mortgage Loans being sold by a Seller on a Purchase Date, each Seller
hereby sells, transfers, conveys and assigns to Buyer or its designee without
recourse, but subject to the terms of this Repurchase Agreement, all the right,
title and interest of such Seller in and to the Purchased Mortgage Loans
together with all right, title and interest in and to the proceeds of any
related Repurchase Assets.

 

(c)                                  In
connection with such sale, transfer, conveyance and assignment, on or prior to
each Purchase Date, the Sellers shall deliver or cause to be delivered and
released to Buyer or its designee the Mortgage File for the related Purchased
Mortgage Loans.

 

SECTION 10.                               HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOAN

 

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

 

SECTION 11.                               REPRESENTATIONS

 

Each Seller represents
and warrants to the Buyer that as of the Purchase Date for any Purchased
Mortgage Loans by the Buyer from the Sellers and as of the date of this
Repurchase Agreement and any Transaction hereunder and at all times while the
Repurchase Documents and any Transaction hereunder is in full force and effect:

 

(a)                                  Acting
as Principal.  The Sellers will
engage in such Transactions as principals (or, if agreed in writing in advance
of any Transaction by the other party hereto, as agent for a disclosed
principal).

 

(b)                                 No
Broker.  The Sellers have not dealt with any broker, investment
banker, agent, or other person, except for the Buyer, who may be entitled to
any commission or compensation in connection with the sale of Purchased
Mortgage Loans pursuant to this Repurchase Agreement.

 

(c)                                  Financial
Statements.  The Sellers have
heretofore furnished to the Buyer a copy of its (a) consolidated balance sheet
and the consolidated balance sheets of its consolidated Subsidiaries for the
fiscal year ended December 31, 2003 and the related consolidated statements of
income and retained earnings and of cash flows for the Sellers and their
respective consolidated Subsidiaries for such fiscal year, setting forth in
each case in comparative form the figures for the previous year, with the
opinion thereon of BDO Seidman LLP and (b) consolidated balance sheet and the
consolidated balance sheets of its consolidated Subsidiaries for the quarterly
fiscal period of the Sellers ended March 31, 2004 and June 30, 2004,
respectively and the related consolidated statements of income and retained earnings
and of cash flows for the Sellers and their respective consolidated
Subsidiaries for such quarterly fiscal

 

33

 

period, setting forth in each case in comparative form the figures for
the previous year.  All such financial
statements are complete and correct and fairly present, in all material
respects, the consolidated financial condition of the Sellers and their
respective Subsidiaries and the consolidated results of their operations as at
such dates and for such fiscal periods, all in accordance with GAAP applied on
a consistent basis.  Since December 31,
2003, there has been no material adverse change in the consolidated business,
operations or financial condition of the Sellers and their respective consolidated
Subsidiaries taken as a whole from that set forth in said financial statements
nor are the Sellers aware of any state of facts which (without notice or the
lapse of time) would or could result in any such material adverse change.  The Sellers do not have, on the date of the
statements delivered pursuant to this section (the “Statement Date”),
any liabilities, direct or indirect, fixed or contingent, matured or unmatured,
known or unknown, or liabilities for taxes, long-term leases or unusual forward
or long-term commitments not disclosed by, or reserved against in, said balance
sheet and related statements, and at the present time there are no material
unrealized or anticipated losses from any loans, advances or other commitments
of the Sellers which are required to be disclosed in or reserved against in
said balance sheet and related statement under GAAP.

 

(d)                                 Organization,
Etc. MortgageIT is a corporation duly organized, validly existing and in
good standing under the laws of New York. 
Holdings is a corporation duly organized, validly existing and in good
standing under the laws of Maryland.  The
Sellers (a) have all requisite corporate or other power, and have all
governmental licenses, authorizations, consents and approvals necessary to own
their respective assets and carry on their respective businesses as now being
or as proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to have a
Material Adverse Effect; (b) are qualified to do business and is in good
standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify would not be reasonably likely (either individually or in the
aggregate) to have a Material Adverse Effect; and (c) have full power and
authority to execute, deliver and perform their respective obligations under
the Repurchase Documents.

 

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

 

34

 

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

 

(g)                                 Purchased
Mortgage Loans.

 

(i)                                     Neither
Seller has assigned, pledged, or otherwise conveyed or encumbered any Purchased
Mortgage Loan to any other Person, and immediately prior to the sale of such
Mortgage Loan to the Buyer, the applicable Seller was the sole owner of such
Purchased Mortgage Loan and had good and marketable title thereto, free and
clear of all Liens, in each case except for Liens to be released simultaneously
with the sale to the Buyer hereunder.

 

(ii)                                  The
provisions of this Repurchase Agreement are effective to either constitute a
sale of Repurchase Assets to the Buyer or to create in favor of the Buyer a
valid security interest in all right, title and interest of the Sellers in, to
and under the Repurchase Assets.

 

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

 

(i)                                     Location
of Books and Records.  The location
where the Sellers keep their books and records, including all computer tapes
and records related to the Repurchase Assets are their respective chief
executive offices.

 

(j)                                     Filing
and Payment of Taxes. Each Seller and its subsidiaries have timely filed on
a timely basis all federal, state and local Tax and information returns,
reports and any other information statements or schedules that are required to
be filed by or in respect of them and have timely paid all Taxes due pursuant
to such returns, reports or other information statements or schedules or
pursuant to any assessment received by it or any of its Subsidiaries, except
for any such Taxes as are being appropriately contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves
have been provided.  The charges,
accruals and reserves on the books of the Sellers in respect of taxes and other
governmental charges are adequate.  There
are no Liens for Taxes except Statutory liens for Taxes not yet due and
payable.

 

(k)                                  Enforceability.  This Repurchase Agreement and all of the
other Repurchase Documents executed and delivered by the Sellers in connection
herewith are legal, valid and

 

35

 

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

 

(l)                                     Ability
to Perform.  Neither Seller believes,
nor do they have any reason or cause to believe, that they cannot perform each
and every covenant contained in the Repurchase Documents to which they are
parties on their part to be performed

 

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

 

(n)                                 No
Default.  No Default or Event of
Default has occurred and is continuing.

 

(o)                                 Underwriting
Guidelines.  The Underwriting
Guidelines provided to Buyer are the true and correct Underwriting Guidelines
of the Sellers.

 

(p)                                 Adverse
Selection.  Neither Seller has not
selected the Purchased Mortgage Loans in a manner so as to adversely affect
Buyer’s interests.

 

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

 

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

 

(s)                                  Accurate
and Complete Disclosure. The information, reports, financial statements,
exhibits and schedules furnished in writing by or on behalf of either Seller to
the Buyer in connection with the negotiation, preparation or delivery of this
Repurchase Agreement and the other Repurchase Documents or included herein or
therein or delivered pursuant hereto or thereto, when taken as a whole, do not
contain any untrue statement of material fact or omit to state any material
fact necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.  All written information furnished after the
date hereof by or on behalf of either Seller to the Buyer in connection with
this Repurchase Agreement and the other Repurchase Documents and the
transactions contemplated hereby and thereby will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified.  There is no fact known to
either Seller that could reasonably be expected to have a Material Adverse
Effect that has not been disclosed herein, in the other Repurchase Documents or
in a report, financial statement, exhibit, schedule, disclosure letter or other
writing furnished to the Buyer for use in connection with the transactions
contemplated hereby or thereby.

 

(t)                                    Margin
Regulations.  The use of all funds
acquired by the Sellers under this Repurchase Agreement will not conflict with
or contravene any of Regulations T, U or X promulgated by the Board of
Governors of the Federal Reserve System as the same may from time to time be
amended, supplemented or otherwise modified.

 

36

 

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

 

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

 

(w)                               ERISA.

 

(i)                                     No
liability under Section 4062, 4063, 4064 or 4069 of ERISA has been or is
expected by either Seller to be incurred by either Seller or any ERISA
Affiliate thereof with respect to any Plan which is a Single-Employer Plan in
an amount that could reasonably be expected to have a Material Adverse Effect.

 

(ii)                                  No
Plan of either Seller which is a Single-Employer Plan had an accumulated
funding deficiency, whether or not waived, as of the last day of the most
recent fiscal year of such Plan ended prior to the date hereof.  Neither of the Sellers nor any ERISA
Affiliate thereof is (i) required to give security to any Plan which is a
Single-Employer Plan pursuant to Section 401(a) (29) of the Code or Section 307
of ERISA, or (ii) subject to a Lien in favor of such a Plan under Section
302(f) of ERISA.

 

(iii)                               Each Plan of the
Sellers, each of their Subsidiaries and each of its ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA and
the Code, except where the failure to comply would not result in any Material
Adverse Effect.

 

(iv)                              Neither
of the Sellers nor any of their Subsidiaries has incurred a tax liability under
Section 4975 of the Code or a penalty under Section 502(i) of ERISA in respect
of any Plan which has not been paid in full, except where the incurrence of
such tax or penalty would not result in a Material Adverse Effect.

 

(v)                                 Neither
of the Sellers nor any of their Subsidiaries or any ERISA Affiliate thereof has
incurred or reasonably expects to incur any withdrawal liability under Section
4201 of ERISA as a result of a complete or partial withdrawal from a
Multiemployer Plan which will result in withdrawal liability to either of the
Sellers, any of their Subsidiaries or any ERISA Affiliate thereof in an amount
that could reasonably be expected to have a Material Adverse Effect.

 

37

 

(x)                                   Agency
Approvals. Each Seller is an FHA Approved Mortgagee and a VA Approved
Lender. Each Seller is also approved by Fannie Mae as an approved lender and
Freddie Mac as an approved seller, and, to the extent necessary, approved by
the Secretary of Housing and Urban Development pursuant to Sections 203 and 211
of the National Housing Act.  In each
such case, each Seller is in good standing, with no event having occurred prior
to the issuance of the consummation of the related Takeout Commitment,
including, without limitation, a change in insurance coverage which would
either make such Seller unable to comply with the eligibility requirements for
maintaining all such applicable approvals or require notification to the
relevant Agency or to the Department of Housing and Urban Development, FHA or
VA.  Each Seller has adequate financial
standing, servicing facilities, procedures and experienced personnel necessary
for the sound servicing of mortgage loans of the same types as may from time to
time constitute Mortgage Loans and in accordance with Accepted Servicing
Practices.

 

(y)                                 Mortgage
Loan Schedule.  The information set
forth in the related Mortgage Loan Schedule and all other information or data
furnished by, or on behalf of, the Sellers to Buyer is complete, true and
correct in all material respects, and the Sellers acknowledge that Buyer has
not verified the accuracy of such information or data.

 

(z)                                   Reserved.

 

(aa)                            No Reliance.  Each Seller has made its own
independent decision to enter into the Repurchase Documents and each
Transaction and as to whether such Transaction is appropriate and proper for it
based upon its own judgment and upon advice from such advisors (including
without limitation, legal counsel and accountants) as it has deemed
necessary.  Neither Seller is relying
upon any advice from Buyer as to any aspect of the Transactions, including without
limitation, the legal, accounting or tax treatment of such Transactions.

 

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

 

(cc)                            Real Estate Investment Trust. 
Holdings has not engaged in any material “prohibited transactions” as
defined in Section 857(b)(6)(B)(iii) and (C) of the Code or the requirements in
any successor or replacement provision in the Code, if any.  Holdings for its current “tax year” (as
defined in the Code) is entitled to a dividends paid deduction under the
requirements of Section 857 of the Code with respect to any dividends paid by
it with respect to each such year for which it claims a deduction in its Form
1120-REIT filed with the United States Internal Revenue Service for such year,
or the requirements in any successor or replacement provision in the Code, if
any.

 

SECTION 12.                               COVENANTS

 

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

 

38

 

(a)                                  Preservation
of Existence; Compliance with Law. Each Seller shall:

 

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

 

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

 

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

 

(iv)                              Keep
adequate records and books of account, in which complete entries will be made
in accordance with GAAP consistently applied; and

 

(v)                                 Permit
representatives of the Buyer, upon reasonable notice (unless an Event of
Default shall have occurred and is continuing, in which case, no prior notice
shall be required), during normal business hours, to examine, copy and make
extracts from its books and records, to inspect any of its Properties, and to
discuss its business and affairs with its officers, all to the extent
reasonably requested by the Buyer.

 

(b)                                 Taxes,
Etc.  The Sellers shall timely file all tax returns that are required to be
filed by them and shall timely pay all Taxes due, except for any such Taxes as
are being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
provided.

 

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

 

(i)                                     the
occurrence of any Default or Event of Default or Termination Event;

 

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

 

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

 

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

 

39

 

(A)                              a
change in the insurance coverage of either Seller, with a copy of evidence of
same attached;

 

(B)                                any
material adverse change in accounting policies or financial reporting practices
of either Seller;

 

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

 

(D)                               any
other event, circumstance or condition that has resulted, or has a possibility
of resulting, in a Material Adverse Effect; and

 

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

 

(d)                                 Financial
Reporting.  Each Seller shall
maintain a system of accounting established and administered in accordance with
GAAP, and furnish to the Buyer:

 

(i)                                     Within
one hundred twenty (120) days after the close of each fiscal year, Financial
Statements, including a statement of income and changes in shareholders’ equity
of the Sellers for such year, and the related balance sheet as at the end of
such year, all in reasonable detail and accompanied by an opinion of an
accounting firm as to said financial statements;

 

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

 

(iii)                               Within thirty (30) days
after the end of each calendar month, the unaudited balance sheets of the
Sellers as at the end of such period and the related unaudited consolidated
statements of income and retained earnings and of cash flows for the Sellers
for such period and the portion of the fiscal year through the end of such
period, subject, however, to year end adjustments;

 

(iv)                              Simultaneously
with the furnishing of each of the Financial Statements to be delivered
pursuant to subsection (ii) above, or monthly upon Buyer’s request, a
certificate in the form of Exhibit VIII hereto and certified by a
Responsible Officer of such Seller;

 

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

 

40

 

Buyer with a copy
of the annual 10-K filed with the SEC by such Seller or its Affiliates, no
later than 90 days after the end of the year; and

 

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

 

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

 

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

 

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

 

(h)                                 True
and Correct Information.  All
information, reports, exhibits, schedules, financial statements or certificates
of either Seller or any of its Affiliates thereof or any of their officers
furnished to Buyer hereunder and during Buyer’s diligence of either Seller are
and will be true and complete in all material respects and do not omit to
disclose any material facts necessary to make the statements therein or
therein, in light of the circumstances in which they are made, not
misleading.  All required financial statements,
information and reports delivered by either Seller to the Buyer pursuant to
this Repurchase Agreement shall be prepared in accordance with GAAP, or if
applicable, to SEC filings, the appropriate SEC accounting requirements.

 

41

 

(i)                                     ERISA
Events.

 

(i)                                     Promptly
upon becoming aware of the occurrence of any Event of Termination which
together with all other Events of Termination occurring within the prior 12
months involve a payment of money by or a potential aggregate liability of the
Sellers or any ERISA Affiliate thereof or any combination of such entities in
excess of $250,000 the Sellers shall give the Buyer a written notice specifying
the nature thereof, what action the Sellers or any ERISA Affiliate thereof has
taken and, when known, any action taken or threatened by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto;

 

(ii)                                  Promptly
upon receipt thereof, the Sellers shall furnish to the Buyer copies of (i) all
notices received by the Sellers or any ERISA Affiliate thereof of the PBGC’s
intent to terminate any Plan or to have a trustee appointed to administer any
Plan; (ii) all notices received by the Sellers or any ERISA Affiliate thereof
from the sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISA
involving a withdrawal liability in excess of $250,000; and (iii) all funding
waiver requests filed by the Sellers or any ERISA Affiliate thereof with the
Internal Revenue Service with respect to any Plan, the accrued benefits of
which exceed the present value of the plan assets as of the date the waiver
request is filed by more than $250,000, and all communications received by the
Sellers or any ERISA Affiliate thereof from the Internal Revenue Service with
respect to any such funding waiver request.

 

(j)                                     Financial
Condition Covenants.

 

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

 

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

 

(iii)                               Maintenance of
Liquidity.  MortgageIT shall ensure
that, as of the end of each calendar month, it has Cash Equivalents in an
amount not less than $10,000,000.

 

(k)                                  RESERVED.

 

(l)                                     No
Adverse Selection.  The Sellers shall
not select Eligible Mortgage Loans to be sold to Buyer as Purchased Mortgage
Loans using any type of adverse selection or other selection criteria which
would adversely affect the Buyer in any material respect.

 

(m)                               Mortgage
Loan Schedule.  On the Friday of each
calendar week (or if such date is not a Business Day, the next preceding
Business Day), or with such greater frequency as requested by Buyer, the
Sellers shall provide to Buyer, electronically, in a format mutually acceptable
to Buyer, a Mortgage Loan Schedule.  The
Sellers shall not cause the Purchased Mortgage Loans to be serviced by any
servicer other than a servicer expressly approved in

 

42

 

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

 

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

 

(o)                                 Books
and Records.  Each Seller shall, to
the extent practicable, maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate records
evidencing the Repurchase Assets in the event of the destruction of the
originals thereof), and keep and maintain or obtain, as and when required, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Repurchase Assets.

 

(p)                                 Security
Interest.  The Sellers shall do all
things necessary to preserve the Repurchase Assets so that they remains subject
to a first priority perfected security interest hereunder.  Without limiting the foregoing, the Sellers
will comply with all rules, regulations and other laws of any Governmental
Authority and cause the Repurchase Assets to comply with all applicable rules,
regulations and other laws.  The Sellers
will not allow any default for which such Seller is responsible to occur under
any Repurchase Assets or any Repurchase Documents and such Seller shall fully
perform or cause to be performed when due all of its obligations under any
Repurchase Assets or the Repurchase Documents.

 

(q)                                 Illegal
Activities.  Neither Seller shall
engage in any conduct or activity that could subject their respective assets to
forfeiture or seizure.

 

(r)                                    Material
Change in Business.  Neither Seller
shall make any material change in the nature of their respective businesses as
carried on at the date hereof.

 

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

 

43

 

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

 

(u)                                 Transactions
with Affiliates.  Neither Seller
shall enter into any transaction, including, without limitation, the purchase,
sale, lease or exchange of property or assets or the rendering or accepting of
any service with any Affiliate, unless such transaction is (a) not otherwise
prohibited in this Repurchase Agreement and (b) upon fair and reasonable terms
no less favorable to such Seller, as the case may be, than it would obtain in a
comparable arm’s length transaction with a Person which is not an Affiliate.

 

(v)                                 ERISA
Matters.

 

(i)                                     Neither
Seller shall permit any event or condition which is described in any of clauses
(i) through (vii) of the definition of “Event of Termination” to occur or exist
with respect to any Plan or Multiemployer Plan if such event or condition,
together with all other events or conditions described in the definition of
Event of Termination occurring within the prior 12 months, involves the payment
of money by or an incurrence of liability of such Seller or any ERISA Affiliate
thereof, or any combination of such entities in an amount in excess of
$250,000.

 

(ii)                                  Neither
Seller shall be an employee benefit plan as defined in Section 3 of Title I of
ERISA, or a plan described in Section 4975(e)(1) of the Code and (b) the Seller
shall not use “plan assets” within the meaning of 29 CFR §2510.3-101 to engage
in this Repurchase Agreement or the Transactions hereunder.

 

(w)                               Consolidations,
Mergers and Sales of Assets.  Neither
Seller shall (i) consolidate or merge with or into any other Person or (ii)
sell, lease or otherwise transfer all or substantially all of its assets to any
other Person; provided that such Seller may merge or consolidate with
another Person if such Seller is the Person surviving such merger and such
Seller may sell Purchased Mortgage Loans to Takeout Investors or pursuant to
securitizations provided that the proceeds therefrom are remitted to Buyer in
accordance with this Repurchase Agreement.

 

(x)                                   Mortgage
Loan Reports.  Each Seller will
furnish to Buyer monthly electronic Mortgage Loan performance data, including,
without limitation, delinquency reports, pool analytic reports and static pool
reports (i.e., delinquency, foreclosure and net
charge-off reports) and monthly stratification reports summarizing the
characteristics of the Mortgage Loans.

 

(y)                                 Agency
Approvals; Servicing.  MortgageIT
shall maintain its status with Fannie Mae and Ginnie Mae as an approved lender
and Freddie Mac as an approved seller, in each case in good standing (each such
approval, an “Agency Approval”). 
MortgageIT shall

 

44

 

service or cause to be serviced, all Mortgage Loans which are subject
to an Agency Takeout Commitment in accordance with the applicable Agency
guide.  Should MortgageIT, for any
reason, cease to possess all such applicable Agency Approvals to the extent
necessary, or should notification to the relevant Agency or to HUD, FHA or VA
be required, MortgageIT shall so notify Buyer immediately in writing.  Notwithstanding the preceding sentence, such
Seller shall take all necessary action to maintain all of its applicable Agency
Approvals at all times during the term of this Repurchase Agreement and each
outstanding Transaction.

 

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

 

(aa)                            Takeout
Payments.  With respect to each
Mortgage Loan subject to a Takeout Commitment, the Sellers shall arrange that
all payments under the related Takeout Commitment shall be paid to the
Settlement Account as set forth in the Custodial Agreement, or to an account
approved by the Buyer in writing prior to such payment.  With respect to any Agency Takeout
Commitment, if applicable, (1) with respect to the wire transfer instructions
as set forth in Freddie Mac Form 987 (Wire Transfer Authorization for a Cash
Warehouse Delivery) such wire transfer instructions are identical to Buyer’s
wire instructions or the Buyer has approved such wire transfer instructions in
writing in its sole discretion, or (2) the Payee Number set forth on Fannie Mae
Form 1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan
Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as
applicable, is identical to the Payee Number that has been identified by Buyer
in writing as Buyer’s Payee Number or the Buyer has approved the related Payee
Number in writing in its sole discretion; With respect to any Takeout
Commitment with an Agency for which the Agency is swapping the related Mortgage
Loans for a mortgage backed security, the applicable Agency documents list
Buyer as sole subscriber.

 

(bb)                          Underwriting
Guidelines.  Without the prior
written consent of Buyer, neither Seller shall amend in any material respect or
otherwise modify the Underwriting Guidelines in any material respect.  Without limiting the foregoing, in the event
that a Seller makes any amendment or modification to the Underwriting
Guidelines, such Seller shall promptly deliver to Buyer a complete copy of the
amended or modified Underwriting Guidelines.

 

(cc)                            HELOC
Provisions.  With respect to each
HELOC, if a Mortgagor requests an increase in the related Credit Limit, such
Seller shall, in its sole discretion, either accept or reject the Mortgagor’s
request in accordance with such Seller’s Underwriting Guidelines and notify the
Buyer’s decision in writing.  If the
request for a Credit Limit increase is accepted by such Seller, the increase
will be effected by such Seller through modification of the Mortgage Loan with
the Mortgagor.  Such Seller shall deliver
to the Buyer an updated Mortgage Loan Schedule reflecting the modification to
the Mortgage Loan and shall deliver any modified Mortgage Loan Documents to the
Custodian.

 

45

 

SECTION 13.                               EVENTS OF DEFAULT

 

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

 

(a)                                  either
Seller shall default in the payment of the Repurchase Price or Price
Differential on its related Repurchase Date or Payment Date, respectively, or
any amount necessary to satisfy a Margin Deficit when due pursuant to Section
4;

 

(b)                                 either
Seller shall default in the payment of any other amount payable by it hereunder
or under any other Repurchase Document, or the payment of Expenses or any other
Obligations, when the same shall become due and payable, whether at the due
date thereof, or by acceleration or otherwise and such failure to make such
payment, in all instances set forth herein shall continue unremedied for a
period of three Business Days; or

 

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

 

(d)                                 any
representation, warranty or certification made or deemed made herein or in any
other Repurchase Document by either Seller or any certificate furnished to the
Buyer pursuant to the provisions hereof or thereof or any information with
respect to the Purchased Mortgage Loans furnished in writing by on behalf of
either Seller shall prove to have been untrue or misleading in any material respect
as of the time made or furnished (other than the representations and warranties
set forth in Schedule 1, which shall be considered solely for the purpose
of determining the Market Value of the Purchased Mortgage Loans; unless
(i) either Seller shall have made any such representations and warranties
with actual knowledge that they were materially false or misleading at the time
made; or (ii) any such representations and warranties have been determined
in good faith by the Buyer in its sole discretion to be materially false or
misleading on a regular basis); or

 

(e)                                  either
Seller shall fail to observe or perform any other covenant or agreement
contained in this Repurchase Agreement (and not identified in clause (b) of
Section 13.01) or any other Repurchase Document, and if such default shall be
capable of being remedied, and such failure to observe or perform shall
continue unremedied for a period of 1 Business Day; or

 

(f)                                    a
judgment or judgments for the payment of money in excess of $1,000,000 in the aggregate
shall be rendered against either Seller or any of its Material Subsidiaries by
one or more courts, administrative tribunals or other bodies having
jurisdiction and the same shall not be satisfied, discharged (or provision
shall not be made for such discharge) or bonded, or a stay of execution thereof
shall not be procured, within 30 days from the date of entry thereof, and
either Seller nor any such Material Subsidiary shall, within said period of
30 days, or such longer period during which execution of the same shall
have been stayed or bonded, appeal therefrom and cause the execution thereof to
be stayed during such appeal; or

 

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

 

46

 

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

 

(h)                                 an
Event of Insolvency shall have occurred with respect to either Seller; or

 

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

 

(j)                                     either
Seller shall grant, or suffer to exist, any Lien on any Repurchase Asset
(except any Lien in favor of the Buyer); or (A) the Repurchase Assets
shall not have been sold to the Buyer, or (B) the Liens contemplated
hereby shall cease or fail to be first priority perfected Liens on any
Repurchase Assets in favor of the Buyer or shall be Liens in favor of any
Person other than the Buyer; or

 

(k)                                  any
material adverse change in the Property, business, prospects, financial
condition or operations of either Seller or any of its Material Subsidiaries
shall occur, in each case as determined by Buyer in its sole good faith
discretion, or any other condition shall exist which, in Buyer’s sole good
faith discretion, constitutes a material impairment of such Seller’s ability to
perform its obligations under this Repurchase Agreement or any other Repurchase
Document.

 

(l)                                     (i) any
Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan
of either Seller, (ii) any material “accumulated funding deficiency” (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on
the assets of either Seller or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Plan of either Seller, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Buyer, likely to result in the termination of such Plan for purposes of Title
IV of ERISA, (iv) any Plan of either Seller shall terminate for purposes
of Title IV of ERISA, (v) either Seller or any Commonly Controlled Entity shall,
or in the reasonable opinion of the Buyer is likely to, incur any liability in
connection with a withdrawal from, or the insolvency or reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan of either Seller; and in each case in
clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could reasonably be expected
to have a Material Adverse Effect;

 

(m)                               
any change or development involving a prospective change in taxation or other
applicable law or regulation or interpretation thereof in the United States
directly affecting

 

47

 

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

 

(n)                                 either
Seller’s audited annual financial statements or the notes thereto or other
opinions or conclusions stated therein shall be qualified or limited by
reference to the status of either Seller as a “going concern” or a reference of
similar import;

 

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

 

(p)                                 The
failure of Holdings to satisfy any of the following asset or income tests and
Buyer has delivered notice of an Event of Default to Holdings with respect
thereto:

 

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

 

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

 

48

 

any successor or
replacement provision in the Code, if any, (iii) interest, (iv) dividends, and
(v) income derived from payments to Holdings on interest rate swap or cap
agreements, options, futures contracts, forward rate agreements and other
similar financial instruments entered into to reduce the interest rate risks
with respect to any indebtedness incurred or to be incurred to acquire or carry
real estate assets, or gain from the sale or other disposition of such an
investment as described in section 856(c)(5)(G), in each case within the
meaning of Section 856(c)(2) of the Code or the requirements in any successor
or replacement provision in the Code, if any.

 

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

 

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

 

Section 13.02                          Termination Event.

 

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

 

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

 

(ii)                                  A
Change of Control of either Seller shall have occurred; or

 

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

 

49

 

(b)                                 Upon
the occurrence of a Termination Event, the Buyer shall have the right, in its
sole discretion, to immediately terminate the Buyer’s agreement to enter into
any additional Transactions on the terms of this Agreement.  With respect to the Termination Events set forth
in Section 13.02(i) and (ii), the Sellers shall repurchase any Purchased
Mortgage Loans subject to a Transaction hereunder within 60 days following
receipt of a request therefor from Buyer following the occurrence of such
Termination Event.

 

SECTION 14.                               REMEDIES

 

(a)                                  If
an Event of Default occurs with respect to either Seller, the following rights
and remedies are available to the Buyer; provided, that an Event of Default
shall be deemed to be continuing unless expressly waived by the Buyer in
writing.

 

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

 

(ii)                                  If
the Buyer exercises or is deemed to have exercised the option referred to in
subsection (a)(i) of this Section,

 

(A)                              the
Sellers’ obligations in such Transactions to repurchase all Purchased Mortgage
Loans, at the Repurchase Price therefor on the Repurchase Date determined in
accordance with subsection (a)(i) of this Section, (1) shall
thereupon become immediately due and payable and (2) all Income paid after
such exercise or deemed exercise shall be retained by the Buyer and applied to
the aggregate unpaid Repurchase Price and any other amounts owed by the Sellers
hereunder;

 

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

 

50

 

(C)                                all
Income actually received by the Buyer pursuant to Section 5 (excluding any
Late Payment Fees paid pursuant to Section 5(a)) shall be applied to the
aggregate unpaid Repurchase Price owed by the Sellers.

 

(iii)                               Upon the occurrence of
one or more Events of Default, the Buyer shall have the right to obtain
physical possession of all files of the Sellers relating to the Purchased
Mortgage Loans and the Repurchase Assets and all documents relating to the
Purchased Mortgage Loans which are then or may thereafter come in to the possession
of the Sellers or any third party acting for the Sellers and the Sellers shall
deliver to the Buyer such assignments as the Buyer shall request.  The Buyer shall be entitled to specific
performance of all agreements of the Sellers contained in the Repurchase
Documents.

 

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

 

(v)                                 The
Sellers shall be liable to Buyer for (i) the amount of all reasonable
legal or other expenses (including, without limitation, all costs and expenses
of Buyer in connection with the enforcement of this Repurchase Agreement or any
other agreement evidencing a Transaction, whether in action, suit or litigation
or bankruptcy, insolvency or other similar proceeding affecting creditors’
rights generally, further including, without limitation, the reasonable fees
and expenses of counsel (including the costs of internal counsel of Buyer)
incurred in connection with or as a result of an Event of Default,
(ii) damages in an amount equal to the cost (including all fees, 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.

 

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

 

51

 

(b)                                 Buyer
may exercise one or more of the remedies available to Buyer immediately upon
the occurrence of an Event of Default and at any time thereafter without notice
to the Sellers.  All rights and remedies
arising under this Repurchase Agreement as amended from time to time hereunder
are cumulative and not exclusive of any other rights or remedies which Buyer
may have.

 

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

 

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

 

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

 

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

 

SECTION 15.                               INDEMNIFICATION AND EXPENSES; RECOURSE

 

(a)                                  The
Sellers agree to hold the Buyer, and its Affiliates and their officers,
directors, employees, agents and advisors (each an “Indemnified Party”)
harmless from and indemnify any Indemnified Party against all liabilities,
losses, damages, judgments, costs and expenses of any kind which may be imposed
on, incurred by or asserted against such Indemnified Party (collectively, “Costs”),
relating to or arising out of this Repurchase Agreement, any other Repurchase
Document or any transaction contemplated hereby or thereby, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Repurchase Agreement, any other Repurchase Document or any transaction
contemplated hereby or thereby, that, in each case, results from anything other
than the Indemnified Party’s gross negligence or willful misconduct.  Without limiting the generality of

 

52

 

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

 

(b)                                 The
Sellers agree to pay as and when billed by the Buyer all of the out-of-pocket
costs and expenses incurred by the Buyer in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Repurchase Agreement, any other Repurchase Document or any other documents
prepared in connection herewith or therewith. 
The Sellers agree to pay as and when billed by the Buyer all of the
reasonable out-of-pocket costs and expenses incurred in connection with the
consummation and administration of the transactions contemplated hereby and
thereby including without limitation filing fees and all the reasonable fees,
disbursements and expenses of counsel to the Buyer which amount shall be
deducted from the Purchase Price paid for the first Transaction hereunder.  Subject to the limitations set forth in
Section 27 hereof, the Sellers agree to pay the Buyer all the reasonable
out of pocket due diligence, inspection, testing and review costs and expenses
incurred by the Buyer with respect to Purchased Mortgage Loans submitted by the
Sellers for purchase under this Repurchase Agreement, including, but not
limited to, those out of pocket costs and expenses incurred by the Buyer
pursuant to Sections 15(b) and 27 hereof.

 

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

 

(d)                                 Each
Seller shall be jointly and severally liable for the full, complete and
punctual performance and satisfaction of all obligations of either Seller under
this Repurchase Agreement.  Accordingly,
each Seller waives any and all notice of creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by Buyer
upon such Seller’s joint and several liability. 
Each Seller waives diligence, presentment, protest, demand for payment
and notice of default or nonpayment to or upon such Seller with respect to the
Obligations.  When pursuing its rights
and remedies hereunder against either Seller, Buyer may, but shall be under no
obligation, to pursue such rights and remedies hereunder against either Seller
or any other Person or against any collateral security for the Obligations or
any right of offset with respect thereto, and any failure by Buyer to pursue
such other rights or remedies or to

 

53

 

collect any payments from such Seller or any such other Person to realize
upon any such collateral security or to exercise any such right of offset, or
any release of such Seller or any such other Person or any such collateral
security, or right of offset, shall not relieve such Seller of any liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of Buyer against such Seller.

 

SECTION 16.                               SERVICING

 

(a)                                  The
Sellers, on Buyer’s behalf, shall contract with a Servicer to, or if a Seller
is the Servicer, such Seller shall, service the Mortgage Loans consistent with
the degree of skill and care that such Seller customarily requires with respect
to similar Mortgage Loans owned or managed by it and in accordance with
Accepted Servicing Practices.  The Servicer
shall (i) comply with all applicable Federal, State and local laws and
regulations, (ii) maintain all state and federal licenses necessary for it
to perform its servicing responsibilities hereunder and (iii) not impair
the rights of Buyer in any Purchased Mortgage Loans or any payment
thereunder.  Buyer may terminate the
servicing of any Purchased Mortgage Loan with the then existing servicer in
accordance with Section 16(e) hereof.

 

(b)                                 The
Sellers shall cause the Servicer to hold or cause to be held all escrow funds
collected by the Sellers with respect to any Purchased Mortgage Loans in trust
accounts and shall apply the same for the purposes for which such funds were
collected.

 

(c)                                  After
Sellers receive notice from Buyer of the need to deposit collections into the
Collection Account, the Sellers shall cause the Servicer to deposit all
collections received by the Sellers on account of the Purchased Mortgage Loans
in the Collection Account no later than two Business Days following receipt
thereof.

 

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

 

(e)                                  Upon
the occurrence of a Default or Event of Default hereunder or a material default
under the Servicing Agreement, Buyer shall have the right to immediately
terminate the Servicer’s right to service the Purchased Mortgage Loans without
payment of any penalty or termination fee. 
The Sellers shall cooperate in transferring the servicing of the
Purchased Mortgage Loans to a successor servicer appointed by Buyer in its sole
discretion.

 

(f)                                    If
the Sellers should discover that, for any reason whatsoever, any entity
responsible to the Sellers by contract for managing or servicing any such
Purchased Mortgage Loan has failed to perform fully the Sellers’ obligations
under the Repurchase Documents or any of the obligations of such entities with
respect to the Purchased Mortgage Loans, the Sellers shall promptly notify
Buyer.

 

54

 

SECTION 17.                               SINGLE AGREEMENT

 

Buyer and the Sellers
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 that each has been entered into in consideration of the other
Transactions.  Accordingly, each of Buyer
and the Sellers agree (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 Transaction hereunder; (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 and (iv) to promptly provide
notice to the other after any such set off or application.

 

SECTION 18.                               SET-OFF

 

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

 

SECTION 19.                               NOTICES AND OTHER COMMUNICATIONS

 

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

 

55

 

SECTION 20.                               ENTIRE AGREEMENT; SEVERABILITY

 

This Repurchase
Agreement, together with the Repurchase Documents, constitute the entire
understanding between Buyer and the Sellers with respect to the subject matter
they cover and shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions involving
Purchased Mortgage Loans.  By acceptance
of this Repurchase Agreement, Buyer and Sellers acknowledge that they have not
made, and are not relying upon, any statements, representations, promises or
undertakings not contained in this Repurchase Agreement.  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.

 

SECTION 21.                               NON-ASSIGNABILITY

 

The rights and
obligations of the parties under this Repurchase Agreement and under any
Transaction shall not be assigned by either Seller without the prior written
consent of Buyer.  Subject to the
foregoing, this Repurchase Agreement and any Transactions shall be binding upon
and shall inure to the benefit of the parties and their respective successors
and assigns.  Nothing in this Repurchase
Agreement express or implied, shall give to any Person, other than the parties
to this Repurchase Agreement and their successors hereunder, any benefit of any
legal or equitable right, power, remedy or claim under this Repurchase
Agreement. Buyer may from time to time with the prior written consent of the
Sellers (which consent will not be unreasonably withheld (provided that such
consent shall not be required with respect to an assignment to any Affiliate of
the Buyer or if an Event of Default shall have occurred and is continuing))
assign all or a portion of its rights and obligations under this Repurchase
Agreement and the Repurchase Documents; provided, however
that Buyer shall maintain, for review by the Sellers upon written request, a
register of assignees and a copy of an executed assignment and acceptance by
Buyer and assignee (“Assignment and Acceptance”), specifying the
percentage or portion of such rights and obligations assigned.  Upon such assignment, (a) such assignee
shall be a party hereto and to each Repurchase Document to the extent of the
percentage or portion set forth in the Assignment and Acceptance, and shall
succeed to the applicable rights and obligations of Buyer hereunder, and
(b) Buyer shall, to the extent that such rights and obligations have been
so assigned by it be released from its obligations hereunder and under the
Repurchase Documents.  Unless otherwise
stated in the Assignment and Acceptance, the Sellers shall continue to take
directions solely from Buyer unless otherwise notified by Buyer in
writing.  Buyer may distribute to any
prospective assignee any document or other information delivered to Buyer by
Sellers.

 

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

 

56

 

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

 

The Buyer may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 21, disclose to the assignee or
participant or proposed assignee or participant, as the case may be, any
information relating to the Sellers or any of its Subsidiaries or to any aspect
of the Transactions that has been furnished to the Buyer by or on behalf of the
Sellers or any of their Subsidiaries; provided that such assignee or
participant agrees to hold such information subject to the confidentiality
provisions of this Repurchase Agreement.

 

The Buyer may at any time
create a security interest in all or any portion of its rights under this
Repurchase Agreement in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System and any
Operating Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Buyer from its obligations hereunder.

 

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

 

SECTION 22.                               TERMINABILITY

 

Each representation and
warranty made or deemed to be made by entering into a Transaction, herein or
pursuant hereto shall survive the making of such representation and warranty,
and the Buyer shall not be deemed to have waived any Default that may arise
because any such representation or warranty shall have proved to be false or
misleading, notwithstanding that the Buyer may have had notice or knowledge or
reason to believe that such representation or warranty was false or misleading
at the time the Transaction was made. 
Notwithstanding any such termination or the occurrence of an Event of
Default, all of the representations and warranties and covenants hereunder
shall continue and survive.  The
obligations of the Sellers under Section 15 hereof shall survive the
termination of this Repurchase Agreement.

 

SECTION 23.                               GOVERNING
LAW

 

THIS
REPURCHASE AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

 

57

 

SECTION 24.                               SUBMISSION TO JURISDICTION; WAIVERS

 

BUYER AND
EACH SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

(i)                                    SUBMITS
FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
REPURCHASE AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;

 

(ii)                                CONSENTS
THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE
EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME;

 

(iii)                            AGREES
THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY
MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS
SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE BEEN
NOTIFIED; AND

 

(iv)                               AGREES
THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
JURISDICTION.

 

(v)                                   THE
BUYER AND EACH SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS REPURCHASE AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

SECTION 25.                               NO
WAIVERS, ETC.

 

No failure on the part of
the Buyer to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any Repurchase Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any Repurchase Document preclude any other or
further exercise thereof or the

 

58

 

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

 

SECTION 26.                               [RESERVED]

 

SECTION 27.                               DUE
DILIGENCE

 

The Sellers acknowledge
that Buyer has the right to perform continuing due diligence reviews with
respect to the Mortgage Loans and the Sellers, for purposes of verifying
compliance with the representations, warranties and specifications made
hereunder, or otherwise, and the Sellers agree that upon reasonable prior
notice unless an Event of Default shall have occurred, in which case no notice
is required, to the Sellers, Buyer or its authorized representatives will be
permitted during normal business hours to examine, inspect, and make copies and
extracts of, the Mortgage Files and any and all documents, records, agreements,
instruments or information relating to such Mortgage Loans in the possession or
under the control of the Sellers and/or the Custodian.  The Sellers also shall make available to
Buyer a knowledgeable financial or accounting officer for the purpose of
answering questions respecting the Mortgage Files and the Mortgage Loans.  Without limiting the generality of the
foregoing, the Sellers acknowledge that Buyer may purchase Mortgage Loans from
the Sellers based solely upon the information provided by the Sellers to Buyer
in the Purchased Mortgage Loan Schedule and the representations, warranties and
covenants contained herein, and that Buyer, at its option, has the right at any
time to conduct a partial or complete due diligence review on some or all of
the Mortgage Loans purchased in a Transaction, including, without limitation,
ordering broker’s price opinions, new credit reports and new appraisals on the
related Mortgaged Properties and otherwise re-generating the information used
to originate such Mortgage Loan.  Buyer
may underwrite such Mortgage Loans itself or engage a mutually agreed upon
third party underwriter to perform such underwriting.  The Sellers agree to cooperate with Buyer and
any third party underwriter in connection with such underwriting, including,
but not limited to, providing Buyer and any third party underwriter with access
to any and all documents, records, agreements, instruments or information
relating to such Mortgage Loans in the possession, or under the control, of the
Sellers.  The Sellers further agree that
the Sellers shall pay all out-of-pocket costs and expenses incurred by Buyer in
connection with Buyer’s activities pursuant to this Section 27 (“Due
Diligence Costs”); provided, that such Due Diligence Costs shall not exceed
$20,000 per calendar year unless a Default or Event of Default shall have
occurred, in which event Buyer shall have the right to perform due diligence,
at the sole expense of Sellers without regard to the dollar limitation set
forth herein.

 

SECTION 28.                               COMMITMENT
FEE

 

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

 

59

 

SECTION 29.                               [RESERVED]

 

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

 

(a)                                  Each
Seller hereby irrevocably constitutes and appoints the Buyer and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Seller and in the name of such Seller or in its own name, from
time to time in the Buyer’s discretion, for the purpose of carrying out the
terms of this Repurchase Agreement, to take any and all appropriate action and
to execute any and all documents and instruments which may be reasonably
necessary or desirable to accomplish the purposes of this Repurchase Agreement,
and, without limiting the generality of the foregoing, such Seller hereby gives
the Buyer the power and right, on behalf of such Seller, without assent by, but
with notice to, such Seller, if an Event of Default shall have occurred and be
continuing, to do the following:

 

(i)                                     in
the name of such Seller, or in its own name, or otherwise, to take possession
of and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due with respect to any other Repurchase
Assets and to file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Buyer for the
purpose of collecting any and all such moneys due with respect to any other
Repurchase Assets whenever payable;

 

(ii)                                  to
pay or discharge taxes and Liens levied or placed on or threatened against the
Repurchase Assets;

 

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

 

60

 

(b)                                 Each
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof.  This power of
attorney is a power coupled with an interest and shall be irrevocable.

 

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

 

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

 

SECTION 31.                               MISCELLANEOUS

 

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

 

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

 

(c)                                  Acknowledgment.  Each Seller hereby acknowledges that:

 

(i)                                     it
has been advised by counsel in the negotiation, execution and delivery of this
Repurchase Agreement and the other Repurchase Documents;

 

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

 

(iii)                               no joint venture exists
between the Buyer and the Sellers.

 

SECTION 32.                               CONFIDENTIALITY

 

The Buyer and the Sellers
hereby acknowledge and agree that all written or computer-readable information
provided by one party to any other regarding the terms set forth in any of the
Repurchase Documents or the Transactions contemplated thereby (the “Confidential
Terms”) shall be kept confidential and shall not be divulged to any party
without the prior written consent of such other party except to the extent that
(i) it is necessary to do so in working with legal counsel, auditors,
taxing authorities or other governmental agencies or regulatory bodies or in
order to comply with any applicable federal or state laws, (ii) any of the
Confidential Terms are in the public domain other than due to a breach of this
covenant, or (iii) in the event of an Event of Default the Buyer
determines such information to be necessary or desirable to disclose in connection
with the marketing and sales of the Purchased Mortgage

 

61

 

Loans or otherwise to enforce or exercise the Buyer’s rights
hereunder.  Each of the parties hereto
hereby acknowledges that the provisions of the federal securities laws may
restrict any Person who is in the possession of material, non-public
information regarding any company from purchasing or selling securities of such
company and from communicating such information to any other Person under
circumstances in which it is reasonably foreseeable that such Person is likely
to purchase or sell such securities. 
Each of the parties hereto hereby agrees to abide by such laws as they
relate to the other’s securities and confidential information.  Notwithstanding the foregoing or anything to
the contrary contained herein or in any other Repurchase Document, the parties
hereto may disclose to any and all Persons, without limitation of any kind, the
U.S. federal, state and local tax treatment of the Transactions, any fact
relevant to understanding the U.S. federal, state and local tax treatment of
the Transactions, and all materials of any kind (including opinions or other
tax analyses) relating to such U.S. federal, state and local tax treatment and
that may be relevant to understanding such tax treatment; provided that Sellers
may not disclose the name of or identifying information with respect to Buyer
or any pricing terms (including, without limitation, the Pricing Spread,
Purchase Price Percentage, and Purchase Price) or other nonpublic business or
financial information (including any sublimits and financial covenants) that is
unrelated to the U.S. federal, state and local tax treatment of the
Transactions to the taxpayer and is not relevant to understanding the U.S.
federal, state and local tax treatment of the Transactions to the taxpayer,
without the prior written consent of the Buyer. 
The provisions set forth in this Section 32 shall survive the
termination of this Repurchase Agreement.

 

SECTION 33.                               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 Mortgage Loans 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 Mortgage Loans 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 Repurchase 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

 

62

 

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

 

SECTION 34.                               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.

 

SECTION 35.                               CONFLICTS

 

In the
event of any conflict between the terms of this Repurchase Agreement, any other
Repurchase Document and any Confirmation, the documents shall control in the
following order of priority:  first,
the terms of the Confirmation shall prevail, then the terms of this Repurchase
Agreement shall prevail, and then the terms of the Repurchase Documents shall
prevail.

 

SECTION 36.                               AUTHORIZATIONS

 

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

 

SECTION 37.                               ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES.

 

Buyer has
in place internal policies and procedures that expressly prohibit its purchase
of any High Cost Mortgage Loan.

 

[THIS SPACE
INTENTIONALLY LEFT BLANK]

 

63

 

IN
WITNESS WHEREOF, the parties have entered into this Repurchase Agreement as of the
date set forth above.

 

 

	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH MORTGAGE CAPITAL
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN WINCHESTER

  
	
   

  	
   

  	
  Name: JOHN WINCHESTER

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
   

  	
  4 World Financial
  Center

  10th Floor

  New York, New York 10080

  

  Attention:  James B. Cason

  Telecopier No.:  (212) 449-3673

  Telephone No.:  (212) 449-1219

  

 

 

	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  MORTGAGEIT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN R. CUTI

  
	
   

  	
   

  	
  Name: JOHN R. CUTI

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
  33 Maiden Lane, 6th
  Floor

  New York, NY 10038

  Attention:  Chief Operating Officer

  Telecopier No.:  212-651-4689

  Telephone No:  212-651-4691

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  MORTGAGEIT HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN R. CUTI

  
	
   

  	
   

  	
  Name: JOHN R. CUTI

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
  33 Maiden Lane, 6th
  Floor

  New York, NY 10038

  Attention:           Michael
  Zigrossi

                                                                    John
  R. Cuti

  Telecopier No.:  212-651-4674

  Telephone No:  212-651-7774Exhibit
10.26

 

 

AMENDED AND
RESTATED

CUSTODIAL
AGREEMENT

 

Among

 

MERRILL LYNCH
MORTGAGE CAPITAL INC.

 

as Buyer

 

and

 

MORTGAGEIT, INC.,

as Seller

 

and

 

MORTGAGEIT,
HOLDINGS, INC.,

as Seller

 

DEUTSCHE BANK
NATIONAL TRUST COMPANY,

 

as Custodian

 

Dated as of August 4,
2004

 

 

 

TABLE OF
CONTENTS

 

	
  Section 1.

  	
  Definitions.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Deposit of Mortgage Loans;
  Effecting a Transaction.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Mortgage Loan
  Schedule or Exception Report.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Obligations of the
  Custodian.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Additional Purchased
  Mortgage Loans.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Future Defects.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Release for Servicing.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Limitation on Release.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Release for Payment.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Covenants of the Seller.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Repurchase Date.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Transfer of Purchased
  Mortgage Loans Upon Termination of a Transaction.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Shipment of Documents.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Examination and Copies of
  Mortgage Files.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Insurance of the
  Custodian.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Periodic Statements.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Fees and Expenses of the
  Custodian.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Custodian Representations.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  No Adverse Interest of the
  Custodian.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Concerning the Custodian.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Indemnification.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Merger or Consolidation of
  Custodian.

  	
   

  

 

i

 

	
  Section 23.

  	
  Removal of the Custodian
  With Respect to Some or All of the Purchased Mortgage Loans.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Termination by the
  Custodian.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Successors and Assigns.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Authorized
  Representatives.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Notices.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Reproduction of Documents.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 29.

  	
  Amendments; Entire
  Agreement.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  Entire Agreement;
  Severability.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 31.

  	
  Governing Law;
  Counterparts.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 32.

  	
  Submission to
  Jurisdiction.

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 1

  	
  Mortgage File

  	
   

  
	
  EXHIBIT 2

  	
  Form of Trust Receipt

  	
   

  
	
  EXHIBIT 3

  	
  Form of
  Request for Release of Documents and Receipt

  	
   

  
	
  EXHIBIT 4

  	
  Authorized
  Representatives of the Custodian

  	
   

  
	
  EXHIBIT 5

  	
  Authorized
  Representatives of the Seller

  	
   

  
	
  EXHIBIT 6

  	
  Authorized
  Representatives of the Buyer

  	
   

  
	
  EXHIBIT 7

  	
  Form of
  Mortgage Loan Schedule

  	
   

  
	
  EXHIBIT 8

  	
  Form of
  Repurchase Release

  	
   

  
	
  EXHIBIT 9

  	
  Form of Lost
  Note Affidavit

  	
   

  
	
  EXHIBIT 10

  	
  Form of
  Wet-Ink Trust Receipt

  	
   

  
	
  EXHIBIT 11

  	
  Approved
  Bailees

  	
   

  
	
  EXHIBIT 12

  	
  Approved
  Takeout Investors

  	
   

  
	
  EXHIBIT 13

  	
  Form of
  Bailee Letter

  	
   

  
	
  EXHIBIT 14

  	
  Form of
  Bailee Violation Letter

  	
   

  
	
  EXHIBIT 15

  	
  Form of
  Settlement Account Control Agreement

  	
   

  

 

ii

 

This AMENDED AND RESTATED
CUSTODIAL AGREEMENT, dated as of August 4, 2004, among Merrill Lynch
Mortgage Capital Inc. (“MLMCI” and the “Buyer”), MortgageIT,
Inc., a New York corporation (“MortgageIT” and a “Seller”),
MortgageIT Holdings, Inc., a Maryland corporation (“Holdings” and a “Seller”,
and collectively with MortgageIT, the “Sellers”) and Deutsche Bank
National Trust Company, as Custodian (the “Custodian”).

 

Merrill Lynch Commercial
Finance Corp. (“MLCFC”), MortgageIT and the Custodian previously entered
into a Custodial Agreement, dated June 20, 2003, (the “Existing
Custodial Agreement”) and MLCFC subsequently assigned its rights hereunder
to MLMCI.

 

The Buyer, the Sellers and
the Custodian have requested that the Existing Custodial Agreement be amended
and restated on the terms and conditions set forth herein.

 

Accordingly, the parties
hereby agree, in consideration of the mutual promises and mutual obligations
set forth herein, that the Custodial Agreement is hereby amended and restated as
set forth herein.

 

W I T N E S S E T H:

 

WHEREAS, the Buyer and
the Sellers may, from time to time, enter into transactions (each, a “Transaction”)
in which the Buyer shall purchase from the Sellers certain Mortgage Loans, with
a simultaneous agreement by the Sellers to repurchase such Purchased Mortgage
Loans as provided in that certain Amended and Restated Master Repurchase
Agreement dated as of August 4, 2004 between the Sellers and the Buyer
(the “Repurchase
Agreement”); and

 

WHEREAS, the Buyer has requested
the Custodian to act as custodian on behalf of the Buyer for purposes of
holding the Purchased Mortgage Loans purchased by Buyer from the Sellers
pursuant to the Repurchase Agreement; and

 

WHEREAS, the Custodian is
a national banking association, is otherwise authorized to act as the Custodian
pursuant to this Agreement, and has agreed to act as custodian/bailee for hire
for the Buyer, all as more particularly set forth herein; and

 

WHEREAS, the Sellers
shall from time to time deliver Purchased Mortgage Loans to the Custodian that
are subject to a Transaction, and has agreed to deliver or cause to be
delivered to the Custodian certain documents with respect to the Purchased
Mortgage Loans subject to each Transaction in accordance with the terms and conditions
hereof;

 

NOW, THEREFORE, in
consideration of the mutual undertakings herein expressed, the parties hereto
hereby agree as follows:

 

 

Section 1.                                            Definitions.

 

Capitalized terms used
but not defined herein shall have the meanings assigned to them in the
Repurchase Agreement.

 

“Additional Purchased Mortgage Loans”
shall have the meaning set forth in Section 5 hereof.

 

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

 

“Agreement” shall mean this Custodial
Agreement and all amendments and attachments hereto and supplements hereof.

 

“Anticipated
Settlement Date” shall mean the anticipated settlement date for any Takeout
Commitment.

 

“Approved Bailee”
shall mean an Approved Takeout Investor or an Approved Bailee listed on Exhibit
11 hereto.

 

“Approved Takeout
Investor” shall mean (i) any Agency, (ii) any institution listed on Exhibit
12 which has made a Takeout Commitment and has been approved by Buyer or
(iii) any other institution which has otherwise been approved in writing by Buyer.

 

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

 

“Assignment of Mortgage” shall mean an
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the transfer of the Mortgage
to the party indicated therein.

 

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

 

“Authorized Representative” shall have
the meaning set forth in Section 26 hereof.

 

“Bailee Letter”
shall mean a master bailee letter, in the form of Exhibit 13, for use by
Custodian in connection with the delivery of a Mortgage File as contemplated in
Section 9 hereof.

 

“Bailee Violation
Letter” shall mean a letter in the form of Exhibit 14 hereto.

 

“Business Day” shall mean any day
excluding (i) Saturday, Sunday or (ii) any day on which banks located
in the States of New York or California are authorized or permitted to close
for business or (iii) any day on which the New York Stock Exchange is
closed.

 

2

 

“Buyer” shall mean Merrill Lynch
Mortgage Capital Inc. or its successor in interest or assigns.

 

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

 

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

 

“Co-op Lien Search”
shall mean a search for (a) federal tax liens, mechanics’ liens, lis pendens,
judgments of record or otherwise against (i) the Co-op Corporation and (ii) the
seller of the Co-op Unit, (b) filings of Financing Statements and (c) the deed
of the Co-op Project into the Co-op Corporation.

 

“Co-op Loan” shall
mean a Mortgage Loan secured by the pledge of stock allocated to a dwelling
unit in a residential cooperative housing corporation and collateral assignment
of the related Proprietary Lease.

 

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

 

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

 

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

 

“Custodian” shall mean Deutsche Bank
National Trust Company, or any successor in interest or assigns, or any successor
to the Custodian under this Agreement as herein provided.

 

“Electronic Agent” shall mean MERSCORP,
Inc., or its successor in interest or assigns.

 

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

 

“Event of Default” shall mean any event
of default under the Repurchase Agreement or any confirmation thereunder.

 

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

 

3

 

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

 

“Freddie Mac”
shall mean Freddie Mac, and any successor thereto.

 

“GNMA” shall mean
the Government National Mortgage Association, and any successor thereto.

 

“Indemnitee” shall have the meaning set
forth in Section 21(a) hereof.

 

“Last Endorsee” shall have the meaning
set forth in Section 3 hereof.

 

“MERS” shall mean Mortgage Electronic
Registration Systems, Inc., or its successors or assigns.

 

“MERS System” shall mean the Electronic
Agent’s mortgage electronic registry system.

 

“Mortgage” shall mean the mortgage,
deed of trust or other instrument securing a Mortgage Note, which creates a
first or second lien on the Mortgaged Property described therein.

 

“Mortgage File”
shall have the meaning set forth in Exhibit 1 and Exhibit 1-A
attached hereto.

 

“Mortgage Loan” shall mean any
residential real estate secured loan, including, without limitation: (i) a
promissory note, any reformation thereof and related deed of trust (or
mortgage) and security agreement; (ii) all guaranties and insurance
policies, including, without limitation, all mortgage and title insurance
policies and all fire and extended coverage insurance policies and rights of
the Sellers to return premiums or payments with respect thereto; and
(iii) all right, title and interest of the Sellers in the property covered
by such deed of trust (or mortgage).

 

“Mortgage Loan Schedule” shall mean a
schedule in written and computer readable formats of Purchased Mortgage
Loans, containing the information set forth in Exhibit 7 hereto and
otherwise acceptable to the Buyer.

 

“Mortgage Loan Schedule and Exception Report”
shall mean a list of Purchased Mortgage Loans delivered by the Custodian to the
Buyer, reflecting the Mortgage Loans held by the Custodian for the benefit of
the Buyer, which includes codes indicating any exceptions with respect to each
Mortgage Loan listed thereon.  Each
Mortgage Loan Schedule and Exception Report shall set forth (a) the
Mortgage Loans being purchased by the Buyer on any applicable Purchase Date as
well as the Mortgage Loans previously purchased by the Buyer and held by the
Custodian hereunder, and (b) all exceptions with respect thereto, with any
updates thereto from time to time last delivered.

 

“Mortgage Note” shall mean the note or
other evidence of the indebtedness of a Mortgagor secured by a Mortgage, as the
same may be reformed or amended from time to time.

 

4

 

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

 

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

 

“Notice of Bailment”
shall mean a notice, in the form of Schedule 1 to the Bailee
Letter, delivered by Custodian to an Approved Bailee in connection with each
delivery to such Approved Bailee of the applicable portion of each Submission
Package.

 

“Notice of Default” shall mean written
notice delivered by the Buyer to the Custodian and the Sellers stating that an
Event of Default has occurred.

 

“Officer’s Certificate”
shall mean a certificate signed by a Responsible Officer of the Person
delivering such certificate and delivered as required by this Custodial
Agreement.

 

“Person” shall mean any individual,
corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof.

 

“Pledge Instruments”
shall mean, with respect to each Co-op Loan, the Stock Power, the Assignment of
Proprietary Lease, the assignment of the Mortgage Note and the acceptance of
assignment of lease agreement.

 

“Primary Insurance
Policy” shall mean a policy of primary mortgage guaranty insurance issued
by a Qualified Insurer, as required under the Repurchase Agreement with respect
to certain Mortgage Loans.

 

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

 

“Purchase Date” shall mean with respect
to each Purchased Mortgage Loan, the date on which such Purchased Mortgage Loan
is purchased by the Buyer pursuant to the Repurchase Agreement.

 

“Purchased Mortgage Loan” shall mean
each Mortgage Loan, and/or any other evidence of ownership of a Mortgage Loan
mutually agreed upon by the Buyer and the Sellers and identified to the
Custodian transferred or caused to be transferred by the Sellers to the Buyer
or its designee (including the Custodian) in a Transaction under the Repurchase
Agreement and any Additional Purchased Mortgage Loans delivered pursuant to
this Agreement.

 

“Qualified Insurer”
shall mean a mortgage guaranty insurance company duly authorized and licensed
where required by law to transact mortgage guaranty insurance business and
acceptable under each Seller’s underwriting guidelines.

 

“Recognition Agreement”
shall mean an agreement among a Co-op Corporation, a lender and a Mortgagor
with respect to a Co-op Loan whereby such parties (i) acknowledge that such

 

5

 

lender may make, or
intends to make, such Co-op Loan, and (ii) make certain agreements with respect
to such Co-op Loan.

 

“Repurchase Agreement” shall have the
meaning set forth in the first paragraph of the recitals hereto.

 

“Repurchase Date” shall mean, with
respect to each Purchased Mortgage Loan, the date on which such Purchased
Mortgage Loan is to be repurchased by each Seller pursuant to the Repurchase
Agreement.

 

“Repurchase Release” shall have the
meaning set forth in Section 11 hereof.

 

“Request for Release” shall have the
meaning set forth in Section 7 hereof.

 

“Responsible Officer”
shall mean, with respect to the Custodian, any officer, including any managing
director, principal, vice president, assistant vice president, assistant
treasurer, assistant secretary, trust officer or any other officer of the
Custodian customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of this Agreement, and also, with respect to a particular
matter, any other officer, to whom such matter is referred because of such
officer’s knowledge and familiarity with the particular subject.

 

“Seller” shall mean each of MortgageIT
and Holdings or their successors in interest or assigns.

 

“Settlement Account”
shall mean the settlement account, which shall be a segregated, non-interest
bearing trust account, established pursuant to Section 5 hereof.

 

“Settlement Account
Control Agreement” shall mean the settlement account control agreement in
the form of Exhibit 15 hereto.

 

“Stock Certificate”
shall mean, with respect to a Co-op Loan, the certificates evidencing ownership
of the Co-op Shares issued by the Co-op Corporation.

 

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

 

“Takeout Commitment”
shall mean a commitment of a Seller to sell one or more Mortgage Loans to an
Approved Takeout Investor and the corresponding Approved Takeout Investor’s
commitment back to a Seller to effectuate the foregoing.

 

“Transaction” shall have the meaning
set forth in the first paragraph of the recitals hereto.

 

“Trust Receipt” shall mean a trust
receipt issued by the Custodian evidencing the Purchased Mortgage Loans it
holds, in the form attached hereto as Exhibit 2 and delivered to
the Buyer by the Custodian in accordance with Section 2 hereof.

 

6

 

“Wet-Ink Delivery Date” shall mean with
respect to each Wet-Ink Mortgage Loan, no later than 5:00 p.m. (New York City
time) on the seventh Business Day following the Purchase Date.

 

“Wet-Ink Mortgage Loan” shall mean a
Purchased Mortgage Loan which is purchased by the Buyer simultaneously with the
origination thereof by a Seller.

 

“Wet-Ink Trust Receipt”
shall mean a trust receipt issued by Custodian evidencing Purchased Mortgage
Loans which are Wet-Ink Mortgage Loans, substantially in the form attached
hereto as Exhibit 10, and delivered to Buyer by Custodian in
accordance with Section 3 hereof.

 

“Written Instructions” shall mean
written communications received by the Custodian from an Authorized
Representative of the Buyer or the Sellers, including communications received
by facsimile, or other telecommunications device capable of transmitting or
creating a written record.

 

Section 2.                                            Deposit
of Mortgage Loans; Effecting a Transaction.

 

(a)                                  With
respect to each Purchased Mortgage Loan (other than a Wet-Ink Mortgage Loan),
no later than 3:00 p.m. (New York City time) one Business Day prior to each
Purchase Date, each Seller shall deliver or cause to be delivered to the
Custodian (i) the Mortgage Files with respect to the related Purchased
Mortgage Loans and (ii) the related Mortgage Loan Schedule.  With respect to each Wet-Ink Mortgage Loan,
no later than 12 noon (New York City time) on the related Purchase Date, each
Seller shall deliver or cause to be delivered to the Custodian the related
Mortgage Loan Schedule listing the Wet-Ink Mortgage Loans.  On the Wet-Ink Delivery Date, each Seller
shall deliver or cause to be delivered to the Custodian (i) the Mortgage
Files with respect to the related Wet-Ink Mortgage Loans and (ii) the
related Mortgage Loan Schedule.  No more
than 200 Purchased Mortgage Loans shall be delivered to the Custodian on any
one Business Day.

 

The Custodian shall
deliver to the Buyer via electronic mail (with the original to follow), no
later than 4:00 p.m. (New York City time) on the Purchase Date, a Mortgage
Loan Schedule and Exception Report of all Mortgage Loans then held or to
be held by the Custodian for the Buyer’s benefit (including Mortgage Loans to
be purchased on such Purchase Date) in an electronic format acceptable to the
Buyer, which schedule shall include all information included in the
Mortgage Loan Schedule and such additional information as the Buyer and
the Custodian may agree.

 

(b)                                 On
each Purchase Date with respect to Purchased Mortgage Loans other than Wet-Ink
Mortgage Loans, upon receipt of the Mortgage Loan Schedule and Exception
Report from the Custodian, in form and substance acceptable to the Buyer, the
Buyer shall transfer to each Seller immediately available funds in an amount
equal to the related Purchase Price. 
With respect to Wet-Ink Mortgage Loans, upon receipt of the Wet-Ink
Trust Receipt and Mortgage Loan Schedule from the Custodian, in form and
substance acceptable to the Buyer, the Buyer shall transfer to each Seller
immediately available funds in an amount equal to the related Purchase Price.

 

7

 

(c)                                  On
and after the Purchase Date for any Mortgage Loan, until the related Repurchase
Date, as such date may be extended by Written Instructions signed by both the
Buyer and a Seller and delivered to the Custodian, or until the Custodian shall
receive a Notice of Default, the Custodian shall hold the Purchased Mortgage
Loans related to such Transaction as the custodian and bailee for hire for the
exclusive benefit of the Buyer and shall not act upon instructions of a Seller
to deliver the Purchased Mortgage Loans other than as expressly provided in
this Agreement.

 

(d)                                 Custodian
shall deliver to Buyer, no later than 4:00 p.m. (New York City time) on the
related Purchase Date, electronically followed by overnight courier a Mortgage
Loan Schedule and Exception Report having appended thereto a
schedule of all Mortgage Loans with respect to which Custodian has
completed the procedures set forth in Section 3 hereof and certify that it
is holding each related Mortgage File for the benefit of Buyer in accordance
with the terms hereof (provided that the Custodian has timely received the
items pursuant to Section 2(a) herein).

 

(e)                                  In
addition to the foregoing, on the initial Purchase Date, the Custodian shall
deliver to the Buyer, no later than 4:00 p.m. (New York City time), a Trust
Receipt with a Mortgage Loan Schedule and Exception Report attached
thereto (provided that the Custodian has timely received the items pursuant to
Section 2(a) herein).  Each Mortgage
Loan Schedule and Exception Report delivered by the Custodian to the Buyer
shall supersede and cancel the Mortgage Loan Schedule and Exception Report
previously delivered by the Custodian to the Buyer hereunder, and shall replace
the then existing Mortgage Loan Schedule and Exception Report to be
attached to the Trust Receipt.  Notwithstanding
anything to the contrary set forth herein, in the event that the Mortgage Loan
Schedule and Exception Report attached to the Trust Receipt is different
from the most recently delivered Mortgage Loan Schedule and Exception
Report, then the most recently delivered Mortgage Loan Schedule and
Exception Report shall control and be binding upon the parties thereto.

 

Section 3.                                            Mortgage
Loan Schedule or Exception Report.

 

No later than 4:00 p.m.
(New York City time) on the Purchase Date (provided that the Custodian has
timely received the items required pursuant to Section 2(a) herein), or
with respect to Wet-Ink Mortgage Loans, by 5:00 p.m. (New York City time) on
the Business Day following the Wet-Ink Delivery Date, the Custodian shall issue
and deliver to the Buyer via facsimile a Mortgage Loan Schedule and
Exception Report relating to the Purchased Mortgage Loans to the effect that
with respect to each such Purchased Mortgage Loan, except as noted in any
attached exception report, (i) all of the documents in paragraphs (a),
(c), (e), (f), (g), and, to the extent provided, (b), (d), and (h) on Exhibit 1
attached hereto are in its possession, (ii) all of the documents in paragraphs
(a), (b), (c), (d), (e), (f), (g), (h) and, to the extent provided, (i) and (j)
on Exhibit 1-A attached hereto are in its possession
(iii) such documents have been reviewed by it and appear regular on their
face and relate to such Mortgage Loan; (iv) based on its examination and
only as to the foregoing documents, the information set forth in the Mortgage
Loan Schedule respecting such Mortgage Loan accurately reflects the
information contained in the documents in the Mortgage File as to (A) the
name of the mortgagor, (B) the address of the Mortgaged Property,
(C) the interest rate on the Mortgage Note, (D) the original
principal amount of the Mortgage Note, and (E) the maturity date of the
Mortgage Note; (v) the Mortgage

 

8

 

Note and the Mortgage,
each bears an original signature or signatures purporting to be the signature
or signatures of the person or persons named as the maker and mortgagor or
grantor; or, in the case of certified copies of the Mortgage, if any, such
copies bear a reproduction of such signature or signatures; (vi) all
signatures on the Mortgage properly relate to the Mortgage Note, as applicable,
and the Custodian has examined the Mortgage for the completions of any required
notarization and has verified that any rider or addendum properly relates to the
Mortgage and that the signatures on any rider or addendum match the signatures
on the Mortgage; (vii) the original principal amount of the indebtedness
secured by the Mortgage is identical to the original principal amount of the
Mortgage Note; (viii) if the Mortgage Note does not name the Seller as the
holder or payee, the Mortgage Note bears original endorsements that complete
the chain of ownership from the original holder or payee to the last endorsee
(the “Last Endorsee”);
(ix) if the Mortgage does not name the Seller or MERS as the mortgagee or
beneficiary, the original of the Assignment of Mortgage from the named
mortgagee or beneficiary bears the original signature purporting to be the
signature of the named mortgagee or beneficiary (including any subsequent
assignors) or in the case of copies certified by the Seller, such copies bear a
reproduction of such signature or signatures and that the Assignment of
Mortgage and any intervening assignments of mortgage complete the chain of
title from the originator to the Last Endorsee; (x) the Mortgagor name on
the Assignment of Mortgage agrees with the related Mortgage Loan Schedule;
(xi) each Mortgage Note in its possession has been endorsed as provided in
Exhibit 1 and Exhibit 1-A hereto, as applicable; and (xii) each
Assignment of Mortgage, Assignment of Lease Agreement and Assignment of
Proprietary Lease have been executed as provided in Exhibit 1 and Exhibit
1-A hereto, as applicable.

 

With respect to each
Wet-Ink Mortgage Loan, on or prior to 4:00 p.m. (New York City time) on the
related Purchase Date, the Custodian shall issue to Buyer a Wet-Ink Trust
Receipt certifying that the Custodian has received the Mortgage Loan
Schedule identifying such Wet-Ink Mortgage Loans as Purchased Mortgage
Loans.

 

With respect to any
modifications or revisions occurring after the Purchase Date or the related
Wet-Ink Delivery Date with respect to Wet-Ink Mortgage Loans, not later than
the Business Day following each Purchase Date, the Custodian shall deliver to
the Buyer a revised Mortgage Loan Schedule and Exception Report relating
to the Purchased Mortgage Loans.

 

Each Seller shall be
solely responsible for providing each and every document required for each
Mortgage File to the Custodian in a timely manner and for completing or
correcting any missing, incomplete or inconsistent documents, and the Custodian
shall not be responsible or liable for taking any such action, causing any
Seller or any other person or entity to do so or notifying any Person (other
than the Buyer to the extent specifically required in this Agreement) that any
such action has or has not been taken. 
The Custodian makes no representations as to and shall not be
responsible to determine or verify (i) the validity, legality,
enforceability, sufficiency, due authorization, filing of recording status or
history, recordability, or genuineness of any document in any Mortgage File or
any of the Purchased Mortgage Loans identified on the Mortgage Loan
Schedule and Exception Report or (ii) the collectability, insurability,
effectiveness or suitability of any such Purchased Mortgage Loan.  The Custodian shall not be required to review
the content (except as necessary to certify its presence or absence) of any
document described in the preceding paragraph except as expressly required
herein in order to deliver the Mortgage Loan Schedule and Exception
Report.

 

9

 

Section 4.                                            Obligations
of the Custodian.

 

(a)                                  With
respect to the Mortgage Files delivered to the Custodian or which come into the
possession of the Custodian, following the related transfer pursuant to
Section 2(b) above until the interests of the Buyer have been released
pursuant to this Agreement, the Custodian is the custodian for the Buyer,
exclusively.  The Custodian shall,
following the related transfer pursuant to Section 2(b) above until the
interests of the Buyer have been released pursuant to this Agreement, hold all
documents received by it for the exclusive use and benefit of the Buyer and
shall make disposition thereof only in accordance with this Agreement and the
Written Instructions furnished by the Buyer. 
The Custodian shall segregate and maintain continuous custody of the
Mortgage Files in secure and fire-resistant facilities in accordance with customary
standards for such custody.

 

(b)                                 The
Custodian shall promptly notify the Buyer if (i) any Seller fails to pay
any amount due to the Custodian under this Agreement or (ii) a Responsible
Officer of the Custodian has actual knowledge that any Mortgage, pledge, lien,
security interest or other charge or encumbrance has been placed on the
Mortgage Files.

 

Section 5.                                            Additional
Purchased Mortgage Loans.

 

(a)                                  Each
Seller may, from time to time, deliver to the Custodian one or more additional
Mortgage Loans (each an “Additional
Purchased Mortgage Loans”) as an addition to the Purchased
Mortgage Loans already held by the Custodian with respect to a
Transaction.  In such event, such Seller
shall deliver to the Custodian the Mortgage File for each Additional Purchased
Mortgage Loans together with a Mortgage Loan Schedule, with a copy to the
Buyer, stating that the Additional Purchased Mortgage Loan is being delivered
with respect to an identified Transaction. 
It is expressly understood and agreed that the Custodian shall have no
duty to perform any valuation of collateral and shall have no responsibility to
ascertain the adequacy of any Additional Purchased Mortgage Loans other than
undertaking a review of the related Mortgage File in accordance with Section 3
hereof.

 

(b)                                 The
Custodian shall deliver to the Buyer no later than one Business Day after
receipt of such Additional Purchased Mortgage Loan and Mortgage Loan
Schedule from such Seller, a Mortgage Loan Schedule and Exception
Report that reflects the delivery of each Additional Purchased Mortgage Loan; provided that in the event that the Custodian does not
receive the items required to be delivered pursuant to Section 5(a) above
by no later than 3:00 p.m. (New York City time) on the Business Day prior to
the date of delivery, then the Custodian shall deliver such Mortgage Loan
Schedule and Exception Report within one Business Day after the date of
delivery.  In issuing such Mortgage Loan
Schedule and Exception Report, the Custodian shall employ the same procedures
as set forth in Section 3 in reviewing the Mortgage Files.

 

Section 6.                                            Future
Defects.

 

During the term of this
Agreement, if the Custodian discovers any defect with respect to any Mortgage
File, the Custodian shall give written specification of such defect to the
Seller and the Buyer.  For purposes of
this Section, “defect” shall mean a failure of a document to

 

10

 

correspond to the
information set forth in the applicable Mortgage Loan Schedule or the absence
of a Mortgage File or any part thereof or any other document required pursuant
to this Agreement.  Each Seller shall be
solely responsible for completing or correcting any missing, incomplete or
inconsistent documents, and the Custodian shall not be responsible or liable
for taking any such action, causing such Seller or any other person or entity
to do so or notifying any Person that any such action has or has not been
taken.

 

Section 7.                                            Release
for Servicing.

 

(a)                                  From
time to time and as appropriate for the servicing of any of the Purchased
Mortgage Loans, the Custodian shall, upon receipt of a Request for Release of
Documents and Receipt in the form of Exhibit 3 attached hereto (“Request for Release”),
release or cause to be released to Sellers or the Sellers’ Authorized
Representative the related Mortgage File or the documents of the related
Mortgage File set forth in such Request for Release.  Each Seller shall send a copy of any such
Request for Release to the Buyer.  Any
document released to a Seller or such Seller’s Authorized Representative
pursuant to a Request for Release shall be returned to the Custodian no later
than 10 Business Days from the date on such Request for Release, and the
Custodian shall notify the Buyer of any failure by a Seller to so return any
such document.

 

All Mortgage Files or
documents from Mortgage Files released by the Custodian to a Seller or, upon
such Seller’s Written Instructions, such Seller’s Authorized Representative,
pursuant to this Section 7 shall be held by a Seller or such Seller’s
Authorized Representative, as applicable, in trust for the benefit of the
Buyer.  Each Seller or such Seller’s
Authorized Representative, as applicable, shall return to the Custodian the Mortgage
File or other such documents from Mortgage Files when the need therefor in
connection with such servicing no longer exists (but in any event no later than
10 Business Days from the date on such Request for Release), unless the
Mortgage Loan shall be liquidated, in which case, a Seller or, if the Mortgage
File or documents were released to such Seller’s Authorized Representative,
such Seller’s Authorized Representative shall deliver to the Custodian an
additional Request for Release that has been acknowledged and agreed to by the
Buyer certifying such liquidation.  Upon
receipt of the related Mortgage File or other such documents from a Seller, the
Custodian shall return the related Request for Release to such Seller, with a
copy to the Buyer, acknowledging receipt of such Mortgage File or other such
documents.

 

Section 8.                                            Limitation
on Release.

 

The foregoing
Section 7 shall be operative only to the extent that at any time the
Custodian shall not have released to a Seller or such Seller’s Authorized
Representative in total active Mortgage Files or documents (including those
requested) pertaining to ten Mortgage Loans at the time being held by the
Custodian under this Agreement.  If ten
Mortgage Loans or more have been, and remain released to a Seller at the time
of request, the Mortgage Note and/or Assignment of Mortgage or any additional
Mortgage Files or documents requested to be released by such Seller or such
Seller’s Authorized Representative may be released only upon the written
acknowledgment of the Request for Release by the Buyer.  The limitations of this paragraph shall not
apply to the release of Mortgage Files to a Seller or, upon such Seller’s
Written Instructions, such Seller’s Authorized Representative, under
Section 9 below.

 

11

 

Section 9.                                            Release
for Payment; Takeout Provisions; Funding by a Takeout Investor.

 

(a)                                  Release
for Payment.  Upon the payment in
full, liquidation or repurchase of any Mortgage Loan, and upon receipt by the
Custodian of a Request for Release certifying that all proceeds related to such
payment in full, liquidation, or repurchase have been received (provided that a Seller shall have delivered a copy of such
Request for Release to the Buyer and the Custodian shall not have received a
Notice of Default from the Buyer), the Custodian shall promptly release the
related Mortgage File to such Seller or, upon such Seller’s Written
Instructions, such Seller’s Authorized Representative.  After such release the Custodian shall amend
the Mortgage Loan Schedule and Exception Report to reflect the release of
the applicable Mortgage Loan and shall deliver to the Buyer such amended
Mortgage Loan Schedule and Exception Report.

 

(b)                                 Takeout
Provisions.  Funding by a Takeout
Investor.

 

(i)                                Each
Seller shall provide to Custodian a completed Request for Release (signed by
such Seller and acknowledged by the Buyer) with respect to the related
Committed Mortgage Loans.  The Mortgage
Files relating to the Committed Mortgage Loans included in a Request for
Release shall be sent for delivery by Custodian to the applicable Approved
Bailee specified by such Seller to Buyer and Custodian in writing by 5:00 p.m.
(New York City time) on the Business Day following the Business Day on which
the completed Request for Release is received by Custodian.  In the event that the Request for Release is
not received prior to 12 noon New York City time, Custodian shall use
reasonable efforts to effect same day shipment of the related Mortgage Files,
but in any event shall send such Mortgage Files on the following Business
Day.  Such Mortgage Files shall be sent
via overnight courier at such Seller’s expense in accordance with such Seller’s
delivery instructions on the Request for Release and under cover of a fully
completed Notice of Bailment prepared by Custodian in accordance with the terms
of the Bailee Letter.  Custodian shall
not deliver any Mortgage File to any potential Approved Bailee unless such
Approved Bailee was identified by a Seller to Buyer and Custodian on the
Purchase Date in the Mortgage Loan Schedule or as otherwise agreed to in
writing by Buyer (with a copy to Custodian) pursuant to the terms hereof.  Custodian shall deliver such documents
accompanied by a Bailee Letter (to be prepared by a Seller and sent to Buyer
and Custodian for execution) to the Approved Bailee.  The location of the Approved Bailee’s office
specified on the Notice of Bailment may only be changed with the prior written
approval of Buyer.

 

(ii)                             At
any time following the delivery of a Request for Release, in the event
Custodian becomes aware of any defect with respect to a related Mortgage File
or the related forms, including the return of documents to Custodian from an
Approved Bailee due to a defect in such documents, the Custodian shall give
prompt oral or electronic notice of such defect to Buyer, followed by a written
specification thereof to Buyer within one Business Day.  In addition, Custodian shall provide a Bailee
Violation Letter to Buyer and the Approved Bailee in the event that Buyer
notifies Custodian that any documents remain in the possession of an Approved
Bailee for thirty days and the related Mortgage Loans have not been purchased
by Approved Bailee prior to such date.

 

12

 

(iii)                          On the
Anticipated Settlement Date and subject to Section 9(b)(v) hereof, unless
Custodian receives on or prior to such Anticipated Settlement Date a Notice of
Default or Written Instructions from both Buyer and each Seller that the
Anticipated Settlement Date has been extended, Buyer irrevocably instructs
Custodian to release to the Approved Bailee the Purchased Mortgage Loans with
respect to such Transaction with a fully completed Notice of Bailment.  Notwithstanding anything to the contrary
herein, in the event the Purchased Mortgage Loans are repurchased prior to the
related Anticipated Settlement Date pursuant to the Repurchase Agreement, Buyer
irrevocably instructs Custodian, upon receipt of written notice thereof from
Buyer, to release to such Seller such Purchased Mortgage Loans as more
particularly described in Section 9(a) above.

 

(iv)                         In the
event that an Approved Takeout Investor rejects a Mortgage Loan for purchase
pursuant to a Takeout Commitment for any reason whatsoever, Custodian shall
promptly notify Buyer and each Seller upon receipt of the returned Mortgage
File or notification from the Approved Takeout Investor (and Custodian shall
provide to Buyer the loan identification number).

 

(v)                            The
Sellers shall establish and maintain a Settlement Account at the Custodian,
titled “[Seller] in trust for Merrill Lynch Mortgage Capital Inc.”, and shall
ensure at all times that such Settlement Account is subject to a Settlement
Account Control Agreement.  Funds
deposited in the Settlement Account may be transferred only in accordance with
the Settlement Account Control Agreement. 
Any funds deposited in the Settlement Account shall at all times be
fully insured to the full extent permitted under applicable law.  Funds deposited in the Settlement Account
shall be held uninvested.  Without
limiting the generality of the foregoing, each Seller shall cause the
applicable Takeout Investor to remit all amounts on account of the related
Mortgage Loans to the Settlement Account in accordance with the provisions of
the related Takeout Commitment.

 

Section 10.                                      Covenants
of the Seller.

 

Each Seller covenants to
the Buyer as of the date that any Mortgage File documents are released to such
Seller or such Seller’s subservicer pursuant to a Request for Release that:

 

(a)                                  if
the Request for Release has been submitted for the release of a Purchased
Mortgage Loan that has been paid in full, all amounts received in connection
with the payment in full of the Purchased Mortgage Loan have been credited to
the Buyer as provided in the Repurchase Agreement;

 

(b)                                 if
item No. 1 has been checked on the Request for Release, the Repurchase Price
for the applicable Purchased Mortgage Loan has been credited to the Buyer as
provided in the Repurchase Agreement; and

 

(c)                                  if
item No. 4 has been checked on the Request for Release, all proceeds of
foreclosure, insurance, condemnation or other liquidation have been finally
received and credited to the Buyer pursuant to the Repurchase Agreement.

 

13

 

Section 11.                                      Repurchase
Date.

 

Each Seller shall provide
the Buyer and the Custodian with Written Instructions prior to 10:00 a.m. (New
York City time) on each Repurchase Date on which such Seller intends to remove
Purchased Mortgage Loans from the repurchase facility governed by the
Repurchase Agreement, which Written Instructions shall include a
schedule of Purchased Mortgage Loans to be removed on such date (unless
all Purchased Mortgage Loans are to be removed, in which case the Written
Instructions shall indicate this fact). 
The Buyer shall send a Repurchase Release in the form of Exhibit 8
hereto (a “Repurchase
Release”) to each Seller and the Custodian by 10:00 a.m.
(New York City time) on the Repurchase Date listing the Purchased Mortgage
Loans to be released on such Repurchase Date. 
On the Repurchase Date for each Transaction, unless the Custodian
receives on the Business Day prior to such Repurchase Date a Notice of Default
from the Buyer or Written Instructions from both the Buyer and each Seller that
the Repurchase Date has been extended, the Buyer hereby irrevocably instructs
the Custodian to release to each Seller or its designee the Purchased Mortgage
Loans designated in such Repurchase Release upon receipt of notification by the
Custodian from the Buyer that it has received the Repurchase Price.  The Buyer shall notify the Custodian
immediately upon confirmation that each Seller has transmitted the Repurchase
Price.

 

Section 12.                                      Transfer
of Purchased Mortgage Loans Upon Termination of a Transaction.

 

If the Custodian is
furnished with Written Instructions in the form of Exhibit 8
attached hereto (i) from the Buyer and any Seller that a Transaction with
respect to the Repurchase Agreement has been terminated, or (ii) from the
Buyer that an Event of Default under the Repurchase Agreement has occurred as
to any or all of the Purchased Mortgage Loans, the Custodian shall release to
such Persons as are designated in such Written Instructions the Mortgage Files
relating to the Purchased Mortgage Loans that are no longer subject to the
Transaction, and shall deliver to the Buyer an updated Mortgage Loan
Schedule and Exception Report listing all of the Purchased Mortgage Loans
still subject to a Transaction.

 

Section 13.                                      Shipment
of Documents.

 

Written Instructions as
to the method of shipment and shipper(s) that Custodian is directed to utilize
in connection with transmission of Mortgage Files in the performance of the
Custodian’s duties hereunder shall be delivered by each Seller or the Buyer to
Custodian prior to any shipment of any Mortgage Files hereunder.  The requesting party will arrange for the
provision of such services at its sole cost and expense (or, at such party’s
option, reimburse Custodian for all costs and expenses incurred by Custodian
consistent with such Written Instructions) and will maintain such insurance
against loss or damage to the Mortgage Files as the requesting party deems
appropriate.  Without limiting the
generality of the provisions of Section 20 below, it is expressly agreed
that in no event shall Custodian have any liability for any losses or damages
to any person, arising out of actions of Custodian in accordance with
instructions of the requesting party, unless such performance constitutes
negligence, lack of good faith or willful misconduct on the part of the
Custodian or any of its directors, officers, agents or employees.  In the absence of Written Instructions from a
Seller or the Buyer, the Custodian shall not ship the related Mortgage Files.

 

14

 

Section 14.                                      Examination
and Copies of Mortgage Files.

 

Upon the written request
of the Buyer, Buyer and its respective agents, accountants, attorneys, auditors
and prospective purchasers will be permitted, upon one Business Day’s prior
notice, during normal business hours to examine the Mortgage Files and any
other documents, records and papers in the possession of or under the control
of the Custodian relating to any or all of the Purchased Mortgage Loans.  Each Seller shall be responsible for any reasonable
expenses in connection with such examinations.

 

Upon the written request
of any Seller or the Buyer, the Custodian shall provide such party, at such
party’s expense, with copies of the Mortgage Notes, Mortgages, Assignment of
Mortgages and other documents relating to one or more of the Mortgage Loans.

 

Section 15.                                      Insurance
of the Custodian.

 

At its own expense, the
Custodian shall maintain at all times during the existence of this Agreement
and keep in full force and effect a fidelity bond, errors and omissions
insurance and document hazard insurance. 
All such insurance shall be in amounts, with standard coverage and
subject to standard deductibles, all as is customary for insurance typically
maintained by institutions which act as custodian.  A certificate of an Authorized Representative
of the Custodian shall be furnished to each Seller and the Buyer, upon written
request, stating that such insurance is in full force and effect.

 

Section 16.                                      Periodic
Statements.

 

Upon the reasonable
Written Instructions of the Buyer or any Seller at any time, at the expense of
such Seller, the Custodian shall provide to the Buyer or such Seller, as the
case may be, a list of all the Purchased Mortgage Loans for which the Custodian
holds a Mortgage File.

 

Section 17.                                      Fees
and Expenses of the Custodian.

 

The Custodian shall
charge such fees for its services under this Agreement as are set forth in a
separate agreement between the Custodian and the Sellers, the payment of which
fees, together with the Custodian’s expenses (including legal fees and
expenses) in connection herewith, shall be solely the obligation of the
Sellers.

 

The foregoing obligation
to pay the Custodian its fees and reimburse the Custodian for its expenses in
connection with services provided by the Custodian hereunder shall survive any
resignation or removal of the Custodian (for all fees and expenses incurred
prior to such resignation or removal) or the termination or assignment of this
Agreement.

 

Section 18.                                      Custodian
Representations.

 

The Custodian (and any
successor Custodian subject to this Agreement as of the date of appointment of
such custodian) hereby represents and warrants as of the date hereof and as of
each date it delivers a Mortgage Loan Schedule and Exception Report that:

 

15

 

(a)                                  The
Custodian is (i) a national banking association duly authorized, validly
existing and in good standing under the laws of the United States and
(ii) duly qualified and in good standing and in possession of all
requisite authority, power, licenses, permits and franchises in order to
execute, deliver and comply with its obligations under the terms of this
Agreement;

 

(b)                                 The
execution, delivery and performance of this Agreement have been duly authorized
by all necessary corporate action and the execution and delivery of this
Agreement by the Custodian in the manner contemplated herein and the
performance of and compliance with the terms hereof by it will not
(i) violate, contravene or create a default under any applicable laws,
licenses or permits, or (ii) violate, contravene or create a default under
any charter document or bylaw of the Custodian;

 

(c)                                  The
execution and delivery of this Agreement by the Custodian and the performance
of and compliance with its obligations and covenants hereunder do not require
the consent or approval of any governmental authority or, if such consent is
required, it has been obtained;

 

(d)                                 This
Agreement, and the original Trust Receipt issued hereunder (when executed and
delivered by the Custodian) will constitute valid, legal and binding
obligations of the Custodian, enforceable against the Custodian in accordance
with their respective terms, except as the enforcement thereof may be limited
by applicable bankruptcy or other debtor relief laws and that certain equitable
remedies may not be available regardless of whether enforcement is sought in
equity or at law;

 

(e)                                  To
the Custodian’s knowledge, there is no litigation pending which, if determined
adversely to Custodian, would adversely affect the execution, delivery or
enforceability of this Agreement, or any of the duties or obligations of
Custodian hereunder;

 

(f)                                    The
Custodian shall follow the Written Instructions of the Buyer, at the Buyer’s
expense, to protect or maintain any interest in real property securing the
Mortgage Loan subject to this Agreement and any insurance applicable thereto;

 

(g)                                 The
Custodian shall not be responsible or liable for, and makes no representation
or warranty with respect to, the validity, adequacy or perfection of any lien
upon or security interest in any Mortgage Loans or Mortgage Files (other than
the Custodian’s obligation to take possession of the Mortgage File for each
Mortgage Loan in accordance with the terms of this Agreement); and

 

(h)                                 The
Custodian is not controlled by, under common control with or otherwise
affiliated with or related to any Seller, and the Custodian covenants and
agrees with Buyer that prior to any such affiliation in the future, it shall
notify Buyer.

 

Section 19.                                      No
Adverse Interest of the Custodian.

 

By execution of this
Agreement, the Custodian represents and warrants that it currently holds, and
during the existence of this Agreement shall hold, no adverse interest, by way
of security or otherwise, in any Purchased Mortgage Loan, and hereby waives and
releases any such interest which it may have in any Purchased Mortgage Loan as
of the date hereof.  The

 

16

 

Purchased Mortgage Loans
shall not be subject to any security interest, lien or right of set-off by the
Custodian or any third party claiming through the Custodian, and the Custodian
shall not pledge, encumber, hypothecate, transfer, dispose of, or otherwise
grant any third party interest in, the Purchased Mortgage Loans.

 

Section 20.                                      Concerning
the Custodian.

 

(a)                                  The
Custodian shall have no duties or responsibilities except those specifically
set forth herein.  The Custodian shall
have no responsibility nor duty with respect to any Mortgage Files while not in
its possession.  If the Custodian
requests instructions from the Buyer with respect to any act, action or failure
to act in connection with this Agreement, the Custodian shall be entitled to
refrain from taking such action and continue to refrain from acting unless and
until the Custodian shall have received Written Instructions from the Buyer
with respect to a Mortgage File without incurring any liability therefore to
the Buyer, any Seller or any other Person.

 

(b)                                 The
Custodian shall not be liable for any action or omission to act hereunder
except for its own negligence or lack of good faith or willful misconduct.  In no event shall the Custodian have any
responsibility to ascertain or take action except as expressly provided herein.

 

(c)                                  Without
limiting the generality of the foregoing, the Custodian may conclusively rely
upon and shall be fully protected in acting in good faith upon any Written
Instructions, notice or other communication from the Buyer or Sellers received
by it and which it reasonably believes to be genuine and duly authorized with
respect to all matters pertaining to this Agreement and its duties hereunder.

 

(d)                                 The
Custodian shall not be liable to the Sellers, the Buyer, or any other Person
with respect to any action taken or not taken by it in good faith in the
performance of its obligations under this Agreement.  The obligations of the Custodian shall be
determined solely by the express provisions of this Agreement.  No representation, warranty, covenant,
agreement, obligation or duty of the Custodian shall be implied with respect to
this Agreement or the Custodian’s services hereunder.

 

(e)                                  The
Custodian shall be under no duty or obligation to inspect, review or examine
the Mortgage Files to determine that the contents thereof are genuine, enforceable
or appropriate for the represented purpose or that they have been actually
recorded, are in the proper form for recordation or that they are not other
than what they purport to be on their face.

 

(f)                                    No
provision of this Agreement shall require the Custodian to expend or risk its
own funds or otherwise incur financial liability (other than expenses or
liabilities otherwise required to be incurred by the terms of this Agreement)
in the performance of its duties under this Agreement if it shall have a good
faith belief that repayment of such funds or indemnity satisfactory to it is
not reasonably assured to it.

 

(g)                                 The
Custodian shall use the same degree of care and skill as is reasonably expected
of financial institutions acting in comparable capacities which are held to a
standard of care of ordinary negligence, and this Section 20 shall not be
interpreted to impose upon the Custodian a higher standard of care than that
set forth in this sentence.

 

17

 

Section 21.                                      Indemnification.

 

(a)                                  Each
Seller agrees to, jointly and severally reimburse, indemnify and hold harmless
the Custodian and its directors, officers, employees, or agents (each, an “Indemnitee”)
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suit, costs, expenses, or disbursements of any
kind or nature whatsoever including reasonable fees and expenses of counsel,
court costs and costs of appeal that may be imposed on, incurred by, or asserted
against it or them in any way in connection with or related to Custodian’s
execution and performance of this Agreement and any transactions contemplated
hereby, including but not limited to the claims of any third parties, including
Buyer, except in the case of loss, liability or expense resulting from a
Custodial Delivery Failure (as defined below), the Custodian’s negligence, lack
of good faith or willful misconduct. 
Such indemnification shall survive the termination of this Agreement and
the resignation or removal of the Custodian hereunder.

 

(b)                                 In
the event that the Custodian fails to produce a Mortgage Note, Assignment of
Mortgage or any other document related to a Purchased Mortgage Loan that was in
its possession within two (2) Business Days after required or requested any
Seller or Buyer, or otherwise determines that a document that it had previously
certified as in its possession, is no longer in its possession, and that
(i) such document is not outstanding pursuant to a Request for Release and
Receipt in the form annexed hereto as Exhibit 3; and (ii) such
document was held by the Custodian, as evidenced by a previously delivered
Mortgage Loan Schedule and Exception Report, on behalf of a Seller or
Buyer, as applicable, (a “Custodial Delivery Failure”) then the
Custodian shall (a) with respect to any missing Mortgage Note, promptly
deliver to Buyer or such Seller upon request, a Lost Note Affidavit in the form
of Exhibit 9 hereto and (b) with respect to any missing
document related to such Mortgage Loan, including but not limited to a missing
Mortgage Note, indemnify such Seller and Buyer in accordance with the
succeeding paragraph of this Section.

 

(c)                                  The
Custodian agrees to indemnify and hold the Buyer and each Seller, and their
respective trustees, shareholders, officers, designees, successors and assigns
harmless against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever, including reasonable attorneys’ fees, court costs
and costs of appeal that may be imposed on, incurred by, or asserted against it
or them in any way relating to or arising from the claims of any third party in
connection with or related to a Custodial Delivery Failure or the Custodian’s
breach of this Agreement, or the negligence, lack of good faith or willful
misconduct on the part of the Custodian. 
The foregoing indemnification shall survive the termination of this
Agreement and the resignation or removal of the Custodian hereunder.

 

Section 22.                                      Merger
or Consolidation of Custodian.

 

Any Person into which the
Custodian may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the Custodian hereunder, without the
execution or filing of any paper or any

 

18

 

further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.

 

Section 23.                                      Removal of the
Custodian With Respect to Some or All of the Purchased Mortgage Loans.

 

Upon an Event of Default
under the Repurchase Agreement the Buyer may (i) require, at the
respective Seller’s expense, the Custodian to complete the endorsements on the
Mortgage Notes in the name of the Buyer and to complete the Assignments of
Mortgage in the name of the Buyer and/or (ii) remove and discharge the
Custodian from the performance of its duties under this Agreement with respect
to some or all of the Mortgage Loans by 30 days’ written notice from the Buyer
to the Custodian with a copy to such Seller. 
In the event that the Buyer removes the Custodian from the performance
of its duties under this Agreement with respect to all of the Mortgage Loans,
the Buyer may, in its sole discretion, after notice to such Seller, either
appoint a successor Custodian to act on behalf of the Buyer by written
instrument, or terminate this Agreement. 
In the event of any such new appointment, the Custodian shall promptly
transfer to the successor Custodian or the Buyer, as directed by the Buyer, the
applicable Mortgage Loan documents being administered under this
Agreement.  In the event of any such
appointment, the Buyer shall be responsible for the fees of the successor
Custodian unless otherwise agreed by such Seller and the Buyer.

 

In the event of
termination of this Agreement pursuant to this Section 23, the Custodian
shall follow the reasonable Written Instructions of Buyer with respect to the
disposition of the respective Mortgage Loan documents.  Concurrently with the transfer and release of
all of the Mortgage Files by the Custodian, the Buyer shall submit the related
Trust Receipts to the Custodian for cancellation.  Notwithstanding the foregoing, in the event
that the Buyer terminates this Agreement with respect to some, but not all, of
the Mortgage Loans, this Agreement shall remain in full force and effect with
respect to any Purchased Mortgage Loans for which this Agreement is not
terminated hereunder.  In addition, the
Buyer and the Custodian may, at the sole option of the Buyer, enter into a
separate custodial agreement which shall be mutually acceptable to the parties
with respect to any or all or the Mortgage Loans with respect to which this
Agreement is terminated.

 

Section 24.                                      Termination
by the Custodian.

 

The Custodian may
terminate its obligations hereunder upon 60 days’ prior written notice to the
Buyer and each Seller.  Such resignation
shall take effect upon (i) the appointment of a successor Custodian
acceptable to the Buyer within such 60 day period; and (ii) delivery of
all Mortgage Files to the successor Custodian or, if no successor Custodian has
been appointed, to Buyer.

 

Upon such termination and
appointment of a successor Custodian and surrender of all outstanding Trust
Receipts, the Custodian shall (i) promptly transfer to the successor
Custodian, as directed in writing by the Buyer, all Mortgage Files being
administered under this Agreement, and (ii) if the endorsements on the
Mortgage Notes and the Assignments of Mortgage have been completed in the name
of the Custodian, assign the Mortgages and endorse without recourse the
Mortgage Notes to the successor Custodian or as otherwise directed in writing
by the Buyer.

 

19

 

Section 25.                                      Successors
and Assigns.

 

This Agreement shall
inure to the benefit of the successors and assigns of the parties hereto.  Neither the Sellers nor Custodian shall
assign their respective rights or obligations hereunder or any interest therein
without the prior written consent of Buyer. 
The Buyer may assign its rights hereunder without the prior consent of
either the Sellers or the Custodian.

 

Section 26.                                      Authorized
Representatives.

 

Each individual
designated as an authorized representative of the Custodian, each Seller and
the Buyer (each, an “Authorized
Representative”), is authorized to give and receive notices,
requests and instructions and to deliver certificates and documents in
connection with this Agreement on behalf of the Custodian, each Seller or the
Buyer, respectively, (in each case subject to their designated limit of
authority, if any) and the specimen signature for each such Authorized
Representative of the Custodian, each Seller and the Buyer initially authorized
hereunder is set forth on Exhibits 4, 5 and 6,
respectively.  From time to time, the
Custodian, the Sellers and the Buyer may, by delivering to the other parties a
revised exhibit, change the information previously given pursuant to this
Section, but each of the parties hereto shall be entitled to rely conclusively
on the then current exhibit until receipt of a superseding exhibit.  Each Seller shall deliver or cause to be
delivered to the Custodian an Authorized Representatives exhibit for each
subservicer designated by such Seller in connection with this Agreement; provided that the Custodian shall not recognize any request
from such Seller’s subservicer unless and until such Seller has given the
Custodian written notice identifying such subservicer and such Authorized
Representatives exhibit is received by the Custodian.  The Custodian shall be entitled to rely
conclusively upon (i) written notice from each Seller identifying a
subservicer authorized to give instructions (including Written Instructions)
under this Agreement until receipt of written notice from such Seller revoking
such authority and (ii) the most recent Authorized Representatives exhibit
delivered to it by a subservicer of each Seller until receipt of a superseding
exhibit.  If the Custodian shall at any
time receive conflicting instructions from any Seller and a subservicer of such
Seller, the Custodian shall be entitled to rely on the instructions of such
Seller.

 

Section 27.                                      Notices.

 

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 listed below, or such other address as may be specified in a notice of
change of address hereafter received by the other:

 

	
  SELLERS:

  	
   

  	
  MortgageIT, Inc.

  
	
   

  	
   

  	
  33 Maiden Lane

  
	
   

  	
   

  	
  6th Floor

  
	
   

  	
   

  	
  New York, New York
  10038

  
	
   

  	
   

  	
  Attention:  Chief Operating Officer

  
	
   

  	
   

  	
  Telephone:  (212) 651-4691

  
	
   

  	
   

  	
  Facsimile:  (212) 651-4680

  

 

20

 

	
   

  	
   

  	
  MortgageIT Holdings,
  Inc.

  
	
   

  	
   

  	
  33 Maiden Lane

  
	
   

  	
   

  	
  6th Floor

  
	
   

  	
   

  	
  New York, New York
  10038

  
	
   

  	
   

  	
  Attention:  Chief Operating Officer

  
	
   

  	
   

  	
  Telephone:  (212) 651-4691

  
	
   

  	
   

  	
  Facsimile:  (212) 651-4680

  
	
   

  	
   

  	
   

  
	
  BUYER:

  	
   

  	
  Merrill Lynch Mortgage
  Capital Inc.

  
	
   

  	
   

  	
  4 World Financial
  Center

  
	
   

  	
   

  	
  10th Floor

  
	
   

  	
   

  	
  New York, New York
  10080

  
	
   

  	
   

  	
  Attention:  James B. Cason

  
	
   

  	
   

  	
  Telephone:  (212) 449-1219

  
	
   

  	
   

  	
  Facsimile:  (212) 449-3673

  
	
   

  	
   

  	
   

  
	
  CUSTODIAN:

  	
   

  	
  Deutsche Bank National
  Trust Company

  
	
   

  	
   

  	
  1761 East St. Andrew
  Place

  
	
   

  	
   

  	
  Santa Ana, California
  92705

  
	
   

  	
   

  	
  Attention:  Mortgage Custody-MG030C

  
	
   

  	
   

  	
  Telephone:  (714) 247-6000

  
	
   

  	
   

  	
  Facsimile:  (714) 247-6082

  

 

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.  Any such notice, demand or request shall be
deemed to have been received on the date delivered to the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt, or in the case of facsimile or other
telecommunication or electronic communication device, the date noted on the
confirmation of such transmission).

 

Section 28.                                      Reproduction
of Documents.

 

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

 

Section 29.                                      Amendments;
Entire Agreement.

 

No amendment or waiver of
any provision of this Agreement nor consent to any departure herefrom shall in
any event be effective unless the same shall be in writing and signed by all
the parties hereto, and then such amendment, waiver or consent shall be
effective only in

 

21

 

the specific instance and
for the specific purpose for which given. 
The Custodian shall not be required to execute any amendment which
adversely affects its rights, duties, indemnities or immunities hereunder.

 

Section 30.                                      Entire
Agreement; Severability.

 

This Agreement, together
with the exhibits, annexes and other writings referred to herein or delivered
pursuant hereto, constitute the entire agreement and understanding of the
parties with respect to the matters and transactions contemplated by this
Agreement and supersede any prior agreement and understandings with respect to
those matters and 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.

 

Section 31.                                      Governing
Law; Counterparts.

 

This Agreement shall be
governed by the internal laws of the State of New York, without giving effect
to the conflict of laws principles thereof. 
For the purpose of facilitating the execution of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute and be one and the same
instrument.

 

Section 32.                                      Submission
to Jurisdiction.

 

With respect to any claim
arising out of this Agreement each party (a) irrevocably submits to the
nonexclusive jurisdiction of the courts of the State of New York and the
United States District Court located in the Borough of Manhattan in New
York City, and (b) irrevocably waives (i) any objection which it may
have at any time to the laying of venue of any suit, action or proceeding
arising out of or relating hereto brought in any such court, (ii) any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum and (iii) the right to object, with
respect to such claim, suit, action or proceeding brought in any such court,
that such court does not have jurisdiction over such party.  Nothing herein will be deemed to preclude any
party hereto from bringing an action or proceeding in respect of this Agreement
in any jurisdiction other than as set forth in this Section 32.

 

22

 

IN WITNESS WHEREOF, the
Buyer, each Seller and the Custodian have caused their name to be duly signed
to this Custodial Agreement by their respective officers thereunto duly
authorized, all as of the date first above written.

 

	
   

  	
  MERRILL
  LYNCH MORTGAGE CAPITAL

  INC.,

  
	
   

  	
  Buyer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN WINCHESTER

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  JOHN WINCHESTER

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MORTGAGEIT, INC.,
    Seller

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN R. CUTI

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  JOHN R. CUTI

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MORTGAGEIT HOLDINGS,
  INC.,   Seller

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN R. CUTI

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  JOHN R. CUTI

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Secretary

  
						

 

23

 

	
   

  	
  DEUTSCHE
  BANK TRUST NATIONAL

  COMPANY,

  
	
   

  	
   as
  Custodian

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CHRISTOPHER
  CORCORAN

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  CHRISTOPHER CORCORAN

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KEVIN R. FISCHER

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  KEVIN R. FISCHER

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
						

 

24

 

EXHIBIT 1

 

MORTGAGE FILE

 

(a) The original
Mortgage Note bearing all intervening endorsements, endorsed “Pay to the order
of
             
without recourse” and signed in the name of the last endorsee (the “Last Endorsee”)
by a Person (in the event that the Mortgage Loan was acquired by the Last
Endorsee in a merger, as notified to the Custodian in writing, the signature
must be in the following form:  “[Last
Endorsee], successor by merger to [name of predecessor]”; in the event that the
Mortgage Loan was acquired or originated by the Last Endorsee while doing
business under another name as notified to the Custodian in writing, the
signature must be in the following form: 
“[Last Endorsee], formerly known as [previous name]”).

 

(b) The original of
the guarantee executed in connection with the Mortgage Note (if any).

 

(c) The original
Mortgage with evidence of recording thereon, or a copy thereof stamp certified
by an officer of the Seller, escrow agent, title company or closing attorney
certifying that such represents a true and correct copy of the original and
that such original has been submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the Mortgaged Property
is located.

 

(d) The originals of
all assumption, modification, consolidation or extension agreements with
evidence of recording thereon, or copies thereof stamp certified by of the
Seller, escrow agent, title company or closing attorney certifying that such
represent true and correct copies of the originals and that such originals have
each been submitted for recordation in the appropriate governmental recording
office of the jurisdiction where the Mortgaged Property is located.

 

(e) Except for each
Mortgage Loan registered in the MERS System, the original Assignment of
Mortgage in blank for each Mortgage Loan, in form and substance acceptable for
recording and signed in the name of the Last Endorsee (in the event that the
Mortgage Loan was acquired by the Last Endorsee in a merger, as notified to the
Custodian in writing, the signature must be in the following form:  “[Last Endorsee], successor by merger to
[name of predecessor]”; in the event that the Mortgage Loan was acquired or
originated while doing business under another name, as notified to the
Custodian in writing, the signature must be in the following form:  “[Last Endorsee], formerly known as [previous
name]”).

 

(f) The originals of
all intervening assignments of mortgage (if any) with evidence of recording
thereon, showing an unbroken chain of title from the originator thereof to the
Last Endorsee or copies thereof stamp certified by an officer of the Seller,
escrow agent, title company or closing attorney certifying that such represent
true and correct copies of the originals and that such originals have each been
submitted for recordation in the appropriate governmental recording office of
the jurisdiction where the Mortgaged Property is located.

 

(g) The original
attorney’s opinion of title and abstract of title or the original mortgagee
title insurance policy, or if the original mortgagee title insurance policy has
not been issued, the irrevocable commitment to issue the same.

 

Exh. 1-1

 

(h) The original of
any security agreement, chattel mortgage or equivalent document executed in
connection with the Mortgage Loan.

 

(i)  At the request of Buyer and as notified to
the Custodian, with respect to a Mortgage Loan that is covered by a Primary
Insurance Policy, a certified copy of such Primary Insurance Policy or evidence
of delegated underwriter approval.

 

(j)  At the request of Buyer and as notified to
the Custodian, with respect to a Mortgage Loan which is covered by pool
insurance, a pool insurer pool certification.

 

From time to time, the
Seller shall forward to the Custodian additional original documents or additional
documents evidencing an assumption, modification, consolidation or extension of
a Mortgage Loan.

 

Exh. 1-2

 

Exhibit 1-A

 

CO-OP LOAN
MORTGAGE FILE

 

The
following items should be included with respect to any Co-op Loan:

 

(a) The (i) original
Mortgage Note, endorsed (on the Mortgage Note or an allonge attached thereto)
“Pay to the order of
                      ,
without recourse” and signed by facsimile signature in the name of the Seller
by an authorized officer, with all intervening endorsements showing a complete,
valid and proper chain of title from the originator of such Mortgage Loan to
the Seller; or (ii) a certified copy of the Mortgage Note (endorsed as provided
above) together with a lost note affidavit providing indemnification to the
holder thereof for any losses incurred due to the fact that the original
Mortgage Note is missing;

 

(b) The original
Assignment of Lease Agreement for each Mortgage Loan, from the Seller signed by
original or by facsimile signature to
                       ,
which assignment shall be in form and substance acceptable for recording
(except for the recording information);

 

(c) the original Stock
Certificate and related Stock Power, in blank, executed by the Mortgagor with
such signature guaranteed and original Stock Power, in blank executed by the
Seller;

 

(d) the original
Proprietary Lease and the Assignment of Proprietary Lease executed by the
Mortgagor in blank or if the Proprietary Lease has been assigned by the Mortgagor
to the Seller, then the Seller must execute an assignment of the Assignment of
Proprietary Lease in blank;

 

(e) the original
Recognition Agreement and the original assignment of Recognition Agreement;

 

(f) the recorded state
and county Financing Statements and all changes thereto;

 

(g) an Estoppel Letter
and/or consent;

 

(h) the Co-op Lien
Search;

 

(i) the guaranty of the
Mortgage Note and Co-op Loan, if any; and

 

(j) the original of any
security agreement or similar document executed in connection with the Co-op
Loan.

 

Exh. 2-1

 

EXHIBIT 2

 

FORM OF TRUST
RECEIPT

 

Merrill Lynch Mortgage
Capital Inc.

4 World Financial Center

10th Floor

New York, New York 10080

 

Re:                               The
Amended and Restated Custodial Agreement, dated as of August 4, 2004, (the
“Custodial Agreement”) among Merrill Lynch Mortgage Capital Inc. (the “Buyer”),
MortgageIT, Inc., (a “Seller”), MortgageIT Holdings, Inc., (a “Seller”,
and collectively with MortgageIT, Inc. the “Sellers”) and Deutsche Bank
National Trust Company, as Custodian (the “Custodian”)                         

 

Ladies and Gentlemen:

 

The Custodian hereby
acknowledges that the above named person has been identified to it as the
registered holder of this Trust Receipt and has the rights of a “Buyer” under
the Custodial Agreement with respect to the Purchased Mortgage Loans identified
in the Mortgage Loan Schedule attached hereto.  Pursuant to the Custodial Agreement, the
Custodian shall hold the Purchased Mortgage Loans, identified in the Mortgage Loan
Schedule and Exception Report attached hereto and updated from time to
time in accordance with Section 3 of the Custodial Agreement, for the
exclusive benefit of the above addressee.

 

In accordance with the
provisions of Section 3 of the Custodial Agreement, the undersigned, as
the Custodian, hereby certifies that as to each Purchased Mortgage Loan
identified in the Mortgage Loan Schedule attached hereto (other than any
Mortgage Loan paid in full or any Mortgage Loan listed on the attachment hereto)
it has received the Mortgage Files and it has reviewed the Mortgage Files and
has determined that, except as noted in the exception report attached hereto
(i) all of the documents in paragraphs (a), (c), (e), (f), (g) and, to the
extent provided, (b), (d), and (h) on Exhibit 1 attached hereto are
in its possession, (ii) such documents have been reviewed by it and appear
regular on their face and relate to such Mortgage Loan; (iii) based on its
examination and only as to the foregoing documents, the information set forth
in the Mortgage Loan Schedule respecting such Mortgage Loan accurately
reflects the information contained in the documents in the Mortgage File as to
(a) the name of the mortgagor, (b) the address of the Mortgaged
Property, (c) the interest rate on the Mortgage Note, (d) the
original principal amount of the Mortgage Note, and (e) the maturity date
of the Mortgage Note; (iv) the Mortgage Note and the Mortgage each bears
an original signature or signatures purporting to be the signature or signatures
of the person or persons named as the maker and mortgagor or grantor; or, in
the case of certified copies of the Mortgage, such copies bear a reproduction
of such signature or signatures; (v) all signatures on the Mortgage
properly relate to the Mortgage Note and the Custodian has examined the
Mortgage for the completions of any required

 

Exh. 2-1

notarization and has
verified that any rider or addendum properly relates to the Mortgage and that
the signatures on any rider or addendum match the signatures on the Mortgage;
(vi) the original principal amount of the indebtedness secured by the Mortgage
is identical to the original principal amount of the Mortgage Note;
(vii) if the Mortgage Note does not name a Seller as the holder or payee,
the Mortgage Note bears original endorsements that complete the chain of
ownership from the original holder or payee to the Last Endorsee;
(viii) if the Mortgage does not name a Seller or MERS as the mortgagee or
beneficiary, the original of the Assignment of Mortgage from the named
mortgagee or beneficiary bears the original signature purporting to be the signature
of the named mortgagee or beneficiary (and any other necessary party including
subsequent assignors) or in the case of copies certified by a Seller, such
copies bear a reproduction of such signature or signatures and that the
Assignment of Mortgage and any intervening assignments of mortgage complete the
chain of title from the originator to the Last Endorsee; (ix) the
Mortgagor name of the Assignment of Mortgage agrees with the related Mortgage
Loan Schedule; (x) each Mortgage Note in its possession has been endorsed
as provided in Exhibit 1 to the Custodial Agreement; and
(xi) each Assignment of Mortgage has been executed as provided in Exhibit 1
to the Custodial Agreement. 
Notwithstanding the foregoing, the Custodian shall not be responsible
for ensuring that the Mortgage Loan Schedule and Exception Report attached
hereto in the possession of the Buyer is the most current Mortgage Loan
Schedule and Exception Report.  The
Buyer may request the Custodian to provide it with a copy of the current
Mortgage Loan Schedule and Exception Report with respect to the Trust
Receipt.

 

Each Mortgage Loan
Schedule and Exception Report covering all Purchased Mortgage Loans
purchased by the Buyer, delivered to the Buyer by the Custodian shall supersede
and cancel the previously delivered Mortgage Loan Schedule and Exception
Report attached to the Trust Receipt, and shall control and be binding upon the
parties hereto; provided  that, to the extent that the Custodian has
indicated that is has in its possession a document, the Custodian may not
subsequently note that such document is not in its possession unless such
document has been released from its possession as provided in the Custodial
Agreement or it notifies the Buyer that such document is missing in accordance
with Section 21 of the Custodial Agreement.

 

Capitalized terms used
but not otherwise defined herein shall have the meanings set forth in the
above-referenced Custodial Agreement.

 

 

	
   

  	
  DEUTSCHE BANK NATIONAL
  TRUST

  COMPANY

  
	
   

  	
    as
  Custodian

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

Exh. 2-2

 

EXHIBIT 3

 

FORM OF REQUEST
FOR RELEASE OF DOCUMENTS AND RECEIPT

 

To:                              [                                        ]

 

Re:                               The
Amended and Restated Custodial Agreement, dated as of August 4, 2004, (the
“Custodial Agreement”) among Merrill Lynch Mortgage Capital Inc. (the “Buyer”),
MortgageIT, Inc., (a “Seller”), MortgageIT Holdings, Inc., (a “Seller”,
and collectively with MortgageIT, Inc. the “Sellers”) and Deutsche Bank
National Trust Company, as Custodian (the “Custodian”)

 

In connection with the
administration of the Purchased Mortgage by you as the Custodian on behalf of
the Buyer, we request the release,  and acknowledge receipt  of
the (Mortgage File/[specify documents]) for the Purchased Mortgage Loan
described below, for the reason indicated.

 

Mortgagors Name, Address
& Zip Code:

 

Mortgage Loan Number:

 

Reason for Requesting
Documents (unless otherwise indicated the Mortgage Loan was
paid in full or rescinded (check only if applicable)

 

o1.                           Mortgage Loan paid in full.
(The Custodian shall delete the Mortgage Loan from the applicable Mortgage Loan
Schedule and send the amended Mortgage Loan Schedule to Buyer).

 

o2.                           Repurchase of Mortgage Loan
pursuant to the Repurchase Agreement. 
(The Custodian shall delete the Mortgage Loan from the applicable
Mortgage Loan Schedule and send the amended Mortgage Loan Schedule to
the Buyer.)

 

o3.                           Delivery of substituted
Mortgage Loan.  (The Custodian is hereby
authorized to delete the Mortgage Loan from the applicable Mortgage Loan
Schedule attached hereto and send the amended Mortgage Loan
Schedule to Buyer.)

 

o4.                           Mortgage Loan liquidated by
                    .  (The Custodian is hereby authorized to
delete the Mortgage Loan from the applicable Mortgage Loan
Schedule attached hereto and send the amended Mortgage Loan
Schedule to the Buyer.)

 

o5.                           Mortgage Loan is otherwise
released for servicing.

 

o6.                           Mortgage Loan released to an
Approved Takeout Investor pursuant to Notice of Bailment and Bailee Letter.

 

Exh. 3-1

 

If box 1, 2, 3 or 4 above
is checked, and if all or part of the Mortgage Files were previously released
to a Seller , please release to such Seller its previous request and receipt on
file with you, as well as any additional documents in your possession relating
to the specified Mortgage Loan.

 

If box 5 above is
checked, upon the return of all of the above documents to you as the Custodian,
please acknowledge your receipt by signing in the space indicated below, and
returning this form.

 

If box 6 above is
checked, please release the documents pursuant to the instructions in the
Notice of Bailment.

 

Each Seller understands
and agrees that all documents delivered to each Seller or each Seller’s
subservicer pursuant to this Request for Release shall be returned to the
Custodian no later than 10 Business Days from the date hereof (other than with
respect to Items 1-4 and 6). 
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in the Custodial Agreement.

 

 

	
   

  	
  MORTGAGEIT, INC.,

  
	
   

  	
    Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MORTGAGEIT HOLDINGS,
  INC.,

  
	
   

  	
    Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

Exh. 3-2

 

	
   

  	
  Acknowledged and
  Agreed:

  
	
   

  	
  MERRILL LYNCH MORTGAGE
  CAPITAL

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

Exh. 3-3

 

	
   

  	
  Acknowledgment of
  documents returned to the Custodian, for the reasons listed in items 5 or 6,
  as applicable

  
	
   

  	
   

  
	
  DEUTSCHE BANK NATIONAL
  TRUST

  COMPANY,

  	
   

  
	
    as
  Custodian

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
							

 

Exh. 3-4

 

EXHIBIT 4

 

AUTHORIZED
REPRESENTATIVES OF THE CUSTODIAN

 

	
  Name/Title

  	
   

  	
  Specimen Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Exh. 4-1

 

EXHIBIT 5

 

AUTHORIZED
REPRESENTATIVES OF THE SELLERS

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Doug W. Naidus

  	
   

  	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Donald Epstein

  	
   

  	
  Executive Vice President- Finance

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael Zigrossi

  	
   

  	
  Senior Vice President Lending Operations

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phillip Kukafka

  	
   

  	
  Chief Lending Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sean McGrath

  	
   

  	
  Senior Vice President- Financial Planning

  	
   

  	
   

  

 

Exh. 5-1

 

EXHIBIT 6

 

AUTHORIZED
REPRESENTATIVES OF THE BUYER

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Authorized
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James Cason

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joshua Green

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joseph Magnus

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gene Nagotko

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John
  Winchester

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Christopher
  Czako

  	
   

  	
  Senior
  Specialist

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lisa
  Liao

  	
   

  	
  Senior
  Specialist

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael
  Saccento

  	
   

  	
  Senior
  Specialist

  	
   

  	
   

  

 

Exh. 6-1

 

EXHIBIT 7

 

FORM OF MORTGAGE
LOAN SCHEDULE

 

	
  1.

  	
   

  	
  Loan ID#

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Account Number

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Property Type

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Loan Purpose

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Loan Rate

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Original Balance

  
	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Actual P & I

  
	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Service Fee

  
	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Original Term

  
	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  State

  
	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Appraisal

  
	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Number of Units

  
	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Margin

  
	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Life Cap

  
	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Property Street Address

  
	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Property City

  
	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Property Zip Code

  
	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Doc Level

  
	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  First Payment Date

  
	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Remaining Term

  
	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  CLTV

  
	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Current Balance

  
	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Borrower Last Name

  

 

Exh. 7-1

 

	
  24.

  	
   

  	
  Borrower First Name

  
	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  Next Interest
  Adjustment

  
	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Index Name

  
	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  Last Payment Date

  
	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  Grade/Rating

  
	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  Debt Service Ratio

  
	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  LTV

  
	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  Owner Occupancy

  
	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  Lien Position

  
	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  Product Description

  
	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  Loan Type (Fixed Rate,
  Buy Down, GPM, GEM, ARM, Balloon)

  
	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  Negative Amortization
  Indicator

  
	
   

  	
   

  	
   

  
	
  36.

  	
   

  	
  Interest Rate
  Adjustment Frequency

  
	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  Annual Payment Cap

  
	
   

  	
   

  	
   

  
	
  38.

  	
   

  	
  Periodic Rate Cap on
  First Adjustment Date

  
	
   

  	
   

  	
   

  
	
  39.

  	
   

  	
  Lifetime Maximum Rate

  
	
   

  	
   

  	
   

  
	
  40.

  	
   

  	
  Negative Amortization
  Limit%

  
	
   

  	
   

  	
   

  
	
  41.

  	
   

  	
  Periodic Rate Cap
  Subsequent to First Adjustment Date

  
	
   

  	
   

  	
   

  
	
  42.

  	
   

  	
  Mortgage Insurance
  Coverage

  
	
   

  	
   

  	
   

  
	
  43.

  	
   

  	
  Primary Mortgage
  Insurer (if applicable)

  
	
   

  	
   

  	
   

  
	
  44.

  	
   

  	
  Borrower Credit Quality

  
	
   

  	
   

  	
   

  
	
  45.

  	
   

  	
  Risk Grades

  
	
   

  	
   

  	
   

  
	
  46.

  	
   

  	
  Current FICO Scores

  
	
   

  	
   

  	
   

  
	
  47.

  	
   

  	
  Mortgage Score

  
	
   

  	
   

  	
   

  
	
  48.

  	
   

  	
  Silent Second

  

 

Exh. 7-2

 

	
  49.

  	
   

  	
  Current Delinquency
  Status (30, 60, 90 Days Past Due, Foreclosure, Bankruptcy)

  
	
   

  	
   

  	
   

  
	
  50.

  	
   

  	
  First Mortgage Balance

  
	
   

  	
   

  	
   

  
	
  51.

  	
   

  	
  Payment Change
  Frequency

  

 

Exh. 7-3

 

EXHIBIT 8

 

FORM OF REPURCHASE
RELEASE

 

MERRILL LYNCH
MORTGAGE CAPITAL INC.

4 World Financial Center

10th Floor

New York, New York 10080

 

[date]

 

[                                                              ]

[                                         ]

[                                         ]

[                                         ]

Attention: 
[                       ]

 

[                                                              ]

 

Re:                               The
Amended and Restated Custodial Agreement, dated as of August 4, 2004, (the
“Custodial Agreement”) among Merrill Lynch Mortgage Capital Inc. (the “Buyer”),
MortgageIT, Inc., (a “Seller”), MortgageIT Holdings, Inc., (a “Seller”,
and collectively with MortgageIT, Inc. the “Sellers”) and Deutsche Bank
National Trust Company, as Custodian (the “Custodian”).

 

Ladies and Gentlemen:

 

Reference is made to the
captioned Custodial Agreement. 
Capitalized terms used herein shall have the respective meanings
ascribed to them in the Custodial Agreement unless otherwise expressly defined
herein.

 

Upon receipt by the Buyer
by wire transfer of immediately available funds on
[                       
    ,         ], in
the amount of $[                           ]
(the “Release Amount”), all ownership
interests of the Buyer in each of the Purchased Mortgage Loans listed on the
Schedule of Mortgage Loans (consisting of
        pages and describing
        Mortgage Loans) attached hereto and
made a part hereof (the “Mortgage Loans”)
and any related collateral, held by the Custodian on behalf of the Buyer, shall
be completely and fully released. 
Please wire transfer the Release Amount as follows:

 

Merrill Lynch Mortgage
Capital Inc.

ABA #

Account Name:

Account #
[                              ]

 

The Custodian is hereby
notified, pursuant to Section 11 of the Custodial Agreement, of this
release and, upon receipt of the notification from the Buyer referenced in the
next paragraph,

 

Exh. 8-1

 

the Custodian is directed
to immediately deliver the Mortgage Loans and related collateral to [trustee],
as trustee (the “Trustee”) under the
[Pooling and Servicing Agreement] dated as of
[                    
     ,            ],
relating to [name of trust(s)] (the “[Pooling and
Servicing Agreement]”) among the Trustee, as trustee, [servicer], as
servicer, and [depositor], as depositor.

 

Please continue to act as
Custodian on behalf of the Buyer pursuant to the Custodial Agreement until
notified of the receipt by the Buyer of the Release Amount by a representative
of the Buyer, at which time please acknowledge receipt of such notification and
your delivery of the Mortgage Loans and related collateral to the Trustee by
signing below.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH MORTGAGE
  CAPITAL

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

Exh. 8-2

 

Receipt is hereby
acknowledged the         day of
          ,
         of the foregoing notification
of release of ownership interests and delivery of the aforesaid Mortgage Loans
and related collateral to the Trustee.

 

 

	
   

  	
  Deutsche Bank National
  Trust Company, as

  Custodian under the Custodial Agreement

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

Attachments:  Schedule of Mortgage Loans

 

Receipt is hereby
acknowledged this       day of
         ,
          of the Aforesaid
Mortgage Loans and related collateral.

 

	
   

  	
  [TRUSTEE], as Trustee
  under the [Pooling and Servicing Agreement]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

Exh. 8-3

 

EXHIBIT 9

 

FORM OF LOST NOTE
AFFIDAVIT

 

	
  (STATE OF NEW YORK

  	
   

  	
  :

  
	
   

  	
   

  	
  :  ss:

  
	
  (COUNTY OF NEW YORK

  	
   

  	
  :

  

 

I,                      ,
as
                    
(title) of Deutsche Bank National Trust Company, as Custodian (the “Custodian”), am authorized to make this
Affidavit on behalf of the Custodian. 
In connection with the administration of the mortgage loans held by the
Custodian on behalf of Merrill Lynch Mortgage Capital Inc.. (“MMC”) or the registered holder of such mortgage
loans, as the case may be (the “Investor”),
(hereinafter called “Deponent”), being
duly sworn, deposes and says that:

 

1.                                       Custodian’s
address is:

 

2.                                       That
(s)he is a
                       
of
[                                                                    ]
[(“                                      ”)],
which was the custodian of the mortgage loan documents for mortgage loan number
                   
under the Amended and Restated Custodial Agreement dated as of August 4,
2004 by and among MMC, MortgageIT, Inc., MortgageIT Holdings,
Inc., as the sellers and Deutsche Bank National Trust Company, as custodian.

 

3.                                       That
the original of the related note (the “Note”)
appears to have been lost mislaid or misfiled by
[                                            ]
(the “Original”).

 

4.                                       That
the records of
[                                      ]
do not show that such Note was ever released, paid off, satisfied, assigned,
transferred, pledged or hypothecated and that such Note has been either lost,
mislaid, or misfiled by
[                                      ].

 

5.                                       That
[                                      ]
is aware that                     
to which the above mentioned mortgage loan is to be assigned, relies upon the
statements made herein as to such Note having been lost, mislaid or misfiled by
[                                      ]
and never having been released, paid off, satisfied, assigned, transferred,
pledged or hypothecated.

 

6.                                       That
in the event that
[                                      ]
should ever locate said Note,
[                                      ]
agrees to provide said Note to
[                                      ]
upon return of this Lost Note to
[                                      ].

 

7.                                       That
attached hereto is a true and correct copy of (i) the Note, endorsed in
blank by the mortgagee, and (ii) the Mortgage or Deed of Trust [strike
one] which secures the Note, which Mortgage or Deed of Trust is recorded at
                                      .

 

8.                                       The
Custodian agrees to indemnify and hold the Buyer and each Seller, and their
respective trustees, shareholders, officers, designees, successors and assigns
harmless against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever, including reasonable attorney’s

 

Exh. 9-1

 

fees, court costs and
costs of appeal that may be imposed on, incurred by, or asserted against it or
them in any way relating to or arising out of the Custodian’s failure to
deliver the Note.

 

 

	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST   COMPANY, as Custodian

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

Exh. 9-2

 

EXHIBIT 10

 

FORM OF WET-INK TRUST RECEIPT

 

	
   

  	
  Total Original Face:

  
	
   

  	
  # of Loans:

  
	
   

  	
  File Name:

  

 

Name of Recipient

Address

City, State Zip

Attn:

 

Re:                               The
Amended and Restated Custodial Agreement, dated as of August 4, 2004, (the
“Custodial Agreement”) among Merrill Lynch Mortgage Capital Inc. (the “Buyer”),
MortgageIT, Inc., (a “Seller”), MortgageIT Holdings, Inc., (a “Seller”,
and collectively with MortgageIT, Inc. the “Sellers”) and Deutsche Bank
National Trust Company, as Custodian (the “Custodian”).

 

(a)                                  In
accordance with the provisions of Section 2 of the above-referenced
Custodial Agreement (the “Custodial Agreement”),
the undersigned, as Custodian, hereby certifies that it will hold each Wet Ink
Mortgage Loan identified on the Mortgage Loan Schedule attached hereto,
pursuant to the Custodial Agreement, upon receipt thereof, as agent and bailee
of and custodian for and for the exclusive use and benefit of the Buyer.  Any transferee of this Trust Receipt shall
be entitled to have a paper copy of the most recent Mortgage Loan
Schedule transmitted by the Custodian as of the date of transfer attached
to this Trust Receipt upon request.  The
Custodian shall notify Buyer via the Mortgage Loan Schedule delivered
pursuant to the immediately following sentence by 5:00 p.m. New York City time
on the eighth (8th) Business Day following the related Purchase Date by not
including such Mortgage Loans in such Mortgage Loan Schedule in the event
that either the Custodian does not receive a Mortgage File relating to a Wet
Ink Mortgage Loan or such Mortgage File has been received but does not include
the documents necessary for the Custodian to include such Wet Ink Mortgage Loan
on a Mortgage Loan Schedule to a Trust Receipt on the eighth (8th)
Business Day following the related Purchase Date.  If such Wet Ink Mortgage Loan is not included on a Mortgage Loan
Schedule to a Trust Receipt by 5:00 p.m. New York City time on the eighth
(8th) Business Day following the related Purchase Date, the Custodian shall
continue to hold the Mortgage File relating to such Wet Ink Mortgage Loan as
agent and bailee for Buyer until the receipt of instructions to the Custodian
in writing to release the related Mortgage File as provided therein.

 

This Wet Ink Mortgage
Loan Trust Receipt is not a negotiable instrument.  The Buyer may, however, transfer this Wet Ink Mortgage Loan Trust
Receipt by a special endorsement to any party. 
The party or parties that take this receipt from the Buyer or its
affiliates by special endorsement may only transfer this receipt by a second
endorsement in the Buyer or its affiliate’s favor.

 

The Custodian will accept
and act on instructions with respect to any Wet Ink Mortgage Loan referred to
herein upon surrender of this Wet Ink Mortgage Loan Trust Receipt at its

 

Exh. 10-1

 

corporate office, or any
other mutually acceptable arrangement, 1761 East St. Andrew Place, Santa Ana,
CA 92705, Attn: Mortgage Custody-MG030C.

 

All initially capitalized
terms used herein without definition have the meanings ascribed to them in the
above-referenced Custodial Agreement.

 

The Mortgage Loan
Schedule attached hereto will be amended on each Business Day via
electronic transmission to the Buyer and each subsequently transmitted Mortgage
Loan Schedule shall automatically supersede each prior schedule and
render all previously transmitted Mortgage Loan Schedules null and void.

 

 

	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST

    COMPANY, as Custodian

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

Exh. 10-2

 

EXHIBIT 11

APPROVED BAILEES

 

1.               Credit Suisse – 11
Madison Avenue, New York NY 10010-3629

 

2.               Wells Fargo – 3200
Robbins Road, Springfield IL 62704

 

3.               Washington
Mutual  - 2210 Enterprise Drive,
Florence SC 29501

 

4.               Chase – 10151
Deerwood Park Blvd., #300, Jacksonville FL 32256

 

5.               Countrywide Home
Loans – 1991 Crocker Road, Suite 600, Westlake, OH 44145

 

6.               Bear Stearns – 383
Madison Avenue, 7th Floor, New York, NY 10179

 

7.               C-Bass- 335 Madison
Avenue, 19th Floor, New York, NY 10017

 

8.               Bayview Financial –
4425 Ponce de Leon Blvd. Coral Gables, FL 33146

 

9.               First Horizon –
4000 Horizon Way, Irving TX 75063

 

10.         Indy Mac – 155 North Lake
Ave., Pasadena CA 91101

 

11.         Principal – 5457 Twin
Knolls Road, #400, Columbia, MD

 

12.         UBS Warburg – 1285 Avenue
of the Americas, 11th Floor, New York NY 10010

 

Exh. 11-1

 

EXHIBIT 12

APPROVED TAKEOUT
INVESTORS

 

1.               Credit Suisse – 11
Madison Avenue, New York NY 10010-3629

 

2.               Wells Fargo – 3200
Robbins Road, Springfield IL 62704

 

3.               Washington
Mutual  - 2210 Enterprise Drive,
Florence SC 29501

 

4.               Chase – 10151
Deerwood Park Blvd., #300, Jacksonville FL 32256

 

5.               Countrywide Home
Loans – 1991 Crocker Road, Suite 600, Westlake, OH 44145

 

6.               Bear Stearns – 383
Madison Avenue, 7th Floor, New York, NY 10179

 

7.               C-Bass- 335 Madison
Avenue, 19th Floor, New York, NY 10017

 

8.               Bayview Financial –
4425 Ponce de Leon Blvd. Coral Gables, FL 33146

 

9.               First Horizon –
4000 Horizon Way, Irving TX 75063

 

10.         Indy Mac – 155 North Lake
Ave., Pasadena CA 91101

 

11.         Principal – 5457 Twin
Knolls Road, #400, Columbia, MD

 

12.         UBS Warburg – 1285 Avenue
of the Americas, 11th Floor, New York NY 10010

 

Exh. 12-1

 

EXHIBIT 13

BAILEE LETTER

 

MERRILL LYNCH
MORTGAGE CAPITAL INC.

MASTER BAILEE LETTER

 

                            ,
         

 

[ADDRESS]

 

[                 ]

 

Attention:

 

Ladies and Gentlemen:

 

The undersigned Merrill
Lynch Mortgage Capital Inc. (“Buyer”) shall from time to time, cause
Deutsche Bank National Trust Company, as custodian (“Custodian”), to
deliver to
                 
(“Takeout Investor”) [or to                    ,
as [custodian] for Takeout Investor] original promissory notes (“Mortgage
Notes”) evidencing certain mortgage loans (“Mortgage Loans”), along
with certain other documents comprising the related files (“Custodial Files”)
and, in each case, a Notice of Bailment in the form of Schedule 1
hereto with respect to each Mortgage Loan (“Notice of Bailment”), for
inspection by Takeout Investor prior to the possible purchase by Takeout
Investor of such Mortgage Loans pursuant to commitments (“Commitments”)
from certain Sellers of Mortgage Loans (“Sellers”).  Prior to its delivery to [Takeout
Investor/Bailee], all of Seller’s right, title and interest in each Mortgage
Loan and proceeds thereof shall have been conveyed to Buyer in accordance with
each Seller’s agreement with Buyer.

 

Except as otherwise
provided herein, each Custodial File so delivered to [Takeout Investor/Bailee]
is to be held by [Takeout Investor/Bailee], as agent for Custodian, and subject
to only Buyer’s direction and control until released as provided herein.  The proceeds of the sale of each Mortgage
Loan accepted for purchase by Takeout Investor must be remitted immediately
upon settlement by Takeout Investor, by wire transfer in immediately available
funds, in accordance with the following wire instructions:

 

	
   

  	
   

  	
   

  
	
   

  	
  ABA#

  	
   

  
	
   

  	
  A/C#

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  

 

Takeout Investor shall be responsible for making certain
that all of the proceeds from the sale of each Mortgage Loan are received in
accordance with the wire transfer instructions set forth on each Notice of
Bailment and Buyer’s interest in the Mortgage Loans shall not be released until
such funds are received by Buyer.

 

Exh. 13-1

 

All Mortgage Loan
documents held by [Takeout Investor/Bailee] which are received by [Takeout
Investor/Bailee] from Custodian with respect to a Mortgage Loan that is not
purchased within thirty days of receipt thereof must be returned immediately to
Custodian at the address for delivery of documents set forth on the Notice of
Bailment.  Buyer reserves the right at
any time, until a Mortgage Loan has been purchased by Takeout Investor, to
demand the return of the related Mortgage Documents to Custodian, and [Takeout
Investor/Bailee] agrees to return to Custodian the Mortgage Documents
pertaining to a Mortgage Loan not purchased by Takeout Investor immediately
upon such demand by Buyer.

 

The persons listed on the
attached Schedule 2 are the authorized representatives (“Authorized
Representatives”) of Buyer. 
[Takeout Investor/Bailee] shall not honor any communication from Sellers
or any third party relating to a Mortgage Loan, which is not confirmed by the
written or telephonic consent of an Authorized Representative of Buyer, or
until Buyer has received the required amount of proceeds of the sale of such
Mortgage Loan.

 

In the event [Takeout
Investor/Bailee] is not able for any reason to comply with the terms of this
Bailee Letter, [Takeout Investor/Bailee] shall immediately return the
Submission Package to Custodian at the above address.

 

[Takeout Investor/Bailee]
acknowledges that the Custodial File is being delivered in accordance with its
instructions. 
[Takeout Investor/Bailee] shall not deliver a Custodial File to any
third party without the prior written consent of Buyer unless such third party
is a wholly owned subsidiary of Takeout Investor or a custodian and bailee of
Takeout Investor who is receiving such Custodial File with written notice of
the bailment created by this Master Bailee Letter.

 

No deviation in performance of the
terms of any previous bailment agreement will alter any of [Takeout
Investor/Bailee’s] duties or responsibilities as provided herein.

 

By accepting delivery of a Custodial
File containing a Notice of Bailment, [Takeout Investor/Bailee] shall be bound
by the terms hereof.  Please execute and
return the enclosed copy of this Master Bailee Letter in the enclosed
self-addressed envelope.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  MERRILL
  LYNCH MORTGAGE CAPITAL

    INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

The undersigned Custodian
executes this Master Bailee Letter solely for purposes of appointing [Takeout
Investor/Bailee] its custodian and bailee to hold the Custodial Files in
accordance with the terms of this Master Bailee Letter.

 

Exh. 13-2

 

	
   

  	
  Agreed to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST

    COMPANY

  
	
   

  	
    (Custodian)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Dated:  As of the date first set forth above

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed to:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Takeout
  Investor/Bailee]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Dated:  As of the date first set forth above

  	
   

  
						

 

Exh. 13-3

 

SCHEDULE 1

TO EXHIBIT 13

 

NOTICE OF BAILMENT

 

[Address]

 

Re:                               [Insert
Description of Loan, including Borrower’s Name, Loan Amount and Loan Number]

 

Ladies and Gentlemen:

 

Pursuant to the Master
Bailee Letter, dated
                            
     ,         
(the “Master Bailee Letter”), between Merrill Lynch Mortgage Capital
Inc. (“Buyer”) and Deutsche Bank National Trust Company (the “Custodian”),
you are hereby notified that the enclosed original promissory note with respect
to the referenced loan together with certain other documents comprising the
related file with respect to that loan (the “Mortgage Documents”) being
hereby delivered to you herewith are to be held by you as agent of Custodian
(which holds the Mortgage Documents as custodian and bailee for the benefit of
Buyer).

 

Any Mortgage Documents
(or portion thereof) not purchased by you in accordance with the provisions of
the Applicable Requirements shall be sent to the Custodian by overnight courier
to:  [insert address for return of documents].

 

In the event you elect to
purchase the Mortgages subject to the Master Bailee Letter, you shall pay the
Takeout Price to the Buyer by wire transfer based upon the following
instructions:

 

	
   

  	
   

  	
   

  
	
   

  	
  ABA#

  	
   

  
	
   

  	
  A/C#

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
   

  

 

Any questions relating to
the Mortgage Documents should be referred to the Buyer at
(212)                 .

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exh. 13-4

 

SCHEDULE 2

TO EXHIBIT 13

 

AUTHORIZED
REPRESENTATIVES OF THE BUYER

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Authorized
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James Cason

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joseph Magnus

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joshua Green

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gene Nagotko

  	
   

  	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John
  Winchester

  	
   

  	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Christopher
  Czako

  	
   

  	
  Senior
  Specialist

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lisa
  Liao

  	
   

  	
  Specialist

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael
  Saccento

  	
   

  	
  Specialist

  	
   

  	
   

  

 

Exh. 13-5

 

EXHIBIT 14

 

FORM OF BAILEE
VIOLATION LETTER

 

[Buyer]

[ADDRESS]

 

[Takeout Investor]

[ADDRESS]

 

RE:  [Reference applicable bailee letter (the “Bailee
Letter”)]

 

We hereby notify you
that, pursuant to the Bailee Letter, the Mortgage Files for the Mortgage Loans
listed on Annex I hereto were released to [Takeout Investor/Bailee] (“Takeout
Investor/Bailee”) for purchase on
        , 200    
and [Takeout Investor/Bailee] has had possession of the Mortgage Files for more
than thirty days without purchasing such Mortgage Loans.

 

	
  By: 

  	
  DEUTSCHE BANK NATIONAL

  TRUST COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
						

 

H-6

 

EXHIBIT 15

 

FORM OF AMENDED AND RESTATED

 

SETTLEMENT ACCOUNT CONTROL AGREEMENT

 

AMENDED AND RESTATED SETTLEMENT
ACCOUNT CONTROL AGREEMENT (this “Agreement”), dated as
of August 4, 2004, between MERRILL LYNCH COMMERCIAL FINANCE CORP. (“MLMCI”
and the “Buyer”), MORTGAGEIT, INC., (“MortgageIT” and a “Seller”),
MORTGAGEIT HOLDINGS, INC., (“Holdings”, a “Seller”, and
collectively with MortgageIT, the “Sellers”), and DEUTSCHE BANK NATIONAL
TRUST COMPANY (the “Bank”).

 

Merrill Lynch Commercial
Finance Corp. (“MLCFC”), MortgageIT 
and the Bank previously entered into a Settlement Account Control
Agreement, dated September 15, 2003, (the “Existing Settlement Account
Control Agreement”) and MLCFC subsequently assigned its rights as Buyer
thereunder to MLMCI.

 

MLMCI, the Sellers and the
Bank have requested that the Existing Settlement Account Control Agreement be
amended and restated on the terms and conditions set forth herein.

 

Accordingly, the parties
hereby agree, in consideration of the mutual promises and mutual obligations
set forth herein, that the Existing Settlement Account Control Agreement is
hereby amended and restated as set forth herein.

 

WHEREAS, the
Sellers and the Buyer have entered into that certain Amended and Restated
Repurchase Agreement, dated as of August 4, 2004 (as amended, the “Repurchase
Agreement”) pursuant to which the Buyer may enter into a Transaction
secured by, among other things, the Settlement Account (as defined below) and
all amounts held therein;

 

WHEREAS, the
Sellers, the Buyer, and the Bank, as Custodian thereunder have entered into
that certain Amended and Restated Custodial Agreement, dated as of August 4,
2004 (as amended, the “Custodial Agreement”);

 

WHEREAS, the
Sellers have established that certain Settlement Account, Acct. No. 38567,
which is a segregated, non-interest bearing trust account, subject to the
security interest of the Buyer, ABA # 021001033, which account is
maintained in the name of the Sellers in trust for the Buyer with the Bank
pursuant to the Custodial Agreement (the “Settlement Account”);

 

WHEREAS, pursuant
to the Custodial Agreement, the Sellers shall cause the applicable Takeout
Investor to remit all amounts on account of the related Mortgage Loans to the
Settlement Account in accordance with the provisions of the related Takeout
Commitment; and

 

WHEREAS, the
Sellers have granted to the Buyer a security interest in the Settlement Account
and all amounts held therein;

 

 

NOW,
THEREFORE, the parties hereby agree as follows:

 

(a)                                  Capitalized
Terms.  Capitalized terms used but
not defined herein shall have the meanings assigned in the Custodial Agreement
or the Repurchase Agreement, as applicable.

 

(b)                                 Transfers
To and From Settlement Account; Control. 
The parties agree that, with respect to a Takeout Commitment:  (a) on or before the Anticipated
Settlement Date, the Sellers shall provide to the Bank instructions, with the
related security release attached thereto, specifying the amount that the Bank
shall credit to the account of the Buyer specified in Written Instructions from
Buyer from time to time, (b) immediately upon receipt of such instructions
and such amount, the Bank shall credit such amount (or, to the extent that the
amount indicated in Sellers’ instructions is less than the amount set forth in
the attached security release and such amount set forth in such security
release is received by the Bank, the amount set forth in such security release)
to such Buyer’s account; (c) except as described in clause (d) below,
the Bank shall transfer the remainder of all amounts that the Bank receives in
respect of such Takeout Commitment as instructed by the Sellers in writing; and
(d) the Bank shall transfer funds from the Settlement Account in
accordance with such instructions until the Bank receives notice from the Buyer
that an event of default has occurred and is continuing under the Repurchase
Agreement (a “Notice of Event of Default”); and (e) upon the Bank’s
receipt of a Notice of Event of Default, the Bank shall (i) in no event
(A) transfer funds from the Settlement Account to the Sellers,
(B) act on the instruction of the Sellers (unless the Buyer so directs),
or (C) cause or permit withdrawals from the Settlement Account in any
manner not approved by the Buyer in writing and (ii) comply with
instructions originated by the Buyer concerning the disposition of funds in the
Settlement Account without further consent of the Sellers.  With respect to a Takeout Commitment, to the
extent that the amount indicated in Sellers’ instructions is less than the
amount set forth in the attached security release and the Bank receives less
than the amount set forth in such security release, the Bank shall provide to
the Buyer prompt written notice thereof. 
Funds in the Settlement Account shall be held uninvested.  In no event shall the Bank have a duty to
review or verify wire instructions, unless expressly stated herein.

 

(c)                                  Settlement
Account.  The Bank hereby confirms
and agrees that:

 

(i)                                                        The
Bank shall not change the name or account number of the Settlement Account
without the prior written consent of the Buyer;

 

(ii)                                                     The
Settlement Account is a “deposit account” (within the meaning of Section 9-102(a)(29)
of the Uniform Commercial Code (the “UCC”));

 

(iii)                                                  Without
limitation on the Buyer’s rights under Section 2 above, the Bank shall
comply with any stop payment orders given by the Buyer after receipt by Bank of
a Notice of Event of Default with respect to items presented for payment by the
Seller;

 

(iv)                                                 Except
for the Custodial Agreement, there are no other agreements entered into between
the Bank and the Seller with respect to the Settlement Account;

 

(v)                                                    It
has not entered into, and until the termination of this Agreement will not
enter into, any agreement with any other person relating to the Settlement
Account and/or any

 

2

 

funds held therein
pursuant to which it has agreed, or will agree, to comply with orders or
instructions of such other person; and

 

(vi)                                                 It
has not entered into, and until the termination of this Agreement will not
enter into, any agreement with the Seller purporting to limit or condition the
obligation of the Bank to comply with orders and other instructions of the
Buyer as set forth in Sections 2(c)(ii) and 3(c) above.

 

(d)                                 Subordination
of Lien; Waiver of Set-Off. 
(i)  In the event that the Bank has or subsequently obtains by
agreement, by operation of law or otherwise a security interest in the
Settlement Account or any funds held therein, the Bank hereby agrees that such
security interest shall be subordinate to the security interest of the
Buyer.  The funds and other items
deposited to the Settlement Account will not be subject to deduction, set-off,
banker’s lien, or any other right in favor of any person other than the Buyer
(except that the Bank may set off (i) all amounts due to the Bank in
respect of customary fees and expenses for the routine maintenance and
operation of the Settlement Account and (ii) the face amount of any checks
which have been credited to the Settlement Account but are subsequently
returned unpaid because of uncollected or insufficient funds, or
(iii) other returned items or mistakes made in crediting the Settlement
Account).

 

(ii)                                                     The
Sellers hereby authorize the Bank, without prior notice, from time to time to
debit any other account the Sellers may have with the Bank for the amount due
the Bank hereunder.

 

(e)                                  CHOICE
OF LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 
REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, FOR PURPOSES OF THE
UCC, NEW YORK SHALL BE DEEMED TO BE THE “BANK’S JURISDICTION.”

 

(f)                                    Conflict
with Other Agreements. 
(i)  In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement between the Sellers and the Bank
now existing or hereafter entered into, the terms of this Agreement shall
prevail.

 

(ii)                                                     No
amendment or modification of this Agreement or waiver of any right hereunder
shall be binding on any party hereto unless it is in writing and is signed by
all of the parties hereto.

 

(g)                                 Adverse
Claims.  Except for the claims and
interest of the Buyer and of the Sellers in the Settlement Account, the Bank
does not have actual knowledge of any claim to, or interest in, the Settlement
Account or in funds held therein.  If
any person asserts any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against the Settlement Account or against any funds held therein, and a
Responsible Officer of the Bank is notified in writing, the Bank will promptly
notify the Buyer and the Sellers thereof. 
For purposes of this Section 7, a “Responsible Officer” shall mean,
with respect to the Bank, any officer, including any managing director,
principal, vice president, assistant vice president, assistant treasurer,
assistant secretary, trust officer or any other officer of the Bank customarily
performing functions similar to those performed by any of

 

3

 

the above designated
officers and having direct responsibility for the administration of this
Agreement, and also, with respect to a particular matter, any other officer, to
whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject.

 

(h)                                 Successors.  The terms of this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who
obtain such rights solely by operation of law.

 

(i)                                     Notices.  Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed, to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received, or three days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below:

 

	
  Seller:

  	
   

  
	
   

  	
   

  
	
   

  	
  MortgageIT, Inc.

  
	
   

  	
  33 Maiden Lane

  
	
   

  	
  6th Floor

  
	
   

  	
  New York, New York
  10038

  
	
   

  	
  Attention: Chief
  Operating Officer

  
	
   

  	
  Telephone: (212)
  651-4961

  
	
   

  	
  Facsimile: (212)
  651-4680

  
	
   

  	
   

  
	
  Seller:

  	
   

  
	
   

  	
   

  
	
   

  	
  MortgageIT Holdings,
  Inc.

  
	
   

  	
  33 Maiden Lane

  
	
   

  	
  6th Floor

  
	
   

  	
  New York, New York
  10038

  
	
   

  	
  Attention: Chief
  Operating Officer

  
	
   

  	
  Telephone: (212)
  651-4961

  
	
   

  	
  Facsimile: (212)
  651-4680

  
	
   

  	
   

  
	
  with copies to the
  Buyer at the address below

  
	
   

  
	
  Buyer:

  	
   

  
	
   

  	
   

  
	
   

  	
  Merrill Lynch Mortgage
  Capital Inc.

  
	
   

  	
  4 World Financial
  Center

  
	
   

  	
  10th Floor

  
	
   

  	
  New York, New York
  10080

  
	
   

  	
  Attention: James Cason

  

 

4

 

	
  Bank:

  	
   

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank National
  Trust Company

  
	
   

  	
  1761 East St. Andrew
  Place

  
	
   

  	
  Santa Ana, California
  92705

  
	
   

  	
  Attention:  Mortgage Custody-MG030C

  
	
   

  	
  Telephone: (714)
  247-6000

  
	
   

  	
  Facsimile: (714)
  247-6082

  

 

Any party may change its
address for notices in the manner set forth above.

 

(j)                                     Termination.  The obligations of the Bank to the Buyer
pursuant to this Agreement shall continue in effect until the Buyer has
notified the Bank of such termination in writing.  The Buyer agrees with the Sellers to provide Notice of
Termination in substantially the form of Exhibit A hereto to the
Bank on or after the termination of the Buyer’s security interest in the
Settlement Account pursuant to, or as otherwise provided by, the terms of the
Repurchase Agreement.

 

(k)                                  Limitation
of Liability; Indemnification of the Bank. 
The Sellers and the Buyer hereby agree that (a) the Bank is
released from any and all liabilities to the Sellers and the Buyer arising from
the terms of this Agreement and the compliance of the Bank with the terms
hereof, except to the extent that such liabilities arise from the Bank’s bad
faith, willful misconduct or negligence and (b) the Sellers, jointly and
severally, their successors and assigns shall at all times indemnify and save
harmless the Bank from and against any loss, liability or expense incurred
without bad faith, willful misconduct or negligence on the part of the Bank,
its officers, directors and agents, arising out of or in connection with the
execution and performance of this Agreement or the maintenance of the Settlement
Account, including the costs and expenses of defending themselves against any
claim or liability in connection with the performance of any of their powers or
duties hereunder, which indemnity shall survive the termination of this
Agreement or the earlier removal or resignation of the Bank.  The Bank shall also be afforded the same
rights and protections afforded to Deutsche Bank National Trust Company in its
role as Custodian under the Custodial Agreement, as if such rights and
protections were fully set forth herein.

 

(l)                                     Counterparts.  This Agreement may be executed may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
and delivering one or more counterparts.

 

[SIGNATURE PAGES
FOLLOW]

 

5

 

IN WITNESS WHEREOF,
the parties hereto have duly executed and delivered this Agreement, all as of
the day and year first above written.

 

 

	
   

  	
  MORTGAGEIT, INC., as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN R. CUTI

  	
   

  
	
   

  	
   

  	
  Name: John R. Cuti

  	
   

  
	
   

  	
   

  	
  Title: Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MORTGAGEIT HOLDINGS,
  INC., as Seller

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN R. CUTI

  	
   

  
	
   

  	
   

  	
  Name: John R. Cuti

  	
   

  
	
   

  	
   

  	
  Title: Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MERRILL
  LYNCH MORTGAGE CAPITAL

    INC., as Buyer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN WINCHESTER

  	
   

  
	
   

  	
   

  	
  Name: John Winchester

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DEUTSCHE
  BANK NATIONAL TRUST

    COMPANY, as Bank

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CHRISTOPHER CORCORAN

  	
   

  
	
   

  	
   

  	
  Name: Christopher
  Corcoran

  	
   

  
	
   

  	
   

  	
  Title: Assistant Vice
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KEVIN R. FISCHER

  	
   

  
	
   

  	
   

  	
  Name: Kevin R. Fischer

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  	
   

  

 

 

Exhibit A to

Settlement Account Control Agreement

 

[LETTERHEAD OF
MERRILL LYNCH MORTGAGE CAPITAL INC.]

 

[Date]

 

Deutsche Bank National Trust Company

1761 East St. Andrew Place

Santa Ana, California 92705

Attention:  Mortgage Custody-MG030C

Facsimile: (714) 247-6082

 

Re:                               Notice
of Termination of Amended and Restated Settlement Account Control Agreement

 

You are hereby notified
that the Amended and Restated Settlement Account Control Agreement, dated as of
August 4, 2004, a copy of which is attached (the “Agreement”),
among you, the undersigned, MortgageIT, Inc., (“MortgageIT” and a “Seller”)
and MortgageIT Holdings, Inc., (a “Seller”, and collectively with
MortgageIT, the “Sellers”) is terminated and you have no further
obligations to the undersigned pursuant to the Agreement.  Notwithstanding any previous instructions to
you, you are hereby instructed to accept all future directions with respect to the
Settlement Account from the Sellers. 
This notice terminates any obligations you may have to the undersigned
with respect to the Settlement Account; provided, however, that nothing
contained in this notice shall alter any obligations which you may otherwise
owe to the undersigned pursuant to any other agreement.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MERRILL
  LYNCH MORTGAGE CAPITAL

    INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exhibit A-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]