Document:

Exhibit 10.3

 Exhibit 10.3 
  
 NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AFTER RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT. THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
  
 THESE SECURITIES REPRESENTED HEREBY ARE ALSO SUBJECT TO RIGHTS AND OBLIGATIONS AS SET FORTH IN A SECURITIES PURCHASE AGREEMENT DATED AS OF MARCH 25, 2004, AND A REGISTRATION RIGHTS AGREEMENT DATED AS OF MARCH 25, 2004, IN EACH CASE AMONG
STAR SCIENTIFIC, INC. AND CERTAIN OTHER PARTIES THERETO AS SUCH MAY BE AMENDED FROM TIME TO TIME. 
  
 SECOND AMENDED & RESTATED 
  
 COMMON STOCK PURCHASE WARRANT 
  
 To Purchase 502,681 Shares of $0.0001 par value Common Stock of 
  
 Star Scientific, Inc. 
  
 THIS SECOND AMENDED AND
RESTATED COMMON STOCK PURCHASE WARRANT (the “Warrant”) CERTIFIES that, for value received, MANCHESTER SECURITIES CORP., a New York corporation (the “Holder”), is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time on or after March 25, 2004 (the “Initial Exercise Date”) and on or prior to the close of business on the fifth (5th) anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter (the “Exercise Period”), to
subscribe for and purchase from Star Scientific, Inc., a corporation incorporated in Delaware (the “Company”), up to 502,681 shares (the “Warrant Shares”) of Common Stock, par value $0.0001 per share, of the Company
(the “Common Stock”). This Warrant amends, restates and supercedes in all respects the Common Stock Purchase Warrant originally issued by the Company to the Holder on March 25, 2004, as amended and restated on April 15, 2004. The
purchase price of one share of Common Stock (the “Exercise Price”) under this Warrant shall be $4.00, subject to adjustment hereunder. The Exercise Price and the number of Warrant Shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated March 25, 2004,
between the Company and the purchaser signatory thereto. 
  
 1. Title to Warrant. Prior to the Termination Date and subject to compliance with applicable laws and Section 7 of this Warrant, this Warrant and all rights hereunder 

  

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are transferable, in whole or in part, at the office or agency of the Company by the Holder in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed and (b) any other documentation reasonably necessary to satisfy the Company that such transfer is in compliance with all applicable securities laws. The term
“Holder” shall refer to the Purchaser or any subsequent transferee of this Warrant. 
  
 2. Authorization of Warrant Shares. The Company represents and warrants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue and any taxes, liens and charges due because of actions taken by Holder). 
  
 3. Exercise of Warrant. 
  
 (a) Except as provided in Section 4 herein, exercise of the purchase rights represented by this Warrant may be made at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by (i) delivering (which may be by facsimile) this Warrant with the Notice of Exercise Form annexed hereto completed and duly executed, to the offices of the Company (or
such other office or agency (including the transfer agent, if applicable) of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company) and (ii) delivering
payment of the Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or by means of a cashless exercise pursuant to Section 3(d). The Holder exercising its purchase rights in accordance
with the preceding sentence shall be entitled to receive a certificate for the number of Warrant Shares so purchased. Certificates for shares purchased hereunder shall be delivered to the Holder within five (5) Trading Days after the date on which
this Warrant shall have been exercised as aforesaid. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other person so designated to be named therein
(provided that the Holder complies with the restrictions in Section 1 and Section 7 for transfer) shall be deemed to no longer hold this Warrant with respect to such shares and to have become a holder of record of such shares for all purposes, in
each case as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 5 prior to the issuance of such shares, have been paid. If the
Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 3(a) by the fifth Trading Day after the date of exercise, then the Holder will have the right to rescind such exercise. In
addition to any other rights available to the Holder, if the Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise by the fifth Trading Day after the date of exercise and the
Holder has not rescinded such exercise pursuant to this Section 3(a), and if after such fifth Trading Day the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by the Holder of 

  

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the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the
amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue by (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant
to the terms hereof. 
  
 (b) In the event that
the Warrant is not exercised in full, the number of Warrant Shares shall be reduced by the number of such Warrant Shares for which this Warrant is exercised and/or surrendered, and the Company, if requested by Holder and at its expense, shall within
ten (10) Trading Days (as defined below) after surrender by Holder of this Warrant to the Company, issue and deliver to the Holder a new Warrant of like tenor in the name of the Holder or as the Holder (upon payment by Holder of any applicable
transfer taxes) may request, reflecting such adjusted Warrant Shares. Notwithstanding anything to the contrary set forth herein, upon exercise of any portion of this Warrant in accordance with the terms hereof, the Holder shall not be required to
physically surrender this Warrant to the Company unless such Holder is purchasing the full amount of Warrant Shares represented by this Warrant, in which case the Holder shall promptly surrender the Warrant to the Company. The Holder and the Company
shall maintain records showing the number of Warrant Shares so purchased hereunder and the dates of such purchases or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this
Warrant upon each such exercise. The Holder and any assignee, by acceptance of this Warrant or a new Warrant, acknowledge and agree that, by reason of the provisions of this Section, following exercise of any portion of this Warrant, the number of
Warrant Shares which may be purchased upon exercise of this Warrant may be less than the number of Warrant Shares set forth on the face hereof. 
  

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 (c) 4.99% and Principal Market Regulation Limitations. 
  
 (i) 4.99% Limitation. Notwithstanding anything to the
contrary contained herein, the number of shares of Common Stock that may be acquired by the Holder upon exercise pursuant to the terms hereof shall not, when added to the total number of shares of Common Stock deemed beneficially owned by such
Holder at such time (other than by virtue of the ownership of securities or rights to acquire securities (including the Warrant Shares) that have limitations on the Holder’s right to convert, exercise or purchase similar to the limitation set
forth herein), as determined pursuant to the rules and regulations promulgated under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), including all shares of Common Stock deemed beneficially owned
(other than by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitations set forth herein) at such time by persons that would be aggregated
for purposes of determining whether a group under Section 13(d) of the 1934 Act exists, exceed 4.99% of the total issued and outstanding shares of the Common Stock (the “Restricted Ownership Percentage”). Holder shall have the right
(w) at any time and from time to time to reduce its Restricted Ownership Percentage immediately upon notice to the Company and (x) (subject to waiver) at any time and from time to time, to increase its Restricted Ownership Percentage immediately in
the event of the announcement as pending or planned, of a Change in Control Transaction (as defined in the Debentures issued by the Company to Holder on March 25, 2004, as amended and restated as of April 15, 2004 and as further amended and restated
as of September 15, 2004 (the “Debentures”). ). 
  
 (ii) Principal Market Regulation. The Company shall not be obligated to issue any shares of Common Stock upon exercise of this Warrant, whether pursuant to this Section 3, or otherwise, if the issuance of such
shares of Common Stock would exceed that number of shares of Common Stock which the Company may issue (i) upon exercise of this Warrant, (ii) upon conversion of the Debentures, (iii) to Elliott Associates, L.P. (“EALP”) and Elliott
International, L.P. (“EILP”) pursuant to a separate Securities Purchase Agreement dated as of April 15, 2004 (the “Elliott Purchase Agreement”) (the issuances of shares to EALP and EILP being referred to herein as
the “Elliott Purchased Shares”), (iv) exercises of an option (the “Option”) granted to each of EALP and EILP under the Elliott Purchase Agreement pursuant to the terms set forth therein (the shares issued upon
exercise of the Option shall be referred to herein as the “Option Shares”), (v) in connection with any other sale, issuance or potential issuance of Common Stock by the Company that may be considered by the Principal Market to be
the same “transaction,” for purposes of NASD Rule 4350(i)(1)(D), as the issuance of Common Stock upon exercise of the Warrant or the issuances described in clause (iii) above (such other sales, issuances or potential issuances, the
“Other Related Offerings”), and (vi) upon exercises of the Common Stock Purchase Warrants dated March 25, 2004 issued to Financial West Group, Robert Schacter and Thomas Griesel (the issuances upon such exercises, the
“Reedland Issuances”) without breaching the Company’s obligations under the rules and regulations 

  

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of the Principle Market (the “Principal Market Cap”), which amount shall be calculated for all the Warrants as the amount of the Principal
Market Cap less the aggregate number of shares of Common Stock issued or to be issued as contemplated by clauses (ii) through (vi), except that such limitation shall not apply in the event that the Company (A) obtains the Shareholder Approval (as
defined in the Debenture) or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Holder. Until such approval or written opinion is obtained, the
Holder pursuant to the Purchase Agreement (the “Purchaser”) shall not be issued, upon conversion of Debentures or exercise of any Warrants held by the Purchaser, shares of Common Stock in an amount greater than the amount of the
Principal Market Cap allocated to it in accordance with this paragraph. Subject to the following sentence, the Principal Market Cap Allocation of a holder shall be: (I) in the case of the initial holder, prior to any transfers, the Principal Market
Cap minus the shares of Common Stock issued or issuable pursuant to clauses (iii) through (vi) above; (II) in the case of a transferor, the amount equal to (x) such transferor’s Principal Market Cap Allocation immediately prior to such transfer
minus (y) the amount of the Principal Market Cap Allocation allocated to the applicable transferee pursuant to clause (III)(y), and (III) in the case of any transferee, the sum of (x) such transferee’s Principal Market Cap Allocation
immediately prior to the applicable transfer, plus (y) the Principal Market Cap Allocation of the transferor immediately prior to such transfer multiplied by a fraction, the numerator of which is the sum of (1) the principal balance (not including
any accrued interest or penalties added to the Principal Amount) of the Debentures so transferred divided by the Conversion Price, plus (2) the number of Warrant Shares issuable upon exercise of any Warrants so transferred, and the denominator of
which is sum of (1) the principal balance (not including any accrued interest or penalties added to the Principal Amount) of the Debentures held by the transferor immediately prior to such transfer divided by the Conversion Price, plus (2) the
number of Warrant Shares issuable upon exercise of any Warrants held by the transferor immediately prior to such transfer, plus (3) the aggregate number of Warrant Shares and Common Shares previously issued to the transferor upon conversion of
Warrants or Debentures, respectively. In the event that any holder of Debentures shall convert all of such holder’s Debentures and exercise all of such holder’s Warrants into a number of shares of Common Stock which, in the aggregate, is
less than such holder’s Principal Market Cap Allocation, then the difference between such holder’s Principal Market Cap Allocation and the number of shares of Common Stock actually issued to such holder shall be allocated to the respective
Principal Market Cap Allocations of the remaining holders of Debentures on a pro rata basis in proportion to the aggregate principal amount of the Debentures then held by each such holder. 
  
 (d) Notwithstanding the foregoing provision regarding
payment of the Exercise Price in cash, during any time after the Effectiveness Deadline (as defined in the Registration Rights Agreement) that the Warrant Shares are not subject to an effective 

  

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Registration Statement as required by the terms of the Registration Rights Agreement, the Holder, by indicating its intent to do so on the Notice of Exercise
Form, may elect to receive a reduced number of Warrant Shares in lieu of tendering the Exercise Price in cash. In such case, the number of Warrant Shares to be issued to the Holder shall be computed using the following formula: 
  
           Y x (A-B)

 X =   –––––––– 
           A 
  
 (X) = the number of Warrant Shares to be issued to the Holder upon such “cashless exercise”; 
  
 (A) = the VWAP (as defined in Section 18 below) on the
Trading Day immediately preceding the date on which such exercise is effective; 
  
 (B) = the Exercise Price of the Warrants, as adjusted; and 
  
 (Y) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of
this Warrant. 
  
 4. No Fractional Shares or Scrip. No
fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price. 
  
 5. Charges, Taxes and Expenses. 
  
 (a) Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and payment in immediately available funds of a sum sufficient to reimburse the Company for any transfer tax incidental thereto. 
  
 (b) Notwithstanding anything to the contrary in this Warrant, the Company (or its agent) shall be authorized
to deduct and withhold any taxes imposed under the Internal Revenue Code of 1986, as amended (the “Code”), or any applicable provision of state, local or foreign tax law, on amounts paid or deemed paid in respect of the Warrant, and any
amount so deducted and withheld shall be treated as paid by the 

  

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Company to holders of the Warrants in accordance with the terms hereof. Without limiting the foregoing, in the event of a deemed dividend under Section 305
of the Code, holders of the Warrant will pay to the Company the amount of any withholding taxes that become due, or the Company will be entitled to reduce the amount of any other consideration payable to a holder of a Warrant in order to pay such
withholding taxes. 
  
 6. Closing of Books. The Company
will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. 
  
 7. Transfer, Division and Combination. 
  
 (a) Subject to compliance with any applicable securities laws and the conditions set forth in Sections 1 and 7(e) hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled. 
  
 (b) This Warrant may be divided
or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with Section 7(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. 
  
 (c)
The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this Section 7. 
  
 (d) The Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants.

  
 (e) The Company may require, as a condition
of allowing any transfer of this Warrant (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope reasonably satisfactory to the
Company) to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), 

  

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(a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a qualified institutional buyer as defined in Rule 144A(a) under the Securities Act.

  
 8. No Rights as Shareholder until Exercise. This
Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price (or by means of a cashless
exercise), the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment and this Warrant shall no longer be
issuable with respect to such Warrant Shares. 
  
 9. Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the
Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. 
  
 10. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday. 
  
 11. Adjustments of Exercise Price and Number
of Warrant Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following. In case the Company shall (i)
pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled to receive the kind and number of Warrant Shares or other securities of the Company which it would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number of Warrant Shares or other securities of the Company which are purchasable hereunder, the Holder shall thereafter be entitled to purchase the number of Warrant Shares or
other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant
hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Company resulting from such adjustment. An 

  

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adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any,
for such event. 
  
 12. Reorganization, Reclassification,
Merger, Consolidation or Disposition of Assets. In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation (“Other Property”), are to be received by or distributed to the holders of Common Stock of the
Company, then the Holder shall have the right thereafter to receive upon exercise of this Warrant, the number of shares of common stock of the successor or acquiring corporation or Common Stock of the Company, if it is the surviving corporation, and
Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to
such event. In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume all the obligations and liabilities of the
Company hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to provide for adjustments of Warrant Shares for which this Warrant is
exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 12. For purposes of this Section 12, “common stock of the successor or acquiring corporation” shall include stock of such
corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock.
The foregoing provisions of this Section 12 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations, spin-offs, or dispositions of assets. 
  
 13. Exercise Price Adjustment. 
  
 (a) In the event that on or subsequent to the Closing Date, the Company issues or sells any shares of Common
Stock or other securities which are convertible into or exchangeable for its Common Stock or any convertible securities, or any warrants or other rights to subscribe for or to purchase or any options for the purchase of its Common Stock or any such
convertible securities (other than shares or options issued or which may be issued pursuant to (i) the Company’s current employee option plans or shares issued upon exercise of options, warrants or rights outstanding on 

  

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the date of the Purchase Agreement and listed in the Company’s most recent periodic report filed under the 1934 Act or in the Purchase Agreement, or
(ii) arrangements with the Holder) at an effective price per share price which is less than the Exercise Price then in effect immediately prior to such issue or sale, then the Exercise Price in effect immediately prior to such issue or sale shall be
reduced effective concurrently with such issue or sale to an amount determined by multiplying the Exercise Price then in effect by a fraction, (x) the numerator of which shall be the sum of (1) the number of shares of Common Stock outstanding
immediately prior to such issue or sale, plus (2) the number of shares of Common Stock which the aggregate consideration received by the Company for such additional shares would purchase at the Exercise Price then in effect; and (y) the denominator
of which shall be the number of shares of Common Stock of the Company outstanding immediately after such issue or sale. 
  
 (b) For the purposes of the foregoing adjustments, in the case of the issuance of any convertible securities, warrants, options or other
rights to subscribe for or to purchase or exchange for, shares of Common Stock (“Convertible Securities”), the maximum number of shares of Common Stock then issuable, whether or not vested, upon exercise, exchange or conversion of
such Convertible Securities shall be deemed to be outstanding, provided that no further adjustment shall be made upon the actual issuance of Common Stock upon exercise, exchange or conversion of such Convertible Securities. 
  
 (c) The number of shares which may be purchased hereunder
shall be increased proportionately to any reduction in Exercise Price pursuant to this Section 13, so that after such adjustments the aggregate Exercise Price payable hereunder for the increased number of shares shall be the same as the aggregate
Exercise Price in effect just prior to such adjustments for the number of shares this Warrant was exercisable into prior to such adjustment. 
  
 (d) Notwithstanding the above in this Section 13, there shall be no adjustment under this Section 13 for the offer or Conversion of the
Debentures or the Elliott Purchased Shares or the Option Shares issued pursuant to the terms of the Elliott Purchase Agreement or for the other Related Offerings effected substantially contemporaneously with the Elliott Purchase Agreement
(containing substantially the same terms as the Elliott Purchase Agreement other than the amount of shares purchased and the aggregate purchase price paid), including shares of Common Stock issued or issuable (including pursuant to options) to
Portside Growth & Opportunity Fund (“Portside”) pursuant to the terms of the Securities Purchase Agreement dated as of April 15, 2004 entered into by and between the Company and Portside. 
  
 14. Other Distributions. If at any time after the date hereof the
Company distributes to holders of its Common Stock, other than as part of its dissolution, liquidation or the winding up of its affairs, any shares of its capital stock, any evidence of indebtedness or any of its assets (other than Common Stock),
then, as part of such distribution, the Company shall make lawful provision so that there shall thereafter be deliverable upon the exercise of this Warrant or any portion thereof, in addition to the number of Warrant Shares receivable upon exercise
of the Warrant, and without payment of any additional consideration, the amount of the dividend or other distribution to which the holder of the number of shares of Common Stock obtained upon exercise hereof would have been entitled to receive had
the exercise occurred as of the record date for such dividend or distribution. 
  

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 15. Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of securities or
other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, as herein provided, the Company shall give notice thereof to the Holder, which notice shall state the number of Warrant Shares (and other securities or
property) purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares (and other securities or property) after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. 
  
 16.
Notice of Corporate Action. If at any time: 
  
 (a) the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of
stock of any class or any other securities or property, or to receive any other right, or 
  
 (b) there shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company
or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation or, 
  
 (c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; 
  
 then, in any one or more of such
cases, the Company shall give to Holder (i) at least ten (10) business days’ prior written notice of the date on which a record date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any
such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution,
liquidation or winding up, at least ten (10) business days’ prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be
taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to
exchange their Warrant Shares for securities or other property deliverable upon such disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section 19(d). 
  
 17. Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a 

  

 11 

 
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. Subject to the limitations set forth in Section 3(c) above, the Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. 
  
 Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. 
  
 18. Call. At any time and from time to time following the six (6) month anniversary of the Effective Date of the
Registration Statement, the Company shall have the right, upon 20 Business Days’ prior written notice to the Holder (“Call Notice”), to call all or any portion of this Warrant at a price equal to $0.05 per Warrant at any time
provided that (i) the Warrant Shares are registered for resale pursuant to the Securities Act and have been for at least the 20-Trading Day period preceding the Call Notice, (ii) the Prospectus has not been suspended at any time during the
20-Trading Day period preceding the Call Notice, (iii) the Common Stock is currently listed (and is not suspended from trading) on the Principal Market as of the date the Call Notice is delivered to the Holder through the effective date of such
call, (iv) the Company is not in default (or taken any action or failure to act which through the passage of time would result in a default) under the Registration Rights Agreement, (v) exercise of the Warrant in whole will not cause the Holder to
exceed the Section 3(c) limitations, (vi) the VWAP of the Common Stock on the Principal Market is equal to or greater than 200% of the Exercise Price (subject to adjustment to reflect forward or reverse stock splits, stock dividends,
recapitalizations and the like)(the “Threshold Price”) for at least 20 consecutive Trading Days (all of which shall have occurred after the six month anniversary of the Effective Date), and (vii) the Call Notice is delivered within
3 Business Days’ of the most recent day in the previous clause and that the Common Stock 

  

 12 

 
reached the Threshold Price. At any time prior to the effective date of such call, the Holder shall have the right to exercise this Warrant in accordance
with its terms. 
  
 “VWAP” shall mean for any
date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on an Approved Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the primary Approved Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. ET to 4:02 p.m. Eastern Time) using the HP function; (b) if the Common
Stock is not then listed or quoted on an Approved Market and if prices for the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by the Company
and Holder in good faith. 
  
 19. Miscellaneous.

  
 (a) Jurisdiction. This Warrant shall
constitute a contract under the laws of New York, without regard to its conflict of law, principles or rules. 
  
 (b) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal securities laws and/or as set forth in the Purchase Agreement. 
  
 (c) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, provided, however, that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to
comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder. 
  
 (d) Notices. Any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement. 
  
 (e) Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder
to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of 

  

 13 

 
Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of
the Company. 
  
 (f) Remedies. Holder, in
addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 
  
 (g) Successors and Assigns. Subject to applicable
securities laws and Sections 1 and 7 of this Warrant, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares. 
  
 (h) Amendment. This Warrant may be modified or
amended or the provisions hereof waived with the written consent of the Company and the Holder. 
  
 (i) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant. 
  
 (j) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. 
  

 14 

 IN WITNESS WHEREOF, the Company has caused this Amended and Restated Warrant to be executed by its officer thereunto duly
authorized. 
  
 Dated: September 15, 2004 
  

					
	 STAR SCIENTIFIC, INC.

		
	By:	 	 /s/ Paul L. Perito

	 	 	 Name:
	 	 Paul L. Perito

	 	 	 Title:
	 	 Chairman, President & C.O.O

  

 15 

 NOTICE OF EXERCISE 
  
 To: Star Scientific, Inc. 
  
 (1) The undersigned hereby elects to purchase                 
Warrant Shares of Star Scientific, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes and legal opinions, if any. 
  
 (2) Payment shall take the form of (check applicable box): 
  
  ̈ in lawful money of the United States; or 
  
  ̈ the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 3(d), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 3(d). 
  
 (3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such
other name as is specified below: 
  
 ___________________________________________ 
  
 ___________________________________________ 
  
 ___________________________________________ 
  
 ___________________________________________ 
  
 The Warrant Shares shall
be delivered to the following: 
  
 ___________________________________________ 
  
 ___________________________________________ 
  
 ___________________________________________ 
  
 (4)
Accredited Investor/Qualified Institutional Buyer. The undersigned is either: (i) an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended. 
  

			
	 [PURCHASER]

		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

	 Dated:
	 	 

  

 ASSIGNMENT FORM 
  
 (To assign the foregoing warrant, execute 
 this form and supply required information. 
 Do not use this form to exercise the warrant.) 
  
 FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to 
  
 ________________________________________________________________________whose address is 
  
 ______________________________________________________________________________________________. 
  
 _____________________________________________________________________________________ 
  
 Dated: ______________, _____ 
  
 Holder’s Signature: ____________________________ 
  
 Holder’s
Address:   ____________________________ 
  
                                    
 ____________________________ 
  
                                    
 ____________________________ 
  
 Signature Guaranteed:
__________________________________________________________________________ 
  
 NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.Third Amended and Restated Master Repurchase Agreement

 Exhibit 10.1 
  
 EXECUTION COPY 
  

  
 THIRD AMENDED AND RESTATED MASTER
REPURCHASE AGREEMENT 
  
 Among 
  
 CDC MORTGAGE CAPITAL INC., as Buyer 
  
 NEW CENTURY MORTGAGE CORPORATION, as Seller 
  
 NC RESIDUAL II CORPORATION, as Seller 
  
 and 
  
 NC CAPITAL CORPORATION, as Seller 
  
 Dated as of September 10, 2004 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

			
	 1.
	  	APPLICABILITY	  	1
			
	 2.
	  	DEFINITIONS	  	1
			
	 3.
	  	INITIATION; TERMINATION	  	18
			
	 4.
	  	MARGIN AMOUNT MAINTENANCE	  	25
			
	 5.
	  	INCOME PAYMENTS	  	26
			
	 6.
	  	REQUIREMENTS OF LAW	  	27
			
	 7.
	  	SECURITY INTEREST	  	28
			
	 8.
	  	PAYMENT, TRANSFER AND CUSTODY	  	30
			
	 9.
	  	HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS	  	31
			
	 10.
	  	SELLER’S REPRESENTATIONS	  	31
			
	 11.
	  	COVENANTS OF SELLER	  	37
			
	 12.
	  	EVENTS OF DEFAULT	  	43
			
	 13.
	  	REMEDIES	  	47
			
	 14.
	  	INDEMNIFICATION AND EXPENSES	  	49
			
	 15.
	  	RECORDING OF COMMUNICATIONS	  	50
			
	 16.
	  	SINGLE AGREEMENT	  	50
			
	 17.
	  	NOTICES AND OTHER COMMUNICATIONS	  	51
			
	 18.
	  	ENTIRE AGREEMENT; SEVERABILITY; MODIFICATIONS	  	51
			
	 19.
	  	NON-ASSIGNABILITY	  	51
			
	 20.
	  	TERMINABILITY	  	52
			
	 21.
	  	GOVERNING LAW	  	52
			
	 22.
	  	SUBMISSION TO JURISDICTION; WAIVERS	  	52
			
	 23.
	  	NO WAIVERS, ETC.	  	53
			
	 24.
	  	SERVICING	  	53
			
	 25.
	  	INTENT	  	55
			
	 26.
	  	BUYER’S REPRESENTATIONS	  	55
			
	 27.
	  	NETTING	  	56
			
	 28.
	  	PERIODIC DUE DILIGENCE REVIEW	  	57
			
	 29.
	  	BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT	  	57

  

 -i- 

					
			
	 30.
	  	MISCELLANEOUS	  	59
			
	 31.
	  	CONFIDENTIALITY	  	59
			
	 32.
	  	CONFLICTS	  	60
			
	 33.
	  	SET-OFF	  	60
			
	 34.
	  	OBLIGATIONS JOINT AND SEVERAL	  	61

  

 -ii- 

			
		
	 EXHIBITS
	  	 
		
	 SCHEDULE 1
	  	Representations and Warranties Re: Mortgage Loans
		
	 SCHEDULE 2
	  	Existing Financing Facilities
		
	 EXHIBIT I
	  	Transaction Request
		
	 EXHIBIT II
	  	Underwriting Guidelines
		
	 EXHIBIT III
	  	Form of Opinion Letter
		
	 EXHIBIT IV
	  	UCC Filing Jurisdictions
		
	 EXHIBIT V
	  	Form of Account Agreement
		
	 EXHIBIT VI
	  	Form of True Sale Certification
		
	 EXHIBIT VII-A
	  	Form of Seller’s Release Letter
		
	 EXHIBIT VII-B
	  	Form of Warehouse Lender’s Release Letter
		
	 EXHIBIT VIII
	  	Form of Servicer Notice
		
	 EXHIBIT IX
	  	Form of Request for Additional Transactions for Excess Margin
		
	 EXHIBIT X
	  	Form of Compliance Report
		
	 EXHIBIT XI
	  	Assignee Liability Jurisdictions

  

 -iii- 

 THIRD AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT 
  
 This is a THIRD AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as of
September 10, 2004, among NEW CENTURY MORTGAGE CORPORATION, a California corporation (“NCMC”), NC RESIDUAL II CORPORATION, a Delaware corporation (“NCRC”) and NC CAPITAL CORPORATION, a California corporation
(“NCCC”, and together with NCMC and NCRC, “Seller”) and CDC MORTGAGE CAPITAL INC., a New York corporation (“Buyer”). 
  
 WHEREAS, NCMC, NCCC and the Buyer are parties to that certain Second Amended and Restated Master Repurchase Agreement, dated
as of June 23, 2003 (the “Second Amended and Restated Repurchase Agreement”), among NCMC, NCCC and the Buyer; and 
  
 WHEREAS NCMC and NCCC have requested Buyer to agree to amend certain provisions of the Second Amended and Restated Repurchase Agreement as set forth in
this Third Amended and Restated Master Repurchase Agreement. The Buyer is willing to agree to such amendments, but only on the terms and subject to the conditions set forth in this Third Amended and Restated Master Repurchase Agreement. 

 
 NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Seller and the Buyer hereby agree as follows: 
  

	1.	APPLICABILITY 

  
 From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Buyer Mortgage Loans against the transfer of funds
by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans at a date certain not later than 364 days after the date of transfer, against the transfer of funds by Seller. Each such transaction shall be referred to
herein as a “Transaction” and shall be governed by this Agreement, unless otherwise agreed in writing. 
  

	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 Agreement in the
singular to have the same meanings when used in the plural and vice versa). Terms otherwise not defined herein shall have the meanings assigned thereto in the Custodial and Disbursement Agreement. 
  
 “Account Agreement” shall mean a letter agreement among
NCCC, NCMC, NCRC, Servicer, Buyer and the Bank substantially in the form of Exhibit V attached hereto. 
  
 “Act of Insolvency” shall mean, with respect to any Person, (i) the filing of a petition, commencing, or authorizing the commencement of
any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or suffering any such petition or proceeding to be commenced by another which is consented to,
not timely contested or results in entry of an order for 

 relief which is not discharged within thirty (30) days; (ii) the seeking or consenting to the appointment
of a receiver, trustee, custodian or similar official for such Person or any substantial part of the property of such Person; (iii) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having
the jurisdiction to do so; (iv) the making or offering by such Person of a composition with its creditors or a general assignment for the benefit of creditors; (v) the admission by such Person of its inability to pay its debts or discharge its
obligations as they become due or mature; or (vi) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to
assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the executive officers of such Person or the ultimate parent of such Person or to curtail its authority in the
conduct of the business of such Person. 
  
 “Additional
Purchased Assets” shall mean Mortgage Loans or cash provided by Seller to Buyer or its designee pursuant to Section 4. 
  
 “Affiliate” shall mean with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy
Code. 
  
 “Agreement” shall mean this Third
Amended and Restated Master Repurchase Agreement, as the same may be further amended, supplemented or otherwise modified in accordance with the terms hereof. 
  

“ALTA” shall mean the American Land Title Association. 
  
 “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 Schedule and Exception Report” shall have the meaning assigned thereto in the Deutsche Custodial and Disbursement Agreement. 
  

“Asset Value” shall mean as of any date of determination with respect to each Eligible Asset, the lesser of (a) the Purchase
Percentage multiplied by the Market Value of such Mortgage Loan as of such date of determination, and (b) the outstanding principal balance of such Eligible Asset as of such date of determination; provided, that, the following additional limitations
on Asset Value shall apply: 
  

	 	(1)	the aggregate Asset Value of Wet-Ink Mortgage Loans may not exceed the Wet-Ink Sub-Limit at any time; 

  

	 	(2)	the aggregate Asset Value of Second Lien Mortgage Loans may not exceed the Second Lien Sub-Limit at any time; 

  

	 	(3)	the aggregate Asset Value of Manufactured Home Mortgage Loans shall not exceed the Manufactured Home Sub-Limit at any time; 

  

 -2- 

	 	(4)	the aggregate Asset Value of a single Mortgage Loan shall not exceed the Mortgage Loan Sub-Limit; 

  

	 	(5)	the aggregate Asset Value of Jumbo Mortgage Loans may not exceed the Jumbo Sub-Limit at any time; 

  

	 	(6)	the aggregate Asset Value of Jumbo(500) Mortgage Loans may not exceed the Jumbo(500) Sub-Limit at any time; 

  

	 	(7)	the aggregate Asset Value of Jumbo(750) Mortgage Loans may not exceed the Jumbo(750) Sub-Limit at any time; 

  

	 	(8)	the aggregate Asset Values of C Credit Mortgage Loans and C Minus Credit Mortgage Loans may not exceed the C/C- Credit Sub-Limit at any time; 

  

	 	(9)	the aggregate Asset Value of Non-owner Occupied Mortgage Loans may not exceed the Non-Owner Occupied Sub-Limit; 

  

	 	(10)	the aggregate Asset Value of Condominium Mortgage Loans and PUD Mortgage Loans may not exceed the Condominium and PUD Sub-Limit at any time; 

  

	 	(11)	the aggregate Asset Value of all FICO Loans owned hereunder by Buyer as of such date of determination may not exceed the FICO Sub-Limit; 

  

	 	(12)	the aggregate Asset Value of all Interest-Only Loans owned hereunder by Buyer as of such date of determination may not exceed the Interest-Only Sub-Limit; and

  

	 	(13)	the Asset Value shall be deemed to be zero with respect to each Mortgage Loan (i) in respect of which there is a breach of a representation and warranty set forth in Schedule
1 (assuming each representation and warranty is made as of the date Asset Value is determined), (ii) in respect of which there is a delinquency in the payment of principal and/or interest which continues for a period in excess of twenty nine
(29) calendar days (without regard to any applicable grace periods), (iii) which has not been repurchased by Seller by the earlier to occur of (A) the Termination Date and (B) the 180th day after the date on which it is first purchased by Buyer,
(iv) which has been released from the possession of Custodian under the Custodial and Disbursement Agreement to Seller for a period in excess of ten (10) calendar days, (v) which exceed the limitations on Asset Value set forth above or (vi) which is
a Wet-Ink Mortgage Loan, for which Custodian has failed to receive the related Mortgage Documents by the eighth (8th) Business Day following the applicable Origination Date of such Wet-Ink Mortgage Loan. 

  

 -3- 

 “Assignment of Mortgage” shall mean, with respect to any Mortgage, an assignment of the
Mortgage in blank, 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 assignment of the Mortgage to Buyer. 
  
 “Bank” shall mean Union Bank of California, N.A., a
national banking association, and its successors in interest, or such other depository institution as may be acceptable to Buyer in its sole discretion, and their respective successors in interest. 
  
 “Bankruptcy Code” shall mean the United States Bankruptcy
Code of 1978, as amended from time to time. 
  
 “Business
Day” shall mean any day other than (i) a Saturday or Sunday or (ii) a day on which banks in the State of New York (or state in which any of Custodian, Disbursement Agent, Seller or Buyer is located) is authorized or obligated by law or
executive order to be closed. 
  
 “Buyer” shall
mean CDC Mortgage Capital Inc., a New York corporation, and its successors in interest and assigns. 
  
 “C Credit Mortgage Loan” shall mean each Mortgage Loan originated in accordance with the Underwriting Guidelines criteria for
“C” credit mortgage loans. 
  
 “C/C- Credit
Sub-Limit” shall mean an amount equal to the product of 9% and the Maximum Amount. 
  
 “C Minus Credit Mortgage Loans” shall mean each Mortgage Loan originated in accordance with the Underwriting Guidelines criteria for “C-” credit mortgage loans. 
  
 “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 Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. 
  
 “Cash” shall mean all cash and Cash Equivalents, as shown on the balance sheet of Seller prepared 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 any commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations 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 Standard and 
  

 -4- 

 Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“S&P”)
or P-1 or the equivalent thereof by Moody’s Investors Service, Inc. (“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 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
of Control” shall mean the occurrence, after the Effective Date, of any of the following circumstances: (a) Guarantor not owning, directly or indirectly, all of the issued and outstanding capital stock of NCMC; or (b) any Person, or two or
more Persons acting in concert, other than the Management Shareholders, acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of Guarantor (or other securities convertible into such securities) representing 35% or more of the combined voting power of all securities of Guarantor entitled to vote in the election of directors; or (c) any Person, or
two or more Persons acting in concert, other than the Management Shareholders, acquiring by contract or otherwise, or entering into a contract or arrangement which upon consummation will result in its or their acquisition of and, control over
securities of Guarantor (or other securities convertible into such securities) representing 35% or more of the combined voting power of all securities of Guarantor entitled to vote in the election of directors. 
  
 “Class” shall mean with respect to a Purchased Asset, the
designation of such Purchased Asset as one or more of the following: (i) a Mortgage Loan, (ii) a Wet-Ink Mortgage Loan, (iii) a Second Lien Mortgage Loan, (iv) a Jumbo Mortgage Loan, (v) a Jumbo(500) Mortgage Loan, (vi) a Jumbo(750) Mortgage Loan,
(vii) a C Credit Mortgage Loan, (viii) a C Minus Credit Mortgage Loan, (ix) a Non-owner Occupied Mortgage Loan, (x) a Manufactured Home Mortgage Loan, (xi) a Condominium Mortgage Loan, (xii) a PUD Mortgage Loan, (xiii) a FICO Loan and/or (ix) an
Interest-Only Loan. 
  
 “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time. 
  
 “Collection Account” shall mean the account established by the Bank subject to an Account Agreement, into which all Income shall be deposited. 
  
 “Combined Loan-to-Value Ratio or CLTV” shall mean with respect to any Second Lien Mortgage Loan, the sum of
the original principal balance of such Mortgage Loan and the outstanding principal balance of any related first lien as of the date of origination of the Mortgage Loan, divided by the lesser of the Appraised Value of the Mortgage Property as of the
Origination Date or the purchase price of the Mortgaged Property if the related Mortgaged Property was purchased within twelve (12) months prior to the Origination Date. 
  

 -5- 

 “Commonly Controlled Entity” shall mean an entity, whether or not incorporated, which is
under common control with Seller within the meaning of Section 4001 of ERISA or is part of a group which includes Seller and which is treated as a single employer under Section 414 of the Code. 
  
 “Condominium Mortgage Loan” shall mean an Eligible Asset
secured by a Residential Dwelling which is a unit in a condominium project. 
  
 “Condominium and PUD Sub-Limit” shall mean an amount equal to the product of 6% and the Maximum Amount. 
  
 “Confirmation” shall have the meaning specified in Section 3(c). 
  
 “Custodial and Disbursement Agreement” shall mean that certain Custodial and Disbursement Agreement, dated
as of May 10, 2002, as amended by that certain amendment and joinder to Custodial and Disbursement Agreement, dated as of September 10, 2004, each by and among Buyer, NCCC, NCRC, NCMC, Disbursement Agent and Custodian, as the same shall be modified
and supplemented and in effect from time to time.  
  
 “Custodial Identification Certificate” shall have the meaning assigned thereto in the Custodial and Disbursement Agreement. 
  
 “Custodian” shall mean Deutsche Bank National Trust Company, a national banking association, and its successors in interest, as custodian
under the Custodial and Disbursement Agreement, and any successor Custodian under the Custodial and Disbursement 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.

  
 “Disbursement Agent” shall mean Deutsche
Bank National Trust Company, a national banking association, and its successors in interest, as disbursement agent under the Custodial and Disbursement Agreement, and any successor Disbursement Agent under the Custodial and Disbursement Agreement.

  
 “Dollars” and “$” shall
mean lawful money of the United States of America. 
  
 “Due Diligence Review” shall mean the performance by Buyer of any or all of the reviews permitted under Section 27 with respect to any or all of the Mortgage Loans, as desired by Buyer from time to time. 
  
 “Effective Date” shall mean the date upon which the
conditions precedent set forth in Section 3(a) shall have been satisfied. 
  

 -6- 

 “Electronic Transmission” shall mean the delivery of information in an electronic format
acceptable to the applicable recipient thereof. An Electronic Transmission shall be considered written notice for all purposes hereof (except when a request or notice by its terms requires execution). Any document that requires signature that is
delivered by Electronic Transmission via email that includes the sender’s name shall satisfy such signature requirement. 
  
 “Eligible Asset” shall mean a Mortgage Loan, including a Wet-Ink Mortgage Loan, (i) as to which the representations and warranties in
Schedule 1 attached hereto are true and correct, (ii) which is underwritten strictly in accordance with the Underwriting Guidelines of Seller, and (iii) which is secured by a Residential Dwelling. 
  
 “ERISA” shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time. 
  
 “ERISA
Affiliate” shall mean any corporation or trade or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which Seller is a member and (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 Seller is a member. 
  
 “Eurodollar Rate” shall mean, with respect to each day a
Transaction is outstanding, the rate per annum equal to the rate appearing at page 5 of the Telerate Screen as one-month LIBOR at or about 9:00 a.m., New York time, on such date (and if such date is not a Business Day, the Eurodollar Rate in effect
on the Business Day immediately preceding such date), and if such rate shall not be so quoted, the average rate per annum at which three mutually acceptable banks are offered Dollar deposits at or about 9:00 a.m., New York City time, on such date 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 thirty (30) days and in an amount
comparable to the amount of the Transactions to be outstanding on such day. The Eurodollar Rate shall be reset by Buyer as described above and Buyer’s determination of Eurodollar Rate shall be conclusive upon the parties absent manifest error
on the part of Buyer 
  
 “Event of Default” has
the meaning specified in Section 12. 
  
 “Excess
Margin” has the meaning specified in Section 3(o). 
  
 “Existing Financing Facilities” has the meaning specified in Section 10(t). 
  
 “Fannie Mae” shall mean the Federal National Mortgage Association, and its successors in interest. 
  
 “FICO Loan” shall mean a Mortgage Loan with a FICO score
less than 550 and greater than or equal to 500. 
  

 -7- 

 “FICO Sub-Limit” shall mean an amount not to exceed $105,000,000; provided Buyer shall
have the right, upon written notice to Seller, from time to time, to reduce the FICO Sub-Limit to an amount not less than 15% of the then outstanding Purchase Price of the Transactions. 
  
 “Foreclosed Loan” shall mean a loan the property securing which has been foreclosed upon by Seller.

  
 “Freddie Mac” shall mean the Federal Home
Loan Mortgage Corporation, and its successors in interest. 
  
 “GAAP” shall mean generally accepted accounting principles as in effect from time to time in the United States. 
  
 “Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over NCCC, NCRC, NCMC, Guarantor, any of their respective Subsidiaries or any of their
properties. 
  
 “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 another Person, to purchase assets, goods, securities or services, or to agree to take-or-pay arrangement or otherwise); provided that the term
“Guarantee” shall not include (i) endorsements for collection or deposit in the ordinary course of business, or (ii) obligations to make servicing advances for delinquent taxes and insurance, or other obligations in respect of a Mortgaged
Property, or other principal and interest advances made in the ordinary course of servicing the Mortgage Loans. 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. 
  
 “Guarantor” shall mean New Century Financial Corporation, a California corporation, and its successors in interest. 
  
 “Guaranty” shall mean the Guaranty, dated as of July 19, 2001, made by Guarantor in favor of Buyer.

  
 “Income” shall mean, with respect to any
Mortgage Loan at any time, all collections and proceeds on or in respect of the Mortgage Loans, including, without limitation, any principal thereof then payable and all interest or other distributions payable thereon less any related servicing
fee(s) charged by Servicer. 
  

 -8- 

 “Indebtedness” shall mean, for 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 after 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
account of such Person; (e) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (f) Indebtedness of others Guaranteed by such Person; (g) all obligations of such Person incurred in connection with
the acquisition or carrying of fixed assets by such Person; and (h) Indebtedness of general partnerships of which such Person is a general partner; and (i) Capital Lease Obligations of such Person; provided, however, that for any period, the
aggregate Indebtedness of the Guarantor during such period maintained in accordance with GAAP shall be calculated less the aggregate amount of any such Indebtedness that is reflected on the balance sheet of the Guarantor in respect of obligations
incurred pursuant to a securitization transaction, solely to the extent such obligations are secured by the assets securitized thereby and are non-recourse to the Guarantor. In the event that any Indebtedness would be excluded from the calculation
of Indebtedness but for the existence of recourse, the Guarantor shall be entitled nonetheless to exclude the amount of such Indebtedness that is not subject to recourse. The amount of any recourse shall be the stated or determinable amount thereof
or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the Guarantor in good faith. Any calculations of Indebtedness provided pursuant to this Agreement shall also separately set forth any
Indebtedness of Guarantor excluded from such calculation pursuant to the proviso in the definition thereof. 
  
 “Interest-Only Loan” shall mean any Mortgage Loan as to which scheduled payments only include interest for an initial period of not more
than 10 years, after which such Mortgage Loan will fully amortize to maturity. 
  
 “Interest-Only Sub-Limit” shall mean $140,000,000. 
  
 “Interest Rate Protection Agreement” shall mean, with respect to any or all of the Mortgage Loans, any short sale of US Treasury
securities, or futures contract, or options related contract, or interest rate swap, cap or collar agreement or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies and acceptable to Buyer. 
  
 “Investment” shall mean with respect to any Person, any direct or indirect purchase or other acquisition by that Person of a beneficial interest in stock or other securities of any 
  

 -9- 

 other Person, or any direct or indirect loan, advance (other than advances to employees for moving and
travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by that Person to any other Person, including all Indebtedness and accounts receivable from that other Person which are not
current assets or did not arise from sales to that other Person in the ordinary course of business. 
  
 “Jumbo Mortgage Loans” shall mean each Mortgage Loan with a principal balance as of origination of more than $333,700, or such other
amount as may be designated from time to time by Fannie Mae. 
  
 “Jumbo Sub-Limit” shall mean an amount equal to the product of 29% and the Maximum Amount. 
  
 “Jumbo(500) Mortgage Loans” shall mean each Mortgage Loan with a principal balance as of origination of more than $500,000 and less than
or equal to $750,000. 
  
 “Jumbo(500) Sub-Limit”
shall mean an amount equal to the product of 20% and the Maximum Amount. 
  
 “Jumbo(750) Mortgage Loans” shall mean each Mortgage Loan with a principal balance as of origination of more than $750,000. 
  
 “Jumbo(750) Sub-Limit” shall mean an amount equal to the product of 12% and the Maximum Amount. 

 
 “Late Payment Fee” has the meaning specified in Section
5(b). 
  
 “Letter Agreement” shall mean the
Letter Agreement, dated as of the date hereof, by and among Buyer, NCCC, NCRC, NCMC and Guarantor.  
  
 “Leverage Ratio” shall mean on any date of determination, the ratio of (a) Total Liabilities to (b) Tangible Net Worth. 
  
 “Lien” shall mean any mortgage, lien, pledge, charge,
security interest or similar encumbrance. 
  
 “Loan-to-Value Ratio” or “LTV” means with respect to any Mortgage Loan, the ratio of the original outstanding principal amount of such Mortgage Loan at the time of origination to the lesser of (a) the
Appraised Value of the related Mortgaged Property at origination of such Mortgage Loan and (b) if the related Mortgaged Property was purchased within twelve (12) months of the origination of such Mortgage Loan, the purchase price of the related
Mortgaged Property. 
  
 “Management
Shareholders” shall mean Robert K. Cole, Brad A. Morrice, and Edward F. Gotschall. 
  

 -10- 

 “Manufactured Home Mortgage Loan” shall mean an Eligible Asset secured by a Residential
Dwelling which is a manufactured home. 
  
 “Manufactured
Home Sub-Limit” shall mean the product of 4% and the Maximum Amount. 
  
 “Margin Base” shall mean the aggregate Asset Value of all Purchased Assets which are Eligible Assets. 
  
 “Margin Deficit” has the meaning specified in Section 4. 
  
 “Market Value” shall mean, as of any date in respect of any Mortgage Loan, the price at which such Mortgage
Loan could readily be sold as determined in Buyer’s sole discretion using its reasonable business judgment, which price may be determined to be zero. Buyer’s determination of Market Value shall be conclusive upon the parties absent
manifest error on the part of Buyer. 
  
 “Material
Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations, financial condition or prospects of NCCC, NCRC, NCMC or Guarantor, (b) the ability of NCCC, NCRC or NCMC 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 Buyer under any of the Repurchase Documents, (e) the timely payment of any amounts payable under
the Repurchase Documents, (f) the Asset Value of the Purchased Assets or (g) the ability of Guarantor to perform its obligations under the Guaranty. 
  
 “Maximum Amount” shall mean $700,000,000. 
  
 “Minimum Pricing Amount” means $4,950,000 less (a) the facility fee received pursuant to Section 3(p) of the Second Amended and Restated
Repurchase Agreement and (b) amounts received by Buyer since September 10, 2004 in respect of the aggregate amount obtained by daily application of the Pricing Spread for each outstanding 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. 
  
 “Mortgage” shall mean the mortgage, deed of trust or other
instrument securing a Mortgage Note, which creates a first lien or second lien on a fee simple Residential Dwelling securing the Mortgage Note. 
  
 “Mortgage File” shall have the meaning assigned thereto in the Custodial and Disbursement Agreement. 
  
 “Mortgage Loan” shall mean a mortgage loan originated in
accordance with the Underwriting Guidelines which Custodian has been instructed to hold for Buyer pursuant to the Custodial and Disbursement Agreement including any Wet-Ink Mortgage Loan listed on a Transaction Request, and which Mortgage Loan
includes, without limitation, (i) a Mortgage Note and related Mortgage, and (ii) all right, title and interest of Seller in and to the Mortgaged Property covered by such Mortgage. 
  

 -11- 

 “Mortgage Loan Sub-Limit” shall mean $1,000,000. 
  
 “Mortgage Note” shall mean the original executed promissory
note or other evidence of the indebtedness of a Mortgagor with respect to a Mortgage Loan. 
  
 “Mortgage-backed Security” shall mean a security (including, without limitation, a participation certificate) that is an interest in a pool of Mortgage Loans or is secured by such an interest.

  
 “Mortgaged Property” shall mean a fee simple
interest in the real property (including all improvements, buildings, fixtures, building equipment and personal property thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral
securing repayment of the debt evidenced by a Mortgage Note. 
  
 “Mortgagee” shall mean the record holder of a Mortgage Note secured by a Mortgage. 
  
 “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 a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been or are required to be made by Seller or any ERISA Affiliate and that is covered by Title IV of ERISA. 
  
 “NCCC” shall mean NC Capital Corporation, a California
corporation, and its successors in interest. 
  
 “NCMC” shall mean New Century Mortgage Corporation, a California corporation, and its successors in interest. 
  
 “NCRC” shall mean NC Residual II Corporation, a Delaware corporation, and its successors in interest. 
  
 “Net Income” shall mean, with respect to any Person for any
period, the net income of such Person for such period as determined in accordance with GAAP. 
  
 “Net Worth” shall mean with respect to any Person, on any date of determination, the net worth of such Person as of such date, determined in accordance with GAAP. 
  
 “Non-owner Occupied Mortgage Loans” shall mean each
Mortgage Loan with respect to which the improvements on the Mortgaged Property are not occupied by the owner of such Mortgaged Property. 
  
 “Non-owner Occupied Sub-Limit” shall mean an amount equal to the product of 10% and the Maximum Amount. 
  

 -12- 

 “Origination Date” shall mean the date a Mortgage Loan is funded by any originator and
the proceeds are disbursed to a borrower under such Mortgage Loan. 
  
 “Payment Calculation Date” shall mean the tenth (10th) day of each month. 
  
 “Payment Date” shall mean two (2) Business Days after the
Payment Calculation Date. 
  
 “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” has the meaning specified in Section 5(b). 
  
 “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 an employee benefit or other plan
established or maintained by any Seller or any ERISA Affiliate and covered by Title IV of ERISA, other than a Multiemployer Plan. 
  
 “Post-Default Rate” shall mean, in respect of any day a Transaction is outstanding or any other amount under this Agreement or any other
Repurchase Document that is not paid when due to Buyer at the stated Repurchase Date or otherwise when due (a “Post-Default Day”), a rate per annum on a 360 day per year basis during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to 4% per annum plus the Prime Rate on such Post-Default Day. 
  
 “Price Differential” means, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application
of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but
excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction). 
  
 “Pricing Rate” shall mean a rate per annum equal to the sum of (a) the Eurodollar Rate plus (b) the Pricing Spread. 
  
 “Pricing Spread” has the meaning specified in the Letter
Agreement. 
  
 “Prime Rate” shall mean the prime
rate announced to be in effect from time to time, as published as the average rate in The Wall Street Journal. 
  
 “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. 
  
 “PUD Mortgage Loan”
shall mean an Eligible Asset secured by a Residential Dwelling which is an attached single family dwelling in a planned unit development. 
  

 -13- 

 “Purchase Agreement” shall mean any purchase agreement by and between NCCC, NCRC or NCMC
and any third party, including without limitation, any Affiliate of NCCC, NCRC or NCMC, pursuant to which NCCC, NCRC or NCMC has purchased assets subsequently sold to Buyer hereunder. 
  
 “Purchase Date” shall mean the date on which Purchased Assets are transferred by Seller to Buyer or its
designee (including Custodian). 
  
 “Purchase
Percentage” has the meaning specified in the Letter Agreement. 
  
 “Purchase Price” shall mean on each Purchase Date, the price at which Purchased Assets are transferred by Seller to Buyer or its designee (including Custodian) which shall equal the Asset Value for
such Purchased Assets on the Purchase Date. 
  
 “Purchased Assets” shall mean the Mortgage Loans sold by Seller to Buyer in a Transaction, and any Additional Purchased Assets. 
  
 “Purchased Items” has the meaning specified in Section 7. 
  
 “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. 
  
 “REIT” shall mean a real estate investment trust, as defined in Section 856(a) of the Code. 
  
 “REO Property” shall mean real property acquired by Seller,
including a Mortgaged Property acquired through foreclosure of a Mortgage Loan or by deed in lieu of such foreclosure. 
  
 “REO Sub” shall mean New Century REO Corp., a California corporation. 
  
 “Reportable Event” shall mean any of the events set forth in Section 4043(b) of ERISA or a successor
provision thereof, other than those events as to which the thirty day notice period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. § 2615 or one or more successor provision thereof. 
  
 “Repurchase Date” shall mean the date on which Seller is to
repurchase the Purchased Assets from Buyer as specified in the related Confirmation, including any date determined by application of the provisions of Sections 3 or 13; which date shall be specified as “open” unless otherwise requested by
Seller and agreed by Buyer; provided that in no event shall the Repurchase Date be in excess of 364 days after the Purchase Date. If the Transaction is “open”, the Repurchase Date shall be one (1) Business Day after the date upon which
either Buyer (in its sole discretion) or the Seller (in its sole discretion) provides to the other written notice of its intention to sell or repurchase, as applicable, the applicable Mortgage Loans; provided that the Repurchase Date shall not, in
any event, exceed 364 days from the date hereof. 
  

 -14- 

 “Repurchase Documents” shall mean this Agreement, the Custodial Agreement, the Custodial
and Disbursement Agreement, the Guaranty, the Account Agreement and all other documents or agreements executed in connection therewith. 
  
 “Repurchase Obligations” shall have the meaning specified in Section 7(b). 
  
 “Repurchase Price” means the price at which Purchased Assets are to be transferred from Buyer or its
designee (including Custodian) to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such
determination, including any amounts paid pursuant to Requests for Additional Transactions for Excess Margin under Section 3(o), decreased by all cash, Income and Periodic Advance Repurchase Payments (including Late Payment Fees, if any) actually
received by Buyer pursuant to Sections 5(a) or 5(b), respectively. 
  
 “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 or regulation 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. 
  
 “Residential Dwelling” shall mean any one of the following:
(i) a detached single family dwelling, (ii) a two-to-four family dwelling, (iii) a unit in a condominium project, (iv) a detached single family dwelling in a planned unit development or (v) manufactured housing units. Mortgaged Properties that
consist of the following property types are not Residential Dwellings: (a) co-operative units, (b) log homes, (c) earthen homes, (d) underground homes, and (e) any dwelling situated on more than ten acres of property. 
  
 “Responsible Officer” shall mean, as to any Person, the
chief executive officer, the president, the chief financial officer, the treasurer, the chief operating officer or an executive vice-president of such Person. 
  

“SEC” shall mean the Securities and Exchange Commission. 
  
 “Second Lien Mortgage Loans” shall mean an Eligible Asset secured by a lien on the Mortgaged Property,
subject to one prior lien on such Mortgaged Property. 
  
 “Second Lien Sub-Limit” shall mean an amount equal to the product of 15% and the Maximum Amount. 
  
 “Security Agreement” shall mean with respect to any Mortgage Loan, any contract, instrument or other document related to security for
repayment thereof (other than the related Mortgage and Mortgage Note), executed by the Mortgagor and/or others in connection with such Mortgage Loan, including without limitation, any security agreement, guaranty, title insurance policy, hazard
insurance policy, chattel mortgage, letter of credit or certificate of deposit or other pledged accounts, and any other documents and records relating to any of the foregoing. 
  

 -15- 

 “Seller” shall mean NCCC, NCRC and NCMC. 
  
 “Seller Asset Schedule” shall have the meaning assigned
thereto in the Custodial and Disbursement Agreement. 
  
 “Seller-Related Obligations” shall mean any obligations, representations, warranties and covenants of NCCC, NCRC or NCMC hereunder and under any other arrangement between NCCC, NCRC, NCMC or a Subsidiary of NCCC, NCRC or
NCMC on the one hand and Buyer or an Affiliate of Buyer on the other hand. 
  
 “Servicer” shall have the meaning specified in Section 24. 
  
 “Servicer Account” shall mean any account established by Servicer in connection with the servicing of the Mortgage Loans. 
  
 “Servicing Agreement” has the meaning specified in Section
24. 
  
 “Servicing Contract” shall mean a
contract or agreement purchased by NCCC, NCRC or NCMC or entered into by NCCC, NCRC or NCMC for its own account (and not as nominee or subservicer), whether now existing or hereafter purchased or entered into, pursuant to which NCCC, NCRC or NCMC
services Mortgage Loans or Mortgage Loan pools for Persons other than itself or the other Seller. 
  
 “Servicing File” means with respect to each Mortgage Loan, the file retained by Seller consisting of originals of all documents in the
Mortgage File which are not delivered to a Custodian and copies of all documents in the Mortgage File set forth in Section 2 of the Custodial and Disbursement Agreement. 
  
 “Servicing Records” has the meaning specified in Section 24. 
  
 “Settlement Agent” shall mean, with respect to any
Transaction, the entity, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Wet-Ink Mortgage Loan is being originated, which funds such Mortgage Loan with amounts
wired pursuant to the terms of an Existing Financing Facility. 
  
 “Sub-Limit” shall mean any of the Web-Ink Sub-Limit, the Second Lien Sub-Limit, the Manufactured Home Sub-Limit, the FICO Sub-Limit, the Condominium and PUD Sub-Limit, the Mortgage Loan Sub-Limit, the Jumbo Sub-Limit, the
Jumbo(500) Sub-Limit, the Jumbo(750) Sub-Limit at any time, the C/C- Credit Sub-Limit, the Non-owner Occupied Sub-Limit and the Interest-Only Sub-Limit. 
  
 “Subordinated Debt” shall mean any Indebtedness of NCCC, NCRC or NCMC, now existing or hereafter created, incurred or arising, which is
subordinated in right of payment to the payment of all obligations hereunder in a manner and to an extent that Buyer has approved in writing prior to the creation of such Indebtedness. 
  

 -16- 

 “Subsidiary” shall mean, with respect to any Person, any corporation, partnership,
limited liability company 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, limited liability company 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. 
  
 “Tangible Net Worth” shall
mean, with respect to any Person, as of a particular date, 
  
 (a) all amounts which would be included under capital on a balance sheet of such Person at such date, determined in accordance with GAAP, less 
  
 (b) (i) amounts owing to such Person from Affiliates, or from officers, employees, partners, members, directors, shareholders or other Persons similarly
affiliated with such Person or the Guarantor or its Subsidiaries, (ii) intangible assets, and (iii) the value of REO Property and Foreclosed Loans. 
  
 “Term Purchased Asset” shall mean any Purchased Asset for which Buyer and Seller shall have agreed that the Repurchase Date is not
“open”. 
  
 “Termination Date” shall
mean the date which is 364 days from the date hereof which shall be September 9, 2005 or such earlier date on which this Agreement shall terminate in accordance with the provisions hereof or by operation of law, as may be extended pursuant to
Section 3(m). 
  
 “Test Period” has the meaning
specified in Section 11(s). 
  
 “Total
Liabilities” shall mean on any date of determination with respect to any Person, the amount, on a consolidated basis, of the liabilities of such Person and its respective Subsidiaries, determined in accordance with GAAP, minus Subordinated
Debt; provided, however, that for any period, the aggregate Total Liabilities of any Person during such period maintained in accordance with GAAP shall be calculated less the aggregate amount of any such Total Liabilities that are reflected on the
balance sheet of such Person in respect of obligations incurred pursuant to a securitization transaction, solely to the extent such obligations are secured by the assets securitized thereby and are non-recourse to such Person. In the event that any
liabilities would be excluded from the calculation of Total Liabilities but for the existence of recourse, such Person shall be entitled nonetheless to exclude the amount of such liabilities that are not subject to recourse. The amount of any
recourse shall be the stated or determinable amount thereof or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. Any calculations of Total Liabilities provided
pursuant to this Agreement shall also separately set forth any liabilities of such Person excluded from such calculation pursuant to the proviso in the definition thereof. 
  

 -17- 

 “Transaction” has the meaning specified in Section 1. 
  
 “Transaction Request” means a request from Seller to Buyer,
in the form attached as Exhibit I hereto, to enter into a Transaction, which may be delivered via Electronic Transmission. 
  
 “True Sale Certification” shall mean a true sale certification in the form of Exhibit VI attached hereto. 
  
 “Trust Receipt” shall mean a trust receipt issued by
Custodian to Buyer confirming Custodian’s possession of certain Mortgage Files which are held by Custodian for the benefit of Buyer or the registered holder of such trust receipt. 
  
 “Underwriting Guidelines” shall mean the underwriting guidelines delivered by Seller to Buyer on or prior
to the Effective Date and as may be modified or supplemented from time to time thereafter as approved by Buyer in its sole discretion attached hereto as Exhibit II. 
  
 “Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection and the priority of the security interest in any Purchased Items 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, effect of perfection or non-perfection and the priority. 
  
 “Wet-Ink Mortgage Loan” shall mean an Eligible Asset which is sold to Buyer within 8 Business Days of the origination thereof by Seller, which origination is in accordance with the Underwriting Guidelines and is funded in
part or in whole with cash advanced directly to an escrow agent, Settlement Agent, or Warehouse Lender approved by Buyer in its sole discretion. 
  
 “Wet-Ink Sub-Limit” shall mean an amount equal to (i) with respect to the first five (5) Business Days of each calendar month, the
product of 50% and the Maximum Amount, (ii) with respect to the last four (4) Business Days of each calendar month, the product of 50% and the Maximum Amount and (iii) at all other times, the product of 40% and the Maximum Amount. 
  

	3.	INITIATION; TERMINATION 

  

	 	(a)	Conditions Precedent to the Effective Date. The Effective Date hereof is subject to the satisfaction, immediately prior to or concurrently therewith, of the conditions
precedent that Buyer shall have received from Seller any fees and expenses payable hereunder (including, without limitation, the fee required pursuant to Section 3(p)), and all of the following documents, each of which shall be satisfactory in form
and substance to Buyer and its counsel: 

  

	 	(1)	Third Amended and Restated Master Repurchase Agreement. This Third Amended and Restated Master Repurchase Agreement duly completed and executed by the parties thereto. In
addition, Seller shall have taken such other action as Buyer shall have requested in order to perfect the security interests created pursuant to this Agreement; 

  

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	 	(2)	Opinions of Counsel. An opinion or opinions of outside counsel to each of NCCC, NCRC, NCMC and Guarantor, substantially in the form of Exhibit III;

  

	 	(3)	Organizational Documents. A good standing certificate and certified copies of the charter and by-laws (or equivalent documents) of each of NCCC, NCMC, NCRC and Guarantor and
of all corporate or other authority for NCCC, NCMC, NCRC or Guarantor, as applicable, with respect to the execution, delivery and performance of the Repurchase Documents to which it is a party and each other document to be delivered by NCCC, NCMC,
NCRC or Guarantor from time to time in connection herewith (and Buyer may conclusively rely on such certificate until it receives notice in writing from NCCC, NCMC, NCRC or Guarantor, as applicable, to the contrary); 

  

	 	(4)	Underwriting Guidelines. A copy of Seller’s current Underwriting Guidelines, and any material changes to the Underwriting Guidelines made since the Underwriting
Guidelines were last delivered to Buyer; 

  

	 	(5)	Servicing Agreement(s). Any Servicing Agreement, certified as a true, correct and complete copy of the original; 

  

	 	(6)	Consents and Waivers. Any and all irrevocable consents and waivers required under the Existing Financing Facilities; 

  

	 	(7)	UCC Amendments and Releases. Any and all amendments or terminations of UCC financing statements required by Buyer; and 

  

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

  

	 	(b)	Conditions Precedent to all Transactions. Buyer’s obligation to enter into each Transaction (including the initial Transaction) is subject to the satisfaction of the
following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect to the consummation thereof and the intended use of the proceeds of the sale: 

  

	 	(1)	Seller shall have delivered a Transaction Request via Electronic Transmission in accordance with the procedures set forth in Section 3(c); 

  

	 	(2)	no Default or Event of Default shall have occurred and be continuing under the Repurchase Documents; 

  

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	 	(3)	after giving effect to the requested Transaction, the aggregate outstanding Purchase Price of the Transactions outstanding shall not exceed the Maximum Amount;

  

	 	(4)	both immediately prior to the requested Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in
Section 10, 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); 

  

	 	(5)	after giving effect to the requested Transaction, the aggregate outstanding Purchase Price of the Transactions outstanding shall not exceed the Asset Value of all the Purchased
Assets subject to outstanding Transactions; 

  

	 	(6)	subject to Buyer’s right to perform one or more Due Diligence Reviews pursuant to Section 28, Buyer shall have completed its due diligence review of the Mortgage File for each
Purchased Asset, and such other documents, records, agreements, instruments, mortgaged properties or information relating to such Purchased Asset as Buyer in its sole discretion deems appropriate to review and such review shall be satisfactory to
Buyer in its sole discretion; 

  

	 	(7)	Buyer shall have received from Seller certified copies of any Servicing Agreement relating to the Eligible Assets and Buyer shall have reviewed and approved each such Servicing
Agreement in its sole discretion; 

  

	 	(8)	Buyer shall have received all fees and expenses of counsel to Buyer as contemplated by Section 14(b) which amount, at Buyer’s option, may be withheld from the sale proceeds of
any Transaction hereunder; 

  

	 	(9)	Buyer shall have approved, in its sole discretion, all exceptions to the Underwriting Guidelines; 

  

	 	(10)	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 Buyer resulting in the effective absence of a “repo
market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in Buyer not being able to finance Purchased Assets 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) an event or events shall have occurred resulting in the effective absence of a “securities
market” for securities backed by mortgage loans 
  

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 or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by
mortgage loans at prices which would have been reasonable prior to such event or events; or 
  
 (C) there shall have occurred a material adverse change in the financial condition of Buyer which affects (or can reasonably be expected
to affect) materially and adversely the ability of Buyer to fund its obligations under this Agreement; 
  

	 	(11)	with respect to each Eligible Asset, Buyer shall have received from Custodian on each Purchase Date an Asset Schedule and Exception Report or Trust Receipt and Basic Status Report,
as applicable, dated the Purchase Date, duly completed and with exceptions acceptable to Buyer in its sole discretion in respect of Eligible Assets to be purchased hereunder on such Business Day; 

  

	 	(12)	Buyer shall have received from Seller a Warehouse Lender’s Release Letter substantially in the form of Exhibit VII-B hereto (or such other form acceptable to Buyer) or a
Seller’s Release Letter substantially in the form of Exhibit VII-A hereto (or such other form acceptable to Buyer) covering each Eligible Asset to be sold to Buyer; 

  

	 	(13)	The aggregate requested Purchase Price of Eligible Assets that are not Wet-Ink Mortgage Loans that Seller has requested Buyer purchase pursuant to the Transaction Request is equal
to or in excess of $10,000,000; 

  

	 	(14)	Buyer shall not have determined that the introduction of, or a change in, any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to
Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions; and 

  

	 	(15)	The Repurchase Date for such Transaction shall not be later than the Termination Date. 

  
 Each Transaction Request delivered by Seller hereunder shall constitute a certification by each of NCCC, NCRC and NCMC that
all the conditions set forth in this Section 3(b) have been satisfied (both as of the date of such notice or request and as of the date of such purchase). 
  
 Each of NCCC, NCRC and NCMC hereby request that Buyer, on each Business Day, convert each Eligible Asset which is a Wet-Ink Mortgage Loan for which the
Mortgage File has been received by the Custodian in accordance with the Custodial Agreement to a dry Mortgage Loan and this request shall constitute a certification by each of NCCC, NCRC and NCMC that all the conditions set forth in this Section
3(b) have been satisfied (both as of the date hereof and as of the date of such conversion). 
  

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 (c) Seller shall request a Transaction by delivering to Custodian, Disbursement Agent and Buyer via
Electronic Transmission a request in the form of Exhibit I attached hereto (a “Transaction Request”) in accordance with the timeframe set forth in Section 3(a) of the Custodial and Disbursement Agreement. Such Transaction Request shall
describe the Purchased Assets in a Seller Asset Schedule and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, (iv) the Pricing Rate applicable to the Transaction, (v) the applicable Purchase Percentages and (vi)
additional terms or conditions not inconsistent with this Agreement. Each such Transaction Request in respect of Eligible Assets that are not Wet-Ink Mortgage Loans shall be for an aggregate Purchase Price equal to or in excess of $10,000,000.

  
 On each Purchase Date, Buyer shall forward to
Seller a confirmation (a “Confirmation”) by Electronic Transmission setting forth with respect to each Transaction funded on such date, (1) the mortgage loan number, (2) the Purchase Price for such Purchased Assets, (3) the Market
Value of the related Mortgage Loans as of the date of such Confirmation, (4) the outstanding principal amount of the related Mortgage Loans, (5) the Repurchase Date, (6) the Pricing Rate and (7) the Class designations of such Purchased Assets. Buyer
shall forward to Seller a revised Confirmation by Electronic Transmission notifying Seller as to any changes made by Buyer in the Pricing Spread, Purchase Percentage or Reduction Amount pursuant to the terms hereof. 
  
 On each date that all the documents set forth in Section
2(a)(i) of the Custodial and Disbursement Agreement are received by the Custodian with respect to any Wet-Ink Mortgage Loan, and Custodian delivers to Buyer a Trust Receipt attaching an Asset Schedule and Exception Report or Basic Status Report and
Exception Report, as applicable, with respect to such Eligible Assets, Buyer shall forward to Seller a new Confirmation by Electronic Transmission setting forth the following information, updated to reflect the revised Pricing Rate, and, if
applicable, Market Value as a result of the conversion of such Mortgage Loan, (1) the mortgage loan number, (2) the Purchase Price for such Purchased Assets, (3) the Market Value of the related Mortgage Loans, (4) the outstanding principal amount of
the related Mortgage Loans, (5) the Repurchase Date, (6) the Pricing Rate and (7) the Class designations of such Purchased Assets. 
  
 In the event Seller disagrees with any terms of the Confirmation, Seller shall notify Buyer in writing of such disagreement within one (1)
Business Day after receipt of such Confirmation unless a corrected Confirmation is sent by Buyer. An objection sent by Seller must state specifically that it is an objection, must specify the provision(s) being objected to by Seller, must set forth
such provision(s) in the manner that Seller believes they should be stated, and must be received by Buyer no more than one (1) Business Day after the Confirmation was received by Seller. 
  

	 	(d)	Any Confirmation by Buyer shall be deemed to have been received by Seller on the date actually received by Seller. 

  

	 	(e)	Except as set forth in Section 3(c), each Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect
to the Transaction to which the Confirmation 

  

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 relates, and Seller’s acceptance of the related proceeds shall constitute Seller’s agreement to
the terms of such Confirmation. It is the intention of the parties that each Confirmation shall not be separate from this Agreement but shall be made a part of this Agreement. 
  

	 	(f)	On the Repurchase Date, termination of a Transaction will be effected by transfer to Seller or its designee of the Purchased Assets (and any Income in respect thereof received by
Buyer not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Section 5) which amount shall be netted against the simultaneous receipt of the Repurchase Price by Buyer. To the extent a net amount is owed to
one party, the other party shall pay such amount to such party. Seller is obligated to obtain the Mortgage Files from Buyer or its designee (including Custodian) at Seller’s expense on the Repurchase Date. 

  

	 	(g)	Subject to the terms and conditions of this Agreement, during the term of this Agreement Seller may sell to Buyer, repurchase from Buyer and resell to Buyer Eligible Assets
hereunder. 

  

	 	(h)	In no event shall a Transaction be entered into when any Default or Event of Default has occurred and is continuing or when the Repurchase Date for such Transaction would be later
than the Termination Date. 

  

	 	(i)	With respect to each Eligible Asset that is not a Wet-Ink Mortgage Loan, Seller shall deliver to Custodian the Mortgage File pertaining to each Eligible Asset to be purchased by
Buyer no later than the time set forth in the Custodial and Disbursement Agreement. 

  

	 	(j)	With respect to each Eligible Asset that is not a Wet-Ink Mortgage Loan, pursuant to the Custodial and Disbursement Agreement, Custodian shall deliver to Buyer and Seller an Asset
Schedule and Exception Report with respect to the Eligible Assets which Seller has requested Buyer purchase on such Purchase Date, and no later than 5 p.m., New York City time, on each Purchase Date, Custodian shall deliver to Buyer a Trust Receipt
in respect of all such Eligible Assets purchased by Buyer on such Purchase Date. Subject to the provisions of this Section 3 and Section 11 of the Custodial and Disbursement Agreement, the Purchase Price for each Eligible Asset that is not a Wet-Ink
Mortgage Loan will be made available to Seller by Disbursement Agent transferring, the aggregate amount of such Purchase Price in accordance with the Custodial and Disbursement Agreement. 

  

	 	(k)	With respect to each Eligible Asset that is a Wet-Ink Mortgage Loan, Seller shall cause the Settlement Agent to send the Custodian a facsimile of the associated Escrow Instruction
Letter on each Purchase Date. Subject to the provisions of this Section 3 and Section 11 of the Custodial and Disbursement Agreement, the Purchase Price for each Eligible Asset which is a Wet-Ink Mortgage Loan will then be made available to Seller
by Disbursement Agent transferring the aggregate amount of such Purchase Price in accordance with the Custodial and Disbursement Agreement. Seller shall deliver the Mortgage File related thereto to Custodian, for receipt by Custodian no later than
seven (7) Business Days following the Origination Date of such Wet-Ink Mortgage Loan. 

  

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	 	(l)	Seller may repurchase any individual Purchased Asset without penalty or premium, but subject to the last sentence of this Section 3(l), on any date. The Repurchase Price payable for
the repurchase of any such Purchased Asset shall be reduced as provided in Section 5(d). If Seller intends to make such a repurchase, Seller shall give one (1) Business Day’s prior written notice thereof to Buyer, designating the Purchased
Assets 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 Assets.
The amount of the original Purchase Price of the Purchased Assets thus repurchased shall be available for subsequent Transactions subject to the terms of this Agreement. If any Term Purchased Asset is repurchased on any date other than the
Repurchase Date for such Term Purchased Asset, Seller shall pay to Buyer any amount determined by Buyer in its sole discretion, exercised in good faith, as necessary to compensate Buyer for any additional losses, costs or expenses which it may
reasonably incur as a result of such repurchase, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by Buyer to fund or maintain such Transaction.

  

	 	(m)	At the request of Seller made at least 90 days, but in no event earlier than 360 days, prior to the then current Termination Date, Buyer may in its sole discretion extend the
Termination Date for a period of 364 additional days or such other period to be determined by Buyer in its sole discretion by giving written notice of such extension to Seller no later than sixty (60) days after Buyer’s receipt of Seller’s
request. Any failure by Buyer to deliver such notice of extension shall be deemed to be Buyer’s determination not to extend the then current Termination Date. 

  

	 	(n)	On the Termination Date, including but not limited to a termination pursuant to Section 20 or otherwise hereunder, Seller shall pay to Buyer the Minimum Pricing Amount. All such
payments pursuant to this clause (o) shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at the account set forth in Section 8(a) hereof 

  

	 	(o)	On any day on which the Margin Base for such Mortgage Loans exceeds the aggregate outstanding Purchase Price of all Transactions with respect to such Mortgage Loans, so long as no
Default or Event of Default has occurred and is continuing: 

  

	 	(1)	Seller may prepare a Request for Additional Transactions for Excess Margin in the form of Exhibit IX attached hereto (“Request for Additional Transactions for Excess
Margin”), (A) specifying (i) the increase in Purchase Price for all outstanding Transactions and the requested Purchase Date, (ii) the Excess Margin with respect to all outstanding Transactions 

  

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 before giving effect to the requested Transaction, (iii) the remaining Excess Margin after giving effect
to the requested Transaction, and (iv) the aggregate outstanding Purchase Price of the Transactions after giving effect to the requested Transaction, and (B) including a certification that, upon the consummation of the additional Transactions, the
Margin Base will be equal to or greater than the aggregate outstanding Purchase Price of all Transactions, and the excess of the Margin Base over the aggregate outstanding Purchase Price, after giving effect to the Transaction, shall be the
“Excess Margin”. 
  

	 	(2)	Seller shall transmit via Electronic Transmission the Request for Additional Transactions for Excess Margin to Disbursement Agent and Buyer prior to 12:00 noon, New York City time,
on the requested Purchase Date. Upon confirming that the Request for Additional Transactions for Excess Margin correctly reflects the information set forth in Section 3(o)(1) and that, after giving effect to the requested Transaction, the amount of
the Margin Base would be equal to or greater than the aggregate outstanding Purchase Prices of all Transactions, Buyer shall cause Disbursement Agent to remit the additional Purchase Price in the amount set forth in such Request for Additional
Transactions for Excess Margin and send a revised Confirmation with respect to such Purchased Assets. In the event that Buyer’s assessment of the Margin Base would alter the information set forth in any Request for Additional Transactions for
Excess Margin, Buyer shall promptly notify Seller in writing of such assessment. 

  

	 	(3)	Buyer shall not be obligated to cause Disbursement Agent to remit the additional Purchase Price requested pursuant to a Request for Additional Transactions for Excess Margin which
(i) Buyer reasonably determines is based on erroneous information or would result in a Transaction other than in accordance with the terms of this Agreement, or (ii) does not reflect Buyer’s current determination of Market Value as provided in
the definition thereof. 

  

	 	(p)	Upon the execution of this Agreement, the Seller shall pay a facility fee to the Buyer equal to the product of (x) $700,000,000, and (y) 15 basis points (0.15%) less the remaining
pro rata portion of the facility fee previously paid by the Seller as described in Section 3(p) of the Second Amended and Restated Master Repurchase Agreement, dated as of June 23, 2003. 

  

	4.	MARGIN AMOUNT MAINTENANCE 

  

	 	(a)	If at any time the Margin Base is less than the aggregate Purchase Price for all outstanding Transactions (a “Margin Deficit”), then Buyer may by notice to Seller
(as such notice is more particularly set forth below, a “Margin Deficit Notice”) require Seller to transfer to Buyer or its designee (including Custodian) cash to be applied to reduce the Purchase Price with respect to all
outstanding Transactions 

  

 -25- 

 such that the aggregate Asset Value of the Purchased Assets will thereupon equal or exceed the aggregate
Purchase Price for all outstanding Transactions. If Buyer delivers a Margin Deficit Notice to Seller on or prior to 6 p.m. (New York time) on any Business Day, then Seller shall transfer such cash to Buyer no later than 5 p.m. (New York time) the
following Business Day. In the event Buyer delivers a Margin Deficit Notice to Seller after 6 p.m. (New York time) on any Business Day, then such Margin Deficit Notice shall be deemed to have been delivered on the following Business Day and Seller
shall be required to transfer cash no later than 5 p.m. (New York time) on the subsequent Business Day. All cash transferred to Buyer pursuant to this Section 4(a) shall be deposited in the account set forth in Section 8(a) hereof. 
  

	 	(b)	Buyer’s election, in its sole discretion, not to deliver a Margin Deficit Notice at any time there is a Margin Deficit shall not in any way limit or impair its right to deliver
a Margin Deficit Notice at any time a Margin Deficit exists. 

  

	5.	INCOME PAYMENTS 

  

	 	(a)	Where a particular Transaction’s term extends over an Income payment date on the Purchased Assets subject to that Transaction such Income shall be the property of Buyer. Buyer
agrees that until a Default or an Event of Default has occurred and Buyer otherwise directs as contemplated in each Servicer Notice, each Servicer that is not Seller shall be permitted to continue to remit Income in accordance with the respective
Servicing Agreement. In the event that Seller is the Servicer of any Mortgage Loans, Buyer agrees that until a Default or an Event of Default has occurred, Seller shall be permitted to continue to remit or retain Income with respect to such Mortgage
Loans in accordance with its current existing business practice. Upon notice of a Default or an Event of Default to Seller hereunder or to Servicer pursuant to a Servicer Notice, Seller shall, and pursuant to the Servicer Notice, Servicer shall be
required to, deposit promptly all 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 the Bank and which is subject to the Account
Agreement. All funds in the Collection Account may be withdrawn by Buyer and applied as determined by Buyer. Seller may not give any instruction with respect to the Collection Account after a Default or an Event of Default. 

 

	 	(b)	Notwithstanding that Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets, Seller shall pay to Buyer the accreted value of the Price
Differential (less any amount of such Price Differential previously paid by Seller to Buyer) of each Transaction through but not including the Payment Calculation Date (each such payment, a “Periodic Advance Repurchase Payment”) on
each Payment Date. Buyer shall deliver to Seller, via Electronic Transmission, notice of the required Periodic Advance Repurchase Payment on or prior to the second Business Day preceding each Payment Date. If Seller fails to make all or part of the
Periodic Advance Repurchase Payment by 5:00 p.m., New York City time, on the Payment Date, Seller shall be obligated to 

  

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 pay to Buyer (in addition to, and together with, the Periodic Advance Repurchase Payment) interest on the
unpaid amount of the Periodic Advance Repurchase Payment at a rate per annum equal to the Post-Default Rate (the “Late Payment Fee”) until the overdue Periodic Advance Repurchase Payment is received in full by Buyer. 
  

	 	(c)	Seller shall hold or cause to be held for the benefit of, and in trust for, Buyer all income, including without limitation all Income received by or on behalf of Seller with respect
to such Purchased Assets. 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 Seller, any affiliate of Seller or the applicable Servicer except as expressly
permitted above in this Section 5. Funds deposited in the Collection Account during any month shall be held therein, in trust for Buyer. 

  

	 	(d)	Buyer shall offset against the Repurchase Price of each such Transaction all Income and Periodic Advance Repurchase Payments actually received by Buyer for such Transaction pursuant
to Sections 5(a) and 5(b) as of the applicable Repurchase Date, respectively, excluding any Late Payment Fees paid pursuant to Section 5(b); it being understood that the Late Payment Fees are properties of Buyer that are not subject to offset
against the Repurchase Price. 

  

	6.	REQUIREMENTS OF LAW 

  

	 	(a)	If any Requirement of Law (other than with respect to any amendment made to 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 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:

  

	 	(1)	shall subject Buyer to any tax of any kind whatsoever with respect to this Agreement or any Transaction (excluding net income taxes) or change the basis of taxation of payments to
Buyer in respect thereof; 

  

	 	(2)	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 Buyer which is not otherwise included in the determination of the Eurodollar Rate hereunder; 

  

	 	(3)	shall impose on Buyer any other condition; 

  
 and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems 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, Seller shall promptly pay Buyer such additional amount or amounts as calculated by Buyer in good faith as will
compensate Buyer for such increased cost or reduced amount receivable. 
  

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	 	(b)	If 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 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 Buyer or any corporation controlling 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 Buyer’s or such corporation’s capital as a consequence of
its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital
adequacy) by an amount deemed by Buyer to be material, then from time to time, Seller shall promptly pay to Buyer such additional amount or amounts calculated by Buyer in good faith as will compensate Buyer for such reduction.

  

	 	(c)	Any payments made by Seller to Buyer shall be free and clear of, and without deduction or withholding for, any taxes; provided, however, that if Seller shall be required by law to
deduct or withhold any taxes from any sums payable to Buyer, then Seller shall (A) make such deductions or withholdings and pay such amounts to the relevant authority in accordance with applicable law, (B) pay to Buyer the sum that would have been
payable had such deduction or withholding not been made, and (C) at the time the Price Differential is paid, pay to Buyer all additional amounts as specified by Buyer in good faith to preserve the after-tax yield Buyer would have been received had
such tax not been imposed. 

  

	 	(d)	If Buyer becomes entitled to claim any additional amounts pursuant to this Section, (i) it shall promptly notify Seller of the event by reason of which it has become so entitled and
(ii) at the sole option of Buyer, (x) Buyer may terminate this Agreement and Seller shall not be required to pay any Termination Fee or (y) this Agreement shall continue in full force and effect, but, Seller shall not be required to pay any Non-Use
Fee with respect to each Test Period during which Buyer is entitled to such additional amounts solely under this Section. A certificate as to any additional amounts payable pursuant to this Section 6(d) submitted by Buyer to Seller shall be
conclusive in the absence of manifest error. 

  

	7.	SECURITY INTEREST 

  

	 	(a)	Each of the following items or types of property, whether now owned or hereafter acquired, now existing or hereafter created and wherever located, is hereinafter referred to as a
“Purchased Item” and all of them are collectively, the “Purchased Items”: all Mortgage Loans, all rights under each Purchase Agreement (but not the obligations thereunder), all Interest Rate Protection Agreements,
all Mortgage Files, including without limitation all promissory notes, all Servicing Records 

  

 -28- 

 relating to the Mortgage Loans (as defined in Section 24(c)), all Servicing Agreements relating to the
Mortgage Loans and any other collateral pledged hereunder or otherwise relating to such Mortgage Loans, together with all files, documents, instruments, surveys, certificates, correspondence, appraisals, computer programs, computer storage media,
accounting records and other books and records relating thereto, all mortgage guaranties and insurance (issued by governmental agencies or otherwise) and any mortgage insurance certificate or other document evidencing such mortgage guaranties or
insurance relating to any Mortgage Loan, all servicing fees to which such Seller is entitled and servicing and other rights relating to the Mortgage Loans, all Servicer Accounts established pursuant to any Servicing Agreement and all amounts on
deposit therein, from time to time, all Purchase Agreements or other agreements or contracts relating to, constituting, or otherwise governing, any or all of the foregoing to the extent they relate to the Purchased Assets including the right to
receive principal and interest payments with respect to the Purchased Assets and the right to enforce such payments, the Collection Account and all monies from time to time on deposit in the Collection Account, all “general intangibles”,
“accounts”, “chattel paper”, “deposit accounts” and “investment property” as defined in the Uniform Commercial Code as in effect from time to time relating to or constituting any and all of the foregoing, and
any and all replacements, substitutions, distributions on or proceeds of any and all of the foregoing. 
  

	 	(b)	Buyer and Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the Purchased Assets. However, in
order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as loans and as security for the performance by Seller of all of Seller’s obligations to Buyer
hereunder and the Transactions entered into hereunder (“Repurchase Obligations”) and the Seller-Related Obligations, each of NCCC, NCRC and NCMC hereby assigns, pledges and grants a security interest in all of its right, title and
interest in, to and under the Purchased Items and Purchased Assets to Buyer to secure the Repurchase Obligations and Seller-Related Obligations, including without limitation the repayment of all amounts owing to Buyer hereunder. The assignment,
pledge and grant of security interest contained herein shall be, and each of NCCC, NCRC and NCMC hereby represents and warrants to Buyer that it is, a first priority perfected security interest to the extent such security interest relates to the
Mortgage Loans. Each of NCCC, NCRC and NCMC agrees to mark its computer records and tapes to evidence the interests granted to Buyer hereunder. All Purchased Items shall secure the payment of all obligations of Seller now or hereafter existing under
this Agreement, including, without limitation, Seller’s obligation to repurchase Purchased Assets, or if such obligation is so recharacterized as a loan, to repay such loan, for the Repurchase Price and to pay any and all other amounts owing to
Buyer hereunder. 

  

	 	(c)	Pursuant to the Custodial and Disbursement Agreement, Custodian shall hold the Mortgage Files as exclusive bailee and agent for Buyer pursuant to the terms of the Custodial and
Disbursement Agreement and shall deliver to Buyer Trust 

  

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 Receipts each to the effect that Custodian has reviewed such Mortgage Files in the manner and to the
extent required by the Custodial and Disbursement Agreement and identifying any deficiencies in such Mortgage Files as so reviewed. 
  

	8.	PAYMENT, TRANSFER AND CUSTODY 

  

	 	(a)	Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to Buyer at the following account maintained by Buyer; Account No. GLA 111569, account name SER, Bank of New York, ABA No. 021000018, Attn: Eric Seyffer, not later than 3 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). Seller acknowledges that it has no rights of withdrawal from the foregoing account.

  

	 	(b)	On the Purchase Date for each Transaction, ownership of the Purchased Assets shall be transferred to Buyer or its designee (including Custodian) against the simultaneous transfer of
the Purchase Price to or on behalf of Seller not later than 6 p.m., New York City time, simultaneously with the delivery to Custodian of the Purchased Assets relating to each Transaction in accordance with the terms hereof and of the Custodial and
Disbursement Agreement. Each of NCCC, NCRC and NCMC hereby sells, transfers, conveys and assigns to Buyer or its designee (including Custodian) without recourse, but subject to the terms of this Agreement, all the right, title and interest of NCCC,
NCRC and NCMC, as applicable, in and to the Purchased Assets together with all right, title and interest in and to the proceeds of any related Purchased Items. 

  

	 	(c)	In connection with such sale, transfer, conveyance and assignment, on or prior to each Purchase Date, Seller shall deliver or cause to be delivered and released to Buyer or its
designee (including Custodian) (i) the Custodial Identification Certificate and (ii) the documents identified in the Custodial and Disbursement Agreement. 

  

	 	(d)	Any Mortgage Files not delivered to Buyer or its designee (including Custodian) are and shall be held in trust by Seller or its designee for the benefit of Buyer as the owner
thereof. Seller or its designee shall maintain a copy of the Mortgage File and the originals of the Mortgage File not delivered to Buyer or its designee (including Custodian). The possession of the Mortgage File by Seller or its designee is at the
will of Buyer for the sole purpose of servicing the related Purchased Asset, and such retention and possession by Seller or its designee is in a custodial capacity only. Each Mortgage File retained or held by Seller or its designee shall be
segregated on Seller’s books and records from the other assets of Seller or its designee and the books and records of Seller or its designee shall be marked appropriately to reflect clearly the sale of the related Purchased Asset to Buyer.
Seller or its designee shall release its custody of the Mortgage File only 

  

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 in accordance with written instructions from Buyer, unless such release is required as incidental to the
servicing of the Purchased Assets or is in connection with a repurchase of any Purchased Asset by Seller. 
  

	9.	HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS 

  
 Title to all Purchased Assets and Purchased Items shall pass to Buyer and Buyer shall have free and unrestricted use of all Purchased Assets and Purchased
Items. Nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Assets and Purchased Items or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Assets and
Purchased Items, all on terms that Buyer may determine in its sole discretion. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Assets and Purchased Items delivered to Buyer by Seller. 
  

	10.	SELLER’S REPRESENTATIONS 

  
 Each of NCCC, NCRC and NCMC represents and warrants to Buyer that as of the Purchase Date for the purchase of any Purchased Assets by Buyer from Seller
and as of the date of this 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. Seller will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a
disclosed principal). 

  

	 	(b)	Solvency. Neither the Repurchase Documents nor any Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of
Seller’s creditors. The transfer of the Mortgage Loans subject hereto and the obligation to repurchase such Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any of Seller’s creditors. Seller is not insolvent
within the meaning of 11 U.S.C. Section 101(32) or any successor provision thereof and the transfer and sale of the Mortgage Loans pursuant hereto and the obligation to repurchase such Mortgage Loan (i) will not cause Seller to become insolvent,
(ii) will not result in Seller having unreasonably small capital, and (iii) will not result in debts that would be beyond Seller’s ability to pay as the same mature. Seller received reasonably equivalent value in exchange for the transfer and
sale of the Purchased Assets and Purchased Items subject hereto. 

  

	 	(c)	No Broker. Seller has not dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in
connection with the sale of Purchased Assets pursuant to this Agreement. 

  

	 	(d)	Ability to Perform. Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in the Repurchase
Documents applicable to it to which it is a party. 

  

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	 	(e)	No Defaults. No Default or Event of Default has occurred and is continuing hereunder. 

  

	 	(f)	Legal Name; Existence. NCMC’s exact legal name is, and for the immediately preceding four months has been, New Century Mortgage Corporation. NCRC’s exact legal name
is, and for the immediately preceding four months has been, NC Residual II Corporation. NCCC’s exact legal name is, and for the immediately preceding four months has been, NC Capital Corporation. Each of NCCC and NCMC (a) is a corporation duly
and exclusively organized, validly existing and in good standing under the laws of California, (b) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and
carry on its business 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; and (c) is 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 could not be reasonably likely (either individually or in the aggregate) to
have a Material Adverse Effect. NCRC (a) is a corporation duly and exclusively organized, validly existing and in good standing under the laws of Delaware, (b) has all requisite corporate or other power, and has all governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on its business 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; and (c) is 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
could not be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect. 

  

	 	(g)	Financial Condition. (a) Seller has heretofore furnished to Buyer a copy of (a) its consolidated balance sheet for the fiscal year ended December 31, 2003, and the related
consolidated statements of income and retained earnings and of cash flows for Seller and its consolidated Subsidiaries for such fiscal year, each audited by and accompanied by an opinion thereon of KPMG LLP, which opinion shall not be qualified as
to scope of audit or going concern and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Seller and its consolidated Subsidiaries as at the end of, and for, such
fiscal year in accordance with GAAP and (b) its consolidated balance sheet and the consolidated balance sheets of its consolidated Subsidiaries for the quarterly fiscal period of Seller ended June 30, 2004 and the related consolidated statements of
income and retained earnings and of cash flows for Seller and its consolidated Subsidiaries for such quarterly fiscal 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 position of Seller and its 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 June 30, 2004, 

  

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 there has been no material adverse change in the consolidated business, operations or financial condition
of Seller and its consolidated Subsidiaries taken as a whole from that set forth in said financial statements. 
  

	 	(h)	Litigation. Except as set forth on the compliance report required under Section 11(y), 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 Seller or any of its Subsidiaries or affecting any of the Property of any of them 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) makes a claim or claims in an aggregate amount greater than $5,000,000
(provided such claims or claims shall be required to be set forth on the compliance report referenced above only upon Buyer’s request), or (iii) individually or in the aggregate, if adversely determined, could reasonably be likely to have a
Material Adverse Effect. 

  

	 	(i)	No Breach. Neither (a) the execution and delivery of the Repurchase Documents nor (b) the consummation of the transactions therein contemplated to be entered into by Seller
in compliance with the terms and provisions thereof will conflict with or result in a breach of the organizational documents of NCCC, NCRC, NCMC or Guarantor, or any applicable law, rule or regulation, or any order, writ, injunction or decree of any
Governmental Authority, or any Servicing Agreement or other material agreement or instrument to which NCCC, NCRC, NCMC, Guarantor or any of their respective Subsidiaries is a party or by which any of them or any of their Property is bound or to
which any of them is subject, or constitute a default under any such material agreement or instrument or result in the creation or imposition of any Lien (except for the Liens created pursuant to the Repurchase Documents) upon any Property of NCCC,
NCRC, NCMC or Guarantor, or any of their respective Subsidiaries pursuant to the terms of any such agreement or instrument, other than a breach or default for which a consent or waiver has been obtained pursuant to Section 3(a)(6).

  

	 	(j)	Action. Each of NCCC, NCRC, NCMC and Guarantor has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under
each of the Repurchase Documents to which it is a party, as applicable; the execution, delivery and performance by NCCC, NCRC, NCMC or Guarantor of each of the Repurchase Documents to which it is a party have been duly authorized by all necessary
corporate or other action on its part; and each Repurchase Document to which it is a party has been duly and validly executed and delivered by NCCC, NCRC, NCMC or Guarantor, as applicable, and constitutes a legal, valid and binding obligation of
NCCC, NCRC, NCMC or Guarantor, as applicable, enforceable against NCCC, NCRC, NCMC or Guarantor, as applicable, in accordance with its terms. 

  

	 	(k)	Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are

  

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 necessary for the execution, delivery or performance by NCCC, NCRC, NCMC or Guarantor, as applicable, of
the Repurchase Documents to which it is a party or for the legality, validity or enforceability thereof, except for filings and recordings in respect of the Liens created pursuant to the Repurchase Documents. 
  

	 	(l)	Margin Regulations. Neither any Transaction hereunder, nor the use of the proceeds thereof, will violate or be inconsistent with the provisions of Regulation T, U or X.

  

	 	(m)	Taxes. Each of NCCC, NCRC, NCMC, Guarantor and their respective Subsidiaries have filed all Federal income tax returns and all other material tax returns that are required to
be filed by them and have paid all taxes due pursuant to such returns 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 NCCC, NCRC, NCMC, Guarantor and their respective Subsidiaries in respect of taxes and other governmental charges
are, in the opinion of NCCC, NCRC, NCMC or Guarantor, as applicable, adequate. 

  

	 	(n)	Investment Company Act. None of NCCC, NCRC, NCMC, Guarantor nor any of their respective Subsidiaries is an “investment company”, or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. 

  

	 	(o)	Purchased Assets. 

  

	 	(1)	None of NCCC, NCRC nor NCMC has assigned, pledged, or otherwise conveyed or encumbered any Mortgage Loan to any other Person (except as between NCCC, NCRC and NCMC), and immediately
prior to the sale of such Mortgage Loan to Buyer, NCCC, NCRC and/or NCMC was the sole legal and beneficial owner of such 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 Buyer hereunder. No Mortgage Loan sold to Buyer hereunder was acquired (by purchase or otherwise) by NCCC, NCRC or NCMC from an Affiliate of NCCC, NCRC or NCMC (except as between NCCC, NCRC and NCMC), as
applicable. 

  

	 	(2)	The provisions of this Agreement are effective to either constitute a sale of Purchased Items to Buyer or to create in favor of Buyer a valid and fully perfected first priority
security interest in all right, title and interest of NCCC, NCRC and NCMC in, to and under the Purchased Items. 

  

	 	(3)	Upon receipt by Custodian of each Mortgage Note, endorsed in blank by a duly authorized officer of NCCC, NCRC or NCMC, as applicable, either a purchase shall have been completed by
Buyer of each Mortgage Note or 

  

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 Buyer shall have a valid and fully perfected first priority security interest in the applicable Mortgage
Note and in such Seller’s interest in the related Mortgaged Property. 
  

	 	(4)	Upon the filing of financing statements on Form UCC-1 naming Buyer as “Secured Party”, and NCCC, NCRC and NCMC as “Debtor” and describing the Purchased Items, in
the jurisdictions and recording offices listed on Exhibit IV attached hereto, the security interests granted hereunder in the Purchased Items will constitute valid and fully perfected first priority security interests under the Uniform
Commercial Code in all right, title and interest of NCCC, NCRC and NCMC in, to and under such Purchased Items, which can be perfected by filing under the Uniform Commercial Code. 

  

	 	(5)	Upon execution and delivery of the Account Agreement, Buyer shall either be the owner of, or have a valid and fully perfected first priority security interest in, all deposit
accounts comprising Purchased Items. 

  

	 	(6)	With respect to each Purchased Asset, each of the representations and warranties on Schedule 1 is true and correct. 

  

	 	(p)	Chief Executive Office/Jurisdiction of Organization. On the Effective Date, and during the four months immediately preceding the Effective Date, each of NCCC, NCRC and
NCMC’s chief executive office, is, and has been located at 18400 Von Karman, Suite 1000, Irvine, California 92612. On the Effective Date, each of NCCC and NCMC’s jurisdiction of organization is California and NCRC’s jurisdiction of
organization is Delaware. 

  

	 	(q)	Location of Books and Records. The location where each of NCCC, NCRC and NCMC keeps its books and records, including all computer tapes and records related to the Purchased
Items is its chief executive office. 

  

	 	(r)	Reserved. 

  

	 	(s)	Servicing Agreements. Seller has delivered to Buyer all Servicing Agreements with respect to the Purchased Assets and no default or event of default exists thereunder.

  

	 	(t)	Existing Financing Facilities. All credit facilities, repurchase facilities or substantially similar facilities of Seller which are presently in effect on the date hereof are
set forth on Schedule 2 hereto (the “Existing Financing Facilities”). Seller has delivered to Buyer copies of all non-confidential portions of Existing Financing Facilities and no defaults or events of default exist thereunder.
Seller shall file with the SEC copies of all non-confidential portions of each new Existing Financing Facility to be entered into. The financial covenants set forth in Section 11(m), (n) and (o) are at least equal to those Seller makes under each of
the Existing Financing Facilities. Seller shall give Buyer prior notification if any amendment to any similar financial covenant in any Existing Financing Facility 

  

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 increases the obligations or requirements of Seller thereunder, and such changed financial covenant
shall, with no further action of Seller or Buyer, automatically become a part hereof and be incorporated herein upon the effectiveness of such amendment in the other Existing Financing Facility 
  

	 	(u)	True and Complete Disclosure. (a) The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of NCCC, NCRC, NCMC or Guarantor
to Buyer in connection with the negotiation, preparation or delivery of this Agreement and the other Repurchase Documents or included herein or therein or delivered pursuant hereto or thereto (other than with respect to the Mortgage Loans), 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 each of NCCC, NCRC, NCMC and Guarantor to Buyer in connection with this Agreement and the other Repurchase Documents and the transactions contemplated hereby (other than with respect to
the Mortgage Loans) 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
a Responsible Officer of either NCCC, NCRC or NCMC, after due inquiry, 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 Buyer for use in connection with the transactions contemplated hereby or thereby. 

  

	 	(v)	ERISA. NCCC, NCRC, NCMC, Guarantor and any of their respective ERISA Affiliates are not and will not be in the future, required to contribute to any Plan (including
Multiemployer Plans) subject to the applicable provisions of ERISA. 

  

	 	(w)	REIT. NCRC has not engaged in any material “prohibited transactions” as defined in Section 857(b)(6)(B)(iii) and (C) of the Code. NCRC for its current “tax
year” (as defined in the Code) is and for all prior tax years subsequent to its election to be a real estate investment trust has been 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. 

  

	 	(x)	No Reliance. Each of NCMC, NCRC, NCCC and Guarantor has made its own independent decisions 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. None of NCMC, NCRC, NCCC or Guarantor 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. 

  

 -36- 

	 	(y)	Compliance with Anti-Money Laundering Laws. Seller has complied with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot
Act of 2001 (collectively, the “Anti-Money Laundering Laws”); Seller has established an adequate anti-money laundering compliance program as required by the Anti-Money Laundering Laws, has conducted the requisite due diligence in
connection with the origination of each Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with respect to the legitimacy of the applicable Mortgagor and the origin of the assets used by the said Mortgagor to purchase the
property in question, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws. 

  

	 	(z)	Other Security Agreements. Seller has not become bound under Section 9-203(d) of the UCC by a Security Agreement previously entered into by another Person.

  

	11.	COVENANTS OF SELLER 

  
 On and as of the date of this Agreement and each Purchase Date and until this Agreement is no longer in force with respect to any Transaction, each of
NCCC, NCRC and NCMC covenants that it will: 
  

	 	(a)	Financial Statements. Seller shall deliver to Buyer: 

  

	 	(1)	as soon as available and in any event within forty-five (45) calendar days after the end of each calendar month, the unaudited consolidated balance sheets of Guarantor, Seller and
their consolidated Subsidiaries as at the end of such period and the related unaudited consolidated statements of income and retained earnings and of cash flows for Guarantor, Seller and their consolidated Subsidiaries for such period and the
portion of the fiscal year through the end of such period, accompanied by a certificate of a Responsible Officer of Guarantor and Seller, as applicable, which certificate shall state that said consolidated financial statements fairly present in all
material respects the consolidated financial condition and results of operations of Guarantor or Seller and its consolidated Subsidiaries, as applicable, in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject
to normal year-end adjustments); 

  

	 	(2)	as soon as available and in any event within ninety (90) days after the end of each fiscal year of Guarantor or Seller, the consolidated balance sheets of Guarantor and Seller and
their respective consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows for Guarantor and Seller and their respective consolidated Subsidiaries for such
year, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall not be

  

 -37- 

 qualified as to scope of audit or going concern and shall state that said consolidated financial
statements fairly present the consolidated financial condition and results of operations of Guarantor and Seller and their respective consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP, and a certificate of
such accountants stating that, in making the examination necessary for their opinion, they obtained no knowledge, except as specifically stated, of any Default or Event of Default; and 
  

	 	(3)	from time to time such other information regarding the financial condition, operations, or business of Seller as Buyer may reasonably request. 

  
 Seller shall furnish to Buyer, at the time Seller furnishes each set of
financial statements pursuant to paragraphs (a) and (b) above, a certificate of a Responsible Officer of Seller to the effect that, to the best of such Responsible Officer’s knowledge, Seller during such fiscal period or year has observed or
performed in all material respects all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Repurchase Documents to be observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate (and, if any Default or Event of Default has occurred and is continuing, describing the same in reasonable detail and describing the action
Seller has taken or proposes to take with respect thereto). 
  

	 	(b)	Litigation. Seller will promptly, and in any event within ten (10) days after service of process on any of the following, give to Buyer notice of all litigation, actions,
suits, arbitrations, investigations (including, without limitation, any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting Seller or any of its Subsidiaries or affecting any of the Property of any of
them before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Repurchase Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a claim or claims
in an aggregate amount greater than $5,000,000 (provided notice with respect to such claim or claims shall be required only upon Buyer’s request), or (iii) which, individually or in the aggregate, if adversely determined, could be reasonably
likely to have a Material Adverse Effect. 

  

	 	(c)	Existence, etc. Each of NCCC, NCRC and NCMC shall: 

  

	 	(1)	preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises necessary for the operation of its business (provided that nothing in
this Section 11(c)(1) shall prohibit any transaction expressly permitted under Section 11(d)); 

  

	 	(2)	comply with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including, without limitation, all environmental laws) if failure to
comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect; 

  

 -38- 

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

  

	 	(4)	not (i) cause or permit any change to be made in its name, organizational identification number, identity or corporate structure, each as described in Section 10(f) or (ii) change
its jurisdiction of organization, unless it shall have provided Buyer thirty (30) days’ prior written notice of such change and shall have first taken all action required by Buyer for the purpose of perfecting or protecting the lien and
security interest of Buyer established hereunder; 

  

	 	(5)	pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; and 

  

	 	(6)	permit representatives of Buyer, upon reasonable notice (unless a 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 Buyer. 

  

	 	(d)	Restriction on Fundamental Changes. None of Guarantor, NCCC, NCRC nor NCMC will enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets; provided, that Guarantor, NCCC, NCRC or NCMC may merge or consolidate with (i) any wholly owned subsidiary of Guarantor,
NCCC, NCRC or NCMC, as applicable, or (ii) any other Person if Guarantor, NCCC, NCRC or NCMC is the surviving corporation; and provided, further, that if after giving effect thereto, no Default would exist hereunder,

  

	 	(e)	Margin Deficit. If at any time there exists a Margin Deficit, Seller shall cure same in accordance with Section 4. 

  

	 	(f)	Notices. Seller shall give notice to Buyer: 

  

	 	(1)	promptly upon receipt of notice or knowledge of the occurrence of any Default or Event of Default; 

  

	 	(2)	with respect to any Purchased Asset, promptly upon receipt of any principal prepayment (in full or partial) of such Purchased Asset; 

  

 -39- 

	 	(3)	with respect to any Purchased Asset hereunder, promptly upon receipt of notice or knowledge that the underlying Mortgaged Property has been damaged by waste, fire, earthquake or
earth movement, flood, tornado or other casualty, or otherwise damaged so as to affect adversely the Asset Value of such Purchased Asset (provided that Seller may satisfy its obligations under this clause (3) by causing Servicer to notify Buyer of
any such damage); 

  

	 	(4)	promptly upon receipt of notice or knowledge of (i) any material default related to any Purchased Item, (ii) any Lien or security interest on, or claim asserted against, any
Purchased Item (other than the Lien created hereby) or (iii) any event or change in circumstances which could reasonably be expected to have a Material Adverse Effect; 

  

	 	(5)	promptly upon any material change in the market value of any or all of Seller’s assets which could reasonably be expected to have a Material Adverse Effect;

  

	 	(6)	no later than five Business Days after the end of each such month, of all amounts borrowed under the Existing Financing Facilities during such month; 

  

	 	(7)	upon the termination of any Existing Financing Facility, if such termination would require Seller to have to file a Form 8-K with the SEC pursuant to the rules governing such
filings; provided, however, this notice requirement shall be deemed satisfied once Seller files the related Form 8-K with the SEC; and 

  

	 	(8)	promptly upon the occurrence of any default or event of default under the Existing Financing Facilities. 

  
 Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of Seller setting forth
details of the occurrence referred to therein and stating what action Seller has taken or proposes to take with respect thereto. 
  

	 	(g)	Reports. Within 45 calendar days following the end of each calendar quarter, Seller shall provide Buyer with a quarterly report, which report shall include, among other
items, a summary of such Seller’s delinquency and loss experience with respect to Mortgage Loans serviced by Seller, any Servicer or any designee of either, operating statements and the occupancy status of such Mortgaged Property and other
property level information, including internal quality control reports, plus any such additional reports as Buyer may reasonably request with respect to Seller or any Servicer’s servicing portfolio or pending originations of Mortgage Loans.

  

	 	(h)	Underwriting Guidelines. All Eligible Assets will conform with the Underwriting Guidelines. Seller shall not make any material change in the Underwriting Guidelines without
the prior written consent of Buyer and shall review the 

  

 -40- 

 Underwriting Guidelines periodically to confirm that they are being complied with in all material
respects and are adequate to meet Seller’s business objectives (and to the extent Buyer’s consent has not yet been obtained, no Mortgage Loan underwritten in accordance with such changed Underwriting Guidelines shall be considered an
Eligible Asset). In the event Seller makes any amendment or modification to the Underwriting Guidelines, Seller shall promptly deliver to Buyer a complete copy of the amended or modified Underwriting Guidelines. 
  

	 	(i)	Transactions with Affiliates. Guarantor, NCCC, NCRC and NCMC will not, and will not permit any of their Subsidiaries to, enter into any transaction with an Affiliate of
Guarantor, NCCC, NCRC or NCMC (other than another Seller) except transactions in the ordinary course of business on terms no less favorable to Guarantor, NCCC, NCRC or NCMC than those that would be obtained in an arm’s-length transaction. In no
event shall Seller transfer to Buyer hereunder any Mortgage Loan acquired by Seller from an Affiliate of Seller (other than each other Seller). 

  

	 	(j)	Limitation on Liens. Immediately upon notice of a Lien or any circumstance which could give rise to a Lien on the Purchased Items to the extent related to the Mortgage Loans,
Seller will defend such Purchased Items against, and will take such other action as is necessary to remove, any Lien, security interest or claim on or to the related Purchased Items (other than any security interest created under this Agreement),
and Seller will defend the right, title and interest of Buyer in and to any of such Purchased Items against the claims and demands of all persons whomsoever. 

  

	 	(k)	Guarantees. Guarantor, NCCC, NCRC and NCMC will not create, incur, assume or suffer to exist any Guarantees of any Person other than an Affiliate without ten (10) days prior
written notice to Buyer of such Guarantee. 

  

	 	(l)	Limitation on Distributions. After the occurrence and during the continuation of any Default, none of NCCC, NCRC nor NCMC 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 or partnership interest of NCCC, NCRC or NCMC, as applicable, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of NCCC, NCRC or NCMC, as applicable. 

  

	 	(m)	Maintenance of Tangible Net Worth. Guarantor will at all times during each fiscal year maintain Tangible Net Worth of not less than (a) the greater of (i) $400,000,000 or
(ii) eighty-five percent (85%) of the Tangible Net Worth at the end of its most recently completed fiscal year (or, in the case of the Tangible Net Worth at the end of any fiscal year, its prior fiscal year) plus (b) ninety percent (90%) of capital
contributions made during such fiscal year plus (c) fifty percent (50%) of positive year-to-date net income. 

  

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	 	(n)	Minimum Liquidity. Seller shall have at all times, on a consolidated basis, Cash, Cash Equivalents and unused borrowing capacity on unencumbered assets that could be drawn
against (taking into account the economic terms of committed Existing Financing Facilities, including, without limitation, any margin or overcollateralization requirements) under committed Existing Financing Facilities in an amount equal to not less
than $125,000,000. Seller shall have on the last day of each fiscal quarter, on a consolidated basis, Cash and Cash Equivalents in an amount equal to not less than $75,000,000. 

  

	 	(o)	Leverage Ratio. Guarantor shall not permit the Leverage Ratio of Guarantor and its consolidated Subsidiaries at any time to be greater than 12:1. 

  

	 	(p)	Servicer; Servicing Tape. Seller shall provide to Buyer and to Disbursement Agent via Electronic Transmission, a remittance report on a monthly basis by no later than the
12th day of each month (the “Reporting Date”) containing servicing information, including
without limitation those fields reasonably requested by Buyer from time to time, on a loan-by-loan basis and in the aggregate, with respect to the Purchased Assets serviced hereunder by Seller or any Servicer for the month (or any portion thereof)
prior to the Reporting Date (such remittance report, an “Asset Tape”). Seller shall not cause the Mortgage Loans to be serviced by any servicer other than a servicer expressly approved in writing by Buyer, which approval shall be
deemed granted by Buyer with respect to Seller with the execution of this Agreement. 

  

	 	(q)	Required Filings. Seller shall promptly provide Buyer with copies of all documents which NCCC, NCRC, NCMC or any Subsidiary of NCCC, NCRC or NCMC is required to file with any
regulatory body in accordance with its regulations other than routine filings in the ordinary course of business with regulatory bodies (other than the Securities and Exchange Commission) which related to obtaining or maintaining licenses to do
business or corporate qualifications. 

  

	 	(r)	Remittance of Prepayments. Seller shall remit or cause to be remitted to Buyer, with sufficient detail via Electronic Transmission to enable Buyer to appropriately identify
the Mortgage Loan to which any amount remitted applies, all full or partial principal prepayments on any Purchased Asset that Seller or Servicer has received on a weekly basis, to be paid on Thursday of the next succeeding week (or the next Business
Day). 

  

	 	(s)	Maintenance of Profitability. Seller shall not permit, for any two consecutive calendar quarters (each such period, a “Test Period”), Net Income for such
Test Period before income taxes for such Test Period and distributions made during such Test Period, to be less than $1.00. 

  

	 	(t)	Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants,
the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of an Event of Default or Default if such action is taken or condition exists.

  

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	 	(u)	Escrow Imbalances. Seller will, no later than five (5) Business Days after learning (from any source) of any material imbalance in any escrow account, fully and completely
correct and eliminate such imbalance including, without limitation, depositing its own funds into such account to eliminate any overdrawal or deficit. 

  

	 	(v)	Reserved. 

  

	 	(w)	Custodial and Disbursement Agreement and Account Agreement. Seller shall maintain each of the Custodial and Disbursement Agreement and Account Agreement in full force and
effect and shall not amend or modify either of the Custodial and Disbursement Agreement or the Account Agreement or waive compliance with any provisions thereunder without the prior written consent of Buyer. 

  

	 	(x)	Inconsistent Agreements. Guarantor, NCMC, NCRC and NCCC will not, and will not permit any of their Subsidiaries to, directly or indirectly, enter into any agreement
containing any provision which would be violated or breached by any Transaction hereunder or by the performance by either of Guarantor, NCCC, NCRC or NCMC of their respective obligations under any Repurchase Document to which it is a party.

  

	 	(y)	Compliance Report. Seller shall provide Buyer no later than the thirtieth (30th) calendar day of each month a compliance report, in the form of Exhibit X attached hereto, demonstrating therein the calculations Seller utilized to determine its compliance with the financial
covenants set forth in clauses (m), (n), (o) and (s) of this Section 11 as of the end of the immediately preceding month. Such compliance report shall be delivered by seller to Buyer in accordance with Section 17 and shall also be delivered by
Seller to Buyer at 9 West 57th Street, New York, NY 10019, Attn: Michael Friedman, Telecopier No.: (212) 891-6143,
Telephone No.: (212) 891-6261. 

  

	12.	EVENTS OF DEFAULT 

  
 If any of the following events (each, an “Event of Default”) occur, Seller and Buyer shall have the rights set forth in Section 13, as
applicable: 
  

	 	(a)	Seller shall default in the payment of any Repurchase Price due or any amount under Section 5 when due (whether at stated maturity, upon acceleration or at mandatory or optional
prepayment); or 

  

	 	(b)	Seller shall default in the payment of any other amount payable by it hereunder or under any other Repurchase Document after notification by Buyer of such default, and such default
shall have continued unremedied for one (1) Business Day; or 

  

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	 	(c)	any representation, warranty or certification made or deemed made herein or in any other Repurchase Document by Seller or any certificate furnished to Buyer pursuant to the
provisions hereof or thereof or any information with respect to the Mortgage Loans furnished in writing by or on behalf of Seller shall prove to have been false 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 Asset Value of the Purchased Assets, unless (i) 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 Buyer in its sole discretion to be materially false or misleading on a regular
basis); or 

  

	 	(d)	Seller shall fail to comply with the requirements of 11(c), Section 11(d), Section 11(e), Section 11(f), Section 11(h) (with respect to the Eligible Assets as a whole and not with
respect to any single Eligible Asset) or Sections 11(i) through 11(w); and such default shall continue unremedied for a period of 5 Business Days from the earlier of (i) a responsible officer of Seller having knowledge of such default and (ii) Buyer
giving notice to Seller of such default; or except as otherwise set forth in Sections 12(a), 12(b), 12(c) and 12(d), Seller shall fail to observe or perform any other covenant or agreement contained in this Agreement or any other Repurchase Document
and such failure to observe or perform shall continue unremedied for a period of 10 Business Days from the earlier of (i) a responsible officer of Seller having knowledge of such default and (ii) Buyer giving notice to Seller of such default; or

  

	 	(e)	a final judgment or judgments for the payment of money in excess of $1,000,000 in the aggregate shall be rendered against NCCC, NCRC, NCMC or any of their Affiliates 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; or 

  

	 	(f)	an Act of Insolvency shall have occurred with respect to Guarantor, NCCC, NCRC, NCMC or any of their Subsidiaries; or 

  

	 	(g)	the Custodial and Disbursement Agreement, the Account Agreement or any Repurchase Document shall for whatever reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by NCCC, NCRC or NCMC; or 

  

	 	(h)	NCCC, NCRC or NCMC shall grant, or suffer to exist, any Lien on any Purchased Item (except any Lien in favor of Buyer); or either the Purchased Items shall not have been sold to
Buyer free and clear of any Liens in favor of any Person other than Buyer, or the Liens contemplated hereby shall cease or fail to be first priority perfected Liens on any Purchased Items (but not the related Mortgaged Properties) in favor of Buyer
or shall be Liens in favor of any Person other than Buyer; or 

  

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	 	(i)	NCCC, NCRC, NCMC or any of their Affiliates shall be in default under (i) any Indebtedness in an amount equal to $10,000,000 or more of NCCC, NCRC or NCMC or of such Affiliate which
default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, (ii) any other contract to which NCCC, NCRC or NCMC
or such Affiliate is a party which default (1) involves the failure to pay a matured obligation in excess of $10,000,000, or (2) permits the acceleration of the maturity of obligations in excess of $10,000,000 by any other party to or beneficiary of
such contract, or (iii) any Seller-Related Obligation; or 

  

	 	(j)	any material adverse change in the Property, business or financial condition of NCCC, NCRC or NCMC or any of their Affiliates 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 Seller’s ability to perform its obligations under this Agreement or any other Repurchase
Document; or 

  

	 	(k)	Reserved; 

  

	 	(l)	upon any event of default or event which, with the passage of time or expiration of any grace periods, would constitute an event of default under any of the Existing Financing
Facilities; or 

  

	 	(m)	a Change of Control shall have occurred; or 

  

	 	(n)	upon the failure of NCRC to at any time to 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 NCRC of any material “prohibited transactions” as defined in Sections 857(b) and 856(c) of the Code; or 

  

	 	(o)	upon the failure by NCRC to satisfy any of the following asset or income tests: 

  

	 	(1)	At the close of each taxable year, at least 75 percent of NCRC’s gross income consists of (i) “rents from real property” within the meaning of Section 856(c)(3)(A) of
the Code, (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, (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, (iv) dividends or other distributions on, and gain

  

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 (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, and (v) amounts
described in Sections 856(c)(3)(E) through 856(c)(3)(I) of the Code. 
  

	 	(2)	At the close of each taxable year, at least 95 percent of NCRC’s gross income 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), (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, (iii) interest, (iv) dividends, and (v) income derived from payments
to NCRC 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. 

  

	 	(3)	At the close of each quarter of NCRC’s taxable years, at least 75 percent of the value of NCRC’s 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 NCRC’s
operations, but not including receivables purchased from another person), and government securities. 

  

	 	(4)	At the close of each quarter of each of NCRC’s taxable years, (i) not more than 25 percent of NCRC’s total asset value will be represented by securities (other than those
described in paragraph 3), (ii) not more than 20 percent of NCRC’s total asset value will be represented by securities of one or more taxable REIT subsidiaries, and (iii) (a) not more than 5 percent of the value of NCRC’s total assets will
be represented by securities of any one issuer (other than Government securities and securities of taxable REIT subsidiaries), and (b) NCRC 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).”of any of the REIT
qualification tests pursuant to Section 856(c) of the Code. 

  

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	13.	REMEDIES 

  

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

  

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

  

	 	(2)	If Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(1) of this Section 13, 

  
 (A) (i) Seller’s obligations in such Transactions to
repurchase all Purchased Assets, at the Repurchase Price therefor on the Repurchase Date, and to pay all other amounts owed by Seller hereunder, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed
exercise shall be retained by Buyer and applied to the aggregate unpaid Repurchase Prices and any other amounts owed by Seller hereunder, and (iii) Seller shall immediately deliver to Buyer any Purchased Assets subject to such Transactions then in
NCCC’s, NCRC’s or NCMC’s possession or control; 
  
 (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, (x) the Post-Default Rate to (y) the Repurchase Price for such
Transaction as of the Repurchase Date (decreased as of any day by (i) any amounts actually in the possession of Buyer pursuant to clause (C) of this subsection, (ii) any proceeds from the sale of Purchased Assets applied to the Repurchase Price
pursuant to subsection (a)(4) of this Section 13, and (iii) any amounts applied to the Repurchase Price pursuant to subsection (a)(4) of this Section 13); and 
  

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

	 	(3)	Upon the occurrence of one or more Events of Default, Buyer shall have the right to obtain physical possession of the Servicing Records (subject to the provisions of the Custodial
and Disbursement Agreement) and all 

  

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 other files of Seller relating to the Purchased Assets and all documents relating to the Purchased
Assets which are then or may thereafter come in to the possession of Seller or any third party acting for Seller and Seller shall deliver to Buyer such assignments as Buyer shall request and Buyer shall have the right to appoint any Person to act as
Servicer for the Purchased Assets. Buyer shall be entitled to specific performance of all agreements of Seller contained in the Repurchase Documents. 
  

	 	(4)	At any time on the Business Day following notice to Seller (which notice may be the notice given under subsection (a)(1) of this Section 13), in the event Seller has not repurchased
all Purchased Assets, 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 Buyer may deem satisfactory any or all Purchased Assets subject to such Transactions
hereunder and apply the proceeds thereof to the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller
credit for such Purchased Assets in an amount equal to the Market Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder. The proceeds of any disposition of Purchased Assets shall
be applied first to the costs and expenses incurred by Buyer in connection with Seller’s default; second to costs of related covering and/or related hedging transactions; third to the Repurchase Price; and fourth to any other outstanding
obligation of Seller to Buyer or its Affiliates. In connection with any sale pursuant to clause (A) of this subsection (a)(4), Buyer may (i) sell any such Purchased Assets without giving any warranties and (ii) specifically disclaim or modify any
warranties of title or the like, and this procedure shall not be considered to adversely affect the commercial reasonableness of any such sale of Purchased Assets. 

  

	 	(5)	Seller agrees that Buyer may obtain an injunction or an order of specific performance to compel Seller to fulfill its obligations as set forth in Section 24, if Seller fails or
refuses to perform its obligations as set forth therein. 

  

	 	(6)	Seller shall be liable to Buyer, payable as and when incurred by Buyer, for (A) the amount of all actual out-of-pocket expenses, including legal or other expenses incurred by Buyer
in connection with or as a consequence of an Event of Default, and (B) all costs incurred in connection with hedging or covering transactions. 

  

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

  

	 	(b)	Buyer may exercise one or more of the remedies available to Buyer immediately upon the occurrence of an Event of Default and, except to the extent provided in

  

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 subsections (a)(1) and (4) of this Section 13, at any time thereafter without notice to Seller. All
rights and remedies arising under this 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 Seller hereby expressly waives any defenses Seller might otherwise have to require
Buyer to enforce its rights by judicial process. Seller also waives any defense (other than a defense of payment or performance) Seller might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of
the Purchased Items, or from any other election of remedies. 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, Seller shall be liable to Buyer for interest on any amounts owing by Seller hereunder, from the date Seller becomes liable for such
amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Buyer’s rights hereunder. Interest on any sum payable by Seller to Buyer under this paragraph 13(d) shall be at a rate equal to the
Post-Default Rate. 

  

	14.	INDEMNIFICATION AND EXPENSES 

  

	 	(a)	NCCC, NCRC and NCMC, jointly and severally, agree to hold Buyer and its Affiliates and their present and former respective officers, directors, employees, agents, advisors and other
representatives (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 (including counsel’s fees and disbursements) (collectively, “Costs”), relating to or arising out of this 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 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 the foregoing, each of NCCC, NCRC and NCMC, jointly and severally, agrees to hold any Indemnified Party harmless from and indemnify such
Indemnified Party against all Costs with respect to all Mortgage Loans relating to or arising out of any violation or alleged violation of any environmental law, rule or regulation or any consumer credit laws, including without limitation the
federal Truth in Lending Act and/or the federal Real Estate Settlement Procedures Act, 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 Mortgage Loan for any sum owing thereunder, or to enforce any provisions of any Mortgage Loan, each of NCCC, NCRC and NCMC, jointly 

  

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 and severally, 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 NCCC, NCRC or NCMC 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 NCCC, NCRC or NCMC. Each of NCCC, NCRC and NCMC, jointly and severally, also agrees 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 Buyer’s rights under this Agreement, any
other Repurchase Document or any transaction contemplated hereby or thereby, including without limitation the fees and disbursements of its counsel. 
  

	 	(b)	Seller agrees to pay as and when billed by Buyer all of the out-of-pocket costs and expenses (including legal fees) incurred by Buyer in connection with the development, preparation
and execution of, and any amendment, supplement or modification to, this Agreement, any other Repurchase Document or any other documents prepared in connection herewith or therewith. Seller agrees to pay as and when billed by Buyer all of the
out-of-pocket costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including without limitation all fees, disbursements and expenses of counsel to Buyer which amount
shall be deducted from the Purchase Price paid for the first Transaction hereunder. Subject to the limitations set forth in Section 26, Seller agrees to pay Buyer all the out of pocket due diligence, inspection, appraisals, testing and review costs
and expenses incurred by Buyer with respect to Mortgage Loans submitted by Seller for purchase under this Agreement, including, but not limited to, those out of pocket costs and expenses incurred by Buyer pursuant to Sections 24 and 26.

  

	15.	RECORDING OF COMMUNICATIONS 

  
 Buyer and Seller shall have the right (but not the obligation) from time to time to make or cause to be made tape recordings of communications between its
employees and those of the other party with respect to Transactions upon notice to the other party of such recording. Buyer and Seller consent to the admissibility of such tape recordings in any court, arbitration, or other proceedings. The parties
agree that a duly authenticated transcript of such a tape recording shall be deemed to be a writing conclusively evidencing the parties’ agreement. 
  

	16.	SINGLE AGREEMENT 

  
 Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the
fact that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer and Seller agrees (i) to perform all of its
obligations in respect of each 
  

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 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. 
  

	17.	NOTICES AND OTHER COMMUNICATIONS 

  
 Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein and under the Custodial and
Disbursement Agreement (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by email, telex or 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 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. 
  

	18.	ENTIRE AGREEMENT; SEVERABILITY; MODIFICATIONS 

  
 This Agreement together with the other Repurchase Documents constitute the entire understanding between Buyer and Seller with respect to the subject
matter it covers and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving Purchased Assets. By acceptance of this Agreement, Buyer and Seller acknowledge that they
have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this 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. No amendment, modification or release from any provision of this Agreement shall be effective unless in writing and executed by
or on behalf of the party or parties to be charged therewith and shall be effective only in the specific instance and for the specific purpose for which given. 
  

	19.	NON-ASSIGNABILITY 

  
 The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by Seller or Buyer without the prior
written consent of the other party, and any attempted assignment without such consent shall be null and void. Notwithstanding the foregoing, Buyer may assign its rights and remedies under this 
  

 -51- 

 Agreement and under any Transaction without the consent of Seller (a) to any Affiliate of Buyer (with
notice to Seller), and (b) in connection with any pledge, rehypothecation or other right permitted pursuant to Section 9. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns. Nothing in this Agreement express or implied, shall give to any person, other than the parties to this Agreement and their successors hereunder, any benefit of any legal or equitable right, power,
remedy or claim under this Agreement. 
  

	20.	TERMINABILITY 

  
 Except as set forth below, this Agreement may be terminated (a) by Seller upon giving written notice to Buyer and payment of the Minimum Pricing Amount
pursuant to Section 3(p), (b) by Buyer, in its sole discretion by giving 30 days’ notice to Seller, upon a decrease of 30% in the aggregate amount available to NCCC, NCRC, NCMC or their Affiliates under the Existing Financing Facilities in the
aggregate and (c) by Buyer, in its sole discretion by giving 30 days’ notice to Seller, upon the occurrence of any event set forth in Section 3(b)(10) except that this Agreement shall, notwithstanding such notice, remain applicable to any
Transaction then outstanding; provided that the Repurchase Date for any such Transaction outstanding shall be the earlier to occur of the original Repurchase Date pursuant to the applicable Confirmation and (ii) 20 days from the date of such notice
of termination. 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 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 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 Seller
under Section 14 shall survive the termination of this Agreement. 
  

	21.	GOVERNING LAW 

  
 THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES. 
  

	22.	SUBMISSION TO JURISDICTION; WAIVERS 

  
 EACH OF BUYER, NCCC, NCRC AND NCMC HEREBY IRREVOCABLY AND UNCONDITIONALLY: 
  
 (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER
REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE 
  

 -52- 

 NON-EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; 
  
 (B) 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; 
  
 (C) 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 BUYER SHALL HAVE BEEN
NOTIFIED; 
  
 (D) 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; AND 
  
 (E) WAIVES, 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 AGREEMENT, ANY OTHER REPURCHASE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
  
  

	23.	NO WAIVERS, ETC. 

  
 No failure on the part of Buyer or Seller 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 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 Buyer in writing. 
  

	24.	SERVICING 

  

	 	(a)	Each of NCCC, NCRC and NCMC covenants to maintain or cause the servicing of the Mortgage Loans to be maintained in conformity with accepted and prudent servicing practices in the
industry for the same type of mortgage loans as the 

  

 -53- 

 Mortgage Loans and in a manner at least equal in quality to the servicing Seller provides for mortgage
loans which it owns. In the event that the preceding language is interpreted as constituting one or more servicing contracts, each such servicing contract shall terminate automatically upon the earliest of (i) an Event of Default, (ii) the date on
which this Agreement terminates or (iii) the transfer of servicing approved by Buyer. 
  

	 	(b)	If the Mortgage Loans are serviced by Seller, Seller agrees that Buyer is the owner of all servicing records, including but not limited to any and all servicing agreements, files,
documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the
servicing of the Mortgage Loans (the “Servicing Records”). Seller covenants to safeguard such Servicing Records and to deliver them promptly to Buyer or its designee (including Custodian) at Buyer’s request.

  

	 	(c)	If the Mortgage Loans are serviced by a person other than Seller (such third party the “Servicer”), Seller (i) shall, in accordance with Section (3)(b)(7), provide
a copy of the servicing agreement to Buyer, which shall be in form and substance acceptable to Buyer (the “Servicing Agreement”), and shall provide a Servicer Notice to Buyer substantially in the form of Exhibit VII hereto,
fully executed by Seller and the Servicer; and (ii) hereby irrevocably assigns to Buyer and Buyer’s successors and assigns all right, title and interest of Seller in, to and under, and the benefits of, any Servicing Agreement with respect to
the Mortgage Loans. Seller agrees that no Person shall assume the servicing obligations with respect to the Mortgage Loans as successor to the Servicer unless such successor is approved in writing by Buyer prior to such assumption of servicing
obligations. 

  

	 	(d)	If the servicer of the Mortgage Loans is Seller, upon the occurrence of an Event of Default, Buyer shall have the right to terminate the Seller as servicer of the Mortgage Loans and
transfer servicing to Buyer’s designated Servicer, at no cost or expense to Buyer, at any time thereafter. If the Servicer of the Mortgage Loans is not Seller, Buyer shall have the right, as contemplated in the applicable Servicer Notice, upon
the occurrence of an Event of Default, to terminate any applicable Servicing Agreement and transfer servicing to Buyer’s designated Servicer, at no cost or expense to Buyer, it being agreed that Seller will pay any and all fees required to
terminate such Servicing Agreement and to effectuate the transfer of servicing to Buyer’s designated Servicer, as well as any servicing fees and expenses payable to such Servicer. 

  

	 	(e)	After the Purchase Date, until the repurchase of any Mortgage Loan, Seller will have no right to modify or alter the terms of such Mortgage Loan and Seller will have no obligation
or right to repossess such Mortgage Loan or substitute another Mortgage Loan, in each case except as provided in the Custodial and Disbursement Agreement. 

  

 -54- 

	 	(f)	In the event Seller or its Affiliate is servicing the Mortgage Loans, Seller shall permit Buyer to inspect Seller’s or its Affiliate’s servicing facilities, as the case
may be, for the purpose of satisfying Buyer that Seller or its Affiliate, as the case may be, has the ability to service the Mortgage Loans as provided in this Agreement. 

  

	25.	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 Purchased Assets 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 Purchased Assets subject to such Transaction would render such definition inapplicable). 

  

	 	(b)	It is understood that either party’s right to liquidate Purchased Assets delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to
Section 16 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 Purchased
Assets subject to such Transaction would render such definition inapplicable). 

  

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

  

	26.	BUYER’S REPRESENTATIONS 

  
 Buyer represents and warrants to Seller that as of the Effective Date and as of the Repurchase Date for the repurchase of any Purchased Assets by Seller
from Buyer hereunder: 
  

	 	(a)	Action. Buyer has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Repurchase Documents to
which it is a party; the execution, delivery and performance by Buyer of each of the Repurchase Documents to which it is a party have been duly authorized by all necessary corporate or other action on its part; and each 

  

 -55- 

 Repurchase Document to which it is a party has been duly and validly executed and delivered by Buyer, and
constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer, in accordance with its terms. 
  

	 	(b)	Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the
execution, delivery or performance by Buyer, of the Repurchase Documents to which it is a party or for the legality, validity or enforceability thereof, except for filings and recordings in respect of the Liens created pursuant to the Repurchase
Documents. 

  

	 	(c)	No Breach. Neither (a) the execution and delivery of the Repurchase Documents nor (b) the consummation of the transactions therein contemplated to be entered into by Buyer in
compliance with the terms and provisions thereof will conflict with or result in a breach of the organizational documents of Buyer, or any applicable law, rule or regulation, or any order, writ, injunction or decree of any Governmental Authority or
other material agreement or instrument to which Buyer or any of its Subsidiaries is a party or by which Buyer or any of its Property is bound or to which Buyer is subject, or constitute a default under any such material agreement or instrument or
result in the creation or imposition of any Lien upon any Property of Buyer, or any of its respective Subsidiaries pursuant to the terms of any such agreement or instrument. 

  

	 	(d)	Purchased Assets. Immediately prior to the repurchase of any Purchased Assets by Seller, Buyer was the sole owner of such Purchased Assets 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 repurchase by Seller hereunder. 

  

	27.	NETTING 

  
 If Buyer and Seller are “financial institutions” as now or hereinafter defined in Section 4402 of Title 12 of the United States Code
(“Section 4402”) and any rules or regulations promulgated thereunder, 
  

	 	(a)	All amounts to be paid or advanced by one party to or on behalf of the other under this Agreement or any Transaction hereunder shall be deemed to be “payment obligations”
and all amounts to be received by or on behalf of one party from the other under this Agreement or any Transaction hereunder shall be deemed to be “payment entitlements” within the meaning of Section 4402, and this Agreement shall be
deemed to be a “netting contract” as defined in Section 4402. 

  

	 	(b)	The payment obligations and the payment entitlements of the parties hereto pursuant to this Agreement and any Transaction hereunder shall be netted as follows. In the event that
either party (the “Defaulting Party”) shall fail to honor any payment obligation under this Agreement or any Transaction hereunder, the other party (the “Nondefaulting Party”) shall be entitled to reduce the amount
of any payment to be made by the Nondefaulting Party to the Defaulting Party by the amount of the payment obligation that the Defaulting Party failed to honor. 

  

 -56- 

	28.	PERIODIC DUE DILIGENCE REVIEW 

  
 Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Mortgage Loans, for purposes of verifying
compliance with the representations, warranties and specifications made hereunder, or otherwise, and Seller agrees that upon reasonable (but no less than one (1) Business Day’s) prior notice unless an Event of Default shall have occurred, in
which case no notice is required, to Seller, 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 Seller and/or Custodian. Seller 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, Seller acknowledges that Buyer may purchase Mortgage Loans from Seller based solely upon the information provided by Seller
to Buyer in the Seller Asset 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 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. Seller agrees 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 Seller. Buyer shall pay all
out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 28 (“Due Diligence Costs”); provided that, (i) in the event that a Default or an Event of Default shall have
occurred or (ii) in the event that Buyer shall determine the need to confirm compliance with local, state or federal laws concerning the regulation of predatory lending practices, Seller shall reimburse Buyer for all Due Diligence Costs for any and
all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 28. 
  

	29.	BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT 

  

	 	(a)	Each of NCCC, NCRC and NCMC hereby irrevocably constitutes and appoints 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 Seller and in the name of Seller or in its own name, from time to time in Buyer’s discretion, for the purpose of carrying out the terms of this 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 

  

 -57- 

 purposes of this Agreement, and, without limiting the generality of the foregoing, Seller hereby gives
Buyer the power and right, on behalf of Seller, without assent by, but with notice to, Seller, to do the following: 
  

	 	(1)	in the name of 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 under any mortgage insurance with respect to a Purchased Item or with respect to any other Purchased Items 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
Buyer for the purpose of collecting any and all such moneys due under any such mortgage insurance with respect to a Purchased Item or with respect to any other Purchased Items whenever payable; 

  

	 	(2)	to pay or discharge taxes and Liens levied or placed on or threatened against the Purchased Items; 

  

	 	(3)	(A) to direct any party liable for any payment under any Purchased Items to make payment of any and all moneys due or to become due thereunder directly to Buyer or as 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 Purchased Items; (C) to sign and endorse any invoices,
assignments, verifications, notices and other documents in connection with any Purchased Items; (D) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Purchased Items
or any proceeds thereof and to enforce any other right in respect of any Purchased Items; (E) to defend any suit, action or proceeding brought against Seller with respect to any Purchased Items; (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 Buyer may deem appropriate; and (G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with
any Purchased Items as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer’s option and Seller’s expense, at any time, and from time to time, all acts and things which Buyer deems
necessary to protect, preserve or realize upon the Purchased Items and Buyer’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as such Seller might do; 

  

	 	(4)	after a Default or an Event of Default, to direct the actions of Custodian with respect to the Purchased Items under the Custodial and Disbursement Agreement; and

  

 -58- 

	 	(5)	to execute, from time to time, in connection with any sale provided for in Section 13, any endorsements, assignments or other instruments of conveyance or transfer with respect to
the Purchased Items. 

  
 Each of NCCC, NCRC and
NCMC 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. Until the occurrence of a Default or Event of Default, Buyer
shall not direct a Servicer in its servicing of the Purchased Assets or commence any servicing actions with respect to the Mortgage Loans pursuant to this Section 28(a). Neither Buyer nor any of its officers, directors, employers or agents shall be
responsible to Seller for any failure to act hereunder prior to a Default or Event of Default. 
  

	 	(b)	The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Purchased Items and Purchased Assets and shall not impose any duty upon it to exercise
any such powers. 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 Seller for any act or
failure to act hereunder, except for its or their own gross negligence or willful misconduct. 

  

	30.	MISCELLANEOUS 

  

	 	(a)	If there is any conflict between the terms of this Agreement or any Transaction entered into hereunder and the Custodial and Disbursement Agreement, this Agreement shall prevail.

  

	 	(b)	This 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 Agreement by signing any such counterpart. 

  

	 	(c)	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 Agreement.

  

	 	(d)	Each of NCCC, NCRC and NCMC hereby acknowledges that: 

  

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

  

	 	(2)	Buyer has no fiduciary relationship to Seller; and 

  

	 	(3)	no joint venture exists between Buyer and Seller. 

  

	31.	CONFIDENTIALITY 

  
 Seller hereby acknowledges and agrees that all information 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 
  

 -59- 

 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 a Default or an Event of Default Buyer determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Assets or
otherwise to enforce or exercise Buyer’s rights hereunder. The provisions set forth in this Section 30 shall survive the termination of this Agreement for a period of one year following such termination. 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 federal income tax treatment of the Transactions, any fact relevant to
understanding the federal tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal income tax treatment; provided that Seller may not disclose the name of or identifying
information with respect to Buyer or any pricing terms (including, without limitation, the Pricing Spread, Purchase Percentage and Purchase Price) or other nonpublic business or financial information (including any sublimits and financial covenants)
that is unrelated to the purported or claimed federal income tax treatment of the Transactions and is not relevant to understanding the purported or claimed federal income tax treatment of the Transactions, without the prior written consent of the
Buyer. Buyer acknowledges that this Agreement will be filed with the SEC. 
  

	32.	CONFLICTS 

  
 In the event of any conflict between the terms of this 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 Agreement shall prevail, and then the terms of the other Repurchase Documents shall prevail. 
  

	33.	SET-OFF 

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

 -60- 

	34.	OBLIGATIONS JOINT AND SEVERAL 

  

	 	(a)	Each of NCCC, NCRC and NCMC hereby acknowledges and agrees that it shall be jointly and severally liable to Buyer for all representations, warranties, covenants, obligations and
indemnities of Seller hereunder. 

  

	 	(b)	Each Seller waives any and all notice of the creation, renewal, extension or accrual of any of the Repurchase Obligations and notice of or proof of reliance by the Buyer upon the
obligations of such Seller set forth herein or acceptance of such obligations by such Seller hereunder. Each Seller waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon each other Seller with
respect to the Repurchase Obligations. Each Seller’s obligations shall be construed as continuing, absolute and unconditional obligations without regard to (i) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by any Seller against the Buyer, or (ii) any other circumstance whatsoever (with or without notice to or knowledge of any Seller) which constitutes, or might be construed to
constitute, an equitable or legal discharge of such Seller for the Repurchase Obligations. Each Seller hereby waives any defense arising by reason of, and any and all right to assert against the Buyer any claim or defense based upon, an election of
remedies by the Buyer which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes such Seller’s subrogation rights, rights to proceed against such Seller or any other party for reimbursement or contribution, and/or any
other rights of such Seller to proceed against any other Seller, against any other guarantor, or against any other person or security. 

  

	 	(c)	The parties intend that the each Seller’s Repurchase Obligations are primary obligations and not in the nature of a guaranty or suretyship. 

  
 [SIGNATURE PAGE FOLLOWS] 
  

 -61- 

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

  

			
	BUYER:
	
	CDC MORTGAGE CAPITAL INC.
		
	By:	 	 /s/ Joe Piscina

	Name:	 	Joe Piscina
	Title:	 	Managing Director
		
	By:	 	 /s/ Kathy Lynch

	Name:	 	Kathy Lynch
	Title:	 	Director

  

			
	Address for Notices:	 	with a copy to:
		
	9 West 57th Street	 	9 West 57th Street
	New York, NY 10019	 	New York, NY 10019
	Attn: Ray Sullivan	 	Attn: Al Zakes, Esq., General Counsel
	Telecopier No.: (212) 891-3347	 	Telecopier No.: (212) 891-1922
	Telephone No.: (212) 891-5815	 	Telephone No.: (212) 891-6137
	Email: r.sullivan@cdcixis-cmna.com	 	Email: albert.zakes@cdcixis- cmna.com
		
	 	 	and with a copy to:
		
	 	 	9 West 57th Street
	 	 	New York, NY 10019
	 	 	Attn: Michael Friedman
	 	 	Telecopier No.: (212) 891-6143
	 	 	Telephone No.: (212) 891-6261
	 	 	Email: m.friedman@cdcixis-cmna.com

			
	SELLER:
	
	 NEW CENTURY MORTGAGE 
       CORPORATION

		
	By:	 	 /s/ Patrick Flanagan

	Name:	 	Patrick Flanagan
	Title:	 	President
	
	Address for Notices:
		
	 	 	18400 Von Karman, Suite 1000
	 	 	Irvine, California 92612
	 	 	Attn: Ralph Flick, Esq.
	 	 	Telecopier No.: (949) 440-7033
	 	 	Telephone No: (949) 862-7749
	 	 	Email: rflick@ncen.com
	
	NC CAPITAL CORPORATION
		
	By:	 	 /s/ Patrick Flanagan

	Name:	 	Patrick Flanagan
	Title:	 	Chief Executive Officer
	
	Address for Notices:
		
	 	 	18400 Von Karman, Suite 1000
	 	 	Irvine, California 92612
	 	 	Attn: Ralph Flick, Esq.
	 	 	Telecopier No.: (949) 440-7033
	 	 	Telephone No: (949) 862-7749
	 	 	Email: rflick@ncen.com

			
	NC RESIDUAL II CORPORATION
		
	By:	 	 /s/ Patrick Flanagan

	Name:	 	Patrick Flanagan
	Title:	 	President
	
	Address for Notices:
		
	 	 	18400 Von Karman, Suite 1000
	 	 	Irvine, California 92612
	 	 	Attn: Ralph Flick, Esq.
	 	 	Telecopier No.: (949) 440-7033
	 	 	Telephone No: (949) 862-7749
	 	 	Email: rflick@ncen.com

 The undersigned guarantor hereby (a) consents and agrees to the foregoing Third Amended and Restated
Master Repurchase Agreement, dated as of September 10, 2004 (the “Repurchase Agreement”), and (b) acknowledges that the terms of the Repurchase Agreement shall be covered by the Guaranty, as defined therein: 
  

			
	 NEW CENTURY FINANCIAL
 CORPORATION

		
	By:	 	 /s/ Patrick Flanagan

	Name:	 	Patrick Flanagan
	Title:	 	Executive Vice President
		
	By:	 	 /s/ Edward F. Gotschall

	Name:	 	Edward F. Gotschall
	Title:	 	Vice Chairman-Finance

 SCHEDULE 1 
  

REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS 
  
 Part I: Residential Mortgage Loans 
  
 Each of NCCC, NCRC and NCMC represents and warrants to Buyer, with respect to each Mortgage Loan, that as of the Purchase Date for the purchase of any Purchased Assets by
Buyer from Seller and as of the date of this Agreement and any Transaction hereunder and at all times while the Repurchase Documents and any Transaction hereunder is in full force and effect. For purposes of this Schedule 1 and the
representations and warranties set forth herein, a breach of a representation or warranty shall be deemed to have been cured with respect to a Mortgage Loan if and when Seller has taken or caused to be taken action such that the event, circumstance
or condition that gave rise to such breach no longer adversely affects such Mortgage Loan. 
  

	 	(1)	Mortgage Loans as Described. The information set forth in the Seller Asset Schedule is complete, true and correct; 

  

	 	(2)	Payments Current. All payments required to be made up to the related Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have been made and credited. No
payment required under the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been delinquent for 30 days or more than once in the 12 months preceding the related Purchase Date. In no event has a payment been more than 59 days
delinquent for such Mortgage Loan. The first Monthly Payment shall be made, or shall have been made, with respect to the Mortgage Loan on its Due Date or within the grace period, all in accordance with the terms of the related Mortgage Note;

  

	 	(3)	No Outstanding Charges. There are no defaults in complying with the terms of the Mortgage securing the Mortgage Loan, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid
and which has been assessed but is not yet due and payable. Except for (A) payments in the nature of escrow payments and (B) interest accruing from the date of the Mortgage Note or date of disbursement of the Mortgage proceeds, whichever is greater
to the day which precedes by one month the Due Date of the first installment of principal and interest, including, without limitation, taxes and insurance payments, Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the Mortgage
Loan proceeds, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest; 

  

 Sch. 1-1 

	 	(4)	Original Terms Unmodified. The terms of the Mortgage Note and Mortgage have not been impaired, waived, altered or modified in any respect, except by a written instrument
which has been recorded, if necessary to protect the interests of Buyer and which has been delivered to Custodian and the terms of which are reflected in the Seller Asset Schedule. The substance of any such waiver, alteration or modification has
been approved by the title insurer, to the extent required by the policy, and its terms are reflected on the Seller Asset Schedule. No Mortgagor has been released, in whole or in part, except in connection with an assumption agreement approved by
the title insurer, to the extent required by the policy, and which assumption agreement is part of the Mortgage File delivered to Custodian and the terms of which are reflected in the Seller Asset Schedule; 

  

	 	(5)	No Defenses. The Mortgage Loan is not subject to any right of rescission, set-off, counterclaim or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding at, or subsequent to, the time the Mortgage Loan was originated; 

  

	 	(6)	Hazard Insurance. Pursuant to the terms of the Mortgage, all buildings or other improvements upon the Mortgaged Property are insured by a generally acceptable insurer against
loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located pursuant to insurance policies conforming to the requirements of Fannie Mae and Freddie Mac in an amount not less
than the greater of (i) 100% of the replacement cost of all improvements to the Mortgaged Property or (ii) the outstanding principal balance of the Mortgage Loan, but in any event at least equal to the amount necessary to avoid the operation of any
co-insurance provisions with respect to the Mortgaged Property, and consistent with the amount that would have been required as of the date of origination in accordance with that required by Fannie Mae and Freddie Mac. If upon origination of the
Mortgage Loan, the Mortgaged Property was in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available) a flood insurance policy meeting
the requirements of the current guidelines of the Federal Flood Insurance Administration is in effect which policy conforms 

  

 Sch. 1-2 

 to the requirements of Fannie Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming Seller and its successors and assigns as mortgagee, and all premiums thereon have been paid and such policies may not be reduced, terminated or cancelled without 30 days’ prior written notice to the mortgagee. The
Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor’s cost and expense, and to seek reimbursement therefor from the Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided
the policy is not a “master” or “blanket” hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer, is in full force and
effect, and will be in full force and effect and inure to the benefit of Buyer upon the consummation of the transactions contemplated by this Agreement. Seller has not engaged in, and has no knowledge of the Mortgagor’s or any
subservicer’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or
realized by Seller; 
  

	 	(7)	Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or
regulations and Seller shall maintain in its possession, available for Buyer’s inspection, and shall deliver to Buyer, upon demand, evidence of compliance with all such requirements; 

  

	 	(8)	No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor; 

  

 Sch. 1-3 

	 	(9)	Location and Type of Mortgaged Property. The Mortgaged Property is a fee simple property located in the state identified in the Seller Asset Schedule, the mortgaged property
consists of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual residential condominium unit in a low-rise condominium project, an individual unit in a planned unit development,
a manufactured home, provided, however, that any condominium unit or planned unit development shall conform with the Underwriting Guidelines. In the case of any Mortgaged Properties that are Manufactured Home Mortgage Loans, (i) such Manufactured
Home Mortgage Loan conforms with the applicable Fannie Mae or Freddie Mac requirements regarding mortgage loans related to manufactured dwellings, (ii) the related manufactured dwelling is permanently affixed to the land, (iii) the related
manufactured dwelling and the related land are subject to a Mortgage properly filed in the appropriate public recording office and naming Seller as mortgagee, (iv) the applicable laws of the jurisdiction in which the related Mortgaged Property is
located will deem the manufactured dwelling located on such Mortgaged Property to be a part of the real property on which such dwelling is located, and (v) such Manufactured Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of
the Internal Revenue Code of 1986, as amended and (y) secured by manufactured housing treated as a single family residence under Section 25(e)(10) of the Code. No portion of the Mortgaged Property is used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as being used for commercial purposes as long as the Mortgaged Property has not been altered for commercial purposes and is not storing any chemicals or raw materials other
than those commonly used for homeowner repair, maintenance and/or household purposes; 

  

	 	(10)	Valid First or Second Lien. The Mortgage is a valid, subsisting, enforceable and perfected first or second lien and first or second priority security interest on the
Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing. The lien of the Mortgage is subject only to: 

  
 (A) the lien of current real property taxes and assessments not yet due and payable; 
  
 (B) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the
Mortgage Loan and (i) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (ii) which do not adversely affect the appraised value of the Mortgaged Property set forth in such appraisal; 
  

 Sch. 1-4 

 (C) other matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property; and 
  
 (D) with respect to each Second Lien Mortgage Loan, a prior mortgage lien on the Mortgaged Property.

  
 Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable (A) first lien and first priority perfected security interest with respect to each First Lien Mortgage Loan, or (B)
second lien and second priority perfected security interest with respect to each Second Lien Mortgage Loan, in either case on the property described therein and Seller has full right to sell and assign the same to Buyer. The Mortgaged Property was
not, as of the date of origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage; 
  

	 	(11)	Validity of Mortgage Loan Documents. The Mortgage Note, the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection
with the Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other related agreement had legal capacity
to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any other related agreement, and the Mortgage Note, the Mortgage and any other related agreement have been duly and properly executed by such parties. The
documents, instruments and agreements submitted for loan underwriting were not falsified and contain no untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the information and
statements therein not misleading. No fraud, error, negligence, misrepresentation or omission of fact with respect to a Mortgage Loan has taken place on the part of Seller or the Mortgagor or any other party involved in the origination or servicing
of the Mortgage Loan. Seller has reviewed all of the documents constituting the Servicing File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein; 

  

	 	(12)	Full Disbursement of Proceeds. The Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been fully disbursed and there is no requirement for future
advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement and 

  

 Sch. 1-5 

 as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage; 
  

	 	(13)	Ownership. Seller is the sole owner of record and holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and Seller has good, indefeasible and marketable
title thereto, and has full right to transfer and sell the Mortgage Loan therein to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject
to no interest or participation of, or agreement with, any other party, to sell and assign each Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, Buyer will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest; 

  

	 	(14)	Doing Business. All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they
held and disposed of such interest, were) (1) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (2) organized under the laws of such state, or (3) qualified to do
business in such state, or (4) federal savings and loan associations or national banks having principal offices in such state, or (5) not doing business in such state; 

  

	 	(15)	LTV; FICO. No Mortgage Loan has an LTV greater than 100%. At origination of the Mortgage Loan, the Mortgagor did not have a FICO score of less than 500.

  

	 	(16)	Title Insurance. The Mortgage Loan is covered by an ALTA lender’s title insurance policy or, with respect to Mortgaged Properties located in California, a CLTA
lender’s title insurance policy, or other generally acceptable form of policy of insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring Seller, its successors and assigns, as to the first or second priority lien of the Mortgage in the original principal amount of the Mortgage Loan, and against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment in the Mortgage Interest Rate and Monthly Payment, subject only to the exceptions contained in clauses (A), (B), and (C), and with
respect to each Second Lien Mortgage Loan clause (D) of Paragraph (10) of this Schedule I. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the 

  

 Sch. 1-6 

 carrier of the required mortgage title insurance. Additionally, such lender’s title insurance
policy affirmatively insures ingress and egress, and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses
and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Seller, its successors and assigns is the sole insured of such lender’s title insurance policy, and such
lender’s title insurance policy is in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and
no prior holder or servicer of the Mortgage, including Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including, without limitation, no unlawful fee, commission, kickback
or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller; 
  

	 	(17)	No Defaults. There is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration. With
respect to each Second Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii) there is no default, breach, violation or event of acceleration existing under such prior mortgage or the related mortgage note, (iii) no event
which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration thereunder, and either (A) the prior mortgage contains a provision which allows or
(B) applicable law requires, the mortgagee under the Second Lien Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to cure any default by payment in full or otherwise under the prior mortgage; 

  

	 	(18)	No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under
the law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage; 

  

	 	(19)	Location of Improvements; No Encroachments. All improvements which were considered in determining the Appraised Value of the Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable
zoning and building law, ordinance or regulation; 

  

 Sch. 1-7 

	 	(20)	Origination: Payment Terms. Either (a) the Mortgage Loan was originated by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and
211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or other similar institution which is supervised and examined by a federal or state authority, or (b) the following
requirements have been met with respect to the Mortgage Loan: Seller meets the requirements set forth in clause (a), and (i) such Mortgage Loan was underwritten in accordance with standards established by Seller, using application forms and related
credit documents approved by Seller, (ii) Seller approved each application and the related credit documents before a commitment by the correspondent was issued, and no such commitment was issued until Seller agreed to fund such Mortgage Loan, (iii)
the closing documents for such Mortgage Loan were prepared on forms approved by Seller, and (iv) such Mortgage Loan was actually funded by Seller and was purchased by Seller at closing or soon thereafter. No Mortgage Loan contains terms or
provisions which would result in negative amortization. Unless such Mortgage Loan is an Interest-Only Loan, principal payments on the Mortgage Loan commenced no more than 60 days after funds were disbursed in connection with the Mortgage Loan. The
Mortgage Interest Rate is adjusted, with respect to adjustable rate Mortgage Loans, on each Interest Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or down to the nearest 0.125%), subject to the Mortgage Interest Rate Cap.
Unless such Mortgage Loan is an Interest-Only Loan, for which monthly payments include interest only and not principal until maturity, the Mortgage Note is payable on the first day of each month in equal monthly installments of principal and
interest, which installments of interest, with respect to adjustable rate Mortgage Loans, are subject to change due to the adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan, unless such Mortgage Loan is an Interest-Only Loan, fully by the stated maturity date, over an original term of not more than 30 years from commencement of amortization. The due date of the first
payment under the Mortgage Note is no more than 60 days from the date of the Mortgage Note; 

  

	 	(21)	Customary Provisions. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor
on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant 

  

 Sch. 1-8 

 to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable
title to the Mortgaged Property. There is no homestead or other exemption available to the Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage subject to
applicable federal and state laws and judicial precedent with respect to bankruptcy and right of redemption; 
  

	 	(22)	Conformance with Underwriting Guidelines and Agency Standards. The Mortgage Loan was underwritten in accordance with Seller’s underwriting guidelines in effect at the
time the Mortgage Loan was originated, a copy of which underwriting guidelines are attached as Exhibit II hereto. The Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or Freddie Mac and Seller has not made any representations
to a Mortgagor that are inconsistent with the mortgage instruments used; 

  

	 	(23)	Occupancy of the Mortgaged Property. As of the related Purchase Date the Mortgaged Property is lawfully occupied under applicable law. All inspections, licenses and
certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate authorities. Seller has not received notification from any Governmental Authority that the Mortgaged Property is in material non-compliance with such laws or regulations, is being used,
operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be. Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard,
license or certificate; 

  

	 	(24)	No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to in Paragraph (10) above; 

  

	 	(25)	Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by Custodian or Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the
Mortgagor; 

  

	 	(26)	Acceptable Investment. The Mortgagor is not in bankruptcy or insolvent and Seller has no knowledge of any circumstances or conditions with respect to the Mortgage, the
Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that can reasonably be expected to cause private institutional investors to regard the Mortgage Loan as an 

  

 Sch. 1-9 

 unacceptable investment, cause the Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan. No Mortgaged Property is located in a state, city, county or other local jurisdiction which the Buyer has determined in its sole good faith discretion would cause the related Mortgage Loan to be ineligible for
whole loan sale or securitization in a transaction consistent with the prevailing sale and securitization industry (including, without limitation, the practice of the rating agencies) with respect to substantially similar mortgage loans; 

 

	 	(27)	Delivery of Mortgage Loan Documents. Other than with respect to Wet-Ink Mortgage Loans, the Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered by Seller under this Agreement have been delivered to Buyer or its Custodian. Seller is in possession of a complete, true and accurate Mortgage File in compliance with Section 2 of the Custodial and Disbursement Agreement,
except for such documents the originals of which have been delivered to Buyer or its Custodian; 

  

	 	(28)	Due on Sale. The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of the Mortgagee thereunder; 

  

	 	(29)	Transfer of Mortgage Loans. The Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged
Property is located; 

  

	 	(30)	No Buydown Provisions; No Graduated Payments or Contingent Interests. The Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially
paid with funds deposited in any separate account established by Seller, the Mortgagor or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions currently in effect which
may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature; 

  

	 	(31)	Consolidation of Future Advances. Any future advances made prior to the related Purchase Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first or second lien priority by
a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan; 

  

 Sch. 1-10 

	 	(32)	Mortgaged Property Undamaged. There is no proceeding pending or threatened for the total or partial condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended;

  

	 	(33)	Collection Practices; Escrow Deposits; Adjustable Rate Mortgage Loan Adjustments. The origination and collection practices used with respect to the Mortgage Loan have been in
accordance with Accepted Servicing Practices and in all respects in compliance with all applicable laws and regulations. With respect to escrow deposits and Escrow Payments (other than with respect to Second Lien Mortgage Loans for which the
mortgagee under the prior mortgage lien is collecting Escrow Payments), all such payments are in the possession of Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been
made. Each Mortgage Loan is covered by a life of loan tax service contract. All Escrow Payments have been collected in full compliance with state and federal laws. An escrow of funds is not prohibited by applicable law and has been established in an
amount sufficient to pay for every item which remains unpaid and which has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due Seller have been capitalized under the Mortgage or the
Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal laws and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state and local laws has been properly
paid and credited; 

  

	 	(34)	Appraisal. The related Servicing File contains an appraisal of the Mortgaged Property signed prior to the approval of the Mortgage application by a appraiser qualified under
Fannie Mae and Freddie Mac guidelines who (i) is licensed in the state where the Mortgaged Property is located, (ii) has no interest, direct or indirect, in the Mortgaged Property or in any Mortgage Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the Mortgage Loan. The appraisal shall have been made within one hundred and eighty (180) days of the origination of the Mortgage Loan, be completed in compliance with the
Uniform Standards of Professional Appraisal Practice, and all applicable Federal and state laws and regulations. If the appraisal was made more than one hundred and twenty (120) days before the origination of the Mortgage Loan, Seller shall have
received and deliver to Buyer a recertification of the appraisal; 

  

 Sch. 1-11 

	 	(35)	Servicemembers Civil Relief Act. The Mortgagor has not notified Seller, and Seller has no knowledge of, any relief requested or allowed to the Mortgagor under the
Servicemembers Civil Relief Act, or any similar state statute; 

  

	 	(36)	Environmental Matters. The Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal
environmental law, rule or regulation. There is no pending action or proceeding directly involving any Mortgaged Property of which Seller is aware in which compliance with any environmental law, rule or regulation is an issue; and to the best of
Seller’s knowledge, nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation consisting a prerequisite to use and enjoyment of said property; 

  

	 	(37)	No Construction Loans. No Mortgage Loan was made in connection with (a) facilitating the trade-in or exchange of a Mortgaged Property or (b) the construction or
rehabilitation of a Mortgaged Property, unless the Mortgage Loan is a construction-to-permanent mortgage loan listed on the Seller Asset Schedule which has been fully disbursed, all construction work is complete and a completion certificate has been
issued; 

  

	 	(38)	No Denial of Insurance. No action, inaction, or event has occurred and no state of fact exists or has existed that has resulted or will result in the exclusion from, denial
of, or defense to coverage under any applicable pool insurance policy, primary mortgage insurance policy, special hazard insurance policy, or bankruptcy bond, irrespective of the cause of such failure of coverage; 

  

	 	(39)	Regarding the Mortgagor. The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such
“living trust” is in compliance with Fannie Mae guidelines for such trusts; 

  

	 	(40)	Mortgagor Acknowledgment. The Mortgagor has received all disclosure materials required by applicable law with respect to the making of Adjustable Rate Mortgage Loans. Seller
shall maintain such documents in the Mortgage File; 

  

	 	(41)	Predatory Lending Regulations; High Cost Loans. No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in violation of any comparable state or local law. The Mortgaged
Property is not located in a jurisdiction where a breach of this representation with respect to the related Mortgage Loan may result in 

  

 Sch. 1-12 

 additional assignee liability to Buyer, as determined by Buyer in its reasonable discretion and as set
forth on Exhibit XI hereto, as such Exhibit may be revised from time to time; 
  

	 	(42)	Qualified Mortgage. The Mortgage Loan is a “qualified mortgage” within the meaning of Section 860G(a)(3) or any successor provision thereof of the Internal Revenue
Code of 1986, as amended. 

  

	 	(43)	Insurance. Seller has caused or will cause to be performed any and all acts required to preserve the rights and remedies of Buyer in any insurance policies applicable to the
Mortgage Loans including, without limitation, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of coinsured, joint loss payee and mortgagee rights in favor of Buyer; 

 

	 	(44)	Simple Interest Mortgage Loans. None of the Mortgage Loans are simple interest Mortgage Loans; 

  

	 	(45)	Prepayment Fee. With respect to each Mortgage Loan that has a prepayment fee feature, each such prepayment fee is enforceable and will be enforced by Seller for the benefit
of Buyer, and each prepayment fee is permitted pursuant to federal, state and local law and is only payable (i) with respect to a Mortgage Loan originated prior to October 1, 2002, during the first 5 years of the term of the Mortgage Loan, and (ii)
with respect to a Mortgage Loan originated on or after October 1, 2002, during the first 3 years of the term of the Mortgage Loan. Each such prepayment fee is in an amount equal to the maximum amount permitted under applicable law;

  

	 	(46)	Flood Certification Contract. Seller shall have obtained a life of loan, transferable flood certification contract for each Mortgage Loan and shall assign all such contracts
to Buyer; 

  

	 	(47)	CLTV. No Second Lien Mortgage Loan has a CLTV in excess of 100%; 

  

	 	(48)	Consent. Either (a) no consent for the Second Lien Mortgage Loan is required by the holder of the related first lien or (b) such consent has been obtained and is contained in
the Mortgage File. 

  

	 	(49)	Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing by Seller to hold the related
Mortgage File as agent and bailee for Buyer or Buyer’s agent and to promptly forward such Mortgage File in accordance with the provisions of the Custodial Agreement. 

  

	 	(50)	No Equity Participation. No document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the
Mortgaged Property or a sharing in 

  

 Sch. 1-13 

 the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note
is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and Seller has not financed nor does it own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor; 
  

	 	(51)	Origination Date. The Origination Date is no earlier than 90 days prior to the date the Mortgage Loan is first purchased by Buyer; 

  

	 	(52)	No Exception. Custodian has not noted any material exceptions on a Basic Status Report and Exception Report or the Seller Asset Schedule and Exception Report, as applicable
(as defined in the Custodial and Disbursement Agreement), with respect to the Mortgage Loan which would materially and adversely affect the Mortgage Loan or Buyer’s ownership of the Mortgage Loan, unless consented to by Buyer;

  

	 	(53)	Mortgage Submitted for Recordation. The Mortgage either has been or will promptly be submitted for recordation in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located; 

  

	 	(54)	Endorsements. Each Mortgage Note has been endorsed by Seller for its own account and not as a fiduciary, trustee, trustor or beneficiary under a trust agreement;

  

	 	(55)	Accuracy of Information. All information provided to Buyer by Seller with respect to the Mortgage Loans is accurate in all material respects; 

  

	 	(56)	Single Premium Credit Insurance. No Mortgagor is offered or required to purchase single premium credit insurance in connection with the origination of the related Mortgage
Loan; 

  

	 	(57)	Fair Credit Reporting Act. The Seller has (or has caused the Servicer to), in its capacity as servicer, for each Mortgage Loan, fully furnished, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete information (e.g., favorable and unfavorable) on its borrower credit files to Equifax, Experian and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis; 

  

	 	(58)	New Century Credit Corporation f/k/a Worth Funding Incorporated. No Mortgage Loan sold hereunder was owned by Worth Funding Incorporated at any time since its Origination
Date; and 

  

	 	(59)	No Arbitration. No Mortgage Loan originated on or after July 1, 2004 requires the related Mortgagor to submit to arbitration to resolve any dispute arising out of or relating
in any way to the Mortgage Loan transaction. 

  

 Sch. 1-14 

 Part II: Defined Terms 
  
 In addition to terms defined elsewhere in the Repurchase Agreement, the following terms shall have the following meanings
when used in this Schedule 1: 
  
 “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 Loans in the jurisdiction where
the related Mortgaged Property is located. 
  
 “Adjustable
Rate Mortgage Loan” shall mean an Adjustable Rate Mortgage Loan purchased pursuant to this Agreement. 
  
 “Covered Loan” shall mean a Mortgage Loan categorized as Covered pursuant to Appendix E of Standard & Poor’s Glossary.

  
 “Due Date” shall mean the day on which the
Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace. 
  
 “Escrow Payments” shall mean with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water charges, sewer rents, municipal charges, mortgage insurance premiums,
fire and hazard insurance premiums, condominium charges, and other payments as may be required to be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note, Mortgage or any other document. 
  
 “First Lien Mortgage Loan” shall mean a Mortgage Loan
secured by a first lien Mortgage on the related Mortgaged Property. 
  
 “Fixed Rate Mortgage Loan” shall mean a fixed rate Mortgage Loan purchased pursuant to this Repurchase Agreement. 
  
 “Gross Margin” shall mean, with respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount set forth in the related
Mortgage Note which amount is added to the index in accordance with the terms of the related Mortgage Note to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate for such Mortgage Loan. 
  
 “Ground Lease” shall mean the original executed instrument
evidencing a leasehold estate with respect to a Mortgaged Property. 
  
 “High Cost Loan” shall mean a Mortgage Loan classified as (a) a “high cost” loan under the Home Ownership and Equity Protection Act of 1994, (b) a “high cost home,” “threshold,” “covered,”
(excluding New Jersey “Covered Home Loans” as that term is defined in clause (1) of the definition of that term in the New Jersey Home Ownership Security Act of 2002), “high risk home,” “predatory” or similar loan under
any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates,
points and/or fees) or (c) a Mortgage Loan categorized as High Cost pursuant 
  

 Sch. 1-15 

 to Appendix E of Standard & Poor’s Glossary. For avoidance of doubt, the parties agree that this definition
shall apply to any law regardless of whether such law is presently, or in the future becomes, the subject of judicial review or litigation. 
  
 “Home Loan” shall mean a Mortgage Loan categorized as Home Loan pursuant to Appendix E of Standard & Poor’s Glossary.

  
 “Interest Rate Adjustment Date” shall mean
with respect to each Adjustable Rate Mortgage Loan, the date set forth in the related Mortgage Note on which the Mortgage Interest Rate on the Mortgage Loan is adjusted in accordance with the terms of the Mortgage Note. 
  
 “Maximum Mortgage Interest Rate” shall mean with respect to
each Adjustable Rate Mortgage Loan, a rate that is set forth on the related Seller Asset Schedule and in the related Mortgage Note and is the maximum interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be increased on any
Interest Rate Adjustment Date. 
  
 “Minimum Mortgage
Interest Rate” shall mean with respect to each Adjustable Rate Mortgage Loan, a rate that is set forth on the related Seller Asset Schedule and in the related Mortgage Note and is the minimum interest rate to which the Mortgage Interest
Rate on such Mortgage Loan may be decreased on any Interest Rate Adjustment Date. 
  
 “Monthly Payment” shall mean with respect to any Mortgage Loan, the scheduled combined payment of principal and interest payable by a Mortgagor under the related Mortgage Note on each Due Date.

  
 “Mortgage Interest Rate” shall mean with
respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note. 
  
 “Standard & Poor’s Glossary” shall mean the Standard & Poor’s LEVELS® Glossary, as may be in effect from time to time.

  

 Sch. 1-16 

 SCHEDULE 2 
  

EXISTING FINANCING FACILITIES 
  
 [TO BE AMENDED/REPLACED BASED ON THE MOST RECENT 10Q FILING] 
  
 Bank of America Financing Facility: the Master Repurchase Agreement dated as of May 10, 2002, as may be amended from time to time, by
and between New Century Funding A and Bank of America, N.A. and all other documents or agreements executed in connection therewith, or replacement facilities with substantially similar terms (including, but not limited to, amounts and rates) with
financial institutions approved by Buyer. 
  
 Morgan Stanley Financing
Facility: the Master Loan and Security Agreement dated June 23, 2003, as may be amended from time to time, between NCCC, NCMC and Morgan Stanley Mortgage Capital, Inc. and all other documents or agreements executed in connection therewith, or
replacement facilities with substantially similar terms (including, but not limited to, amounts and rates) with financial institutions approved by Buyer. 
  
 Salomon Financing Facility: the TBMA/ISMA Global Master Repurchase Agreement, as may be amended from time to time, by and between Salomon Smith Barney Inc. as
agent for Salomon Brothers International Ltd. and NCCC and Annex I thereto, dated as of March 29, 2001 and all other documents or agreements executed in connection therewith, or replacement facilities with substantially similar terms (including, but
not limited to, amounts and rates) with financial institutions approved by Buyer. 
  
 Salomon NCMC Financing Facility: the Letter Agreement, dated December 1, 2000, as may be amended from time to time, by and among Salomon Brothers Realty Corp., NCCC and NCMC and all other documents or agreements executed in
connection therewith, or replacement facilities with substantially similar terms (including, but not limited to, amounts and rates) with financial institutions approved by Buyer. 
  
 Salomon REO Financing Facility: the Master Loan and Security Agreement dated as of April 1, 2000, as may be amended from time to
time, by and between NCMC, NCCC and Salomon Brothers Realty Corp., and all other documents or agreements executed in connection therewith, or replacement facilities with substantially similar terms (including, but not limited to, amounts and rates)
with financial institutions approved by Buyer. 
  
 UBS Financing Facility:
the Committed Note Purchase Agreement dated as of May 10, 2002, as may be amended from time to time, by and between New Century Funding I and UBS Real Estate Securities Inc. (formerly known as Paine Webber Real Estate Securities Inc.) and all other
documents or agreements executed in connection therewith, or replacement facilities with substantially similar terms (including, but not limited to, amounts and rates) with financial institutions approved by Buyer; provided that the UBS Financing
Facility may be terminated or amounts available to Seller thereunder may be reduced so long as it is a result of the repayment of all amounts due thereunder other than as a result of an acceleration or a default. 
  

 Exh. I-1 

 EXHIBIT I 
  

FORM OF TRANSACTION REQUEST 
  
 [Date] 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, NY 10019 
 Attention: 
  
 Ladies/Gentlemen: 
  
 This letter
is a request for you to purchase from us the Mortgage Loans listed in Appendix I hereto, pursuant to the Third Amended and Restated Master Repurchase Agreement governing purchases and sales of Mortgage Loans between us, dated as of September 10,
2004 (the “Agreement”), as follows: 
  
 Requested Purchase Date: 
  
 Eligible Assets requested
to be Purchased: See Appendix I hereto. 
 [Appendix I to Transaction Request will list Mortgage Loans] 
  
 Aggregate Principal Amount of Eligible Assets requested to be purchased:

  
 Purchase Price: 
  
 Pricing Rate: 
  
 Repurchase Date1: 
  
 Repurchase Price: 
  
 Purchase Percentage: 

	1	If marked as “open”, the Repurchase Date shall be one (1) Business Day after the date upon which either Buyer (in its sole discretion) or the Seller (in
its sole discretion) provides to the other written notice of its intention to sell or repurchase, as applicable, the Mortgage Loans on Appendix I hereto; provided that the Repurchase Date shall not, in any event, exceed 364 days from the date
hereof. 

  

 Exh. I-1 

 Names and addresses for communications: 
  
 Buyer: 
  
 CDC Mortgage Capital Inc. 
 9 West
57th Street 
 New York, NY 10019 
 Attention: Ray Sullivan 
 Email: r.sullivan@cdcixis-cmna.com 
  
 with copies to: 
  
 John Racy 
 Email: jracy@cdcixis-cmna.com 
  
 Seller: 
  
 New Century Mortgage Corporation 
 18400 Von
Karman, 
 Suite 1000 
 Irvine,
California 92612 
 Attn: 
 Email: 
  
 This Transaction Request constitutes certification by Seller
that: 
  

	 	1.	No Default or Event of Default has occurred and is continuing on the date hereof nor will occur after giving effect to such Transaction as a result of such Transaction.

  

	 	2.	Each of the conditions precedent set forth in Section 3 with respect to the Transaction has been satisfied. 

  

	 	3.	Each of the representations and warranties made by Seller in or pursuant to the Agreement is true and correct in all material respects on and as of such date and as of the date
hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date). 

  

	 	4.	Seller is in compliance with all governmental licenses and authorizations and is qualified to do business and is in good standing in all required jurisdictions.

  
 All capitalized terms used herein shall have the
meaning assigned thereto in the Agreement. 
  

 Exh. I-2 

 EXHIBIT II 
  

UNDERWRITING GUIDELINES 
  

 Exh. II-1 

 EXHIBIT III 
  
 FORM OF OPINIONS 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, NY 10019 
  
 Dear Sirs and Mesdames: 
  
 You have requested our opinion as counsel to New Century Mortgage Corporation (“NCMC”), NC Residual II Corporation
(“NCRC”) and NC Capital Corporation (“NCCC”) and New Century Financial Corporation (the “Guarantor”), each a corporation organized and existing under the laws of California, with respect to certain
matters in connection with that certain Third Amended and Restated Master Repurchase Agreement governing purchases and sales of certain Mortgage Loans, dated as of September 10, 2004 (the “Repurchase Agreement”), by and among NCCC,
NCRC, NCMC and CDC Mortgage Capital Inc. (the “Buyer”), the Custodial Agreement, dated as of May 10, 2002, as amended (the “Custodial Agreement”), among NCCC, NCRC, NCMC, Buyer and Deutsche Bank National Trust
Company, as custodian and disbursement agent and the Account Agreement, dated as of September 10, 2004 (the “Account Agreement”), among NCCC, NCRC, NCMC, Buyer and Union Bank of California, N.A.. The Master Repurchase Agreement, the
Custodial Agreement and the Account Agreement are hereinafter collectively referred to as the “Governing Agreements.” Capitalized terms not otherwise defined herein have the meanings set forth in the Repurchase Agreement.

  

	 	[We]	[I] have examined the following documents: 

  

	 	1.	the Repurchase Agreement; 

  

	 	2.	the Custodial and Disbursement Agreement; 

  

	 	3.	the Account Agreement; 

  

	 	4.	unfiled copies of the financing statements listed on Schedule 1 (collectively, the “Financing Statements”) naming each of NCCC, NCRC and NCMC as Debtor and
Buyer as Secured Party and describing the Purchased Items (as defined in the Master Repurchase Agreement) as to which security interests may be perfected by filing under the Uniform Commercial Code of the States listed on Schedule 1 attached
hereto (the “Filing Collateral”), which I understand will be filed in the filing offices listed on Schedule 1 attached hereto (the “Filing Offices”); 

  

	 	5.	the reports listed on Schedule 2 as to UCC financing statements (collectively, the “UCC Search Report”); and 

  

	 	6.	such other documents, records and papers as we have deemed necessary and relevant as a basis for this opinion. 

  
 To the extent [we] [I] have deemed necessary and proper, [we] [I] have relied
upon the representations and warranties of NCCC, NCRC and NCMC contained in the 
  

 Exh. III-1 

 Repurchase Agreement. [We] [I] have assumed the authenticity of all documents submitted to me [us] as originals, the
genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all documents. 
  
 Based upon the foregoing, it is [our] [my] opinion that: 
  
 1. Each of NCCC and NCMC is a corporation duly organized, validly existing and in good standing under the laws of the State of California and is qualified
to transact business in, and is in good standing under, the laws of the State of California. NCRC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to transact business
in, and is in good standing under, the laws of the State of Delaware. 
  
 2. Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to transact business in, and is in good standing under, the laws of the State of Delaware.

  
 3. The execution, delivery and performance by each of NCCC,
NCRC, NCMC and Guarantor of the Governing Agreements to which it is a party, and the sales by NCCC, NCRC and NCMC and the pledge of the Purchased Items under the Repurchase Agreement have been duly authorized by all necessary corporate action on the
part of NCCC, NCRC, NCMC and Guarantor, as applicable. Each of the Governing Agreements to which it is a party have been executed and delivered by NCCC, NCRC, NCMC and Guarantor and are legal, valid and binding agreements enforceable in accordance
with their respective terms against Seller, subject to bankruptcy laws and other similar laws of general application affecting rights of creditors and subject to the application of the rules of equity, including those respecting the availability of
specific performance, none of which will materially interfere with the realization of the benefits provided thereunder or with Buyer’s purchase of the Purchased Assets and/or security interest in the Purchased Assets. 
  
 4. No consent, approval, authorization or order of, and no filing or
registration with, any court or governmental agency or regulatory body is required on the part of NCCC, NCMC or Guarantor for the execution, delivery or performance by NCCC, NCRC, NCMC or Guarantor of the Governing Agreements to which it is a party
or for the sales by NCCC, NCRC or NCMC under the Repurchase Agreement or the sale of the Purchased Items to Buyer and/or granting of a security interest to Buyer in the Purchased Items, pursuant to the Repurchase Agreement. 
  
 5. The execution, delivery and performance by NCCC, NCRC, NCMC or Guarantor
of, and the consummation of the transactions contemplated by the Governing Agreements to which it is a party do not and will not (a) violate any provision of NCCC’s, NCRC’s, NCMC’s or Guarantor’s, as applicable, charter or
by-laws, (b) violate any applicable law, rule or regulation, (c) violate any order, writ, injunction or decree of any court or governmental authority or agency or any arbitral award applicable to NCCC, NCRC, NCMC or Guarantor of which I [we] have
knowledge (after due inquiry) or (d) result in a breach of, constitute a default under, require any consent under, or result in the acceleration or required prepayment of any indebtedness pursuant to the terms of, any agreement or instrument of
which I 
  

 Exh. III-2 

 have knowledge (after due inquiry) to which NCCC, NCRC, NCMC or Guarantor is a party or by which NCCC, NCRC, NCMC or
Guarantor is bound or to which NCCC, NCRC, NCMC or Guarantor is subject, or (except for the Liens created pursuant to the Repurchase Agreement) result in the creation or imposition of any Lien upon any Property of NCCC, NCRC, NCMC or Guarantor
pursuant to the terms of any such agreement or instrument. 
  
 6.
There is no action, suit, proceeding or investigation pending or, to the best of [our] [my] knowledge, threatened against NCCC, NCRC, NCMC or Guarantor which, in [our] [my] judgment, either in any one instance or in the aggregate, could be
reasonably likely to result in any material adverse effect on (a) the Property, business, operations, financial condition or prospects of NCCC, NCRC, NCMC or Guarantor, (b) the ability of NCCC, NCRC or NCMC 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 Buyer under any of the Repurchase Documents, (e) the timely payment of any amounts payable under
the Repurchase Documents, (f) the Asset Value of the Purchased Assets or (g) the ability of Guarantor to perform its obligations under the Guaranty. 
  
 7. The Repurchase Agreement is effective to create, in favor of Buyer, either a valid sale of the Purchased Items to Buyer or a valid security interest
under the Uniform Commercial Code in all of the right, title and interest of NCCC, NCRC and NCMC in, to and under the Purchased Items as collateral security for the payment of NCCC’s, NCRC’s and NCMC’s obligations under the Repurchase
Agreement, except that (a) such security interests will continue in Purchased Items after its sale, exchange or other disposition only to the extent provided in Section 9-306 of the Uniform Commercial Code, (b) the security interests in Purchased
Items in which Seller acquires rights after the commencement of a case under the Bankruptcy Code in respect of NCCC, NCRC or NCMC may be limited by Section 552 of the Bankruptcy Code. 
  
 8. When the Mortgage Notes are delivered to Custodian, endorsed in blank by a duly authorized officer of NCCC, NCRC or NCMC,
as applicable, the security interest referred to in Section 7 above in the Mortgage Notes will constitute a fully perfected first priority security interest in all right, title and interest of Seller therein. 
  
 9. (a) Upon the filing of financing statements on Form UCC-1 naming Buyer as
“Secured Party” and NCCC, NCRC and NCMC as “Debtor”, and describing the Purchased Items, in the jurisdictions and recording offices listed on Schedule 1 attached hereto, the security interests referred to in Section 7
above will constitute fully perfected security interests under the Uniform Commercial Code in all right, title and interest of NCCC, NCRC and NCMC in, to and under such Purchased Items, which can be perfected by filing under the Uniform Commercial
Code, or, will demonstrate a completion of the sale of the Mortgage Loans to Buyer. 
  
 (b) The UCC Search Report sets forth the proper filing offices and the proper debtors necessary to identify those Persons who have on file in the jurisdictions listed on Schedule 1 financing statements covering
the Purchased Items as of the dates and times specified on Schedule 2. The UCC Search Report identifies no Person who has filed in any Filing Office a financing statement describing the Purchased Items prior to the effective dates of the UCC
Search Report. 
  

 Exh. III-3 

 10. None of NCCC, NCRC, NCMC nor Guarantor is an “investment company”, or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. 
  
 11. Commencing with NCRC’s initial taxable year ended [            ], the Company
is organized in conformity with the requirements for qualification as a real estate investment trust (a “REIT”) under the Code, and the Company’s actual method of operations and its proposed method of operations will enable the
Company to meet the requirements for qualification and taxation as a REIT under the Code. 
  
 Very truly yours, 
  

 Exh. III-4 

 EXHIBIT IV 
  

UCC FILING JURISDICTIONS 
  
 Secretary of State of California 
 Secretary of
State of Delaware 
  

 Exh. IV-1 

 EXHIBIT V 
  

FORM OF ACCOUNT AGREEMENT 
  
 [date] 
  
 New Century Mortgage Corporation, as Seller 
 NC Capital Corporation, as Seller 
 18400 Von Karman, 
 Suite 1000 
 Irvine, California 92612 
 Attn: Ralph Flick, Esq. 
  
 [BANK], as Bank 
 [ADDRESS] 
 Attn: 
  

	 	Re:	Collection Account Established by NEW CENTURY MORTGAGE CORPORATION (“NCMC”), NC RESIDUAL II CORPORATION (“NCRC”), NC CAPITAL CORPORATION
(“NCCC” and, together with NCRC and NCMC, “Seller”) at [BANK] (the “Bank”) pursuant to that certain Third Amended and Restated Master Repurchase Agreement (as amended, supplemented or otherwise modified
from time to time, the “Repurchase Agreement”), dated as of September 10, 2004, among CDC Mortgage Capital Inc. (the “Buyer”), NCCC, NCRC and NCMC. 

  
 Ladies and Gentlemen: 
  
 Seller has entered into a Repurchase Agreement pursuant to which Buyer may from time to time purchase mortgage loans (the
“Purchased Assets”) secured by, among other things, the payments made by mortgagors on account of Purchased Assets sold to Buyer under the Repurchase Agreement. As a requirement of such transactions, upon a default or an event of
default under the Repurchase Agreement, all such payments are required to be forwarded daily to Buyer at the Collection Account identified below within one (1) Business Day of receipt. 
  
 Seller has established a collection account, Account No. [        ], for the
account of Buyer, with the Bank, ABA# [                    ] (the “Collection Account”) which the Bank maintains in
the name of, and in trust for, Buyer as the Bank’s customer. Seller has granted to Buyer a security interest in all payments deposited in the Collection Account with respect to the Purchased Assets sold to Buyer under the Repurchase Agreement.

  
 In the event the Bank receives notice from Buyer that a
default or an event of default has occurred and is continuing under the Repurchase Agreement (a “Notice of Event of Default”) from Buyer, the Bank shall in no event (a) transfer funds from the Collection Account to Seller or any
other person other than pursuant to Buyer’s direction, (b) act on the instruction of Seller or any person other than Buyer or (c) cause or permit withdrawals from the Collection 
  

 Exh. V-1 

 Account in any manner not approved by Buyer in writing. Until receipt of a Notice of an Event of Default, Seller shall be
permitted to withdraw funds or cause funds to be transferred from the Collection Account without Buyer’s approval. 
  
 The Bank hereby waives any right that the Bank may now or hereafter have to security interest, bank’s or other possessory liens, rights to offset or
other claims against the funds in the Collection Account. 
  
 In
addition, the Bank acknowledges that (a) Seller has granted to Buyer a security interest in all of Seller’s right, title and interest in and to any funds from time to time on deposit in the Collection Account with respect to the Purchased
Assets sold to Buyer under the Repurchase Agreement, (b) that such funds are received by the Bank in trust for the benefit of Buyer and, except as provided below, are for application against Seller’s obligations to Buyer, and (c) that the Bank
shall comply with Buyer’s instructions regarding the disposition of funds in the Collection Account in accordance with Buyer’s instructions, without the consent of Seller until the Bank receives notice from Buyer that it has released its
lien on the Collection Account and all funds deposited therein. 
  
 All bank statements in respect to the Collection Account shall be sent to Buyer at: 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, NY 10019 
 Attention: Ray Sullivan 
 Email: r.sullivan@cdcixis-cmna.com 
  
 with copies to Seller at: 
  

	
	[Seller]
	  

	  

	Attention:
	Email:

  
 This account
agreement shall be governed and construed in accordance with the laws of the State of New York without regard to conflicts of law principles. 
  

 Exh. V-2 

 Kindly acknowledge your agreement with the terms of this agreement by signing the enclosed copy of this
letter and returning it to the undersigned. 
  

			
	 Very truly yours,

	
	 CDC MORTGAGE CAPITAL INC.

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

			
	 Agreed and acknowledged:

	
	 NEW CENTURY MORTGAGE CORPORATION, as Seller

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 NC CAPITAL CORPORATION, as Seller

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 Agreed and acknowledged:

	
	 [BANK], as Bank

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 [SERVICER]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 Exh. V-3 

 EXHIBIT VI 
  

FORM OF TRUE SALE CERTIFICATION 
  
 CERTIFICATE OF [NEW CENTURY MORTGAGE CORPORATION] 
  
 In connection with the transaction pursuant to the Third Amended and Restated Master Repurchase Agreement, dated as of September 10, 2004 between CDC
Mortgage Capital Inc., NC Capital Corporation [(the “Purchaser”)] and New Century Mortgage Corporation [(the “Purchaser”)], the undersigned certifies, on behalf of Purchaser that: 
  
 1. I personally participated as the
                     of the Purchaser in the transaction (the “Transaction”), pursuant to which [INSERT NAME OF SELLING
ENTITY] (the “Seller”) sold [DESCRIBE ASSETS] (the “Assets”) to the Purchaser. In such capacity, I reviewed the purchase and sale agreement relating to the Transaction dated as of
                         , 200[    ] (the “Purchase and Sale
Agreement”). 
  
 2. Due to my close involvement in the
Transaction, I can accurately and diligently certify the facts listed herein on behalf of the Purchaser. 
  
 3. Seller has shifted all of the risks and burdens which are associated with the ownership of the Assets to the Purchaser. 
  
 4. Seller has shifted all of the benefits and rewards which are associated
with the Assets to the Purchaser. Subsequent to the consummation of the Transaction, Seller had no control or other rights with respect to the Assets, and all legal rights and title with respect to the Assets vested in the Purchaser. 
  
 5. There has been no recourse to Seller with respect to the performance of
the Assets. 
  
 6. As of the date of the consummation of the
Transaction, Seller received from the Purchaser reasonably equivalent value for the transferred Assets, in the form of [DESCRIBE CONSIDERATION]. 
  
 7. The Purchase and Sale Agreement represented the intention of Seller and the Purchaser to accomplish a complete and irrevocable sale of the Assets.

  
 8. Seller neither was obligated to repurchase, nor had any
“call” rights with respect to, the Assets. 
  
 9. The
Purchaser neither was obligated to sell the Assets back to Seller, nor had any “put” rights with respect to the Assets. 
  
 10. The Purchaser’s books and records reflect that the Transaction was a purchase of the Assets from the Seller, rather than a secured financing or a
loan. 
  

 Exh. VI-1 

 11. The Purchaser treated the Transaction as a purchase for accounting and tax purposes. 
  
 12. The Transaction was duly authorized by the Purchaser’s officers and
directors, as required by the Purchaser’s organizational documents and applicable law. 
  
 I have been duly authorized to execute this certificate on behalf of Purchaser. 
  

			
	 [NEW CENTURY MORTGAGE CORPORATION]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 Exh. VI-2 

 CERTIFICATE OF [NAME OF SELLING ENTITY] 
  
 In connection with the transaction pursuant to the Third Amended and Restated
Master Repurchase Agreement, dated as of September 10, 2004 between CDC Mortgage Capital Inc., NC Capital Corporation [(the “Purchaser”)] and New Century Mortgage Corporation [(the “Purchaser”)], the undersigned
certifies, on behalf of [NAME OF SELLING ENTITY] (the “Seller”) that: 
  
 1. I personally participated as the                      of Seller in the transaction (the
“Transaction”) pursuant to which Seller sold [DESCRIBE ASSETS] (the “Assets”) to the Purchaser. In such capacity, I reviewed the purchase and sale agreement relating to the Transaction dated as of
                     , 200[    ] (the “Purchase and Sale Agreement”). 
  
 2. Due to my close involvement in the Transaction, I can accurately and
diligently certify the facts listed herein on behalf of Seller. 
  
 3. Seller has shifted all of the risks and burdens which are associated with the ownership of the Assets to the Purchaser. 
  
 4. Seller has shifted all of the benefits and rewards which are associated with the Assets to the Purchaser. Subsequent to the consummation of the
Transaction, Seller had no control or other rights with respect to the Assets, and all legal rights and title with respect to the Assets vested in the Purchaser. 
  
 5. There has been no recourse to Seller with respect to the performance of the Assets. 
  
 6. As of the date of the consummation of the Transaction, Seller received
from the Purchaser reasonably equivalent value for the transferred Assets, in the form of [DESCRIBE CONSIDERATION]. 
  
 7. The Purchase and Sale Agreement represented the intention of Seller and the Purchaser to accomplish a complete and irrevocable sale of the Assets.

  
 8. Seller neither was obligated to repurchase, nor had any
“call” rights with respect to, the Assets. 
  
 9. The
Purchaser neither was obligated to sell the Assets back to Seller, nor had any “put” rights with respect to the Assets. 
  
 10. Seller’s books and records reflect that the Transaction was a sale of the Assets to the Purchaser, rather than a secured financing or a loan.

  
 11. Seller treated the Transaction as a sale for accounting
and tax purposes. 
  
 12. The Transaction was duly authorized by
Seller’s officers and directors, as required by Seller’s organizational documents and applicable law. 
  

 Exh. VI-3 

 I have been duly authorized to execute this certificate on behalf of [Insert name of Selling
Entity]. 
  

			
	[INSERT NAME OF SELLING ENTITY]
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 Exh. VI-4 

 EXHIBIT VII-A 
  
 FORM OF SELLER’S RELEASE LETTER 
  
 [Date] 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, NY 10019 
  

	 	Re:	Third Amended and Restated Master Repurchase Agreement, dated as of September 10, 2004 (the “Repurchase Agreement”), by and among New Century Mortgage Corporation
(“NCMC”), NC RESIDUAL II CORPORATION (“NCRC”), NC Capital Corporation (“NCCC” and, together with NCRC and NCMC, the “Seller”) and CDC Mortgage Capital Inc. (the
“Buyer”). 

  
 Ladies and Gentlemen: 
  
 With respect to the mortgage loans described in the attached Schedule
A (the “Mortgage Loans”) (a) we hereby certify to you that the Mortgage Loans are not subject to a lien of any third party and (b) we hereby release all right, interest or claim of any kind with respect to such Mortgage Loans,
such release to be effective automatically without further action by any party upon payment from CDC Mortgage Capital Inc., of the amount of the Purchase Price contemplated under the Repurchase Agreement (calculated in accordance with the terms
thereof) in accordance with the wiring instructions set forth in the Repurchase Agreement. 
  

			
	 Very truly yours,

	
	 NEW CENTURY MORTGAGE CORPORATION

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 Exh. VII-A-1 

			
	 NC RESIDUAL II CORPORATION

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 NC CAPITAL CORPORATION

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 Exh. VI-2 

 EXHIBIT VII-B 
  
 FORM OF WAREHOUSE LENDER’S RELEASE LETTER 
  
 [Date] 
  
 CDC Mortgage Capital Inc. 
 9 West 57th Street 
 New York, NY 10019 
  

	 	Re:	Certain Mortgage Loans Identified on Schedule A hereto and owned by [Seller] 

  
 The undersigned hereby releases all right, interest, lien or claim of any kind with respect to the mortgage loan(s)
described in the attached Schedule A, such release to be effective automatically without any further action by any party upon payment in one or more installments, in immediately available funds of
$                    , in accordance with the following wire instructions: 
  

			
	  

	  

	
	 Very truly yours,

	
	 [WAREHOUSE LENDER]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 Exh.VII-B-1 

 EXHIBIT VIII 
  
 FORM OF SERVICER NOTICE 
  
 September 10, 2004 
  
 [SERVICER], as Servicer 
 [ADDRESS] 
 Attention: 
  

	 	Re:	Master Repurchase Agreement, dated as of [                    ,
200  ] (the “Agreement”), by and between [Seller] (the “Seller”) and [Buyer] (the “Buyer”). 

  
 Ladies and Gentlemen: 
  
 [SERVICER] (the “Servicer”) is servicing certain mortgage loans for Seller pursuant to certain [name servicing agreements] (the “Servicing
Agreement”) between the Servicer and Seller. Pursuant to the Agreement between Buyer and Seller, the Servicer is hereby notified that Seller has sold to Buyer certain mortgage loans which are serviced by Servicer. 
  
 Upon receipt of a notice (a “Default Notice”) from Buyer in which Buyer
shall (a) represent that a default or an event of default has occurred with respect to Seller’s obligations to Buyer and (b) identify the mortgage loans which are then owned by Buyer under the Agreement (the “Mortgage Loans”),
the Servicer shall segregate all amounts collected on account of such Mortgage Loans, hold them in trust for the sole and exclusive benefit of Buyer, and remit such collections in accordance with Buyer’s written instructions. Following receipt
of such Default Notice, Servicer shall follow the instructions of Buyer with respect to the Mortgage Loans, and shall deliver to Buyer any information with respect to the Mortgage Loans reasonably requested by Buyer. 
  
 Upon a receipt of a Default Notice, Buyer shall have the right to terminate the Servicing
Agreement and transfer servicing to its designee, at no cost or expense to Buyer, and Seller shall pay any and all fees required to terminate the Servicing Agreement and to effectuate the transfer of servicing to the designee of Buyer. 

 
 Notwithstanding any contrary information which may be delivered to the Servicer by Seller,
the Servicer may conclusively rely on any information or Default Notice delivered by Buyer, and Seller shall indemnify and hold the Servicer harmless for any and all claims asserted against it for any actions taken in good faith by the Servicer in
connection with the delivery of such information or Default Notice. 
  

 Exh. VIII-1 

 Please acknowledge receipt of this instruction letter by signing in the signature block below and forwarding an executed
copy to Buyer promptly upon receipt. Any notices to Buyer should be delivered to the following address: 9 West 57th
Street, New York, New York 10019, Attention: Ray Sullivan. 
  

			
	 Very truly yours,

	
	 NEW CENTURY MORTGAGE CORPORATION

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 NC CAPITAL CORPORATION

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

			
	 ACKNOWLEDGED AND AGREED:

	
	 [SERVICER]

	 as Servicer

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	 Telephone:
	 	 
	 Facsimile:
	 	 

  

 Exh. VIII-2 

 EXHIBIT IX 
  
 FORM OF REQUEST FOR ADDITIONAL TRANSACTIONS FOR EXCESS MARGIN 
  
 Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed thereto in the Third Amended and Restated Master
Repurchase Agreement dated as of             , 200   between [SELLER] (the “Seller”) and CDC Mortgage Capital Inc. (“Buyer”).

  
 Pursuant to Section 3(o) of the Repurchase Agreement, Seller
hereby requests the advance of additional Transactions, and in connection with such request provides the following information: 
  

			
	Requested Increase in	  	 
	Purchase Price	  	___________
		
	Requested Purchase Date	  	$                        
		
	Excess Margin prior to giving effect to Requested Transaction	  	$                        
		
	Remaining Excess Margin after giving effect to such Transaction	  	$                        
		
	Aggregate Outstanding Purchase Price of the Transactions as of Date Hereof after giving effect to the Requested Transaction	  	$                        

  
 Seller hereby
certifies that, after giving effect to the Transaction requested pursuant hereto, the Margin Base will be equal to or greater than the aggregate Purchase Price of the Transactions. 
  
 This Request For Additional Transactions For Excess Margin is dated
                    . 
  

 Exh. IX-1 

 EXHIBIT X 
  
 FORM OF COMPLIANCE CERTIFICATE 
  
 OFFICER’S CERTIFICATE 
  
 I,                 , the duly appointed, qualified and acting
                 of [SELLER], a [            ]
[                ] (the “Company”), hereby certify on behalf of the Company to CDC Mortgage Capital Inc. (“CDC”) as follows: 
  
 1. This certificate is being furnished to Buyer pursuant to Section 11(y) of
the Master Repurchase Agreement, dated as of September 10, 2004 (the “Repurchase Agreement”), between the Company and CDC. 
  
 2. Pursuant to Section 10(h) of the Repurchase Agreement, Schedule 1 attached hereto sets forth (i) upon Buyer’s request, all claims in an aggregate
amount greater than $5,000,000 and (ii) all claims which individually or in the aggregate, if adversely determined, could reasonably be likely to have a Material Adverse Effect. 
  
 3. After a review of the Company’s activities during the period from
            , 200   ended             , 200   (the “Subject Period”), I
have determined the following: (a) if applicable for the Subject Period, the Company has complied with the financial covenants set forth in Sections 11(m), 11(n), 11(o) and 11(s) of the Repurchase Agreement; (b) compliance by the Company with the
above-referenced financial covenants is accurately calculated on Schedule 2 attached hereto; and (c) that the Company has Cash, Cash Equivalents and available borrowing capacity as follows: 
  

			
	$                        	 	Cash
		
	$                        	 	Cash Equivalents
		
	$                        	 	Available borrowing capacity calculated pursuant to Section 11(n)
		
	 	 	[list Existing Financing Facility]

  
 4. NCRC is, and has
been since             , organized and operating in conformity with the requirements for qualification and taxation as a real estate investment trust (a “REIT”) under the
Internal Revenue Code of 1986, as amended (“Code”). Attached hereto as Schedule 2 is a true and correct summary of the calculations for REIT qualification of NCRC. 
  
 Capitalized terms used herein without definition have the meanings given them in the Repurchase Agreement. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 Exh. X-1 

 IN WITNESS WHEREOF, I have executed this certificate on behalf of the Company this
[        ] day of [                ], 200  . 
  

			
	 [_______________________]

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 Exh. X-2 

 EXHIBIT XI 
  
 ASSIGNEE LIABILITY JURISDICTIONS 
  
 [none] 
  

 Exh. XI-1

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