Document:

Master Repurchase Agreement dated 02/27/2002

 EXHIBIT 10.8 
  
 EXECUTION VERSION 

  
 MASTER REPURCHASE AGREEMENT 
  
 Between: 
  
 Merrill Lynch Mortgage Capital Inc., as Buyer 
  
 and 
  
 HomeBanc Mortgage Corporation, as Seller 
  
 Dated as of February 27, 2002 
  

  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

			
	 SECTION 1.
	  	 APPLICABILITY
	  	1
			
	 SECTION 2.
	  	 DEFINITIONS
	  	1
			
	 SECTION 3.
	  	 INITIATION; TERMINATION
	  	16
			
	 SECTION 4.
	  	 MARGIN AMOUNT MAINTENANCE
	  	20
			
	 SECTION 5.
	  	 INCOME PAYMENTS
	  	21
			
	 SECTION 6.
	  	 REQUIREMENTS OF LAW
	  	22
			
	 SECTION 7.
	  	 TAXES
	  	23
			
	 SECTION 8.
	  	 SECURITY INTEREST
	  	24
			
	 SECTION 9.
	  	 PAYMENT, TRANSFER AND CUSTODY
	  	25
			
	 SECTION 10.
	  	 HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOAN
	  	25
			
	 SECTION 11.
	  	 REPRESENTATIONS
	  	25
			
	 SECTION 12.
	  	 COVENANTS
	  	30
			
	 SECTION 13.
	  	 EVENTS OF DEFAULT
	  	37

  

 -i- 

					
			
	 SECTION 14.
	  	 REMEDIES
	  	39
			
	 SECTION 15.
	  	 INDEMNIFICATION AND EXPENSES; RECOURSE
	  	41
			
	 SECTION 16.
	  	 SERVICING
	  	42
			
	 SECTION 17.
	  	 SINGLE AGREEMENT
	  	43
			
	 SECTION 18.
	  	 SET-OFF
	  	43
			
	 SECTION 19.
	  	 NOTICES AND OTHER COMMUNICATIONS
	  	44
			
	 SECTION 20.
	  	 ENTIRE AGREEMENT; SEVERABILITY
	  	44
			
	 SECTION 21.
	  	 NON-ASSIGNABILITY
	  	44
			
	 SECTION 22.
	  	 TERMINABILITY
	  	45
			
	 SECTION 23.
	  	 GOVERNING LAW
	  	46
			
	 SECTION 24.
	  	 SUBMISSION TO JURISDICTION; WAIVERS
	  	46
			
	 SECTION 25.
	  	 NO WAIVERS, ETC
	  	47
			
	 SECTION 26.
	  	 DUE DILIGENCE
	  	47
			
	 SECTION 27.
	  	 BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT
	  	48
			
	 SECTION 28.
	  	 MISCELLANEOUS
	  	49

  

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	 SECTION 29.
	  	 CONFIDENTIALITY
	  	49
			
	 SECTION 30.
	  	 INTENT
	  	50
			
	SECTION 31.	  	 DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
	  	50
			
	 SECTION 32.
	  	 CONFLICTS
	  	51

  

 -iii- 

 EXHIBITS 
  

			
		
	 SCHEDULE 1
	  	 Representations and Warranties Re: Mortgage Loans

		
	 SCHEDULE 2
	  	 Existing Indebtedness

		
	 EXHIBIT I
	  	 Form of Confirmation Letter

		
	 EXHIBIT II
	  	 Form of Opinion Letter

		
	 EXHIBIT III
	  	 UCC Filing Jurisdictions

		
	 EXHIBIT IV
	  	 Form of Account Agreement

		
	 EXHIBIT V
	  	 Mortgage Loan Schedule Fields

		
	 EXHIBIT VI
	  	 Mortgage File Documents

		
	 EXHIBIT VII
	  	 Underwriting Guidelines

		
	 EXHIBIT VIII
	  	 Seller’s Officer’s Certificate

  

 -iv- 

 MASTER REPURCHASE AGREEMENT 
  
 This is a MASTER REPURCHASE AGREEMENT, dated as of February 27, 2002, between HOMEBANC MORTGAGE CORPORATION, a Delaware
corporation (the “Seller”) and MERRILL LYNCH MORTGAGE CAPITAL INC., a New York corporation (the “Buyer”). 
  
 SECTION 1. APPLICABILITY 
  
 From time to time the parties hereto shall enter into transactions in which the respective Seller agrees to transfer to Buyer Mortgage Loans against the
transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to the Seller such Mortgage Loans at a date certain not later than the date 364 days after the related Purchase Date, against the transfer of funds by the Seller. Each
such transaction shall be referred to herein as a “Transaction” and shall be governed by this Repurchase Agreement, unless otherwise agreed in writing. This Agreement is not a commitment by Buyer to enter into Transactions with
Seller but rather sets forth the procedures to be used in connection with periodic requests for Buyer to enter into Transactions with Seller. Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any
Transaction pursuant to this Agreement. 
  
 SECTION 2. DEFINITIONS

  
 As used herein, the following terms shall have the
following meanings (all terms defined in this Section 2 or in other provisions of this Repurchase Agreement in the singular to have the same meanings when used in the plural and vice versa) 
  
 “Accepted Servicing Practices” shall mean, with respect to
any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located. 
  
 “Account Agreement” shall mean a letter agreement between
the Seller, the Buyer, and the Bank substantially in the form of Exhibit IV attached hereto. 
  
 “Additional Purchased Mortgage Loans” shall mean Mortgage Loans or cash provided by the Seller to Buyer or its designee pursuant to
Section 4 of this Repurchase Agreement. 
  
 “Affiliate” shall mean with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code. 
  
 “Agency” shall mean Freddie Mac, Fannie Mae or Ginnie Mae, as applicable. 
  
 “Agency Security” shall mean a mortgage-backed security
issued by an Agency. 
  

 “Agency Takeout Commitment” shall mean a commitment by an Agency to (a) purchase the
Mortgage Loan under any of its cash purchase programs or (b) (i) swap one or more Mortgage Loans for an Agency Security, and (ii) sell the related Agency Security to a Take-out Investor. 
  
 “Appraised Value” shall mean the value set forth in an appraisal made in connection with the origination of
the related Mortgage Loan as the value of the Mortgaged Property. 
  
 “Asset Value” shall mean with respect to each Eligible Mortgage Loan, the Purchase Price Percentage multiplied by the lesser of (a) the Market Value of such Mortgage Loan and (b) the outstanding principal balance of such
Mortgage Loan. 
  
 “Bailee Letter” shall have the
meaning assigned to such term in the Custodial Agreement. 
  
 “Bank” shall mean First Union, in its capacity as bank with respect to the Account Agreement. 
  
 “Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as amended from time to time. 
  
 “Business Day” shall mean a day other than (i) a Saturday or
Sunday, or (ii) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in the State of New York. 
  
 “Buyer” shall mean Merrill Lynch Mortgage Capital Inc., its successors in interest and assigns. 

 
 “Capital Lease Obligations” shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP, and, for purposes of this Repurchase Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. 
  
 “Change in Control” shall mean: 
  
 (A) any transaction or event as a result of which
Abetterwayhome Corp. ceases to own, directly 100% of the stock of the Seller; 
  
 (B) any transaction or event as a result of which HBMC Holdings, LLC ceases to own, directly 100% of the stock of Abetterwayhome Corp.; 
  
 (C) any transaction or event as a result of which GTCR Fund VII, L.P. ceases to own, directly at least 80%
of the ownership interests of HBMC Holdings, LLC; 
  

 -2- 

 (D) the sale, transfer, or other disposition of all or substantially all of a
Person’s assets (excluding any such action taken in connection with any securitization transaction); or 
  
 (E) the consummation of a merger or consolidation of a Person with or into another entity or any other corporate reorganization, if more
than 25% of the combined voting power of the continuing or surviving entity’s stock outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not stockholders of the Seller immediately
prior to such merger, consolidation or other reorganization. 
  
 “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. 
  
 “Committed Mortgage Loan” shall
mean a Mortgage Loan which is the subject of a Takeout Commitment with a Takeout Investor. 
  
 “Confirmation” shall mean a Confirmation Letter in the form of Exhibit I hereto. 
  
 “Conforming Mortgage Loan” shall mean a mortgage loan that (i) conforms to the requirements of an Agency for securitization or cash
purchase and (ii) is subject to an Agency Commitment including, without limitation, conventional Mortgage Loans, FHA Loans and VA Loans. 
  
 “Construction to Permanent Mortgage Loan” means a Mortgage Loan made to a Mortgagor for the purpose of constructing a one-to-four family
dwelling which Mortgage Loan is secured by a first lien on the related real estate and includes a dwelling constructed for occupancy by the related Mortgagor and/or for resale to a potential occupant. Construction to Permanent Mortgage Loans shall
have a maximum maturity of twelve months from origination and shall have been originated in conformity with the Seller’s Underwriting Guidelines. 
  
 “Custodial Agreement” shall mean that certain Custodial Agreement dated as of the date hereof, among Seller, Buyer and Custodian as the
same may be amended from time to time. 
  
 “Custodian” shall mean LaSalle Bank, National Association, or any successor thereto under the Custodial Agreement. 
  
 “Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.

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

 -3- 

 “Dollars” and “$” shall mean lawful money of the United States of
America. 
  
 “Due Date” shall mean the day of the
month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace. 
  
 “Due Diligence Review” shall mean the performance by Buyer of any or all of the reviews permitted under Section 26 hereof with respect to any or all of the Mortgage Loans, as desired by the 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. 
  
 “Eligible Mortgage Loan” shall mean a Purchased Mortgage Loan which complies with the representations and warranties set forth on Schedule 1 to this Repurchase Agreement. 
  
 “ERISA” shall, with respect to any Person, mean the Employee
Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and rulings issued thereunder. 
  

“ERISA Affiliate” shall, with respect to any Person, mean any Person which is a member of any group of organizations (i) described in
Section 414(b) or (c) of the Code of which such Person is a member, or (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which such Person is a member. 
  
 “Escrow Payments” shall mean, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates,
sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

  
 “Event of Default” shall have the meaning
specified in Section 13.01 hereof. 
  
 “Event of
Insolvency” shall mean, for any Person: 
  
 (a) that such
Person or any Affiliate shall discontinue or abandon operation of its business; or 
  
 (b) that such Person or any Affiliate shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or 
  
 (c) a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for
relief in respect of such Person or any Affiliate in an involuntary case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person or 

  

 -4- 

 
any Affiliate, or for any substantial part of its property, or for the winding-up or liquidation of its affairs; or 
  
 (d) the commencement by such Person or any Affiliate of a voluntary case
under any applicable bankruptcy, insolvency or other similar Law now or hereafter in effect, or such Person’s or any Affiliate’s consent to the entry of an order for relief in an involuntary case under any such Law, or consent to the
appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or any general assignment for the benefit
of creditors; or 
  
 (e) that such Person or any Affiliate shall
become insolvent; or 
  
 (f) if such Person or any Affiliate is a
corporation, such Person or any Affiliate, or any of their subsidiaries, shall take any corporate action in furtherance of, or the action of which would result in any of the actions set forth in the preceding clause (a), (b), (c), (d) or (e).

  
 “Event of Termination” shall, with respect to
the Seller, mean (i) with respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event, or (ii) the withdrawal of the Seller or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (iii) the failure by the Seller or any
ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, or (iv) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by the Seller or any ERISA Affiliate thereof to terminate any Plan, or (v)
the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan is a part if the Seller or any ERISA Affiliate thereof
fails to timely provide security to the Plan in accordance with the provisions of said Sections, or (vi) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or (vii) the receipt by the Seller or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (vi) has been taken by the PBGC with respect to such Muitiemployer Plan, or
(viii) any event or circumstance exists which may reasonably be expected to constitute grounds for the Seller or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412(c)(11) or 412(n) of the Code with respect
to any Plan. 
  
 “Expenses” shall mean all
present and future expenses reasonably incurred by or on behalf of the Buyer in connection with this Repurchase Agreement or any of the other Repurchase Documents and any amendment, supplement or other modification or waiver related hereto or
thereto, whether incurred heretofore or hereafter, which expenses shall include the cost of title, lien, judgment and other record searches; reasonable attorneys’ fees; and costs of preparing and recording any UCC financing statements or other
filings necessary to perfect the security interest created hereby. 
  

 -5- 

 “Fannie Mae” shall mean Fannie Mae, or any successor thereto. 
  
 “Financial Statements” shall mean the consolidated financial
statements of the Seller prepared in accordance with GAAP for the year or other period then ended. Such financial statements will be audited, in the case of annual statements, by Ernst & Young LLP or such other independent certified public
accountants approved by the Buyer (which approval shall not be unreasonably withheld). 
  
 “First Payment Default” shall mean, with respect to a Mortgage Loan, the failure of the Mortgagor to make the first Monthly Payment due under the Mortgage Loan on or before its scheduled Due Date.

  
 “FHA” shall mean the Federal Housing
Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the
FHA Regulations. 
  
 “FHA Approved Mortgagee”
shall mean a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.

  
 “FHA Loan” shall mean a Mortgage Loan which
is the subject of an FHA Mortgage Insurance Contract. 
  
 “FHA Mortgage Insurance” shall mean, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA. 
  
 “FHA Mortgage Insurance Contract” shall mean the contractual obligation of the FHA respecting the insurance
of a Mortgage Loan. 
  
 “FHA Regulations” shall
mean the regulations promulgated by the Department of Housing and Urban Development under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other Department of Housing and Urban Development
issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters. 
  
 “Fitch” shall mean Fitch Ratings, Inc., or any successor thereto. 
  
 “Freddie Mac” shall mean Freddie Mac, or any successor thereto. 
  
 “GAAP” shall mean generally accepted accounting principles
in the United States of America, applied on a consistent basis and applied to both classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its
predecessors and successors. 
  
 “Ginnie Mae”
shall mean the Government National Mortgage Association and any successor thereto. 
  

 -6- 

 “Governmental Authority” shall mean the government of the United States of America or of
any state, county, municipality or other political subdivision thereof or any governmental body, agency, authority, department or commission (including, without limitation, any taxing authority) or any instrumentality or officer of any of the
foregoing (including, without limitation, any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation, partnership or other entity directly or
indirectly owned by or controlled by the foregoing. 
  
 “Ground Lease” means the original executed instrument evidencing a leasehold estate with respect to a Mortgaged Property. 
  
 “Guarantee” shall mean, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other
Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, or to take-or-pay or otherwise); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of a
Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof
as determined by such Person in good faith. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings. 
  
 “HUD” shall mean the Department of Housing and Urban Development. 
  
 “Income” shall mean, with respect to any Mortgage Loan at
any time, any principal thereof then payable and all interest, dividends or other distributions payable thereon. 
  
 “Indebtedness” shall mean, with respect to any Person, (a) obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business, so long as such trade accounts
payable are payable within 90 days of the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e)
Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase agreements, sale/buy-back agreements or like arrangements; (g) Indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person; and (i) Indebtedness of general partnerships of which such Person is a general partner. 
  

 -7- 

 Illegible 
  

 -8- 

 “Lien” shall mean any lien, claim, charge, restriction, pledge, security interest,
mortgage, deed of trust or other encumbrance. 
  
 “Margin
Call” shall have the meaning specified in Section 4. 
  
 “Margin Deficit” shall have the meaning specified in Section 4. 
  
 “Market Value” shall mean, as of any date with respect to any Purchased Mortgage Loan, the price at which such Mortgage Loan could readily be sold as determined by the Buyer in its sole good faith
discretion. Without limiting the generality of the foregoing, the Seller acknowledges that the Market Value of a Purchased Mortgage Loan may be reduced to zero by Buyer if: 
  
 (a) such Purchased Mortgage Loan ceases to be an Eligible Mortgage Loan; 
  
 (b) the Purchased Mortgage Loan has been released from the possession of the
Custodian under the Custodial Agreement (other than to a Take-out Investor pursuant to a Bailee Letter) for a period in excess of 10 calendar days; 
  
 (c) the Purchased Mortgage Loan (other than a Purchased Mortgage Loan which is a Construction to Permanent Mortgage Loan) has been subject to a
Transaction for a period of greater than 120 days; 
  
 (d) the
Purchased Mortgage Loan is a Construction to Permanent Mortgage Loan (other than a Qualified Construction to Permanent Mortgage Loan) which has been subject to a Transaction for a period of greater than 360 days; 
  
 (e) the Purchased Mortgage Loan is a Qualified Construction to Permanent
Mortgage Loan which has been subject to a Transaction for a period of greater than 15 months; 
  
 (f) such Purchased Mortgage Loan is a Delinquent Mortgage Loan; 
  
 (g) such Purchased Mortgage Loan is a Conforming or Jumbo Mortgage Loan which is rejected by the related Takeout Investor; 
  
 (h) a First Payment Default occurs with respect to such Purchased Mortgage
Loan; 
  
 (i) if the Purchased Mortgage Loan is a Conforming
Mortgage Loan or Jumbo Mortgage Loan, the Buyer has determined in its sole good faith discretion that the Purchased Mortgage Loan is not eligible for whole loan sale or securitization in a transaction consistent with the prevailing sale and
securitization industry with respect to Conforming Mortgage Loans and Jumbo Mortgage Loans; 
  
 (j) when the Purchase Price for such Purchased Mortgage Loan is added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Conforming Mortgage Loans that are Purchased Mortgage Loans exceeds
$100,000,000; 
  

 -9- 

 (k) when the Purchase Price for such Purchased Mortgage Loan is added to other Purchased Mortgage Loans,
the aggregate Purchase Price of all Jumbo Mortgage Loans that are Purchased Mortgage Loans exceeds $50,000,000; 
  
 (l) when the Purchase Price for such Purchased Mortgage Loan is added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Construction
to Permanent Mortgage Loans that are Purchased Mortgage Loans exceeds $30,000,000; 
  
 (m) when the Purchase Price for such Purchased Mortgage Loan is added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Jumbo Mortgage Loans with an unpaid principal balance greater than $750,000
but less than $2,000,000 that are Purchased Mortgage Loans exceeds $10,000,000; 
  
 (n) when the Purchase Price for such Purchased Mortgage Loan is added to other Purchased Mortgage Loans, the aggregate Purchase Price of all Construction to Permanent Loans with an unpaid principal balance greater
than $1,000,000 but less than $2,000,000 that are Purchased Mortgage Loans exceeds $5,000,000; or 
  
 (o) when the Purchase Price for such Purchased Mortgage Loan is added to other Purchased Mortgage Loans, the sum of (i) the aggregate Purchase Price of
all Construction to Permanent Loans with an unpaid principal balance greater than $1,000,000 but less than $2,000,000 that are Purchased Mortgage Loans, and (ii) the aggregate Purchase Price of all Jumbo Mortgage Loans with an unpaid principal
balance greater than $750,000 but less than $2,000,000 that are Purchased Mortgage Loans, exceeds $10,000,000. 
  
 “Material Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations, financial condition or
prospects of the Seller or any Affiliate, (b) the ability of the Seller or any Affiliate to perform its obligations under any of the Repurchase Documents to which it is a party, (c) the validity or enforceability of any of the Repurchase Documents,
(d) the rights and remedies of the Buyer or any Affiliate under any of the Repurchase Documents, (e) the timely payment of any amounts payable under the Repurchase Documents, or (f) the Market Value of the Purchased Mortgage Loans. 
  
 “Maximum Purchase Price” shall mean $100,000,000.

  
 “Monthly Payment” shall mean the scheduled
monthly payment of principal and interest on a Mortgage Loan. 
  
 “Moody’s” shall mean Moody’s Investor’s Service, Inc. or any successors thereto. 
  
 “Mortgage” shall mean each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents,
security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a first lien on real property and other property and rights incidental thereto.

  
 “Mortgage File” shall mean, with respect to a
Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set forth in Exhibit VI hereto. 
  

 -10- 

 “Mortgage Interest Rate” shall mean the rate of interest borne on a Mortgage Loan from
time to time in accordance with the terms of the related Mortgage Note. 
  
 “Mortgage Loan” shall mean any first lien, one-to-four-family residential mortgage loan evidenced by a Mortgage Note and secured by a Mortgage, which Mortgage Loan is subject to a Transaction hereunder, which in no event
shall include any mortgage loan which (a) is subject to Section 226.32 of Regulation Z or any similar state law (relating to high interest rate credit/lending transactions), (b) includes any single premium credit life or accident and health
insurance or disability insurance, or (c) contains any term or condition, or involves any loan origination practice, that has been defined as “predatory” or “threshold” under applicable federal, state or local law, or which has
been expressly categorized as an “unfair” or “deceptive” term, condition, or practice in any applicable federal, state or local law dealing with “predatory” or “high cost” mortgage lending. 
  
 “Mortgage Loan Schedule” shall mean with respect to any
Transaction as of any date, a mortgage loan schedule in the form of a computer tape or other electronic medium generated by the Seller and delivered to Buyer and the Custodian, which provides information (including, without limitation, the
information set forth on Exhibit V attached hereto) relating to the Purchased Mortgage Loans in a format acceptable to the Buyer. 
  
 “Mortgage Loan Schedule and Exception Report” shall have the meaning set forth in the applicable Custodial Agreement. 
  
 “Mortgage Note” shall mean the promissory note or other
evidence of the indebtedness of a Mortgagor secured by a Mortgage. 
  
 “Mortgaged Property” shall mean the real property securing repayment of the debt evidenced by a Mortgage Note. 
  
 “Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any Person who has assumed or guaranteed the obligations of
the obligor thereunder. 
  
 “Multiemployer Plan”
shall mean, with respect to any Person, a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to by such Person or any ERISA
Affiliate thereof on behalf of its employees and which is covered by Title IV of ERISA. 
  
 “Net Income” shall mean, for any Person for any period, the net income of such Person for such period as determined in accordance with GAAP. 
  
 “Non-Excluded Taxes” shall have the meaning set forth in
Section 7(a) hereof. 
  
 “Obligations” shall mean
(a) any amounts due and payable by the Seller to Buyer in connection with a Transaction hereunder, together with interest thereon (including interest which would be payable as post-petition interest in connection with any bankruptcy or similar
proceeding) and all other fees or expenses which are payable hereunder or under any of the Repurchase Documents and (b) all other obligations or amounts due and payable by the Seller to the Buyer or an Affiliate of Buyer under any other contract or
agreement. 
  

 -11- 

 “Other Taxes” shall have the meaning set forth in Section 7(b) hereof. 
  
 “Payment Date” shall mean the last day of each month, or if
such date is not a Business Day, the Business Day immediately preceding the last day of the month. 
  
 “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

  
 “Periodic Advance Repurchase Payment” shall
have the meaning specified in Section 5(a). 
  
 “Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or
political subdivision thereof). 
  
 “Plan” shall
mean, with respect to any Person, any employee benefit or similar plan that is or was at any time during the current year or immediately preceding five years established or maintained by such Person or any ERISA Affiliate thereof and that is covered
by Title IV of ERISA, other than a Multiemployer Plan. 
  
 “PMI Policy” shall mean a policy of primary mortgage guaranty insurance issued by a Qualified Insurer, as required by this Agreement with respect to certain Mortgage Loans. 
  
 “Post-Default Rate” shall mean a rate equal to the sum of
(a) the Pricing Rate and (b) two percent (2.00%). 
  
 “Price Differential” shall mean, with respect to any Transaction hereunder as of any date, the aggregate amount obtained by daily application of the Pricing Rate (or, during the continuation of an Event of Default, by daily
application of the Post-Default Rate) for such Transaction to the Purchase Price for such Transaction on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction
and ending on (but excluding) the Repurchase Date (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction). 
  
 “Pricing Rate” shall mean a rate per annum equal to the sum of (a) the LIBOR Rate plus (b) the Pricing
Spread. 
  
 “Pricing Spread” shall mean:

  
 (a) so long as no Event of Default has
occurred and is then continuing: 
  
 (i) with
respect to Transactions the subject of which are Mortgage Loans which are Conforming Mortgage Loans, 1.00%; 
  
 (ii) with respect to Transactions the subject of which are Mortgage Loans which are Jumbo Mortgage Loans, 1.25%; 
  

 -12- 

 (iii) with respect to Transactions the subject of which are Mortgage Loans which are
Construction to Permanent Mortgage Loans, 2.00%. 
  
 “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. 
  
 “Purchase Date” shall mean the date on which Purchased Mortgage Loans are transferred by Seller to the
Buyer or its designee. 
  
 “Purchase Price” shall
mean, 
  
 (a) on the Purchase Date, the price at which each
Purchased Mortgage Loan is transferred by Seller to Buyer which shall equal the applicable Purchase Price Percentage of the lesser of (a) the Market Value of such Mortgage Loan on the Purchase Date and (b) the outstanding principal balance of the
Mortgage Loan; and 
  
 (b) thereafter, except where Buyer and
Seller agree otherwise, such Purchase Price decreased by the amount of any cash, Income and Periodic Advance Repurchase Payments actually received by Buyer pursuant to Sections 5 or applied to reduce Seller’s obligations under Section 4(a)
hereof. 
  
 “Purchase Price Percentage” shall
mean: 
  
 (i) with respect to each Mortgage Loan which is a
Conforming Mortgage Loan, 98; 
  
 (ii) with respect to each Jumbo
Mortgage Loan with an unpaid principal balance less than or equal to $750,000, 97%; 
  
 (iii) with respect to each Jumbo Mortgage Loan with an unpaid principal balance greater than $750,000 but less than $2,000,000, 95%; and 
  
 (iv) with respect to each Construction to Permanent Mortgage Loan, 85%. 
  
 “Purchased Mortgage Loan Report” shall mean a report,
delivered with each Transaction Request, on Friday of each week, or upon the request of the Buyer, including a Mortgage Loan Schedule in the form of Exhibit V hereto, setting forth information with respect to the Purchased Mortgage Loans (and
Mortgage Loans proposed to be the subject of a Transaction on the related Purchase Date, if applicable). 
  
 “Purchased Mortgage Loans” shall mean the Mortgage Loans sold by the Seller to Buyer in a Transaction, and any Additional Purchased
Mortgage Loans as evidenced by a Confirmation and a Trust Receipt. 
  
 “Qualified Construction to Permanent Mortgage Loan” shall mean a Construction to Permanent Mortgage Loan which has an unpaid principal balance of greater than $1,000,000 but less than $2,000,000 for which the related
Mortgaged Property is located in the state of Florida. 
  

 -13- 

 “Qualified Insurer” shall mean a mortgage guaranty insurance company duly authorized and
licensed where required by law to transact mortgage guaranty insurance business and acceptable under the Underwriting Guidelines. 
  
 “Rating Agency” shall mean any of S&P, Moody’s or Fitch. 
  
 “Records” shall mean all instruments, agreements and other books, records, and reports and data generated
by other media for the storage of information maintained by Seller or any other person or entity with respect to a Purchased Mortgage Loan. Records shall include the mortgage notes, any Mortgages, the Mortgage Files, the credit files related to the
Purchased Mortgage Loan and any other instruments necessary to document or service a Mortgage Loan. 
  
 “Regulations T, U and X” shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as
the same may be modified and supplemented and in effect from time to time. 
  
 “Repurchase Agreement” shall mean this Master Repurchase Agreement between Buyer and the Seller, dated as of the date hereof as the same may be further amended, supplemented or otherwise modified in
accordance with the terms hereof. 
  
 “Repurchase
Assets” shall have the meaning provided in Section 8 hereof. 
  
 “Repurchase Date” shall mean the date on which the Seller is to repurchase the Purchased Mortgage Loans subject to a Transaction from Buyer as specified in the related Confirmation, or if not so specified on a date
requested pursuant to Section 3(d) or on the Termination Date, including any date determined by application of the provisions of Sections 3 or 14, or the date identified to Buyer by the Seller as the date that the related Mortgage Loan is to be sold
pursuant to a Take-out Commitment. 
  
 “Repurchase
Documents” shall mean this Repurchase Agreement, the Custodial Agreement, and the Account Agreement. 
  
 “Repurchase Price” shall mean the price at which Purchased Mortgage Loans are to be transferred from Buyer or its designee to the 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. 
  
 “Request for Additional Purchase Price” shall have the
meaning set forth in Section 3(e) hereof. 
  
 “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. 
  

“Responsible Officer” shall mean, as to any Person, the chief executive officer, the chief financial officer, the treasurer or the
chief operating officer of such Person. 
  

 -14- 

 “S&P” shall mean Standard & Poor’s Ratings Services, or any successor
thereto. 
  
 “Seller” shall mean HomeBanc
Mortgage Corporation, or any successor in interest thereto. 
  
 “Single-Employer Plan” shall mean a single-employer plan as defined in Section 4001(a)(15) of ERISA which is subject to the provisions of Title IV of ERISA. 
  
 “Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which
at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or
other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. 
  
 “Takeout Commitment” shall mean an Agency Takeout Commitment
or an Investor Takeout Commitment. 
  
 “Takeout Commitment
Assignment” shall mean an assignment of a Takeout Commitment to the Buyer. 
  
 “Takeout Investor” shall mean any institution which has made a Takeout Commitment and has been approved by Buyer. 
  
 “Tangible Net Worth” shall mean, for 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, shareholders or other Persons similarly affiliated with such Person, and (ii) intangible assets. 
  
 “Taxes” shall have the meaning set forth in Section 7(a)
hereof. 
  
 “Termination Date” shall mean the
date which is 364 days from the date hereof which shall be February 26, 2003. 
  
 “Termination Event” shall have the meaning set forth in Section 13.02 hereof. 
  
 “Test Period” shall mean any period of three (3) consecutive months. 
  
 “Transaction” shall have the meaning specified in Section 1. 
  

 -15- 

 “Transaction Request” shall mean a request from the Seller to Buyer to enter into a
Transaction. 
  
 “Trust Receipt” shall have the
meaning set forth in the Custodial Agreement. 
  
 “Underwriting Guidelines” shall mean (a) with respect to Jumbo and Conforming Mortgage Loans, the applicable Agency guidelines and (b) with respect to Construction to Permanent Mortgage Loans, the underwriting guidelines of
the Seller, attached hereto as Exhibit VII. 
  
 “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection
or non-perfection of the security interest in any Repurchase Assets or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial
Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. 
  
 “VA” shall mean the U.S. Department of Veterans Affairs, an
agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs. 
  
 “VA Approved Lender” shall mean a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.

  
 “VA Loan” shall mean a Mortgage Loan which is
subject of a VA Loan Guaranty Agreement as evidenced by a VA Loan Guaranty Agreement, or a Mortgage Loan which is a vender loan sold by the VA. 
  
 “VA Loan Guaranty Agreement” shall mean the obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a
maximum amount) upon default of the Mortgagor pursuant to the Servicemen’s Readjustment Act, as amended. 
  
 SECTION 3. INITIATION; TERMINATION 
  
 (a) Conditions Precedent to Initial Transaction. Buyer’s agreement to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of
such Transaction, of the condition precedent that Buyer shall have received from the Seller any fees and expenses payable hereunder, and all of the following documents, each of which shall be satisfactory to Buyer and its counsel in form and
substance: 
  
 (i) The following Repurchase
Documents delivered to the Buyer: 
  
 (A)
Repurchase Agreement. This Repurchase Agreement, duly executed by the parties thereto; 
  
 (B) Custodial Agreement. The Custodial Agreement, duly executed by the parties thereto; 
  

 -16- 

 (C) Account Agreement. An Account Agreement, duly executed by the parties thereto
in form and substance acceptable to the Buyer. 
  
 (ii) Opinions of Counsel. 
  
 (A)
An opinion or opinions of outside counsel to the Seller, substantially in the form of Exhibit II. 
  
 (iii) Seller Organizational Documents. A certificate of corporate existence of the Seller delivered to Buyer prior to the Effective
Date (or if unavailable, as soon as available thereafter) and certified copies of the charter and by-laws (or equivalent documents) of the Seller and of all corporate or other authority for the Seller with respect to the execution, delivery and
performance of the Repurchase Documents and each other document to be delivered by the Seller from time to time in connection herewith. 
  
 (iv) Security Interest. Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect
Buyer’s interest in the Purchased Mortgage Loans and other Repurchase Assets have been taken, including, without limitation, UCC searches and duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1. 
  
 (v) Underwriting Guidelines. A true and correct copy
of the Underwriting Guidelines certified by an officer of the Seller. 
  
 (vi) PMI Master Policies. A true and correct copy of any PMI master insurance policies covering any of the Purchased Mortgage Loans certified by an officer of the Seller. 
  
 (vii) Other Documents. Such other documents as Buyer
may reasonably request, in form and substance reasonably acceptable to Buyer. 
  
 (b) Conditions Precedent to all Transactions. Buyer’s agreement 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 thereto to the intended use thereof: 
  
 (i) Buyer shall have executed and delivered a Confirmation in accordance with the procedures set forth in Section 3(c); 
  
 (ii) no Termination Event, Default or Event of Default shall
have occurred and be continuing under the Repurchase Documents; 
  
 (iii) both immediately prior to the Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by the Seller in Section 11 hereof, shall be true, correct
and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of
such specific date); 
  

 -17- 

 (iv) After giving effect to the requested Transaction, the aggregate outstanding Purchase
Price for all Purchased Mortgage Loans subject to then outstanding Transactions under this Repurchase Agreement shall not exceed the Maximum Purchase Price; 
  
 (v) after giving effect to the requested Transaction, the Asset Value of all Purchased Mortgage Loans exceeds the aggregate Repurchase
Price for such Transactions; 
  
 (vi) On or prior
to 10 a.m. (New York Time) one (1) day prior to the related Purchase Date, the Seller shall have delivered to the Buyer (a) a Transaction Request, and (b) a Purchased Mortgage Loan Report; 
  
 (vii) The Seller shall have delivered to the Custodian the
Mortgage File with respect to each Purchased Mortgage Loan and the Custodian shall have issued a Trust Receipt with respect to each such Purchased Mortgage Loan to the Buyer; 
  
 (viii) the Buyer shall have received all fees and expenses of counsel to the Buyer as contemplated by
Sections 15(b) and 26 which amounts, at the Buyer’s option, may be withheld from the proceeds remitted by Buyer to the Seller pursuant to any Transaction hereunder; 
  
 (ix) none of the following shall have occurred and/or be continuing: 
  
 (A) an event or events shall have occurred in the good faith
determination of the Buyer resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by securities or an event or events shall have occurred resulting in the Buyer
not being able to finance Purchased Mortgage Loans through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or

  
 (B) there shall have occurred a material
adverse change in the financial condition of the Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of the Buyer to fund its obligations under this Repurchase Agreement; or 
  
 (x) Each Transaction Request delivered by the Seller
hereunder shall constitute a certification by the Seller that all the conditions set forth in this Section 3(b) (other than clause (ix) hereof) have been satisfied (both as of the date of such notice or request and as of the date of such purchase).

  
 (c) Initiation; Confirmation. 
  
 (i) The Seller shall deliver a Transaction Request to the
Buyer on or prior to 10:00 a.m. on the date one (1) Business Day prior to entering into any Transaction. Such Transaction Request shall include a Mortgage Loan Schedule with respect to the Mortgage Loans to be sold in such requested Transaction.
Buyer shall confirm the terms 

  

 -18- 

 
of each Transaction by issuing a written confirmation to the Seller promptly after the parties enter into such Transaction in the form of Exhibit I
attached hereto (a “Confirmation”). Such Confirmation shall set forth (A) the Purchase Date, (B) the Purchase Price, (C) the Repurchase Date, (D) the Pricing Rate applicable to the Transaction, (E) the applicable Purchase Price
Percentages, (F) LIBOR Period and (G) additional terms or conditions not inconsistent with this Repurchase Agreement. 
  
 (ii) The Repurchase Date for each Transaction shall not be later than the date which is 364 days after the related Purchase Date. The
LIBOR Period for each Transaction shall one month, unless agreed to in writing by the Buyer. 
  
 (iii) Each Confirmation, together with this Repurchase Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered
thereby unless objected to in writing by the Seller no more than two (2) Business Days after the date the Confirmation was received by the Seller or unless a corrected Confirmation is sent by Buyer. An objection sent by Seller must state
specifically that writing which is an objection, must specify the provision(s) being objected to by the Seller, must set forth such provision(s) in the manner that the Seller believes they should be stated, and must be received by Buyer no more than
two (2) Business Days after the Confirmation was received by the Seller. 
  
 (iv) Subject to the terms and conditions of this Repurchase Agreement, during such period the Seller may sell, repurchase and resell Eligible Mortgage Loans hereunder. 
  
 (v) In no event shall a Transaction be entered into when the
Repurchase Date for such Transaction would be later than the Termination Date. 
  
 (vi) No later than 12:00 p.m., New York City time, five (5) Business Days prior to the requested Purchase Date, the Seller shall deliver
to the Custodian the Mortgage Loan File pertaining to each Eligible Mortgage Loan to be purchased by the Buyer. 
  
 (vii) Subject to the provisions of this Section 3, the Purchase Price will then be made available to the Seller by the Buyer transferring,
via wire transfer, in the aggregate amount of such Purchase Price in funds immediately available. 
  
 (d) Repurchase 
  
 (i) The Seller may repurchase Purchased Mortgage Loans without penalty or premium on any date. The Repurchase Price payable for the
repurchase of any such Purchased Mortgage Loan shall be reduced as provided in Section 5(d). If the Seller intends to make such a repurchase, the Seller shall give one (l) Business Day’s prior written notice thereof to the Buyer, designating
the Purchased Mortgage Loans to be repurchased. If such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, and, on receipt, such amount shall be applied to the Repurchase Price for the
designated Purchased Mortgage Loans. 
  
 (ii) On
the Repurchase Date, termination of the Transaction will be effected by reassignment to the Seller or its designee of the Purchased Mortgage Loans (and any 

  

 -19- 

 
Income in respect thereof received by Buyer not previously credited or transferred to, or applied to the obligations of, the Seller pursuant to Section 5)
against the simultaneous transfer of the Repurchase Price to an account of Buyer. The Seller is obligated to obtain the Mortgage Files from Buyer or its designee at the Seller’s expense on the Repurchase Date. 
  
 (e) Request for Additional Purchase Price. With respect to any
Construction to Permanent Mortgage Loan, Seller may prepare a Request for Purchase Price in the form of Exhibit IX attached hereto (“Request for Additional Purchase Price”) as a result of additional disbursements made under
the Construction to Permanent Mortgage Loan, specifying (i) the increase in Purchase Price for which a Transaction is sought and the requested date of such additional Purchase Price, (ii) the Asset Value with respect to such Purchased Mortgage Loans
sold hereunder before giving effect to the requested additional Purchase Price, (iii) the aggregate outstanding Purchase Price of all Transactions prior to giving effect to the requested additional Purchase Price, and (v) an officer’s
certificate from Seller certifying that, upon the making of the additional Purchase Price, the Asset Value of all Purchased Mortgage Loans will be equal to or greater than the aggregate outstanding Purchase Price of all Purchased Mortgage Loans
subject to outstanding Transactions. 
  
 (i) The
Seller shall transmit via electronic transmission the Request for Additional Purchase Price to Buyer prior to 12:00 noon, New York City time, on the requested Purchase Date. Upon confirming that the Request for Additional Purchase Price correctly
reflects the information set forth in Section 3(e) above and that, after giving effect to the requested additional Purchase Price, the Asset Value would be equal to or greater than the aggregate outstanding Purchase Price of all Transactions, Buyer
may, in its sole discretion, remit the additional Purchase Price in the amount set forth in such Request for Additional Purchase Price and send a revised Confirmation with respect to such Purchased Mortgage Loans. In the event that Buyer’s
assessment of the Asset Value would alter the information set forth in any Request for Additional Purchase Price, Buyer shall promptly notify Seller in writing of such assessment. 
  
 (ii) The amount of additional Purchase Price made available to Seller pursuant to this Section shall be
added to the Purchase Price for the applicable Transaction. 
  
 (iii) Prior to the Buyer remitting the additional Purchase Price, the Seller shall have delivered an inspection report with respect to such Construction to Permanent Mortgage Loan to the Custodian and such other
documents as the Buyer may reasonably request. 
  
 SECTION 4. MARGIN AMOUNT
MAINTENANCE 
  
 (a) The Buyer shall determine the Asset Value
of the Purchased Mortgage Loans on a weekly basis, or at such other intervals as determined by the Buyer in its sole discretion. 
  
 (b) If at any time the aggregate Asset Value of all related Purchased Mortgage Loans subject to all Transactions is less than the aggregate Repurchase
Price for all such Transactions (a “Margin Deficit”), then Buyer may by notice to Seller (as such notice is more 

  

 -20- 

 
particularly set forth below, a “Margin Call”), require Seller to transfer to Buyer or its designee cash or Eligible Mortgage Loans approved
by the Buyer in its sole discretion (“Additional Purchased Mortgage Loans”) so that the aggregate Asset Value of the Purchased Mortgage Loans, including any such Additional Purchased Mortgage Loans or cash, will thereupon equal or
exceed the aggregate Repurchase Price for all Transactions. If Buyer delivers a Margin Call to the Seller on or prior to 9:30 a.m. (New York City time) on any Business Day, then the Seller shall transfer cash or Additional Purchased Mortgage Loans
to Buyer no later than 5 p.m. (New York City time) that day. In the event the Buyer delivers a Margin Call to a Seller after 9:30 a.m. (New York City time) on any Business Day, the Seller shall be required to transfer cash or Additional Purchased
Mortgage Loans no later than 5 p.m. (New York City time) on the subsequent Business Day. 
  
 (c) Buyer’s election, in its sole and absolute discretion, not to make a Margin Call at any time there is a Margin Deficit shall not in any way limit or impair its right to make a Margin Call at any time a Margin
Deficit exists. 
  
 (d) Any cash transferred to the Buyer pursuant
to Section 4(a) above shall be credited to the Repurchase Price of the related Transactions. 
  
 SECTION 5. INCOME PAYMENTS 
  
 (a) Notwithstanding that Buyer and the Seller intend that the Transactions hereunder be sales to Buyer of the Purchased Mortgage Loans (provided, however, the parties intend to treat the Transactions as Indebtedness for
accounting and tax purposes), the Seller shall pay to Buyer the accreted value of the Price Differential (less any amount of such Price Differential previously paid by the Seller to Buyer) plus the amount of any unpaid Margin Deficit (each such
payment, a “Periodic Advance Repurchase Payment”) on each Payment Date. Notwithstanding the preceding sentence, if Seller fails to make all or part of the Periodic Advance Repurchase Payment by 5:00 p.m. (New York time) on any
Payment Date, the Pricing Rate shall be equal to the Post-Default Rate until the Periodic Advance Repurchase Payment is received in full by Buyer. 
  
 (b) The Seller shall hold for the benefit of, and in trust for, Buyer all income, including without limitation all Income received by or on behalf of the
Seller with respect to such Purchased Mortgage Loans. The Seller shall deposit such Income in a deposit account (the title of which shall indicate that the funds therein are being held in trust for Buyer) (the “Collection Account”)
with a financial institution acceptable to Buyer and subject to the Account Agreement within one Business Day of receipt by the Seller. All such Income shall be held in trust for Buyer, shall constitute the property of Buyer and shall not be
commingled with other property of the Seller, any Affiliate of the Seller or the applicable Seller except as expressly permitted above. Funds deposited in the Collection Account during any month shall be held therein, in trust for the Buyer, until
the next Payment Date. Subject to the terms of the Account Agreement, the Seller shall withdraw any funds on deposit in the Collection Account and apply such funds as follows: 
  
 (i) first, to the payment of all costs and fees payable by the Seller pursuant to this Repurchase Agreement;

  

 -21- 

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

  
 (iii) third, without limiting the rights of
Buyer under Section 4 of this Repurchase Agreement, to the Buyer, subject to the provisions of Section 4 of this Repurchase Agreement, in the amount of any unpaid Margin Deficit; and 
  
 (iv) fourth, to the Seller. 
  
 (c) To the extent that the Buyer receives any funds from a Takeout Investor with respect to the purchase by such Takeout
Investor of a Mortgage Loan, the Buyer shall promptly apply such funds in accordance with the same order of priority set forth in Section 5(b) hereof. 
  
 (d) Notwithstanding the preceding provisions, if an Event of Default has occurred, all funds in the Collection Account shall be withdrawn and applied as
determined by the Buyer. 
  
 (e) Buyer shall offset against the
Repurchase Price of each such Transaction all Income and Periodic Advance Repurchase Payments actually received by Buyer pursuant to Section 5(a), excluding any Late Payment Fees paid pursuant to any Periodic Advance Repurchase Payments made at the
Post-Default Rate pursuant to Section 5(a). 
  
 SECTION 6. REQUIREMENTS OF LAW

  
 (a) If any Requirement of Law (other than with respect to
any amendment made to the Buyer’s certificate of incorporation and by-laws or other organizational or governing documents) or any change in the interpretation or application thereof or compliance by the Buyer with any request or directive
(whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: 
  
 (i) shall subject the Buyer to any tax of any kind whatsoever with respect to this Repurchase Agreement or any Transaction (excluding net
income taxes) or change the basis of taxation of payments to the Buyer in respect thereof; 
  
 (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of the Buyer which is not otherwise included in the determination of the LIBOR Rate hereunder;

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

 -22- 

 (b) If the Buyer shall have determined that the adoption of or any change in any Requirement of Law
(other than with respect to any amendment made to the Buyer’s certificate of incorporation and by-laws or other organizational or governing documents) regarding capital adequacy or in the interpretation or application thereof or compliance by
the Buyer or any corporation controlling the Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on the Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which the Buyer or such corporation could have achieved but for such adoption, change or compliance (taking
into consideration the Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by the Buyer to be material, then from time to time, the Seller shall promptly pay to the Buyer such additional amount or
amounts as will compensate the Buyer for such reduction. 
  
 (c)
If the Buyer becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify the Seller of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to
this Section submitted by the Buyer to the Seller shall be conclusive in the absence of manifest error. 
  
 SECTION 7. TAXES. 
  
 (a)
All payments made by the Seller under this Repurchase Agreement shall be made free and clear of, and without deduction or withholding for, or on account of, any present or future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities (including penalties, interest and additions to tax) with respect thereto imposed by any Governmental Authority thereof or therein (“Taxes”), excluding income taxes, branch profits taxes, franchise taxes or
similar taxes imposed on the Seller as a result of any present or former connection between the Seller and the United States, other than any such connection arising solely from the Buyer having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement (all such nonexcluded Taxes, “Non-Excluded Taxes”). If the Seller shall be required to deduct or withhold any Taxes from or in respect of any amount payable hereunder, (i) the
Seller shall make such deductions or withholdings, (ii) the Seller shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law, and (iii) with respect to any Non-Excluded Taxes, the amount
payable shall be increased by an amount (the “additional amount” necessary so that the Buyer, shall receive a net amount equal to the amount it would have received had no such deductions or withholdings in respect of Non-Excluded
Taxes been made. 
  
 (b) In addition, the Seller agrees to pay to
the relevant Governmental Authority in accordance with applicable law any current or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including, without limitation, mortgage recording taxes and
similar fees) imposed by the United States or any taxing authority thereof or therein that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (“Other
Taxes”). 
  
 (c) The Seller will indemnify the Buyer for
the full amount of Non-Excluded Taxes (including additional amounts with respect thereto) and Other Taxes paid by the Buyer, 

  

 -23- 

 
provided that the Buyer shall have provided the Seller with evidence, reasonably satisfactory to the Seller, of payment of Non-Excluded Taxes or Other
Taxes, as the case may be. 
  
 (d) As soon as practicable after
the date of any payment of Taxes or Other Taxes by the Seller to the relevant Governmental Authority, the Seller will deliver to the Buyer the original or a certified copy of the receipt issued by such Governmental Authority evidencing payment
thereof. 
  
 (e) Without prejudice to the survival of any other
agreement of the Seller hereunder, the agreements and obligations of the Seller contained in this Section 7 shall survive the termination of this Repurchase Agreement. Nothing contained in this Section 7 shall require the Buyer to make available any
of its tax returns or any other information that it deems to be confidential or proprietary. 
  
 SECTION 8. SECURITY INTEREST 
  
 Although the parties intend that all Transactions hereunder be sales and purchases and not loans (provided, however, that the parties intend to treat the Transactions as Indebtedness for accounting and tax purposes), in the
event any such Transactions are deemed to be loans, the Seller hereby pledges to Buyer as security for the performance by the Seller of its Obligations and hereby grants, assigns and pledges to Buyer a fully perfected first priority security
interest in the Purchased Mortgage Loans, the Records, and all related servicing rights, the Repurchase Documents (to the extent such Repurchase Documents and the Seller’s right thereunder relate to the Purchased Mortgage Loans), any Property
relating to any Purchased Mortgage Loan or the related Mortgaged Property, any Takeout Commitments relating to any Purchased Mortgage Loan, all insurance policies and insurance proceeds relating to any Purchased Mortgage Loan or the related
Mortgaged Property, including but not limited to any payments or proceeds under any related primary insurance, hazard insurance, FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if any), any Income relating to any Purchased Mortgage
Loan, the Collection Account, any Interest Rate Protection Agreements relating to any Purchased Mortgage Loan, any accounts relating to any Purchased Mortgage Loan (including any interest of the Seller in escrow accounts) and any other contract
rights, accounts, payments, rights to payment (including payments of interest or finance charges) and general intangibles to the extent that the foregoing relates to any Purchased Mortgage Loan and any other assets relating to the Purchased Mortgage
Loans (including, without limitation, any other accounts) or any interest in the Purchased Mortgage Loans, the servicing of the Purchased Mortgage Loans, all collateral under any other secured debt facility between the Seller or its Affiliates on
the one hand and the Buyer and the Buyer’s Affiliates on the other, and any proceeds (including the related securitization proceeds) and distributions and any other property, rights, title or interests as are specified on a Trust Receipt and
Mortgage Loan Schedule and Exception Report with respect to any of the foregoing, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Repurchase Assets”). 
  
 The Seller hereby authorizes the Buyer to file such financing statement or
statements relating to the Repurchase Assets without the Seller’s signature thereon as the Buyer, at its option, may deem appropriate. The Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this
Section 8. 
  

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 SECTION 9. PAYMENT, TRANSFER AND CUSTODY 
  
 (a) Unless otherwise mutually agreed in writing, all transfers of funds to be made by the Seller hereunder shall be made in
Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Buyer at the following account maintained by the Buyer: Account No. 00812914, for the account of MLMCI Match Book, Bankers Trust Co., N.Y., ABA No.
021-001-033, not later than 5:00 p.m. New York City time, on the date on which such payment shall become due (and each such payment made after such time shall be deemed to have been made on the next succeeding Business Day). The 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 Mortgage Loans shall be transferred to the Buyer or its designee against the simultaneous transfer of the Purchase Price to the following account of the Seller (or as
otherwise directed by the Seller): Account No. 1024157, for the account of HomeBanc Payoff Account, Bank One, ABA No. 071000013, Attn: Oscar Bustillos, not later than 5:00 p.m. New York City time, simultaneously with the delivery to the Buyer of the
Purchased Mortgage Loans relating to each Transaction. With respect to the Purchased Mortgage Loans being sold by a Seller on a Purchase Date, the Seller hereby sells, transfers, conveys and assigns to Buyer or its designee without recourse, but
subject to the terms of this Repurchase Agreement, all the right, title and interest of the Seller in and to the Purchased Mortgage Loans together with all right, title and interest in and to the proceeds of any related Repurchase Assets.

  
 (c) In connection with such sale, transfer, conveyance and
assignment, on or prior to each Purchase Date, the Seller shall deliver or cause to be delivered and released to Buyer or its designee the Mortgage File for the related Purchased Mortgage Loans. 
  
 SECTION 10. HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOAN 
  
 Title to all Purchased Mortgage Loans and Repurchase Assets shall pass to
Buyer and Buyer shall have free and unrestricted use of all Purchased Mortgage Loans. Nothing in this Repurchase Agreement shall preclude the Buyer from engaging in repurchase transactions with the Purchased Mortgage Loans or otherwise pledging,
repledging, transferring, hypothecating or rehypothecating the Purchased Mortgage Loans. Nothing contained in this Repurchase Agreement shall obligate the Buyer to segregate any Purchased Mortgage
Loans delivered to the Buyer by the Seller. 
  
 SECTION 11. REPRESENTATIONS

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

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 (b) No Broker. The Seller has not dealt with any broker, investment banker, agent, or other
person, except for the Buyer, who may be entitled to any commission or compensation in connection with the sale of Purchased Mortgage Loans pursuant to this Repurchase Agreement. 
  
 (c) Financial Statements. The Seller has heretofore furnished to the Buyer a copy of its (a) consolidated balance
sheet and the consolidated balance sheets of its consolidated Subsidiaries for the fiscal year ended December 31, 2000 and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated
Subsidiaries for such fiscal year, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon of Ernst & Young LLP and (b) consolidated balance sheet and the consolidated balance sheets of its
consolidated Subsidiaries for the quarterly fiscal periods of the Seller ended March 31, 2001, June 30, 2001 and September 30, 2001 and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its
consolidated Subsidiaries for such quarterly fiscal periods, setting forth in each case in comparative form the figures for the previous year. All such financial statements are complete and correct and fairly present, in all material respects, the
consolidated financial condition of the 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 September 30, 2001,
there has been no material adverse change in the consolidated business, operations or financial condition of the Seller and its consolidated Subsidiaries taken as a whole from that set forth in said financial statements nor is the Seller aware of
any state of facts which (without notice or the lapse of time) would or could result in any such material adverse change. The Seller does not have, on the date of the statements delivered pursuant to this section (the “Statement
Date”), any liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said
balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of the Seller except as heretofore disclosed to the Buyer in writing. 
  
 (d) Organization, Etc. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of Delaware. The Seller (a) 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; (b) 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 would not be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect; and (c) has full power and authority to execute, deliver and perform its obligations under the Repurchase Documents. 
  

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 (e) Authorization, Compliance, Etc. The execution and delivery of, and the performance by the
Seller of its obligations under, the Repurchase Documents to which it is a party (a) are within the Seller’s powers, (b) have been duly authorized by all requisite action, (c) do not violate any provision of applicable law, rule or regulation,
or any order, writ, injunction or decree of any court or other Governmental Authority, or its organizational documents, (d) do not violate any indenture, agreement, document or instrument to which the Seller is a party, or by which it or any of its
properties, any of the Repurchase Assets is bound or to which any of them is subject and (e) are not in conflict with, do not result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or except as may be
provided by any Repurchase Document, result in the creation or imposition of any Lien upon any of the property or assets of the Seller pursuant to, any such indenture, agreement, document or instrument. The Seller is not required to obtain any
consent, approval or authorization from, or to file any declaration or statement with, any Governmental Authority in connection with or as a condition to the consummation of the Transactions contemplated herein and the execution, delivery or
performance of the Repurchase Documents to which it is a party. 
  
 (f) Litigation. There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or threatened) or other legal or arbitrable proceedings affecting the Seller or any of
its Subsidiaries or affecting any of the Repurchase Assets or any of the other properties of the Seller 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 $175,000, (iii) individually or in the aggregate, if adversely determined, would have a Material Adverse Effect, or
(iv) requires filing with the SEC in accordance with its regulations. 
  
 (g) Purchased Mortgage Loans. 
  
 (i) The Seller has not assigned, pledged, or otherwise conveyed or encumbered any Mortgage Loan to any other Person, and immediately prior to the sale of such Mortgage Loan to the Buyer, the Seller was the sole 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 the Buyer hereunder. 
  
 (ii) The provisions of this Repurchase Agreement are effective to either constitute a sale of Repurchase
Assets to the Buyer or to create in favor of the Buyer a valid security interest in all right, title and interest of the Seller in, to and under the Repurchase Assets. 
  
 (h) Chief Executive Office/Jurisdiction of Organization. During the four months immediately preceding July 1, 2001
and on the Effective Date, The Seller’s chief executive office is, and has been, located at 5555 Glen Ridge Connector, Suite 800 Atlanta GA, 30342. The Seller’s jurisdiction of organization is Delaware. 
  
 (i) Location of Books and Records. The location where the Seller keeps
its books and records, including all computer tapes and records related to the Repurchase Assets is its chief executive office. 
  

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 (j) Filing and Payment of Taxes. The Seller has filed on a timely basis all federal, state and
local tax and information returns, reports and any other information statements or schedules that are required to be filed by or in respect of it and has paid all taxes due pursuant to such returns, reports or other information statements or
schedules or pursuant to any assessment received by it, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided. The
charges, accruals and reserves on the books of the Seller in respect of taxes and other governmental charges are adequate. 
  
 (k) Enforceability. This Repurchase Agreement and all of the other Repurchase Documents executed and delivered by the Seller in connection herewith
are legal, valid and binding obligations of the Seller and are enforceable against the Seller in accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors rights generally and (ii) general principles of equity. 
  
 (l) Ability to Perform. The 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 to which it is a party on its part to be performed 
  
 (m) Material Adverse Effect. Since December 31, 2000, there has been no development or event nor, to the Seller’s knowledge, any prospective
development or event, which has had or could have a Material Adverse Effect. 
  
 (n) No Default. No Default or Event of Default has occurred and is continuing. 
  
 (o) Underwriting Guidelines. The Underwriting Guidelines provided to Buyer are the true and correct Underwriting Guidelines of the Seller.

  
 (p) Adverse Selection. The Seller has not selected the
Purchased Mortgage Loans in a manner so as to adversely affect Buyer’s interests. 
  
 (q) Tangible Net Worth. On the initial Purchase Date, the Tangible Net Worth of the Seller is not less than $ 30,000,000. 
  

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

 
 (s) Accurate and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on behalf of the Seller to the Buyer in connection with the negotiation, preparation or delivery of this Repurchase Agreement and the other Repurchase Documents or included
herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of the Seller to the Buyer in connection with this Repurchase Agreement and the other Repurchase Documents and the
transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of 

  

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projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to the Seller, after due
inquiry, that could reasonably be expected to have a Material Adverse Effect that has been disclosed herein, in the other Repurchase Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to
the Buyer for use in connection with the transactions contemplated hereby or thereby. 
  
 (t) Margin Regulations. The use of all funds acquired by the Seller under this Repurchase Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the
Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified. 
  
 (u) Investment Company. The Seller is not an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. 
  
 (v) Solvency. As of the date hereof and immediately after giving effect to each Transaction, the fair value of the assets of the Seller is greater than the fair value of the liabilities (including, without
limitation, contingent liabilities if and to the extent required to be recorded as a liability on the financial statements of the Seller in accordance with GAAP) of the Seller and the Seller is solvent and, after giving effect to the transactions
contemplated by this Repurchase Agreement and the other Repurchase Documents, will not be rendered insolvent or left with an unreasonably small amount of capital with which to conduct its business and perform its obligations. The Seller does not
intend to incur, nor does it believe that it has incurred, debts beyond its ability to pay such debts as they mature. The Seller is not contemplating the commencement of an insolvency, bankruptcy, liquidation, or consolidation proceeding or the
appointment of a receiver, liquidator, conservator, trustee, or similar official in respect of itself or any of its property. 
  
 (w) ERISA. 
  
 (i) No liability under Section 4062, 4063, 4064 or 4069 of ERISA has been or is expected by the Seller to be incurred by the Seller or any
ERISA Affiliate thereof with respect to any Plan which is a Single-Employer Plan in an amount that could reasonably be expected to have a Material Adverse Effect. 
  
 (ii) No Plan which is a Single-Employer Plan had an accumulated funding deficiency, whether or not waived,
as of the last day of the most recent fiscal year of such Plan ended prior to the date hereof. Neither the Seller nor any ERISA Affiliate thereof is (i) required to give security to any Plan which is a Single-Employer Plan pursuant to Section 401(a)
(29) of the Code or Section 307 of ERISA, or (ii) subject to a Lien in favor of such a Plan under Section 302(f) of ERISA. 
  
 (iii) Each Plan of the Seller, each of its Subsidiaries and each of its ERISA Affiliates is in compliance in all material respects with
the applicable provisions of ERISA and the Code, except where the failure to comply would not result in any Material Adverse Effect. 
  

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 (iv) Neither the Seller nor any of its Subsidiaries has incurred a tax liability under
Section 4975 of the Code or a penalty under Section 502(i) of ERISA in respect of any Plan which has not been paid in full, except where the incurrence of such tax or penalty would not result in a Material Adverse Effect. 
  
 (v) Neither the Seller nor any of its Subsidiaries or any
ERISA Affiliate thereof has incurred or reasonably expects to incur any withdrawal liability under Section 4201 of ERISA as a result of a complete or partial withdrawal from a Multiemployer Plan which will result in withdrawal liability to the
Seller, any of its Subsidiaries or any ERISA Affiliate thereof in an amount that could reasonably be expected to have a Material Adverse Effect. 
  
 (x) Agency Approvals. The Seller is an FHA Approved Mortgagee and a VA Approved Lender. The Seller is also approved by Fannie Mae as an approved
lender and Freddie Mac as an approved seller/servicer, and, to the extent necessary, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. In each such case, the Seller is in good
standing, with no event having occurred or the Seller having any reason whatsoever to believe or suspect will occur prior to the issuance of the consummation of the related Takeout Commitment, as the case may be, including, without limitation, a
change in insurance coverage which would either make the Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the relevant Agency or to the Department of Housing and Urban
Development, FHA or VA. The Seller has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans
and in accordance with Accepted Servicing Practices. 
  
 SECTION 12. COVENANTS

  
 On and as of the date of this Repurchase Agreement and
each Purchase Date and until this Repurchase Agreement is no longer in force with respect to any Transaction, the Seller covenants as follows: 
  
 (a) Preservation of Existence; Compliance with Law. The Seller shall: 
  
 (i) Preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises necessary for the operation of its business; 
  
 (ii) Comply with the requirements of all applicable laws, rules, regulations and orders, whether now in effect or hereafter enacted or
promulgated by any applicable Governmental Authority (including, without limitation, all environmental laws); 
  
 (iii) Maintain all licenses, permits or other approvals necessary for the Seller to conduct its business and to perform its obligations
under the Repurchase Documents, and shall conduct its business strictly in accordance with applicable law; 
  

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 (iv) Keep adequate records and books of account, in which complete entries will be made
in accordance with GAAP consistently applied; and 
  
 (v) Permit representatives of the Buyer, upon reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case, no prior notice shall be required), during normal business hours, to examine, copy and make
extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by the Buyer, subject to the provisions set forth in Section 26 hereof.

  
 (b) Taxes, Etc. 
  
 (i) The Seller shall pay and discharge or cause to be paid
and discharged, when due, or adequately reserve for the payment of, all taxes, assessments and governmental charges or levies imposed upon it or upon its income and profits or upon any of its property, real, personal or mixed (including without
limitation, the Repurchase Assets) or upon any part thereof, as well as any other lawful claims which, if unpaid, might become a Lien upon such properties or any part thereof. 
  
 (ii) The Seller shall file on a timely basis all federal, state and local tax and information returns,
reports and any other information statements or schedules required to be filed by or in respect of it and pay all taxes due pursuant to such returns, reports and other information statements or schedules or pursuant to any assessment received by it,
except for any such taxes as are appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are provided. 
  
 (c) Notice of Proceedings or Adverse Change. The Seller shall give notice to the Buyer immediately after a
responsible officer of the Seller has any knowledge of: 
  
 (i) the occurrence of any Default or Event of Default; 
  
 (ii) any (a) default or event of default under any Indebtedness of the Seller or (b) litigation, investigation, regulatory action or
proceeding that is pending or threatened by or against the Seller in any federal or state court or before any Governmental Authority which, if not cured or if adversely determined, would reasonably be expected to have a Material Adverse Effect or
constitute a Default or Event of Default, and (c) any Material Adverse Effect with respect to the Seller; 
  
 (iii) any litigation or proceeding that is pending or threatened against (a) the Seller in which the amount involved exceeds $500,000 and
is not covered by insurance, in which injunctive or similar relief is sought, or which, if adversely determined, would reasonably be expected to have a Material Adverse Effect and (b) any litigation or proceeding that is pending or threatened in
connection with any of the Repurchase Assets, which, if adversely determined, would reasonably be expected to have a Material Adverse Effect; 
  

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

  
 (A) a change in the insurance coverage of the
Seller, with a copy of evidence of same attached; 
  
 (B) any material change in accounting policies or financial reporting practices of the Seller; 
  
 (C) the termination or nonrenewal of any debt facilities (or any portion thereof) of the Seller which have a maximum principal amount (or
equivalent) available of more than $25,000,000. 
  
 (D) promptly upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other Repurchase Document) on, or claim asserted against, any of the Repurchase Assets; and

  
 (E) any other event, circumstance or
condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect; and 
  
 (v) Promptly, but no later than two (2) Business Days after the Seller receives any of the same, deliver to the Buyer a true, complete,
and correct copy of any schedule, report, notice, or any other document delivered to the Seller by any Person pursuant to, or in connection with, any of the Repurchase Assets. 
  
 (d) Financial Reporting. The Seller shall maintain a system of accounting established and administered in accordance
with GAAP, and furnish to the Buyer: 
  
 (i)
Within one hundred twenty (120) days after the close of each fiscal year, Financial Statements, including a statement of income and changes in shareholders’ equity of the Seller for such year, and the related balance sheet as at the end of such
year, all in reasonable detail and accompanied by an opinion of an accounting firm as to said financial statements; 
  
 (ii) Within sixty (60) days after the close of each of the Seller’s first three fiscal quarters in each fiscal year unaudited balance
sheets and income statements, for the period from such fiscal year subject however, to year end adjustments; 
  
 (iii) Within thirty (30) days after the end of each calendar month, the unaudited balance sheets of the Seller as at the end of such
period and the related unaudited consolidated statements of income and retained earnings and of cash flows for the Seller for such period and the portion of the fiscal year through the end of such period, subject, however, to year end adjustments;

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

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 (v) If applicable, copies of any 10-Ks, 10-Qs, registration statements and other
“corporate finance” SEC filings (other than 8-Ks) by the Seller, within 5 Business Days of their filing with the SEC; provided, that, the Seller or any Affiliate will provide the Buyer with a copy of the annual 10-K filed with the SEC by
the Seller or its affiliates, no later than 90 days after the end of the year; 
  
 (vi) Promptly, from time to time, such other information regarding the business affairs, operations and financial condition of the Seller
as the Buyer may reasonably request; and 
  
 (vii) At the request of the Buyer, the Seller shall provide to the Buyer documentation with respect to Construction to Permanent Mortgage Loans, including but not limited to documentation of additional draws and inspections of the related
Mortgaged Property. 
  
 (e) Visitation and Inspection
Rights. The Seller shall permit the Buyer to inspect, and to discuss with the Seller’s officers, agents and auditors, the affairs, finances, and accounts of the Seller, the Repurchase Assets, and the Seller’s books and records, and to
make abstracts or reproductions thereof and to duplicate, reduce to hard copy or otherwise use any and all computer or electronically stored information or data, in each case, (i) during normal business hours, (ii) upon reasonable notice (provided,
that upon the occurrence of an Event of Default, no notice shall be required), and (iii) at the expense of the Seller to discuss with its officers, its affairs, finances, and accounts. 
  
 (f) Reimbursement of Expenses. On the date of execution of this Repurchase Agreement, the Seller shall reimburse the
Buyer for all expenses incurred by the Buyer on or prior to such date. From and after such date, the Seller shall promptly reimburse the Buyer for all expenses as the same are incurred by the Buyer and within thirty (30) days of the receipt of
invoices therefor. 
  
 (g) Further Assurances. The Seller
shall execute and deliver to the Buyer all further documents, financing statements, agreements and instruments, and take all further action that may be required under applicable law, or that the Buyer may reasonably request, in order to effectuate
the transactions contemplated by this Repurchase Agreement and the Repurchase Documents or, without limiting any of the foregoing, to grant, preserve, protect and perfect the validity and first-priority of the security interests created or intended
to be created hereby. The Seller shall do all things necessary to preserve the Repurchase Assets so that they remain subject to a first priority perfected security interest hereunder. Without limiting the foregoing, the Seller will comply with all
rules, regulations, and other laws of any Governmental Authority and cause the Repurchase Assets to comply with all applicable rules, regulations and other laws. The Seller will not allow any default for which the Seller is responsible to occur
under any Repurchase Assets or any Repurchase Document and the Seller shall fully perform or cause to be performed when due all of its obligations under any Repurchase Assets or the Repurchase Documents. 
  
 (h) True and Correct Information. All information, reports, exhibits,
schedules, financial statements or certificates of Seller or any of its Affiliates thereof or any of their officers 

  

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furnished to Buyer hereunder and during Buyer’s diligence of the Seller are and will be true and complete and do not omit to disclose any material facts
necessary to make the statements therein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by the Seller to the Buyer pursuant to this Repurchase
Agreement shall be prepared in accordance with GAAP, or in applicable, to SEC filings, the appropriate SEC accounting requirements. 
  
 (i) ERISA Events. 
  
 (i) Promptly upon becoming aware of the occurrence of any Event of Termination which together with all other Events of Termination
occurring within the prior 12 months involve a payment of money by or a potential aggregate liability of the Seller or any ERISA Affiliate thereof or any combination of such entities in excess of $500,000 the Seller shall give the Buyer a written
notice specifying the nature thereof, what action the Seller or any ERISA Affiliate thereof has taken and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto;

  
 (ii) Promptly upon receipt thereof, the
Seller shall furnish to the Buyer copies of (i) all notices received by the Seller or any ERISA Affiliate thereof of the PBGC’s intent to terminate any Plan or to have a trustee appointed to administer any Plan; (ii) all notices received by the
Seller or any ERISA Affiliate thereof from the sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISA involving a withdrawal liability in excess of $500,000; and (iii) all funding waiver requests filed by the Seller or any ERISA Affiliate
thereof with the Internal Revenue Service with respect to any Plan, the accrued benefits of which exceed the present value of the plan assets as of the date the waiver request is filed by more than $500,000, and all communications received by the
Seller or any ERISA Affiliate thereof from the Internal Revenue Service with respect to any such funding waiver request. 
  
 (j) Financial Condition Covenants. 
  
 (i) Maintenance of Tangible Net Worth. The Seller shall maintain a Tangible Net Worth of not less than $24,000,000. The Seller
shall maintain a Tangible Net Worth at the end of any calendar quarter of not less than 80% of its Tangible Net Worth at the end of the second preceding calendar quarter. 
  
 (ii) Maintenance of Ratio of Indebtedness to Tangible Net Worth. The Seller shall maintain the ratio
of Indebtedness to Tangible Net Worth no greater than 15:1. 
  
 (k) Hedging. If requested by the Buyer in writing, the Seller shall have entered into Interest Rate Protection Agreements, in an amount in accordance with the Buyer’s written request, with Buyer or any Affiliate, having terms
with respect to protection against fluctuations in interest rates reasonably acceptable to the Buyer. 
  
 (l) No Adverse Selection. The Seller shall not select Eligible Mortgage Loans to be sold to Buyer as Purchased Mortgage Loans using any type of
adverse selection or other selection criteria which would adversely affect the Buyer. 
  

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 (m) Mortgage Loan Schedule. On the 5th Business Day of each calendar week, or with such greater
frequency as requested by Buyer, the Seller shall provide to Buyer, electronically, in a format mutually acceptable to Buyer, a Mortgage Loan Schedule. The 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 the Seller with the execution of this Repurchase Agreement. 
  
 (n) Insurance. The Seller shall continue to maintain insurance coverage with respect to employee dishonesty, forgery
or alteration, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount at least equal to $5,000,000. The Seller shall maintain a fidelity bond in respect
of its officers, employees and agents, with respect to any claims made in connection with all or any portion of the Repurchase Assets. The Seller shall notify the Buyer of any material change in the terms of any such fidelity bond or insurance
policy. 
  
 (o) Books and Records. The Seller shall, to the
extent practicable, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing the Repurchase Assets in the event of the destruction of the originals thereof), and keep
and maintain or obtain, as and when required, all documents, books, records and other information reasonably necessary or advisable for the collection of all Repurchase Assets. 
  
 (p) Security Interest. The Seller shall do all things necessary to preserve the Repurchase Assets so that they
remains subject to a first priority perfected security interest hereunder. Without limiting the foregoing, the Seller will comply with ail rules, regulations and other laws of any Governmental Authority and cause the Repurchase Assets to comply with
all applicable rules, regulations and other laws. The Seller will not allow any default for which the Seller is responsible to occur under any Repurchase Assets or any Repurchase Documents and the Seller shall fully perform or cause to be performed
when due all of its obligations under any Repurchase Assets or the Repurchase Documents. 
  
 (q) Illegal Activities. The Seller shall not engage in any conduct or activity that could subject its assets to forfeiture or seizure. 
  
 (r) Material Change in Business. The Seller shall not make any material change in the nature of its business as
carried on at the date hereof. 
  
 (s) Limitation on Dividends
and Distributions. The Seller shall not make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of the Seller,
whether now or hereafter outstanding, or make any other distribution in respect of any of the foregoing or to any shareholder or equity owner of the Seller, either directly or indirectly, whether in cash or property or in obligations of the Seller
or any of the Seller’s consolidated Subsidiaries in any calendar year; provided, that, Seller may make distributions to its parent, Abetterwayhome Corp., to enable such parent to pay principal and/or interest on the parent’s
Indebtedness; and provided, further no such dividends or other distributions may be made at any time following the occurrence and during the continuation of Default or an Event of Default. 
  

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 (t) Disposition of Assets; Liens. The Seller shall not create, incur, assume or suffer to exist
any mortgage, pledge, Lien, charge or other encumbrance of any nature whatsoever on any of the Repurchase Assets, whether real, personal or mixed, now or hereafter owned, other than the Liens created in connection with the transactions contemplated
by this Repurchase Agreement; nor shall the Seller cause any of the Purchased Mortgage Loans to be sold, pledged, assigned or transferred. 
  
 (u) Transactions with Affiliates. The Seller shall not enter into any transaction, including, without limitation, the purchase, sale, lease or
exchange of property or assets or the rendering or accepting of any service with any Affiliate, unless such transaction is (a) not otherwise prohibited in this Repurchase Agreement, (b) in the ordinary course of the Seller’s business and (c)
upon fair and reasonable terms no less favorable to the Seller, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate; provided, however, that the terms of this
clause shall not apply to a management fee in an amount up to $100,000 due annually to GTCR Fund VII, L.P. 
  
 (v) ERISA Matters. The Seller shall not permit any event or condition which is described in any of clauses (i) through (vii) of the definition of
“Event of Termination” to occur or exist with respect to any Plan or Multiemployer Plan if such event or condition, together with all other events or conditions described in the definition of Event of Termination occurring within the prior
12 months, involves the payment of money by or an incurrence of liability of the Seller or any ERISA Affiliate thereof, or any combination of such entities in an amount in excess of $500,000. 
  
 (w) Consolidations, Mergers and Sales of Assets. The Seller shall not
(i) consolidate or merge with or into any other Person or (ii) sell, lease or otherwise transfer all or substantially all of its assets to any other Person; provided that the Seller may merge or consolidate with another Person if the Seller
is the corporation surviving such merger. 
  
 (x) Mortgage Loan
Reports. The Seller will furnish to Buyer monthly electronic Mortgage Loan performance data, including, without limitation, delinquency reports, pool analytic reports and static pool reports (i.e., delinquency, foreclosure and net
charge-off reports) and monthly stratification reports summarizing the characteristics of the Mortgage Loans. 
  
 (y) Agency Approvals; Servicing. The Seller shall maintain its status with Fannie Mae and Ginnie Mae as an approved lender and Freddie Mac as an
approved seller/servicer, in each case in good standing (each such approval, an “Agency Approval”). The Seller shall service all Purchased Mortgage Loans which are subject to an Agency Takeout Commitment in accordance with the
applicable Agency guide. Should the Seller, for any reason, cease to possess all such applicable Agency Approvals to the extent necessary, or should notification to the relevant Agency or to HUD, FHA or VA be required, the Seller shall so notify
Buyer immediately in writing. Notwithstanding the preceding sentence, the Seller shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction.

  

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 (z) Guarantees. The Seller shall not create, incur, assume or suffer to exist any Guarantees,
except (i) to the extent reflected in the Seller’s financial statements or notes thereto and (ii) to the extent the aggregate Guarantees of the Seller do not exceed $2,500,000. 
  
 (aa) Takeout Payments. With respect to each Mortgage Loan subject to a Takeout Commitment which has not been assigned
to the Buyer pursuant to a Takeout Commitment Assignment, the Seller shall arrange that all payments under the related Takeout Commitment shall be paid directly to the Buyer at the account set forth in Section 9 hereof, or to an account approved by
the Buyer in writing prior to such payment. With respect to any Agency Takeout Commitment, if applicable, (1) with respect to the wire transfer instructions as set forth in Freddie Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse
Delivery) such wire transfer instructions are identical to Buyer’s wire instructions or the Buyer has approved such wire transfer instructions in writing in its sole discretion, or (2) the Payee Number set forth on Fannie Mae Form 1068
(Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as applicable, is identical to the Payee Number that has been identified by Buyer in writing as Buyer’s
Payee Number or the Buyer has approved the related Payee Number in writing in its sole discretion; With respect to any Takeout Commitment with an Agency for which the Agency is swapping the related Mortgage Loans for a mortgage backed security, the
applicable Agency documents list Buyer as sole-subscriber. 
  
 (bb) Underwriting Guidelines. Without the prior written consent of Buyer, the Seller shall not materially amend or otherwise materially modify the Underwriting Guidelines. Without limiting the foregoing, in the event that the Seller
makes any amendment or modification to the Underwriting Guidelines, the Seller shall promptly deliver to Buyer a complete copy of the amended or modified Underwriting Guidelines. 
  
 (cc) Tax Service Contracts. Upon the request of Buyer, or automatically in the case of any Purchased Mortgage Loan
subject to a Transaction hereunder for more than 90 days (other than Construction to Permanent Mortgage Loans), Seller shall obtain tax service contracts with respect to each such Purchased Mortgage Loan. 
  
 SECTION 13. EVENTS OF DEFAULT 
  
 Section 13.01 Events of Default. If any of the following events (each
an “Event of Default”) occur, the Seller and Buyer shall have the rights set forth in Section 14, as applicable: 
  
 (a) the Seller shall default in the payment of (i) any amount payable by it hereunder or under any other Repurchase Document, (ii) Expenses or (iii) any
other Obligations, when the same shall become due and payable, whether at the due date thereof, or by acceleration or otherwise; or 
  
 (b) the failure of the Seller to perform, comply with or observe any term, covenant or agreement applicable to the Seller contained in Sections 12(a),
(h), (j), (n), (r), (s), (t), (u), (v), (w), (x), (y), (z), (aa) or (bb); or 
  

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 (c) any representation, warranty or certification made or deemed made herein or in any other Repurchase
Document by the Seller or any certificate furnished to the Buyer pursuant to the provisions hereof or thereof or any information with respect to the Mortgage Loans furnished in writing by on behalf of the Seller shall prove to have been untrue or
misleading in any material respect as of the time made or furnished (other than the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Market Value of the Purchased Mortgage
Loans; unless (i) the Seller shall have made any such representations and warranties with actual knowledge that they were materially false or misleading at the time made; or (ii) any such representations and warranties have been determined in good
faith by the Buyer in its sole discretion to be materially false or misleading on a regular basis); or 
  
 (d) the Seller shall fail to observe or perform any other covenant or agreement contained in this Repurchase Agreement (and not identified in clause (b)
of Section 13.01) or any other Repurchase Document, and if such default shall be capable of being remedied, and such failure to observe or perform shall continue unremedied for a period of 1 Business Day; or 
  
 (e) a judgment or judgments for the payment of money in excess of $100,000 in
the aggregate shall be rendered against the Seller or any of its Affiliates by one or more courts, administrative tribunals or other bodies haying jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such
discharge) or bonded, or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof, and the Seller or any such Affiliate shall not, within said period of 30 days, or such longer period during which execution of
the same shall have been stayed or bonded, appeal therefrom and cause the execution thereof to be stayed during such appeal; or 
  
 (f) any “event of default” or any other default which permits a demand for, or requires, the early repayment of obligations due by the Seller or
its Affiliates under (i) any agreement (after the expiration of any applicable grace period under any such agreement) relating to any indebtedness of the Seller or any Affiliate, as applicable, to which the Buyer or any Affiliate is a party or (iii)
any agreement (after the expiration of any applicable grace period under any such agreement) relating to any Indebtedness of the Seller or any Affiliate, as applicable; or 
  
 (g) an Event of Insolvency shall have occurred with respect to the Seller; or 
  
 (h) for any reason, this Repurchase Agreement at any time shall not be in
full force and effect in all material respects or shall not be enforceable in all material respects in accordance with its terms, or any Lien granted pursuant thereto shall fail to be perfected and of first priority, or any Person (other than Buyer)
shall contest the validity, enforceability, perfection or priority of any Lien granted pursuant thereto, or any party thereto (other than Buyer) shall seek to disaffirm, terminate, limit or reduce its obligations hereunder; or 
  
 (i) the Seller shall grant, or suffer to exist, any Lien on any Repurchase
Asset (except any Lien in favor of the Buyer); or (A) the Repurchase Assets shall not have been sold to the Buyer, or (B) the Liens contemplated hereby shall cease or fail to be first priority perfected 

  

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Liens on any Repurchase Assets in favor of the Buyer or shall be Liens in favor of any Person other than the Buyer; or 
  
 (j) any material adverse change in the Property, business, prospects,
financial condition or operations of the Seller or any of its 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 the Seller’s ability to perform its obligations under this Agreement or any other Repurchase Document. 
  
 Section 13.02 Termination Event. (a) If the following event (a “Termination Event”) occurs, the Buyer shall have the rights set
forth in Section 13.02(b): 
  
 (i) the senior
debt obligations or short-term debt obligations of Merrill Lynch & Co., Inc. shall be rated below the four highest generic grades (without regard to any pluses and minuses reflecting gradations within such generic grades) by any nationally
recognized statistical rating organization. 
  
 (ii) A Change of Control of the Seller, HBMC Holdings, LLC or Abetterwayhome Corp. shall have occurred. 
  
 (b) Upon the occurrence of a Termination Event, the Buyer shall have the right, in its sole discretion, to immediately terminate the Buyer’s
obligation to enter into any additional Transactions. The Seller shall repurchase any Mortgage Loans subject to a Transaction hereunder within 60 days following receipt of a request therefor from Buyer following the occurrence of a Termination
Event. 
  
 SECTION 14. REMEDIES 
  
 (a) If an Event of Default occurs with respect to the Seller, the following
rights and remedies are available to the Buyer; provided, that an Event of Default shall be deemed to be continuing unless expressly waived by the Buyer in writing. 
  
 (i) At the option of the Buyer, exercised by written notice to the Seller (which option shall be deemed to
have been exercised, even if no notice is given, immediately upon the occurrence of an Event of Insolvency of the Seller), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur. The
Buyer shall (except upon the occurrence of an Act of Insolvency of the Seller) give notice to the Seller of the exercise of such option as promptly as practicable. 
  
 (ii) If the Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(i) of
this Section, 
  
 (A) the Seller’s
obligations in such Transactions to repurchase all Purchased Mortgage Loans, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subsection (a)(i) of this Section, (1) shall thereupon become immediately due and
payable and (2) all Income paid after such exercise or deemed exercise shall be retained by the Buyer and applied to the 

  

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aggregate unpaid Repurchase Price and any other amounts owed by the Seller hereunder; 
  
 (B) to the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction
shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding
the date of payment of the Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as of the Repurchase Date as determined pursuant to subsection (a)(i) of
this Section (decreased as of any day by (i) any amounts actually in the possession of Buyer pursuant to clause (C) of this subsection, and (ii) any proceeds from the sale of Purchased Mortgage Loans applied to the Repurchase Price pursuant to
subsection (a)(iv) of this Section; and 
  
 (C)
all Income actually received by the Buyer pursuant to Section 5 (excluding any Late Payment Fees paid pursuant to Section 5(a)) shall be applied to the aggregate unpaid Repurchase Price owed by the Seller. 
  
 (iii) Upon the occurrence of one or more Events of Default,
the Buyer shall have the right to obtain physical possession of all files of the Seller relating to the Purchased Mortgage Loans and the Repurchase Assets and all documents relating to the Purchased Mortgage Loans which are then or may thereafter
come in to the possession of the Seller or any third party acting for the Seller and the Seller shall deliver to the Buyer such assignments as the Buyer shall request. The Buyer shall be entitled to specific performance of all agreements of the
Seller contained in the Repurchase Documents. 
  
 (iv) At any time on the Business Day following notice to the Seller (which notice may be the notice given under subsection (a)(i) of this Section), in the event the Seller has not repurchased all Purchased Mortgage Loans, the Buyer may (A)
immediately sell, without demand or further notice of any kind, at a public or private sale and at such price or prices as the Buyer may deem satisfactory any or all Purchased Mortgage Loans and the Repurchase Assets subject to a such Transactions
hereunder and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the Seller hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Mortgage Loans, to give
the Seller credit for such Purchased Mortgage Loans and the Repurchase Assets in an amount equal to the Asset Value of the Purchased Mortgage Loans against the aggregate unpaid Repurchase Price and any other amounts owing by the Seller hereunder.
The proceeds of any disposition of Purchased Mortgage Loans and the Repurchase Assets shall be applied first to the costs and expenses incurred by the Buyer in connection with the Seller’s default; second to costs of cover and/or related
hedging transactions; third to the Repurchase Price; and fourth to any other outstanding obligation of the Seller to the Buyer or its Affiliates. 
  
 (v) The Seller shall be liable to Buyer for (i) the amount of all reasonable legal or other expenses (including, without limitation, all
costs and expenses of Buyer in 

  

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connection with the enforcement of this Repurchase Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or
bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal counsel of Buyer) incurred in
connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in
connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction. 
  
 (vi) The Buyer shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other agreement or applicable law. 
  
 (b) Buyer may exercise one or more of the remedies available to Buyer immediately upon the occurrence of an Event of Default and at any time thereafter without notice to the Seller. All rights and remedies arising
under this Repurchase Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have. 
  
 (c) Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and the Seller hereby expressly waives any defenses the
Seller might otherwise have to require Buyer to enforce its rights by judicial process. The Seller also waives any defense (other than a defense of payment or performance) the Seller might otherwise have arising from the use of nonjudicial process,
enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. The Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are
the result of a bargain at arm’s length. 
  
 (d) To the
extent permitted by applicable law, the Seller shall be liable to the Buyer for interest on any amounts owing by the Seller hereunder, from the date the Seller becomes liable for such amounts hereunder until such amounts are (i) paid in full by the
Seller or (ii) satisfied in full by the exercise of the Buyer’s rights hereunder. Interest on any sum payable by the Seller to the Buyer under this paragraph 14(d) shall be at a rate equal to the Pricing Rate in effect following an Event of
Default. 
  
 SECTION 15. INDEMNIFICATION AND EXPENSES; RECOURSE 

 
 (a) The Seller agrees to hold the Buyer, and its Affiliates and their
officers, directors, employees, agents and advisors (each an “Indemnified Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be
imposed on, incurred by or asserted against such Indemnified Party (collectively, “Costs”), relating to or arising out of this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, or
any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Repurchase Agreement, any other Repurchase Document or any transaction contemplated hereby or thereby, that, in each case, results from anything
other than the 

  

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

  
 (b) The Seller agrees to pay as and when billed by the Buyer
all of the out-of-pocket costs and expenses incurred by the Buyer in connection with the development,” preparation and execution of, and any amendment, supplement or modification to, this Repurchase Agreement, any other Repurchase Document or
any other documents prepared in connection herewith or therewith. The Seller agrees to pay as and when billed by the Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the consummation and administration of the
transactions contemplated hereby and thereby including without limitation filing fees and all the reasonable fees, disbursements and expenses of counsel to the Buyer which amount shall be deducted from the Purchase Price paid for the first
Transaction hereunder. Subject to the limitations set forth in Section 26 hereof, the Seller agrees to pay the Buyer all the reasonable out of pocket due diligence, inspection, testing and review costs and expenses incurred by the Buyer with respect
to Mortgage Loans submitted by the Seller for purchase under this Repurchase Agreement, including, but not limited to, those out of pocket costs and expenses incurred by the Buyer pursuant to Sections 15(b) and 26 hereof. 
  
 (c) The obligations of the Seller from time to time to pay the Repurchase
Price, the Periodic Advance Repurchase Payments, and all other amounts due under this Repurchase Agreement shall be full recourse obligations of the Seller. 
  
 SECTION 16. SERVICING 
  
 (a) The Seller shall service the Mortgage Loans consistent with the degree of skill and care customarily required with respect to similar Mortgage Loans
owned or managed by it and in accordance with all applicable industry standards. The Seller shall (i) comply with all applicable Federal, State and local laws and regulations, (ii) maintain all state and federal licenses necessary for it to perform
its servicing responsibilities hereunder and (iii) not impair the rights of Buyer in any Mortgage Loans or any payment thereunder. Buyer may terminate the servicing of any Mortgage Loan with the Seller in accordance with Section 16(d) hereof.

  

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 (b) The Seller shall hold or cause to be held all escrow funds collected by the Seller with respect to
any Purchased Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected. 
  
 (c) The Seller shall deposit all collections received by the Seller on account of the Purchased Mortgage Loans in the Collection Account no later than two
Business Days following receipt. 
  
 (d) Upon the occurrence of a
Default or Event of Default hereunder, Buyer shall have the right to immediately terminate the Seller’s right to service the Purchased Mortgage Loans without payment of any penalty or termination fee. The Seller shall cooperate in transferring
the servicing of the Purchased Mortgage Loans to a successor servicer appointed by Buyer in its sole discretion. 
  
 (e) If the Seller should discover that, for any reason whatsoever, any entity responsible to the Seller by contract for managing or servicing any such
Purchased Mortgage Loan has failed to perform fully the Seller’s obligations under the Repurchase Documents or any of the obligations of such entities with respect to the Purchased Mortgage Loans, the Seller shall promptly notify Buyer.

  
 SECTION 17. SINGLE AGREEMENT 
  
 Buyer and the 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 the Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transaction hereunder; (iii) that
payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the
obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted and (iv) to promptly provide notice to the other after any such set off or application. 
  
 SECTION 18. SET-OFF 
  
 In addition to any rights and remedies of the Buyer hereunder and by law, the Buyer shall have the right, without prior
notice to the Seller, any such notice being expressly waived by the Seller to the extent permitted by applicable law, upon any amount becoming due and payable by the Seller hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Buyer or any Affiliate thereof to or for the credit 

  

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or the account of the Seller or any Affiliate thereof. The Buyer agrees promptly to notify the Seller after any such set-off and application made by the
Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application. 
  
 SECTION 19. NOTICES AND OTHER COMMUNICATIONS 
  
 Except as otherwise expressly permitted by this Repurchase Agreement, all notices, requests and other communications provided for herein (including
without limitation any modifications of, or waivers, requests or consents under, this Repurchase Agreement) shall be given or made in writing (including without limitation by telecopy) delivered to the intended recipient at the “Address for
Notices” specified below its name on the signature pages hereof or thereof); or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. Except as otherwise provided in this
Repurchase Agreement and except for notices given under Section 3 (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when transmitted by telecopy or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid. 
  
 SECTION 20. ENTIRE AGREEMENT; SEVERABILITY 
  
 This Repurchase Agreement, together with the Repurchase Documents, constitute the entire understanding between Buyer and the Seller with respect to the subject matter they cover and shall supersede any existing agreements between the
parties containing general terms and conditions for repurchase transactions involving Purchased Mortgage Loans. By acceptance of this Repurchase Agreement, Buyer and Seller acknowledge that they have not made, and are not relying upon, any
statements, representations, promises or undertakings not contained in this Repurchase Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable
notwithstanding the unenforceability of any such other provision or agreement. 
  
 SECTION 21. NON-ASSIGNABILITY 
  
 The rights and
obligations of the parties under this Repurchase Agreement and under any Transaction shall not be assigned by the Seller without the prior written consent of Buyer. Subject to the foregoing, this Repurchase Agreement and any Transactions shall be
binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Nothing in this Repurchase Agreement express or implied, shall give to any Person, other than the parties to this Repurchase Agreement and their
successors hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Repurchase Agreement. Buyer may from time to time assign all or a portion of its rights and obligations under this Repurchase Agreement and the
Repurchase Documents; provided, however that Buyer shall maintain, for review by the Seller upon written request, a register of assignees and a copy of an executed assignment and acceptance by Buyer and assignee (“Assignment and
Acceptance”), specifying the percentage or portion of such rights and obligations assigned; and provided, further, that there shall not be more than five (5) “Buyers” hereunder at any one time. Upon such assignment, (a) such
assignee shall be a party hereto and to each Repurchase Document to the 

  

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extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Buyer
hereunder, and (b) Buyer shall, to the extent that such rights and obligations have been so assigned by it be released from its obligations hereunder and under the Repurchase Documents. Unless otherwise stated in the Assignment and Acceptance, the
Seller shall continue to take directions solely from Buyer unless otherwise notified by Buyer in writing. Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Seller. 
  
 The Buyer may sell participations to one or more Persons in or to all or a
portion of its rights and obligations under this Agreement; provided, however, that (i) the Buyer’s obligations under this Agreement shall remain unchanged, (ii) the Buyer shall remain solely responsible to the other parties hereto for the
performance of such obligations; and (iii) the Seller shall continue to deal solely and directly with the Buyer in connection with the Buyer’s rights and obligations under this Agreement and the other Program Agreements. Notwithstanding the
terms of Section 8, each participant of the Buyer shall be entitled to the additional compensation and other rights and protections afforded the Buyer under Section 8 to the same extent as the Buyer would have been entitled to receive them with
respect to the participation sold to such participant. 
  
 The
Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 21, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information
relating to the Seller or any of its subsidiaries or to any aspect of the transactions that has been furnished to the buyer by or on behalf of the Seller or any of its subsidiaries; provided that such assignee or participant agrees to hold such
information subject to the confidentiality provisions of this agreement. 
  
 The Buyer may at any time create a security interest in all or any portion of its rights under this agreement in favor of any Federal Reserve Bank in accordance with regulation a of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve Bank. No such assignment shall release the assigning buyer from its obligations hereunder. 
  
 In the event the Buyer assigns all or a portion of its rights and obligations under this agreement, the parties hereto agree
to negotiate in good faith an amendment to this agreement to add agency provisions similar to those included in repurchase agreements for similar syndicated repurchase facilities. 
  
 SECTION 22. TERMINABILITY 
  
 Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto shall survive the making of such
representation and warranty, and the Buyer shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be false or misleading, notwithstanding that the Buyer may have had notice or
knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was made. Notwithstanding any such termination or the occurrence of an Event of Default, all of the representations and 

  

 -45- 

 
warranties and covenants hereunder shall continue and survive. The obligations of the Seller under Section 15 hereof shall survive the termination of this
Repurchase Agreement. 
  
 SECTION 23. GOVERNING LAW 
  
 THIS REPURCHASE AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF. 
  
 SECTION 24. SUBMISSION TO JURISDICTION; WAIVERS 
  
 BUYER AND THE SELLER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY: 
  
 (i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS REPURCHASE AGREEMENT AND THE OTHER
REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF; 
  
 (ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; 
  
 (iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE BEEN NOTIFIED; AND 
  
 (iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION. 
  
 (v) THE BUYER AND THE SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS REPURCHASE AGREEMENT, 

  

 -46- 

 
ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
  
 SECTION 25. NO WAIVERS, ETC. 
  
 No failure on the part of the Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under
any Repurchase Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Repurchase Document preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. An Event of Default shall be deemed to be continuing unless expressly waived by the Buyer in writing. 
  
 SECTION 26. DUE DILIGENCE 
  
 The Seller acknowledges that Buyer has the right to perform continuing due
diligence reviews with respect to the Mortgage Loans and the Seller, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, or otherwise, and the Seller agrees that upon reasonable (but no less
than three (3) Business Day’s) prior notice unless an Event of Default shall have occurred or Buyer has a good faith belief that an Event of Default shall occur, in which case no notice is required, to the 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 the Seller and/or the Custodian. The 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, the Seller acknowledges that Buyer may purchase Mortgage Loans from the Seller based solely upon the information provided by the Seller to Buyer in the Purchased Mortgage Loan Schedule and the
representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Mortgage Loans purchased in a Transaction, including,
without limitation, ordering broker’s price opinions new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan. Buyer may underwrite such Mortgage
Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. The 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 the Seller. The Seller further agrees
that the Seller shall pay all out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 26 (“Due Diligence Costs”); provided, that such Due Diligence Costs shall not
exceed $15,000 per calendar year unless a Default or Event of Default shall have occurred, in which event Buyer shall have the right to perform due diligence, at the sole expense of Seller. 
  

 -47- 

 SECTION 27. BUYER’S APPOINTMENT AS ATTORNEY-IN-FACT 
  
 (a) The Seller hereby irrevocably constitutes and appoints the Buyer and any
officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Seller and in the name of the Seller or in its own name, from time to time in
the Buyer’s discretion, for the purpose of carrying out the terms of this Repurchase Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be reasonably necessary or desirable to
accomplish the purposes of this Repurchase Agreement, and, without limiting the generality of the foregoing, the Seller hereby gives the Buyer the power and right, on behalf of the Seller, without assent by, but with notice to, the Seller, if an
Event of Default shall have occurred and be continuing, to do the following: 
  
 (i) in the name of the Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to
any other Repurchase Assets and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Buyer for the purpose of collecting any and all such moneys due with respect to any
other Repurchase Assets whenever payable; 
  
 (ii) to pay or discharge taxes and Liens levied or placed on or threatened against the Repurchase Assets; 
  
 (iii) (A) to direct any party liable for any payment under any Repurchase Assets to make payment of any and all moneys due or to become
due thereunder directly to the Buyer or as the Buyer shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of
any Repurchase Assets; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Repurchase Assets; (D) to commence and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Repurchase Assets or any proceeds thereof and to enforce any other right in respect of any Repurchase Assets; (E) to defend any suit, action or proceeding brought against the Seller with respect to any
Repurchase Assets; (F) to settle, compromise or adjust any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as the Buyer may deem appropriate; and (G) generally, to sell,
transfer, pledge and make any agreement with respect to or otherwise deal with any Repurchase Assets as fully and completely as though the Buyer were the absolute owner thereof for all purposes, and to do, at the Buyer’s option and the
Seller’s expense, at any time, and from time to time, all acts and things which the Buyer deems necessary to protect, preserve or realize upon the Repurchase Assets and the Buyer’s Liens thereon and to effect the intent of this Repurchase
Agreement, all as fully and effectively as the Seller might do. 
  
 (b) The Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. 
  

 -48- 

 (c) The Seller also authorizes the Buyer, if an Event of Default shall have occurred, from time to time,
to execute, in connection with any sale provided for in Section 14 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Repurchase Assets. 
  
 (d) The powers conferred on the Buyer hereunder are solely to protect the
Buyer’s interests in the Repurchase Assets and shall not impose any duty upon it to exercise any such powers. The Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it
nor any of its officers, directors, employees or agents shall be responsible to the Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct. 
  
 SECTION 28. MISCELLANEOUS 
  
 (a) Counterparts. This Repurchase Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Repurchase Agreement by signing any such counterpart. 
  
 (b) Captions. The captions and headings appearing herein are for
included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Repurchase Agreement. 
  
 (c) Acknowledgment. The Seller hereby acknowledges that: 
  

(i) it has been advised by counsel in the negotiation, execution and delivery of this Repurchase Agreement and the other Repurchase
Documents; 
  
 (ii) the Buyer has no fiduciary
relationship to the Seller; and 
  
 (iii) no
joint venture exists between the Buyer and the Seller. 
  
 SECTION 29.
CONFIDENTIALITY 
  
 The Buyer and, the Seller hereby
acknowledge and agree that all written or computer-readable information provided by one party to any other regarding the terms set forth in any of the Repurchase Documents or the Transactions contemplated thereby (the “Confidential
Terms”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except to the extent that (i) it is necessary to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, (ii) any of the Confidential Terms are in the public domain other than due to a breach of this covenant, or (iii) in the
event of an Event of Default the Buyer determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Mortgage Loans or otherwise to enforce or exercise the Buyer’s rights
hereunder. The provisions set forth in this Section 29 shall survive the termination of this Repurchase Agreement. 
  

 -49- 

 SECTION 30. INTENT 
  
 (a) The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United
States Code, as amended (except insofar as the type of Mortgage Loans subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that term is defined in Section
741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). 
  
 (b) It is understood that either party’s right to liquidate Mortgage Loans delivered to it in connection with
Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. 
  
 (c) The parties agree and acknowledge that if a party hereto is an
“insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in
FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable). 
  
 (d) It is understood that this Repurchase Agreement constitutes a “netting contract” as defined in and subject to
Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment
entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).

  
 SECTION 31. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

  
 The parties acknowledge that they have been advised that:

  
 (a) in the case of Transactions in which one of the parties is
a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the
position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder; 
  
 (b) in the case of Transactions in which one of the parties is a government securities broker or a government securities
dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and 
  
 (c) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial
institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable. 
  

 -50- 

 SECTION 32. CONFLICTS 
  
 In the event of any conflict between the terms of this Repurchase Agreement, any other Repurchase Document and any Confirmation, the documents shall
control in the following order of priority: first, the terms of the Confirmation shall prevail, then the terms of this Repurchase Agreement shall prevail, and then the terms of the Repurchase Documents shall prevail. 
  
 [THIS SPACE INTENTIONALLY LEFT BLANK] 
  

 -51- 

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

					
	BUYER:
	
	 MERRILL LYNCH MORTGAGE
CAPITAL INC.

		
	By:	 	 /s/    James B. Cason

	 	 	

	 	 	 Title: DIRECTOR

	
	Address for Notices:
		
	 	 	4 World Financial Center
	 	 	 22nd Floor

	 	 	 New York, New York 10080

		
	 	 	Attention: James B. Cason
	 	 	Telecopier No.: (212) 449-3673
	 	 	 Telephone No.: (212) 449-1219

  

					
	 SELLER:

	
	 HOMEBANC MORTGAGE CORPORATION

		
	By:	 	 /s/ Frank Plenskofski

	 	 	

	 	 	 Title: EVP Chief Financial Officer

	
	Address for Notices:
		
	 	 	5555 Glen Ridge Connector
	 	 	Suite 800
	 	 	Atlanta, Georgia 30342
	 	 	Attention:
	 	 	Telecopier No.:
	 	 	Telephone No:

  

 SCHEDULE 1  
  

REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS 
  
 The Seller represents and warrants to the Buyer, with respect to each Mortgage Loan, that as of the Purchase Date for the purchase of any Purchased
Mortgage Loans by the Buyer from the Seller and as of the date of this Repurchase Agreement and any Transaction hereunder and at all times while the Repurchase Documents and any Transaction hereunder is in full force and effect. 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 the 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. With respect to those representations and warranties which are made to the best of the Seller’s knowledge, if it is
discovered by the Seller or the Buyer that the substance of such representation and warranty is inaccurate, notwithstanding the Seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall
be deemed a breach of the applicable representation and warranty. 
  
 (a) Mortgage Loans as Described. The information set forth in the related Mortgage Loan Schedule is complete, true and correct; 
  
 (b) Payments Current. Except with respect to Delinquent Mortgage Loans, all payments required to be made up to the close of business on the Closing
Date for such 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 at any time since the origination of
the 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; 
  
 (c) No Outstanding Charges. There are no delinquent taxes, ground
rents, water charges, sewer rents, governmental assessments, municipal charges, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting the related Mortgaged Property. The
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 later, to the day which precedes by one month the Due Date of the first installment of principal and interest; 
  
 (d) Original Terms Unmodified. The terms of the Mortgage Note and the
Mortgage have not been impaired, waived, altered or modified in any respect, except by written instruments, recorded in the applicable public recording office if necessary to maintain the lien priority of the Mortgage, and which have been delivered
to the Custodian; the substance of any such waiver, alteration or modification has been approved by the insurer under the Primary Insurance Policy, if any, and the title insurer, to the extent required by the related policy, and is reflected on the
related Mortgage Loan Schedule. No instrument of waiver, alteration or 

  

 Sch. 1-1 

 
modification has been executed, and no Mortgagor has been released, in whole or in part, except in connection with an assumption agreement approved by the
insurer under the Primary Insurance Policy, if any, the title insurer, to the extent required by the policy, and which assumption agreement has been delivered to the Custodian and the terms of which are reflected in the related Mortgage Loan
Schedule; 
  
 (e) No Defenses. The Mortgage Note and the
Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note and the Mortgage, or the exercise of any right thereunder, render
the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including 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 of any state or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated; 
  
 (f) Hazard Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such
other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Seller as of the date of origination consistent with the Underwriting Guidelines, against earthquake and other risks insured against by
Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than the least of (i) 100% of the replacement cost of all improvements to the Mortgaged Property, (ii) the outstanding principal balance of the
Mortgage Loan, or (iii) 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
the Underwriting Guidelines. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current
guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of the Mortgage Loan (2) the full
insurable value of the Mortgaged Property, and (3) the maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1974. All such insurance policies (collectively, the
“hazard insurance policy”) contain a standard mortgagee clause naming Seller its sucessors and assigns .(including,, without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled
without 30 days’ prior written notice to the mortgagee. No such notice has been received by Seller. All premiums on such insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such
Mortgagor’s failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from such 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 a condominium, or any 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 and is in full force and effect. Seller has not engaged in, and has no knowledge of the Mortgagor’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 

  

 Sch. 1-2 

 
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; 
  
 (g) Compliance with Applicable Law. 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 or shall cause its agent to maintain in its possession, available for the inspection of Buyer, and shall deliver to Buyer, upon demand, evidence of compliance with all
such requirements; 
  
 (h) No Satisfaction of Mortgage. The
Mortgage has not been satisfied, cancelled, 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 satisfaction, cancellation, subordination, rescission or release. The 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 the Seller waived any default resulting from any action or inaction by the Mortgagor; 
  
 (i) Valid First Lien. The Mortgage is a valid, subsisting, enforceable and perfected (a) with respect to each first lien Mortgage Loan, first
priority lien and first priority security interest, on the real property included in 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: 
  
 (i) the lien of current real property taxes and assessments
not yet due and payable; 
  
 (ii) 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 Buyer’s title
insurance policy delivered to the originator of the Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and 
  
 (iii) 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. 
  

 Sch. 1-3 

 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 first lien and first priority security interest on the property described therein and Seller has full right to pledge 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; 
  
 (j) Validity of Mortgage Documents. The Mortgage Note and the Mortgage
and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a 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 such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note,
the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan. Seller has reviewed all of the documents constituting the Mortgage File
and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. To the best of Seller’s knowledge, except as disclosed to Buyer in writing, all tax identifications and property
descriptions are legally sufficient; and tax segregation, where required, has been completed; 
  
 (k) Full Disbursement of Proceeds. Except with respect to Construction to Permanent Mortgage Loans, the proceeds of the Mortgage Loan have been fully disbursed to or for the account of the Mortgagor and there
is no obligation for the Mortgagee to advance additional funds thereunder and any and all requirements as to completion of any on-site or off-site improvement and 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 have been paid, and the Mortgagor is not entitled to any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage Note or
Mortgage; 
  
 (l) Ownership Seller has full right to sell
the Mortgage Loan 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 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 except any such security interest created pursuant to the terms of this Agreement; 
  
 (m) 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) (i) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such
state, 

  

 Sch. 1-4 

 
(C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such
state; 
  
 (n) Title Insurance. The Mortgage Loan is
covered by either (i) an attorney’s opinion of title and abstract of title, the form and substance of which is acceptable to prudent mortgage lending institutions making mortgage loans in the area wherein the Mortgaged Property is located or
(ii) an ALTA lender’s title insurance policy or other generally acceptable form of policy or insurance acceptable to Fannie Mae or Freddie Mac and each such title insurance policy is 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 priority lien of the Mortgage, as applicable in the original principal amount of the Mortgage
Loan (or to the extent a Mortgage Note provides for negative amortization, the maximum amount of negative amortization in accordance with the Mortgage), subject only to the exceptions contained in clauses (a), (b) and (c), and in the case of
adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose the 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, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and
remains 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 related 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; 
  
 (o) 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 the
Seller has not waived any default, breach, violation or event of acceleration; 
  
 (p) 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 law could give rise to such
lien) affecting the related Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage; 
  
 (q) Location of Improvements; No Encroachments. Unless otherwise affirmatively insured by a lender’s title insurance policy, all improvements
which were considered in determining the Appraised Value of the related Mortgaged Property lay wholly 

  

 Sch. 1-5 

 
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 Mortgage Property is in violation of any applicable zoning law or regulation; 
  
 (r) Origination. The Mortgage Loan was originated by or in conjunction with a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to s 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar banking institution which is supervised and examined by a federal or state
authority. 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 .125%), subject to the Mortgage
Interest Rate Cap. The Mortgage Note is payable on the first day of each month in equal monthly installments of 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 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; 
  
 (s) Payment Provisions. Interest payments on the Mortgage Loan commenced no more than sixty days after the proceeds of the Mortgage Loan were
disbursed. The Mortgage Loan bears interest at the Mortgage Interest Rate. The Mortgage Note does not permit negative amortization. No Mortgage Loan is a Convertible Mortgage Loan; 
  
 (t) Customary Provisions. The Mortgage Note has a stated maturity. 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 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 a Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s
sale or the right to foreclose the Mortgage. The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Fannie Mae; 
  
 (u) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The origination and collection practices used by the Seller with respect to
each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing industry. The Mortgage Loan has been serviced by the Seller and any predecessor servicer in accordance with the
terms of the Mortgage Note. With respect to escrow deposits and Escrow Payments, if any, all such payments are in the possession of, or under the control of, the Seller and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or Escrow Payments or other charges or payments due the Seller have been capitalized under any Mortgage or the related Mortgage Note and no such escrow deposits or Escrow
Payments are being held by 

  

 Sch. 1-6 

 
the Seller for any work on a Mortgaged Property which has not been completed. All Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state and local law has been properly paid and credited; 
  
 (v) Mortgaged Property Undamaged. The Mortgaged Property is free of damage by fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty and waste, and there is no proceeding pending for the total or partial condemnation thereof; 
  
 (w) Customary Provisions. The Mortgage and related Mortgage Note contain 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, (a) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (b)
otherwise by judicial foreclosure. The Mortgaged Property has not been subject to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed for protection under applicable bankruptcy laws. 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. The Mortgagor has not notified the Seller and the Seller has no knowledge of
any relief requested or allowed to the Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940; 
  
 (x) Conformance with Agency Standards. The Mortgage Loan was underwritten in accordance with the Underwriting Guidelines in effect at the time the
Mortgage Loan was originated which underwriting standards, with respect to Conforming Mortgage Loans and Jumbo Mortgage Loans, satisfy the standards of Fannie Mae and Freddie Mac under one of their respective home mortgage purchase programs (except
that the principal balance of Jumbo Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie Mac); and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae and Freddie Mac; 
  
 (y) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage on the Mortgaged Property and the security interest of any applicable security agreement or chattel mortgage referred to in (j) above; 
  
 (z) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property which satisfied the standards of Fannie Mae and Freddie Mac and was made and signed, prior to the approval of the Mortgage Loan application, by a qualified appraiser, duly appointed by the Seller, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security thereof, whose compensation is not affected by the approval or disapproval of the Mortgage Loan and who met the minimum qualifications of Fannie Mae and Freddie Mac. Each
appraisal of the Mortgage Loan was made in accordance with the requirements of Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated; 
  
 (aa) Deeds of Trust. In the event
the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and 

  

 Sch. 1-7 

 
currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Buyer to the trustee under the deed of trust,
except in connection with a trustee’s sale after default by the Mortgagor; 
  
 (bb) No Buydown Provisions; No Graduated Payments or Contingent Interests. Other than those Mortgage Loans acceptable for purchase by an Agency, no Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate account established by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any other similar
provisions 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; 
  
 (cc) Mortgagor Acknowledgment. The Mortgagor has executed a statement
to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of fixed rate mortgage loans in the case of Fixed Rate Mortgage Loans, and adjustable rate mortgage loans in the case of
Adjustable Rate Mortgage Loans and rescission materials with respect to Refinanced Mortgage Loans, and such statement is and will remain in the Mortgage File; 
  

(dd) No Construction Loans. Except with respect to Construction to Permanent Mortgage Loans, no Mortgage Loan was made in connection with (a)
the construction or rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or exchange of a Mortgaged Property; 
  
 (ee) Acceptable Investment. The Seller has no knowledge of any circumstances or condition with respect to the Mortgage, the Mortgaged Property, the
Mortgagor or the Mortgagor’s credit standing that can reasonably be expected to cause the Mortgage Loan to be an unacceptable investment, cause the Mortgage Loan to become delinquent, or adversely affect the value of the Mortgage Loan;

  
 (ff) LTV, PMI Policy. No Mortgage Loan has an LTV
(“loan-to-value” ratio) or CLTV (“combined loan-to-value” ratio) in excess of 100%. Each Mortgage Loan with an LTV at origination in excess of 80% is and will be subject to a Primary Mortgage Insurance Policy, issued by a
Qualified Insurer, which insures that portion of the Mortgage Loan in excess of the portion of the Appraised Value of the Mortgaged Property required by the applicable Underwriting Guidelines or Agency. All provisions of such Primary Insurance
Policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. Any Mortgage subject to any such Primary Insurance Policy obligates the Mortgagor thereunder to maintain such
insurance and to pay all premiums and charges in connection therewith. The Mortgage Interest Rate for the Mortgage Loan does not include any such insurance premium; 
  
 (gg) Capitalization of Interest. The Mortgage Note does not by its terms provide for the capitalization or
forbearance of interest. 
  

 Sch. 1-8 

 (hh) 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 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. 
  
 (ii) Proceeds of Mortgage Loan. The proceeds of the Mortgage Loan have
not been and shall not be used to satisfy, in whole or in part, any debt owed or owing by the Mortgagor to Seller or any Affiliate or correspondent of Seller, except in connection with a refinanced Mortgage Loan. 
  
 (jj) Origination Date. Except as disclosed by the Seller and approved
by the Buyer in writing, the origination date is no earlier than sixty (60) days prior to the related Purchase Date. 
  
 (kk) No Exception. The Custodian has not noted any material exceptions on a Mortgage Loan Schedule and Exception Report with respect to the
Mortgage Loan which would materially adversely affect the Mortgage Loan or Buyer’s interest in the Mortgage Loan. 
  
 (ll) Occupancy of Mortgaged Property. 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, have been made or obtained from the
appropriate authorities; 
  
 (mm) No Misrepresentation or
Fraud. No error, omission, misrepresentation, negligence, fraud or similar occurrence with respect to a Mortgage Loan has taken place on the part of any person, including without limitation the Mortgagor, any appraiser, any builder or developer,
or any other party involved in the origination of the Mortgage Loan or in the application of any insurance in relation to such Mortgage Loan; 
  
 (nn) 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; 
  
 (oo)
Consolidated Future Advances. Any principal advances made to the Mortgagor prior to the Cut-off 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 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; 
  
 (pp) No Balloon Payment. No Mortgage Loan has a balloon payment
feature; 
  

 Sch. 1-9 

 (qq) Condominiums/ Planned Unit Developments. If the Residential Dwelling on the Mortgaged
Property is a condominium unit or a unit in a planned unit development (other than a de minimis planned unit development) such condominium or planned unit development project meets the eligibility requirements of Fannie Mae and Freddie Mac including
Fannie Mae eligibility requirements for sale to Fannie Mae or is located in a condominium or planned unit development project which has received Fannie Mae project approval and the representations and warranties required by Fannie Mae with respect
to such condominium or planned unit development have been made and remain true and correct in all respects; 
  
 (rr) Downpayment. The source of the down payment with respect to each Mortgage Loan has been fully verified by the Seller; 
  
 (ss) Calculation of Interest. Interest on each Mortgage Loan is
calculated on the basis of a 360-day year consisting of twelve 30-day months; 
  
 (tt) Environmental Matters. The Mortgaged Property is in material compliance with all applicable local, state and federal environmental laws, rules or regulations pertaining to environmental hazards including,
without limitation, asbestos, and neither the Seller nor, to the Seller’s knowledge, the related Mortgagor, has received any notice of any violation or potential Violation of such law nor is there any pending action or proceeding directly
involving any Mortgaged Property of which the Seller is aware in which compliance with any environmental law, rule or regulation is an issue; 
  
 (uu) Predatory Lending Regulations; High Cost Loans. No Mortgage Loan (a) is subject to Section 226.32 of Regulation Z or any similar state law
(relating to high interest rate credit/lending transactions), or (b) contains any term or condition, or involve any loan origination practice, that has been defined as “predatory” or “threshold” under applicable federal, state or
local law, or which has been expressly categorized as an “unfair” or “deceptive” term, condition, or practice in any applicable federal, state or local law (or the regulations promulgated thereunder) dealing with
“predatory” or “high cost” mortgage lending; 
  
 (vv) Location and Type of Mortgaged Property. The Mortgaged Property is a ‘ fee simple property or subject to a Ground Lease located in the state identified in the Mortgage Loan Schedule and consists of a parcel of real property
with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual condominium unit in a condominium project, or an individual unit in a planned unit development, provided, however, that any condominium
project or planned unit development shall conform with the applicable Fannie Mae and Freddie Mac requirements regarding such dwellings, and no residence or dwelling is a mobile home or a manufactured dwelling. No portion of the Mortgaged Property is
used for commercial purposes; 
  
 (ww) 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 Mortgage
thereunder; 
  

 Sch. 1-10 

 (xx) Soldiers’ and Sailors’ Relief Act. The Mortgagor has not notified the Seller, and
the Seller has no knowledge of any relief requested or allowed to the Mortgagor under the Soldiers’ and Sailors’ Civil Relief Act of 1940; 
  
 (yy) No Denial of Insurance. No action, inaction, or event has occurred and no state of 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, special hazard insurance policy, PMI Policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement
of any such insurance, no commission, fee, or other compensation has been or will be received by the Seller or any designee of the Seller or any corporation in’ which the Seller or any officer, director, or employee had a financial interest at
the time of placement of such insurance. The Seller has caused or will cause to be performed any and all acts required to preserve the rights and remedies of the 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 the Buyer; 
  
 (zz) Flood Certification Contract. The Seller has obtained a life of
loan, transferable flood certification contract for each Mortgage Loan and such contract is assignable without penalty, premium or cost to the Buyer; 
  
 (aaa) Recordation. Each original Mortgage was recorded and, except for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to the Buyer) have been recorded in the appropriate jurisdictions wherein such recordation is necessary to perfect the lien thereof as against creditors of the Seller, or is
in the process of being recorded; 
  
 (bbb) Documents
Genuine. Such Purchased Mortgage Loan and all accompanying collateral documents are complete and authentic and all signatures thereon are genuine. Such Purchased Mortgage Loan is a “closed” loan and held in Seller’s name.

  
 (ccc) Bona Fide Loan. Such Purchased Mortgage Loan
arose from a bona fide loan, complying with all applicable State and Federal laws and regulations, to persons having legal capacity to contract and is not subject to any defense, set-off or counterclaim. 
  
 (ddd) Other Encumbrances. To the best of Seller’s knowledge, any
property subject to any security interest given in connection with such Purchased Mortgage Loan is not subject to any other encumbrances other than a stated first mortgage, if applicable, and encumbrances which may be allowed under the Underwriting
Guidelines. 
  
 (eee) Description. Each Purchased Mortgage
Loan conforms to the description thereof as set forth on the related Mortgage Loan Schedule and Exception Report delivered to the Custodian and Buyer. 
  
 (fff) Located in U.S. No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to
a Purchased Mortgage Loan is located in any jurisdiction other than in one of the fifty (50) states of the United States of . America or the District of Columbia. 
  

 Sch. 1-11 

 (ggg) Prepayment Penalty. With respect to each Mortgage Loan that has a Prepayment Penalty
feature, each such Prepayment Penalty is enforceable and will be enforced by the Seller, and each Prepayment Penalty is permitted pursuant to federal, state and local law. No Mortgage Loan will impose a Prepayment Penalty for a term in excess of
five years from the date such Mortgage Loan was originated. Except as otherwise set forth on the Mortgage Loan Schedule, with respect to each Mortgage Loan that contains a Prepayment Penalty, such Prepayment Penalty is at least equal to the lesser
of (A) the maximum amount permitted under applicable law and (B) six months interest at the related Mortgage Interest Rate on the amount prepaid in excess of 20% of the original principal balance of such Mortgage Loan; 
  
 (hhh) Servicing Practices. Each Mortgage Loan has been serviced in all
material respects in compliance with those mortgage servicing practices (including collection procedures) of prudent mortgage banking institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located; and 
  
 (iii)
Single-Premium Credit Life Insurance. None of the proceeds of the Mortgage Loan were used to finance single-premium credit insurance policies. 
  
 (jjj) Takeout Commitment. Each Conforming Mortgage Loan and Jumbo Mortgage Loan is covered by a Take-out Commitment, does not exceed the
availability under such Take-out Commitment (taking into consideration mortgage loans which have been purchased by the respective Take-out Investor under the Take-out Commitment and mortgage loan which Seller has identified to Buyer as covered by
such Take-out Commitment) and conforms to the requirements and the specifications set forth in such Take-out Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Take-out Investor and is eligible for sale to
and insurance or guaranty by, respectively the applicable Take-out Investor and applicable insurer. 
  
 Each Takeout Commitment and each Takeout Commitment Assignment is a legal, valid and binding obligation of Seller enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding
in equity or at law). 
  
 Each Agency Takeout Commitment has been
assigned pursuant to a Takeout Commitment Assignment to Merrill Lynch Government Securities, Inc (“MLGSI”). and such securities will be issued in the name of MLGSI. 
  
 Each Agency Takeout Commitment designates the Buyer as the payee of the purchase price thereunder. 
  
 Each Investor Takeout Commitment either (a) has been assigned pursuant to a
Takeout Commitment Assignment to the Buyer or (b) designates the Buyer as the payee of the purchase price thereunder. 
  
 (kkk) FHA Mortgage Insurance; VA Loan Guaranty. With respect to the FHA Loans, the FHA Mortgage Insurance Contract is in full force and effect and
there exists no 

  

 Sch. 1-12 

 
impairment to full recovery without indemnity to the Department of Housing and Urban Development or the FHA under FHA Mortgage Insurance. With respect to the
VA Loans, the VA Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein. All necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid
and enforceable obligation of the FHA and the VA, respectively, to the full extent thereof, without surcharge, set-off or defense. Each FHA Loan and VA Loan was originated in accordance with the criteria of an Agency for purchase of such Mortgage
Loans. Each Mortgage Loan which is represented to Buyer to have, or to be eligible for, FHA insurance is insured, or eligible to be insured, pursuant to the National Housing Act. Each Mortgage Loan which is represented by Seller to be guaranteed, or
to be eligible for guaranty, by the VA is guaranteed, or eligible to be guaranteed, under the provisions of Chapter 37 of Title 38 of the United States Code. As to each FHA insurance certificate or each VA guaranty certificate, Seller has complied
with applicable provisions of the insurance for guaranty contract and federal statutes and regulations, all premiums or other charges due in connection with such insurance or guarantee have been paid, there has been no act or omission which would or
may invalidate any such insurance or guaranty, and the insurance or guaranty is, or when issued, will be, in full force and effect with respect to each Mortgage Loan. There are no defenses, counterclaims, or rights of setoff affecting the Mortgage
Loans or affecting the validity or enforceability of any private mortgage insurance or FHA insurance applicable to the Mortgage Loans or any VA guaranty with respect to the Mortgage Loans. 
  
 (III)Ground Leases. With respect to each Mortgage Loan, for which the
related Mortgaged Property is subject to a Ground Lease: 
  

	 	(i)	The Ground Lease or a memorandum thereof has been duly recorded, the Ground Lease permits the interest of the lessee thereunder to be encumbered by the related Mortgage, does not
restrict the use of the Mortgaged Property by the lessee or its successors and assigns in a manner that would adversely affect the security provided by the related Mortgage, and there has not been a material change in the terms of the Ground Lease
since its recordation, with the exception of written instruments which are part of the related Mortgage File; 

  

	 	(ii)	The Ground Lease is not subject to any liens or encumbrances superior to or of equal priority with, the related Mortgage, other than the related ground lessor’s related fee
interest; and 

  

	 	(iii)	The Ground Lease either (i) has a term which extends not less than five years beyond the maturity date of the related Mortgage Loan or (ii) grants the lessee the option to extend
the term of the lease for a period (in the aggregate) which exceeds five years beyond the maturity date of the related Mortgage Loan. 

  

 Sch. 1-13 

 EXHIBIT I  
  

FORM OF CONFIRMATION LETTER 
  
                                        
     [                    ], 200     
  
 _______________________________ 
 _______________________________ 
 _______________________________ 
 _______________________________ 
 Attention: 
  
 Confirmation No.:_________________________ 
  
 Ladies/Gentlemen: 
  
 This letter confirms our oral agreement to purchase from you the Mortgage Loans listed in Appendix I hereto, pursuant to the
Master Repurchase Agreement governing purchases and sales of Mortgage Loans between us, dated as of February 27, 2002 (the “Agreement”), as follows: 
  
 Purchase Date: 
  
 Mortgage Loans to be Purchased: See Appendix I hereto. 
 [Appendix I to Confirmation Letter will list Mortgage Loans] 
  
 Aggregate Principal Amount of Purchased Mortgage Loans: 
  
 Purchase Price: 
  
 Pricing
Spread: 
  
 Repurchase Date [OPEN]:  
  
 Repurchase Price: 
  
 [Purchase Price Percentage:] 
  
 LIBOR Period: 
  

 Exh. I-1 

 Names and addresses for communications: 
  
 Buyer: 
  
 Merrill Lynch Mortgage Capital Inc. 
 4 World
Financial Center 
 22nd Floor 
 New York, New York 10080 
 Attention: James B. Cason 
  
 Seller: 
  
 HomeBanc Mortgage Corporation 
 5555 Glen
Ridge Connector 
 Suite 800 Atlanta GA, 30342 
 Attention: 
  

			
	 MERRILL LYNCH MORTGAGE CAPITAL INC.

		
	By:	 	 
	 	 	

	 	 	 Name:

	 	 	Title:

  
 [Agreed and Acknowledged:

  

			
	 HOMEBANC MORTGAGE CORPORATION
 Seller

		
	By:	 	 
	 	 	

	 	 	 Name:

	 	 	 Title:]

  

 Exh. I-2 

 EXHIBIT II  
  

FORM OF OPINIONS 
  
 Merrill Lynch Mortgage Capital Inc. 
 4 World Financial Center 
 22nd Floor 
 New York, New York 10080 
  
 Dear Sirs and Mesdames: 
  
 You have requested our opinion as counsel to HomeBanc Mortgage Corporation, a corporation organized and existing under the laws of Delaware
(the “Seller”), with respect to certain matters in connection with that certain Master Repurchase Agreement governing purchases and sales of certain Mortgage Loans, dated February 27, 2002 (the “Repurchase
Agreement”), by and between the Seller and Merrill Lynch Mortgage Capital Inc. (the “Buyer”) and that certain Custodial Agreement, dated February 27, 2002 by and between the Buyer, the Seller LaSalle Bank, National
Association. The Master Repurchase Agreement and the Custodial Agreement are hereinafter collectively referred to as the “Governing Agreement.” 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 Agreement; 

  

	 	3.	unfiled copies of each financing statements listed on Schedule 1 (collectively, the “Financing Statements”) naming the Seller as Debtor and the Buyer as
Secured Party and describing the Repurchase Assets (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 (the
“Filing Collateral”), which I understand will be filed in the filing offices listed on Schedule 1 (the “Filing Offices”); 

  

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

  

	 	5.	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 the Seller contained in the 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. 
  

 Exh. II-1 

 Based upon the foregoing, it is [our] [my] opinion that: 
  
 1. HomeBanc Mortgage Corporation 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 _________]. 
  
 2. The execution, delivery and performance by the Seller of the Governing Agreements to which it is a party, and the sales
by the Seller and the pledge of the Repurchase Assets under the Repurchase Agreement have been duly authorized by all necessary corporate action on the part of the Seller. Each of the Governing Agreements have been executed and delivered by the
Seller, and are legal, valid and binding agreements enforceable in accordance with their respective terms against the 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 the Buyer’s purchase of the
Purchased Mortgage Loans and/or security interest in the Purchased Mortgage Loans. 
  
 3. 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 the Seller for the execution, delivery or
performance by such party of the Governing Agreements to which it is a party or for the sales by the Seller under the Repurchase Agreement or the sale of the Repurchase Assets to the Buyer and/or granting of a security interest to the Buyer in the
Repurchase Assets, pursuant to the Repurchase Agreement. 
  
 4.
The execution, delivery and performance by the Seller 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 the Seller’s 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 the Seller 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 have knowledge (after due
inquiry) to which the Seller is a party or by which it is, bound or to which it is subject, of (except for the Liens created pursuant to the Repurchase Agreement) result in the creation or imposition of any Lien upon any Property of such party
pursuant to the terms of any such agreement or instrument. 
  
 5.
There is no action, suit, proceeding or investigation pending or, to the best of [our] [my] knowledge, threatened against the Seller which, in [our] [my] judgment, either in any one instance or in the aggregate, would be reasonably likely to result
in any material adverse change in the properties, business or financial condition, or prospects of such party or in any material impairment of the right or ability of such party to carry on its business substantially as now conducted or in any
material liability on the part of such party or which would draw into question the validity of the Governing Agreements to which it is a party or the Mortgage Loans or of any action taken or to be taken in connection with the transactions
contemplated thereby, or 

  

 Exh. II-2 

 
which would be reasonably likely to impair materially the ability of such party to perform under the terms of the Governing Agreements to which it is a party
or the Mortgage Loans. 
  
 6. The Repurchase Agreement is
effective to create, in favor of the Buyer, either a valid sale of the Repurchase Assets to the Buyer or a valid security interest under the Uniform Commercial Code in all of the right, title and interest of the Seller in, to and under the
Repurchase Assets as collateral security for the payment of the Seller’s obligations under the Repurchase Agreement, except that (a) such security interests will continue in Repurchase Assets 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 Repurchase Assets in which the Seller acquires rights after the commencement of a case under the Bankruptcy Code in respect of the Seller may be
limited by Section 552 of the Bankruptcy Code. 
  
 7. When the
Purchased Mortgage Loans are delivered to the Buyer, the security interest referred to in Section 6 above in the Mortgage Loans will constitute a fully perfected first priority security interest in all right, title and interest of the Seller
therein. 
  
 8. (a) Upon the filing of financing statements on
Form UCC-1 with respect to the Seller naming the Buyer as “Secured Party” and the Seller as a “Debtor”, and describing the Repurchase Assets, in the jurisdictions and recording offices listed on Schedule 1 attached hereto,
the security interests referred to in Section 6 above will constitute fully perfected security interests under the Uniform Commercial Code in all right, title and interest of the Seller in, to and under such Repurchase Assets, which can be perfected
by filing under the Uniform Commercial Code, or, will demonstrate a completion of the sale of the Mortgage Loans to the 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 Repurchase Assets 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 Repurchase Assets prior to the effective dates of the UCC Search Report. 
  
 9. The Seller is not an “investment company”, or a company “controlled” by an “investment company,” within the meaning of
the Investment Company Act of 1940, as amended. 
  
 Very truly yours, 
  

 Exh. II-3 

 EXHIBIT III  
  
 UCC FILING JURISDICTIONS 
  
 Delaware 
  

 Exh. III-1 

 EXHIBIT IV 
  

[FORM OF ACCOUNT AGREEMENT] 
  
 [                     ],
200     
  
 HomeBanc Mortgage Corporation, as Seller

 5555 Glen Ridge Connector 
 Suite 800 
 Atlanta GA, 30342 
 Attn: 
  
 [BANK], as Bank 
 [ADDRESS] 
 Attn:  
  

	 	Re:	Collection Account Established by HomeBanc Mortgage Corporation (the “Seller”) at
[                     ] (the “Bank”) pursuant to that certain Master Repurchase Agreement (as amended, supplemented or otherwise
modified from time to time, the “Repurchase Agreement”), dated February 27, 2002, between Merrill Lynch
Mortgage Capital Inc. (the “Buyer”), and the Seller. 

  
 Ladies and Gentlemen: 
  
 The Seller has entered into the
Repurchase Agreement pursuant to which the Buyer may from time to time enter into Transactions (as defined therein) secured by, among other things, the payments made on account of Purchased Mortgage Loans sold to the Buyer under the Repurchase
Agreement. As a requirement of such Transactions, all such payments are required to be deposited into the Collection Account identified below within two (2) Business Day of receipt. 
  
 The Seller has established a collection account, Account No.
[            ], for the account of Merrill Lynch Mortgage Capital Inc., with the Bank, ABA#
[                     ] (the “Collection Account”) which the Bank maintains in the name and in trust for the Buyer. The
Seller has granted to the Buyer a security interest in all payments deposited in the Collection Account with respect to the Repurchase Assets sold to the Buyer under the Repurchase Agreement. 
  
 The Bank acknowledges that (a) the Seller has granted a security interest in
all of the 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 Mortgage Loans sold to the 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 the Seller’s liabilities to Buyer, and (c) that the Bank shall transfer funds from the Collection Account in accordance with the
Seller’s instructions until the Bank receives notice from the Buyer that an event of default has 

  

 Exh. IV-1 

 
occurred and is continuing under the Repurchase Agreement (a “Notice of Event of Default”). In such event, the Bank shall in no event (a)
transfer funds from the Collection Account to the Seller, (b) act on the instruction of the Seller or (c) cause or permit withdrawals from the Collection Account in any manner not approved by the Buyer in writing. 
  
 All bank statements in respect to the Collection Account shall be sent to the
Buyer at: 
  
 Merrill Lynch Mortgage Capital Inc. 
 4 World Financial Center 
 22nd Floor

 New York, New York 10080 
 Attention: James Cason 
  
 with copies to HomeBanc
Mortgage Corporation at: 
  
 HomeBanc Mortgage Corporation

 5555 Glen Ridge Connector 
 Suite 800 
 Atlanta GA, 30342 
 Attention: 
  
 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,
  

	 MERRILL LYNCH MORTGAGE CAPITAL INC.

		
	By:	 	 
	 	 	

	 	 	 Title:

  
 Agreed and acknowledged:

  

			
	 HomeBanc Mortgage Corporation, as Seller

		
	By:	 	 
	 	 	

	 	 	 Title:

  

 Exh. IV-2 

 Agreed and acknowledged: 
  

			
	[BANK], as Bank
		
	By:	 	 
	 	 	

	 	 	 Title:

  

 Exh. IV-3 

 EXHIBIT V 
  

Mortgage Loan Schedule Fields 
  

	1.	Loan ID# 

  

	2.	Account Number 

  

	3.	Property Type 

  

	4.	Loan Purpose 

  

	5.	Loan Rate 

  

	6.	Original Balance 

  

	7.	Actual P & I 

  

	8.	Service Fee 

  

	9.	Original Term 

  

	10.	State 

  

	11.	Appraisal 

  

	12.	Number of Units 

  

	13.	Margin 

  

	14.	Life Cap 

  

	15.	Property Street Address  

  

	16.	Property City 

  

	17.	Property Zip Code 

  

	18.	Doc Level 

  

	19.	First Payment Date 

  

	20.	Remaining Term 

  

	21.	CLTV 

  

	22.	Current Balance 

  

	23.	Borrower Last Name 

  

 Exh. V-l 

	24.	Borrower First Name 

  

	25.	Next Interest Adjustment 

  

	26.	Index Name 

  

	27.	Last Payment Date 

  

	28.	Grade/Rating 

  

	29.	Debt Service Ratio 

  

	30.	LTV 

  

	31.	Owner Occupancy 

  

	32.	Lien Position 

  

	33.	Product Description 

  

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

  

	35.	Negative Amortization Indicator 

  

	36.	Interest Rate Adjustment Frequency 

  

	37.	Annual Payment Cap 

  

	38.	Periodic Rate Cap on First Adjustment Date 

  

	39.	Lifetime Maximum Rate 

  

	40.	Negative Amortization Limit % 

  

	41.	Periodic Rate Cap Subsequent to First Adjustment Date 

  

	42.	Mortgage Insurance Coverage 

  

	43.	Primary Mortgage Insurer 

  

	44.	Borrower Credit Quality 

  

	45.	Risk Grades 

  

	46.	Current FICO Scores 

  

	47.	Mortgage Score 

  

	48.	Silent Second 

  

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

  

	50.	First Mortgage Balance 

  

	51.	Payment Change Frequency 

  

 EXHIBIT VI 
  

Mortgage File Documents 
  

 79 

 EXHIBIT VII 
  

Underwriting Guidelines 
  

 Exh. VII-1 

 EXHIBIT VIII  
  
 Seller’s Officer’s Certificate 
  
 I, _______________________, do hereby certify that I am duly elected, qualified and authorized officer of HomeBanc Mortgage
Corporation (“Seller”). This Certificate is delivered to you in connection with Section 13.01(d)(iv) of the Master Repurchase Agreement dated as of February         , 2002, among HomeBanc
Mortgage Corporation and Merrill Lynch Mortgage Capital Inc. (the “Agreement”). I hereby certify that, as of the date of the financial statements attached hereto and as of the date hereof, Seller is and has been in compliance with
all the terms of the Agreement and, without limiting the generality of the foregoing, I certify that: 
  
 (i) Maintenance of Tangible Net Worth. The Seller has maintained a Tangible Net Worth of not less than $24,000,000. The Seller has
maintained a Tangible Net Worth at the end of any calendar quarter of not less than 80% of its Tangible Net Worth at the beginning of the second preceding calendar quarter. 
  
 (ii) Maintenance of Ratio of Indebtedness to Tangible Net Worth. The Seller has maintained the ratio
of Indebtedness to Tangible Net Worth no greater than 15:1. 
  
 (iii) No Default or Event of Default has occurred or is continuing. [If any Default or Event of Default has occurred and is continuing, Seller shall describe the same in reasonable detail and describe the action the
Seller has taken or proposes to take with respect thereto.] 
  
 (iv) Attached hereto as Schedule 1 is a true and correct list of all Mortgage Loans purchased by Buyer and held by the Custodian pending repurchase. 
  

 Exh. IX-1 

 IN WITNESS WHEREOF, I have set my hand this ________ day of _________, __________. 
  

			
	 
		
	By:	 	 
	 	 	

	Name:	 	 
	 	 	

	Title:	 	 
	 	 	

  

 Exh. VI-2 

 [Schedule 1] 
  
 [to Officer’s Certificate] 
  

 Exh. VI-3 

 EXHIBIT IX 
  

FORM OF REQUEST FOR ADDITIONAL PURCHASE PRICE 
  
 Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed thereto in the Repurchase Agreement. 
  
 Pursuant to Section 3(e) of the Repurchase Agreement, we hereby request the additional
Purchase Price, and in connection with such request provide the follow information: 
  

			
	Requested Increase in Purchase Price	  	$                    
	Requested Purchase Date	  	___________
	Asset Value prior to giving effect to Requested Transaction	  	$                    
	Aggregate Outstanding Purchase Price of the Transactions as of Date Hereof after giving effect to the Requested Transaction	  	$                    

  
 We hereby certify that, (a) after
giving effect to the Transaction requested pursuant hereto, the Asset Value will be equal to or greater than the unpaid principal balance of the Transactions and (b) no Event of Default or Default has occurred or is continuing. 
  
 This Request For Additional Transactions is dated
                     . 
  

 Exh. IX-1 

			
	 HOMEBANC MORTGAGE CORPORATION

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

 Exh. VI-2 

			
	 HOMEBANC MORTGAGE CORPORATION

		
	By:	 	 
	 	 	

	 	 	 Name:
 Title:

  

 Exh. VI-2Amend. No 1 to Master Repurchase Agreement dated 04/15/2003

 EXECUTION COPY 
  
 EXHIBIT 10.9 
  
 AMENDMENT NO. 1 
 TO MASTER REPURCHASE
AGREEMENT 
  
 Amendment No. 1, dated as of April 15, 2003
(this “Amendment”), among MERRILL LYNCH MORTGAGE CAPITAL INC. (the “Buyer”) and HOMEBANC MORTGAGE CORPORATION (the “Seller”). 
  
 RECITALS 
  
 The Buyer and the Seller are parties to that certain Master Repurchase Agreement, dated as of February 27, 2002 (the “Existing Master Repurchase
Agreement”; as amended by this Amendment, the “Master Repurchase Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Master Repurchase Agreement.

  
 The Buyer and the Seller have agreed, subject to the terms and
conditions of this Amendment, that the Existing Master Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Master Repurchase Agreement. 
  
 Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual premises and mutual obligations set forth
herein, that the Existing Master Repurchase Agreement is hereby amended as follows: 
  
 SECTION 1. Definitions. 
  
 (a) Section 2 of the Existing Repurchase Agreement is hereby temporarily amended by adding the following defined term, which amendment shall be effective solely during the Increased Maximum Purchase Price Period (as
defined below): 
  
 ““Increased
Maximum Purchase Price Period” shall mean the period beginning April 1, 2003 through and including April 30, 2003; provided, that such Increased Maximum Purchase Price Period may be extended in the sole discretion of Buyer by delivery of
written notification thereof to the Seller.” 
  
 (b) Section 2 of the Existing Repurchase Agreement is hereby temporarily amended by deleting the definition of “Maximum Purchase Price” in its entirety and replacing it with the following language, which amendment shall be
effective solely during the Increased Maximum Purchase Price Period: 
  
 ““Maximum Purchase Price” means ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000).” 
  
 SECTION 2. Covenants. Section 12(j)(ii) is hereby amended by deleting it in its entirety and replacing it with the following: 
  
 “(ii) Maintenance of Ratio of Indebtedness to
Tangible Net Worth. The Seller shall maintain the ratio of Indebtedness to Tangible Net Worth no greater than 15:1; provided, 

  

 
that with respect to the period beginning on February 28, 2003 through and including April 30 , 2003, the Seller shall maintain the ratio of Indebtedness to
Tangible Net Worth no greater than 16:1.” 
  
 SECTION 3.
Conditions Precedent. This Amendment shall become effective on April 15, 2003 (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent: 
  
 3.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance: 
  
 (a) this Amendment, executed and delivered by the duly authorized officers of the Buyer and the Seller; and 
  
 (b) such other documents as the Buyer or counsel to the
Buyer may reasonably request. 
  
 SECTION 4. Representations
and Warranties. Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Existing Master Repurchase Agreement on its part to be observed or performed, and that no Event of
Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 11 of the Existing Master Repurchase Agreement. 
  
 SECTION 5. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Master Repurchase
Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms. 
  
 SECTION 6. Counterparts. This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same instrument. 
  
 SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF. 

 
 [SIGNATURE PAGE FOLLOWS] 
  

 2 

 IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written. 
  

					
	 Buyer:
	 	 MERRILL LYNCH MORTGAGE
 CAPITAL INC.,
 as Buyer

			
	  	 	 By:
	 	 /s/ James Cason

	 	 	 	 	

	 	 	 	 	 Name: James Cason
 Title:   Vice President

		
	 Seller:
	 	 HOMEBANC MORTGAGE
 CORPORATION
 as Seller

			
	  	 	 By:
	 	  
	 	 	 	 	

	 	 	 	 	 Name:
 Title:

  

 IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written. 
  

					
	 Buyer:
	 	 MERRILL LYNCH MORTGAGE
 CAPITAL
INC.,
 as Buyer

			
	  	 	 By:
	 	  
	 	 	 	 	

	 	 	 	 	 Name:
 Title:

		
	 Seller:
	 	 HOMEBANC MORTGAGE
 CORPORATION
 as Seller

			
	  	 	 By:
	 	 /s/ Debra F. Watkins

	 	 	 	 	

	 	 	 	 	 Name: Debra F. Watkins
 Title:   Executive Vice President

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