Document:

Exhibit 4.1

 

EXECUTION
COPY

 

MASTER
MORTGAGE LOAN

 

PURCHASE
AGREEMENT

 

 

Dated
as of August 13, 2002

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE 1   DEFINITIONS AND MATTERS OF
  CONSTRUCTION

  
	
   

  
	
   

  	
  Section
  1.1

  	
  Definitions

  
	
   

  	
   

  
	
   

  	
  Section
  1.2

  	
  Construction;
  Intent of the Parties

  
	
   

  	
   

  
	
  ARTICLE 2   PURCHASE AND SALE PROCEDURES

  
	
   

  	
   

  
	
   

  	
  Section  2.1

  	
  Sale of Mortgage
  Loans

  
	
   

  	
   

  
	
   

  	
  Section
  2.2

  	
  Settlement

  
	
   

  	
   

  
	
   

  	
  Section  2.3

  	
  Fees

  
	
   

  	
   

  
	
   

  	
  Section  2.4

  	
  Sale Commissions

  
	
   

  	
   

  
	
   

  	
  Section
  2.5

  	
  Updated
  Representations Concerning the Originator

  
	
   

  	
   

  
	
   

  	
  Section
  2.6

  	
  Representations
  and Warranties Concerning Mortgage Loans

  
	
   

  	
   

  
	
   

  	
  Section  2.7

  	
  Rejection of
  Mortgage Loans

  
	
   

  	
   

  
	
   

  	
  Section
  2.8

  	
  Sale
  of Mortgage Loans to Take-Out Investors

  
	
   

  	
   

  
	
   

  	
  Section
  2.9

  	
  Originator’s
  Obligations with respect to Defective Mortgage Loans

  
	
   

  	
   

  
	
  ARTICLE 3   SERVICING OF MORTGAGE LOANS

  
	
   

  
	
   

  	
  Section  3.1

  	
  Servicing of
  Mortgage Loans

  
	
   

  	
   

  
	
   

  	
  Section  3.2

  	
  Custodial Account

  
	
   

  	
   

  
	
   

  	
  Section  3.3

  	
  Fidelity Bonds

  
	
   

  	
   

  
	
  ARTICLE 4   RECORD TITLE TO MORTGAGE
  LOANS; INTENT OF PARTIES; SECURITY INTEREST

  
	
   

  	
   

  
	
   

  	
  Section  4.1

  	
  Title

  
	
   

  	
   

  
	
   

  	
  Section  4.2

  	
  Books and Records

  
	
   

  	
   

  
	
   

  	
  Section  4.3

  	
  Security Interest

  
	
   

  	
   

  
	
   

  	
  Section
  4.4

  	
  Transfers
  of Mortgage Loans by Purchaser

  

 

i

 

	
  ARTICLE 5   REPRESENTATIONS AND
  WARRANTIES

  
	
   

  	
   

  
	
   

  	
  Section
  5.1

  	
  Representations
  and Warranties

  
	
   

  	
   

  
	
   

  	
  Section
  5.2

  	
  Survival

  
	
   

  	
   

  
	
  ARTICLE 6   COVENANTS

  
	
   

  	
   

  
	
   

  	
  Section  6.1

  	
  Change of Name/Address

  
	
   

  	
   

  
	
   

  	
  Section  6.2

  	
  Payment of Taxes, Claims and Indebtedness

  
	
   

  	
   

  
	
   

  	
  Section  6.3

  	
  Protection of Assets

  
	
   

  	
   

  
	
   

  	
  Section  6.4

  	
  Corporate Changes

  
	
   

  	
   

  
	
   

  	
  Section  6.5

  	
  Purchased Items

  
	
   

  	
   

  
	
   

  	
  Section  6.6

  	
  Financial Statements and Other Reports

  
	
   

  	
   

  
	
   

  	
  Section  6.7

  	
  Notice of Defaults; Litigation; Financial
  Changes

  
	
   

  	
   

  
	
   

  	
  Section  6.8

  	
  Inspection

  
	
   

  	
   

  
	
   

  	
  Section  6.9

  	
  Further Assurances

  
	
   

  	
   

  
	
   

  	
  Section  6.10

  	
  Financial Covenants

  
	
   

  	
   

  
	
   

  	
  Section  6.11

  	
  Bankruptcy Proceedings

  
	
   

  	
   

  
	
  ARTICLE 7   MISCELLANEOUS

  
	
   

  	
   

  
	
   

  	
  Section  7.1

  	
  Custodian

  
	
   

  	
   

  
	
   

  	
  Section  7.2

  	
  Term

  
	
   

  	
   

  
	
   

  	
  Section  7.3

  	
  Notices; Service

  
	
   

  	
   

  
	
   

  	
  Section  7.4

  	
  Fees and Expenses; Indemnity

  
	
   

  	
   

  
	
   

  	
  Section  7.5

  	
  Modifications, Consents and Waivers; Entire
  Agreement

  
	
   

  	
   

  
	
   

  	
  Section  7.6

  	
  Remedies Cumulative

  
	
   

  	
   

  
	
   

  	
  Section  7.7

  	
  Counterparts

  
	
   

  	
   

  
	
   

  	
  Section  7.8

  	
  Governing Law

  
	
   

  	
   

  
	
   

  	
  Section  7.9

  	
  Consent to Jurisdiction; Waiver of Trial by
  Jury

  

 

ii

 

	
   

  	
  Section  7.10

  	
  Severability

  
	
   

  	
   

  
	
   

  	
  Section  7.11

  	
  Binding Effect; No Assignment or
  Delegation

  
	
   

  	
   

  
	
   

  	
  Section  7.12

  	
  Time of the Essence

  
	
   

  	
   

  
	
   

  	
  Section  7.13

  	
  MERS

  
	
   

  	
   

  
	
   

  	
  Section  7.14

  	
  Limited Recourse

  
	
   

  	
   

  
	
   

  	
  Schedule A

  	
  Administrative Costs

  
	
   

  	
   

  
	
   

  	
  Schedule B

  	
  Sub-Limits

  
	
   

  	
   

  
	
   

  	
  Schedule C

  	
  Approved Takeout Investors

  
	
   

  	
   

  
	
   

  	
  Schedule D

  	
  Agencies

  
	
   

  	
   

  
	
   

  	
  Exhibit A

  	
  Adjusted Takeout Price Calculation

  
	
   

  	
   

  
	
   

  	
  Exhibit B

  	
  Submission Package Documents/Advance
  Submission Documents

  
	
   

  	
   

  
	
   

  	
  Exhibit C

  	
  Form of Loan Purchase Detail

  
	
   

  	
   

  
	
   

  	
  Exhibit D

  	
  Form of Loan Transfer Form

  
	
   

  	
   

  
	
   

  	
  Exhibit E

  	
  Form of Warehouse Lender’s Release

  
	
   

  	
   

  
	
   

  	
  Exhibit F

  	
  Acceptable Loan Guidelines

  

 

iii

 

MASTER
MORTGAGE LOAN PURCHASE AGREEMENT

 

This Mortgage Loan Purchase
Agreement (“Agreement”), dated as of August 13, 2002 between WAREHOUSEONE
ACCEPTANCE COMPANY, LLC, a New Jersey limited liability company having an
address care of WarehouseOne, Inc., 340 Scotch Road, W. Trenton, NJ 08628
(together with its successors and assigns, “Purchaser”) and AVAILENT MORTGAGE,
INC., a Texas corporation having an address of 2720 Stemmons Frwy., Suite 600,
Dallas, TX 75207 (“Originator”).

 

PRELIMINARY
STATEMENT

 

It is anticipated that, from
time to time, Originator shall sell to Purchaser, and that Purchaser shall
purchase, certain residential mortgage loans in accordance with the terms and
conditions set forth in this Agreement.

 

Accordingly, the parties
hereto hereby agree as follows:

 

ARTICLE 1

 

DEFINITIONS AND MATTERS OF
CONSTRUCTION

 

SECTION
1.1 DEFINITIONS.

 

As used in this Agreement,
the following terms have the following meanings:

 

“ACT OF INSOLVENCY”: (a) the
commencement by Originator as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
law, or Originator’s seeking the appointment of a receiver, trustee, custodian
or similar official for Originator or any substantial part of its property, or
(b) the commencement of any such case or proceeding against Originator, or
another’s seeking such appointment, or the filing against Originator of an
application for a protective decree which (i) is consented to or not timely
contested by Originator, or (ii) results in the entry of an order for relief,
such an appointment, the issuance of such a protective decree or the entry of
an order having a similar effect, or (iii) is not dismissed within sixty (60)
days, (c) the making by Originator of a general assignment for the benefit of
creditors, or (d) the admission in writing by Originator that Originator is
unable to pay its debts as they become due or the nonpayment generally by
Originator of its debts as they become due.

 

“ACQUISITION DATE”: with
respect to any Mortgage Loan, the date of payment by Purchaser to Originator of
the Acquisition Price.

 

“ACQUISITION PRICE”: with respect
to each Mortgage Loan, the amount set forth on the related Loan Purchase Detail
as the Acquisition Price, provided, however, that in no event shall the
Acquisition Price exceed 98%, of the least of (1) the face amount of the
related Mortgage Note; (2) the related Takeout Price, if any; (3) the Adjusted
Takeout Price, and (4) the fair market value of any Mortgage Loan for which a
Takeout Commitment is not furnished, which fair market value shall be
determined by Bear Stearns & Co. Inc. in its sole discretion.

 

1

 

“ADJUSTED ACQUISITION
PRICE”: for any Mortgage Loan means the Acquisition Price for such Mortgage
Loan plus the aggregate amount obtained by the daily application of the
Investment Return Rate to the Acquisition Price for such Mortgage Loan on a
360-day-per-year basis for the actual number of days in the period from and
including the Acquisition Date to and excluding the Settlement Date for such
Purchased Loan, or the date on which such Purchased Loan is re-purchased by
Originator pursuant to Section 2.9, as the case may be.

 

“ADJUSTED TAKEOUT PRICE”
shall apply to any Pooled Loan with a coupon less than the weighted average
coupon required by the applicable Takeout Commitment for the related pool, and
shall be based on the forward market prices for FNMA securities with a
comparable settlement date, as published on Bloomberg page OPX as of the close
of business on the Business Day immediately preceding the Acquisition Date (or
if such page ceases to exist or publish such information, then a comparable
publication selected by Purchaser) and calculated in the manner described on
Exhibit A.

 

“ADJUSTED TAKEOUT PROCEEDS”
with respect to any Purchased Loan means the Takeout Proceeds less any
Administrative Costs incurred in connection with such Purchased Loan.

 

“ADMINISTRATIVE COSTS”:
means the fees, charges and expenses listed on Schedule A.

 

“ADVANCE SUBMISSION
DOCUMENTS” means, with respect to any Mortgage Loan, the documents designated
as such on Exhibit B hereto, each in form and substance satisfactory to
Purchaser in its sole discretion.

 

“AFFILIATE” means, with
respect to a Person, any other Person (other than a subsidiary) that: (i)
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such given Person; (ii)
directly or indirectly beneficially owns or holds ten percent (10%) or more of
any class of voting stock (or, in the case of a Person which is not a
corporation, 10% or more of any equity interest) of such Person or any
subsidiary of such Person; or (iii) ten percent (10%) or more of the voting
stock of which is directly or indirectly beneficially owned or held by such
Person or a subsidiary of such Person. The term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities or equity interest, by contract or otherwise, provided that, in any
event each director, officer of, of general partner in, or director or officer
or Affiliate of any corporate general partner in, Borrower, shall be deemed to
be an Affiliate of Borrower.

 

“AGENCIES”: FHA, FNMA, VA
and FHLMC.

 

“AGENCY GUIDELINES”: those
requirements, standards and procedures which may be adopted by the Agencies
from time to time with respect to their purchase or guaranty of residential
mortgage loans, which requirements govern the Agencies’ willingness to purchase
and/or guaranty such loans.

 

“ASSIGNMENT IN BLANK”: each
assignment of mortgage in recordable form and otherwise in form and substance
satisfactory to Purchaser, executed in blank by Originator and delivered to
Purchaser as part of the Submission Package Documents.

 

2

 

“BANKRUPTCY LAW”: any
Requirement of Law in any jurisdiction relating to bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation.

 

“BUSINESS DAY”: any day
other than a Saturday, Sunday or other day on which banks located in the City
of New York, New York or the State of New Jersey are authorized or obligated by
law or executive order to be closed.

 

“COMMITMENT EXPIRATION
DATE”: with respect to any Takeout Commitment, the last day on which the
Takeout Investor will purchase the related Mortgage Loan, as set forth in such
Takeout Commitment.

 

“CREDIT FILE DOCUMENTS”:
with respect to each Mortgage Loan, all papers and records of whatever kind or
description, whether developed or originated by Originator or others, required
to document or service such Mortgage Loan (other than any Mortgage Loan papers,
documents or records which are contained in the Submission Package Documents).

 

“CUSTODIAL ACCOUNT”: a
separate custodial account, established and maintained by Originator under the
conditions set forth in Section 3.2, for the deposit by Originator of all
collections in respect of a Mortgage Loan that are payable to Purchaser as the
owner of the Mortgage Loan.

 

“CUSTODIAN”: has the meaning
set forth in Section 7.1 hereof.

 

“DEFAULT”: the occurrence or
non-occurrence of any event which, with the giving of notice, the lapse of
time, or both, would become an Event of Default.

 

“DEFECTIVE MORTGAGE LOAN”: a
Mortgage Loan (i) as to which Submission Package Documents are not received
within four (4) Business Days after the Acquisition Date, or (ii) that does not
conform to any of the representations or warranties of the Originator contained
in Section 2.6 of this Agreement.

 

“DEFECTIVE SETTLEMENT INFORMATION”:
any Settlement Information (i) that does not accurately identify a Mortgage
Loan by the Mortgagor’s name, or (ii) in which the aggregate disbursement
information does not equal the precise amount of Takeout Proceeds received by
Purchaser from the Takeout Investor.

 

“DESIGNATED INVESTOR”: the
Takeout Investor identified as such with respect to a Mortgage Loan by
Originator in the Submission Package Documents or Advance Submission Documents
with respect to such Mortgage Loan.

 

“DIRECT FUNDING”: a Mortgage
Loan that is being closed with the Mortgagor on the Acquisition Date therefor
and accordingly, as to which Submission Package Documents cannot be sent to
Purchaser prior to the Acquisition Date.

 

“DOCUMENT FILE”: with
respect to each Mortgage Loan, the Credit File Documents, the Submission
Package Documents and the Advance Submission Documents relating to such
Mortgage Loan.

 

3

 

“DUE DATE”: the first
business day of each calendar month.

 

“DWELL TIME”: forty-five
(45) days from the Acquisition Date.

 

“EFFECTIVE DATE”: the date
this Agreement is executed by both parties, (which shall conclusively be deemed
to be the date appearing at the top of the first page hereof absent manifest
error), unless a contrary intent specifically appears herein.

 

“ELIGIBLE BANK”: any bank
selected by Originator and approved by Purchaser in writing and licensed to
conduct trust and other banking business in the States where it purports to
conduct business.

 

“ELIGIBLE MORTGAGE LOAN”:
any Mortgage Loan, originated not more than thirty (30) days prior to delivery
to Purchaser, as to which all of the representations and warranties contained
in Section 2.6 hereof are true and the Submission Package Documents or Advance
Submission Documents have been received by or on behalf of Purchaser.

 

“EVENTS OF DEFAULT”: any of
the following events shall have occurred and be continuing;

 

(i)            the Originator shall fail to re-purchase any
Defective Mortgage Loan at the time and for the amount required hereby; or

 

(ii)           any representation or warranty made by the Originator in connection
with this Agreement or contained herein shall be inaccurate or incomplete in
any material respect on or as of the date made or hereafter becomes untrue; or

 

(iii)          the Originator shall fail in the observance or performance of any duty,
responsibility or obligation contained in this Agreement and such failure shall
continue unremedied for a period of thirty (30) days; or

 

(iv)          any Act of Insolvency occurs; or

 

(v)           one or more judgments or decrees shall be entered against the
Originator involving claims not paid or not fully covered by insurance and all
such judgments or decrees shall not have been vacated, discharged, or stayed or
bonded pending appeal within sixty (60) days from entry thereof; or

 

(vi)          any Agency, or private investor, or any other party shall seize or take
control of Originator’s servicing portfolio for breach of any servicing
agreement applicable to such servicing portfolio, or for any other reason whatsoever;
or

 

(vii)         any Agency revokes Originator’s authority to originate Mortgage Loans;
or

 

4

 

(viii)        Originator defaults under any mortgage loan purchase arrangement
similar to the one described herein which it may have with any other purchaser,
or under any warehouse lending arrangement which may support its residential
loan program, beyond applicable notice and grace periods; or

 

(ix)           any Purchased Loan is rejected by the Designated Investor; or

 

(x)            Originator is required to re-purchase
Mortgage Loans under subsection 2.9.2 having an aggregate Sales Price in excess
of nine percent (9%) of the aggregate Sales Price of all Mortgage Loans
theretofore acquired by Purchaser from Originator.

 

“FEDERAL FUNDS RATE”: the
Federal Funds Open rate as provided on Bloomberg BTMM.

 

“FHA”: the organization
known as the Federal Housing Association.

 

“FNMA”: the organization
known as the Federal National Mortgage Association.

 

“FHLMC”: the organization
known as the Federal Home Loan Mortgage Corporation.

 

“GAAP” means generally
accepted accounting principles in the United States consistently applied.

 

“INDIVIDUALLY COMMITTED
LOAN”: a Mortgage Loan as to which the applicable Takeout Commitment, if any,
is specific to such Mortgage Loan.

 

“INVESTOR PURCHASE
AGREEMENT”: each agreement to acquire Mortgage Loans between the Originator and
a Designated Investor, in form and substance satisfactory to Purchaser in its
sole discretion.

 

“INVESTMENT RETURN RATE”: as
defined in Schedule A attached hereto.

 

“JUMBO LOAN”: a mortgage
loan secured by a one- to four-family residence which conforms to the
guidelines contained in Exhibit F attached hereto in all respects, with a
principal amount of the related Mortgage Note greater than those published by
Fannie Mae from time to time.

 

“LEVERAGE RATIO”: the ratio
of Total Indebtedness divided by Tangible Net Worth.

 

“LIBOR”: for each day, the
rate of interest per annum for dollar deposits with a duration of one month on
the Telerate Page 3750 at about 11:00 A.M. (London time) on such day (or, if
such day is not a LIBOR Business Day, on the next preceding LIBOR Business Day)
or, if that page ceases to display the necessary information, then whatever
page replaces it on that service for the purpose of displaying that information
(the “Telerate Rate”). If the Telerate Rate cannot be determined then the LIBOR
Rate means the arithmetic mean of the rates of interest offered by two prime
banks in the London interbank market (selected by Purchaser) for dollar
deposits with

 

5

 

a duration of one month at about 11:00 A.M. (London time) on the LIBOR
Business Day prior to such day.

 

“LITIGATION”: as to any
Person, means any action, suit, investigation, claim, proceeding, judgement,
order, decree or resolution pending or threatened against or affecting such
Person or the business, operations, properties or assets of such Person before,
or by, any Regulatory Authority.

 

“LOAN PURCHASE DETAIL”: a
loan purchase detail, transmitted via facsimile in the form of Exhibit C, or
transmitted electronically in an appropriate data layout, provided to Purchaser
(and Custodian, if applicable) prepared by Originator, containing certain
information regarding the characteristics of all Mortgage Loans being offered
for sale by Originator on a particular Business Day.

 

“LOAN QUARTER”: each
consecutive three (3) month period commencing on the Effective Date.

 

“LOAN TRANSFER FORM”: with
respect to each Mortgage Loan purchased by Purchaser from Originator, the trade
confirmation, substantially in the form of Exhibit D hereto, confirming the
terms of Purchaser’s purchase of such Mortgage Loans, to be prepared by
Originator and delivered to Purchaser (or Custodian if applicable).

 

“LOSSES”: any and all
losses, claims, damages, liabilities or expenses (including reasonable
attorneys’ fees and disbursements) incurred by any Person specified.

 

“MATERIAL ADVERSE EFFECT”
means any (i) material adverse effect upon the validity, performance or enforceability
of this Agreement, (ii) material adverse effect upon the properties, business
or condition, financial or otherwise, of Originator, (iii) material adverse
effect upon the ability of Originator to fulfill its obligations under this
Agreement, or (iv) occurrence or state of facts that causes a Default.

 

“MATERIAL AGREEMENT” means
any contract, lease, instrument or other agreement, the non-performance of
which by either party could have a Material Adverse Effect.

 

“MONTHLY PAYMENT”: the
scheduled monthly payment of principal and interest on a Mortgage Loan.

 

“MORTGAGE”: the mortgage,
deed of trust or other instrument creating a first lien on an estate in fee
simple in real property securing a Mortgage Note.

 

“MORTGAGE LOAN”: a mortgage
loan secured by a one- to four-family residence situated in any State within
the continental United States other than Alaska, Hawaii or Puerto Rico, that
conforms to the guidelines contained in Exhibit F attached hereto or a Jumbo
Loan.

 

“MORTGAGE NOTE”: the note or
other evidence of the indebtedness evidencing a Mortgage Loan.

 

6

 

“MORTGAGED PROPERTY”: the
property subject to the lien of the Mortgage securing a Mortgage Note.

 

“MORTGAGOR”: The obligor on
a Mortgage Note.

 

“ORIGINATOR’S CONCENTRATION
LIMIT”: that limit set forth in Schedule B attached hereto.

 

“ORIGINATOR’S CONCENTRATION
SUBLIMITS”: means the sub-limits established by Purchaser with respect to its
willingness to acquire Mortgage Loans from Originator, as the same shall be set
forth on Schedule B, as amended from time to time.

 

“ORIGINATOR’S OPERATING
ACCOUNT”: the account to be established for Originator with the Custodian, if
any, through which the Acquisition Price shall be paid.

 

“ORIGINATOR’S SETTLEMENT ACCOUNT”:
as to each Originator, the account thereof to be established with the
Custodian, if any, into which shall be deposited from time to time any Sale
Commissions which are due to the Originator.

 

“ORIGINATOR’S WIRE
INSTRUCTIONS”: standing written instructions, in form reasonably acceptable to
Purchaser, delivered by Originator to Purchaser, setting forth the bank wire
coordinates to be used for the payment of all amounts due and payable to
Originator hereunder.

 

“PERSON”: means an
individual, partnership, corporation, business trust, limited liability
company, joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.

 

“POOLED LOAN”: a Mortgage
Loan as to which the applicable Takeout Commitment, if any, relates to a pool
of unspecified Mortgage Loans.

 

“PROPERTY CHARGES”: all
taxes, fees, governmental assessments, water, sewer and municipal charges
(general or special) and all insurance premiums, leasehold payments or ground
rents.

 

“PURCHASED ITEMS”: the
Purchased Loans, including all rights and appurtenances related thereto,
including, without limitation, all servicing rights related thereto, any
Custodial Accounts, the Takeout Commitments, any Mortgage Notes and the
proceeds of any and all of the foregoing.

 

“PURCHASED LOAN”: any
Mortgage Loan with respect to which Purchaser has paid the applicable Sales
Price.

 

“REGULATORY AUTHORITY” with
respect to any Person means any governmental or quasi-governmental department,
commission, board, regulatory authority, bureau, agency or instrumentality,
domestic, foreign, federal, state or municipal (including, without limitation,
the OTS, FDIC, SEC or the NASD), any court or arbitration panel, or any private
body having regulatory jurisdiction over such Person or its business or assets
(including any insurance company or underwriter through whom such Person has
obtained insurance coverage).

 

7

 

“REQUIREMENT OF LAW” with
respect to any Person means any law, ordinance, requirement, order, direction,
rule, regulation, decision, ruling, writ, injunction, instruction, resolution,
decree, or other similar document, instrument or directive, whether currently
existing or promulgated hereafter, of any Regulatory Authority, or any
requirement of the organizational documents of such Person.

 

“SALE COMMISSION”: has the
meaning set forth in Section 2.4 hereof.

 

“SETTLEMENT ADVICE”: the
advice by a Takeout Investor, to be delivered to Purchaser, confirming the amount
of Takeout Proceeds allocable to each Mortgage Loan to be purchased by the
Takeout Investor on the date such advice is delivered.

 

“SETTLEMENT DATE”: with
respect to any Mortgage Loan, the Business Day on which the applicable Takeout
Proceeds are received by Purchaser (or Custodian, if applicable) from a Takeout
Investor as confirmed by receipt of the related Settlement Information;
provided, that if such funds are received after 12:00 noon on such Business
Day, the “Settlement Date” shall be deemed to be the next succeeding Business
Day.

 

“SETTLEMENT INFORMATION”:
the Settlement Advice or group of Settlement Advices which shall identify each
Mortgage Loan by the Mortgagor’s name, and indicating that the aggregate
disbursement amount equals the precise dollar amount of Takeout Proceeds to be
received by Purchaser from the Takeout Investor and states the Business Day for
such settlement.

 

“SHORTFALL PREMIUM”: a fee
equal to 0.25% per annum on the daily average unused portion of 80% of the
Originator’s Concentration Limit.

 

“SUBMISSION PACKAGE
DOCUMENTS” means, with respect to any Mortgage Loan, the applicable documents
designated as such on Exhibit B hereto, each in form and substance satisfactory
to Purchaser in its sole discretion.

 

“SUCCESSOR SERVICER”: an
entity designated by Purchaser, in conformity with subsection 3.1.4, to replace
Originator as servicer of Purchased Loans on behalf of Purchaser.

 

“TAKEOUT COMMITMENT”: an
irrevocable commitment, issued by a Designated Investor, to acquire a Mortgage Loan
on or before a specified Settlement Date, which shall in no event exceed
forty-five (45) days after the Acquisition Date, which commitment shall be
assignable by its terms to Purchaser and Purchaser’s successors and assigns,
and which shall be otherwise in such form as shall be acceptable to Purchaser
in its sole discretion.

 

“TAKEOUT INVESTOR”: such
investors as may be approved by Purchaser in writing from time to time in its
sole discretion.

 

“TAKEOUT PRICE”: the price
at which a Designated Investor will acquire a particular Mortgage Loan as set
forth on the related Takeout Commitment plus the amount of any accrued but
unpaid interest on the related Mortgage Note.

 

“TAKEOUT PROCEEDS”: the
amount of funds a Takeout Investor pays with respect to a Mortgage Loan as
identified by the related Settlement Information.

 

8

 

“TANGIBLE NET WORTH”: at the
time of such determination, the excess of total assets over total liabilities,
each to be determined in accordance with GAAP, excluding, however, from the
determination of total assets, all assets which would be classified as
intangible assets under GAAP, including, without limitation, goodwill,
licenses, patents, trademarks, copyrights and franchises and any non-acceptable
assets as determined by HUD.

 

“TERM”: the period between
the Effective Date and the date on which this Agreement shall be terminated in
accordance with the provisions of Section 7.2.

 

“TOTAL INDEBTEDNESS”: at any
date, all items (other than capital stock, capital surplus, retained earnings,
deferred taxes and deferred credits) which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of Originator as at the date on which Total Indebtedness is to be
determined.

 

“UCC”: the Uniform
Commercial Code, as adopted in the relevant jurisdiction.

 

“VA”: the organization known
as the Department of Veteran Affairs.

 

“WAREHOUSE LENDER”: any
lender providing interim financing to the Originator in any fractional amount
for the purpose of originating or purchasing Mortgage Loans, which lender has a
security interest in such Mortgage Loans as collateral for the obligations of
Originator to such lender.

 

“WAREHOUSE LENDER’S
RELEASE”: a letter substantially in the form of Exhibit E hereto, from a
Warehouse Lender to Purchaser, conditionally releasing all of Warehouse
Lender’s right, title and interest in certain Mortgage Loans identified therein
upon receipt of payment by Warehouse Lender.

 

“WAREHOUSE LENDER’S WIRE
INSTRUCTIONS”: written instructions, in form reasonably acceptable to
Purchaser, delivered by a Warehouse Lender to Purchaser, setting forth the bank
wire co-ordinates to be used for the payment of all amounts due and payable to
such Warehouse Lender hereunder.

 

SECTION
1.2 CONSTRUCTION; INTENT OF THE PARTIES.

 

The headings used in this Agreement are for convenience only and shall
not be deemed to constitute a part hereof. All uses herein of the masculine
gender or of singular or plural terms shall be deemed to include uses of the
feminine or neuter gender or plural or singular terms, as the context may
require.

 

THIS AGREEMENT HAS BEEN FULLY REVIEWED AND NEGOTIATED BY THE PARTIES
HERETO AND THEIR RESPECTIVE COUNSEL. ACCORDINGLY, IN INTERPRETING THIS
AGREEMENT, NO WEIGHT SHALL BE PLACED UPON WHICH PARTY HERETO OR ITS COUNSEL
DRAFTED THE PROVISION BEING INTERPRETED.

 

FOR THE AVOIDANCE OF DOUBT, PURCHASER AND ORIGINATOR CONFIRM THAT THE
TRANSACTIONS CONTEMPLATED HEREIN ARE INTENDED TO BE TRUE SALES AND ABSOLUTE
ASSIGNMENTS OF THE MORTGAGE LOANS BY ORIGINATOR TO

 

9

 

PURCHASER RATHER THAN BORROWINGS SECURED BY THE MORTGAGE LOANS.
Purchaser shall own the purchased loans and have all right and entitlement
appurtenant thereto, including, without limitation, the right to pledge or
transfer its interest (subject only to any contractual obligations Purchaser
may have assumed with respect to any Designated Investor), to take over
servicing any Purchased Loan or replace Originator as the servicing agent with
respect to any Purchased Loan, to sell any Purchased Loan as to which there is
no Designated Investor to such third party, and on such terms, as it deems
appropriate. Originator shall not take any action inconsistent with Purchaser’s
ownership of any Purchased Loans and shall not claim any legal, beneficial or
other interest in any Purchased Loan.

 

1.2.4 Whenever in this
Agreement a time of day is specified, such time shall be a reference to New
York.

 

ARTICLE 2

 

PURCHASE AND SALE PROCEDURES

 

SECTION
2.1 SALE OF MORTGAGE LOANS.

 

Originator agrees to sell to Purchaser, and Purchaser may buy, from
time to time, Eligible Mortgage Loans, in accordance with the terms hereof.
Originator acknowledges that (i) the terms offered to Originator represent a
premium available only for bulk purchases, and (ii) Purchaser may enter into
various financial arrangements to make funds available to acquire Eligible
Mortgage Loans. Accordingly, Originator guarantees that the average daily
aggregate Acquisition Price for all Eligible Mortgage Loans offered by
Originator to Purchaser in any Loan Quarter shall not fall below fifty percent
(50%) of the Originator Concentration Limit.

 

In connection with such sale, Originator shall deliver, or cause to be
delivered, to Purchaser (or Custodian, if so directed by the Purchaser) a Loan
Purchase Detail (either electronically or via facsimile transmission) and all
Submission Package Documents. In the case of a Direct Funding, Originator shall
initially deliver Advance Submission Documents and shall, within two Business
Days thereafter, deliver Submission Package Documents.

 

Upon receipt of a Loan Purchase Detail and the related Submission
Package Documents or Advance Submission Documents, as the case may be, subject
to satisfaction of the conditions precedent contained in Section 2.2 hereof,
Purchaser may purchase the related Eligible Mortgage Loan at the Acquisition
Price.

 

For the avoidance of doubt, Originator shall have no right to replace
or re-purchase any Purchased Loan other than a Defective Mortgage Loan.

 

In no event shall Purchaser purchase any Mortgage Loan (a) if the
Acquisition Price of such Mortgage Loan, when combined with the aggregate
Acquisition Price of all Purchased Loans then held by Purchaser, is in excess
of the Originator Concentration Limit; or (b) if such Mortgage Loan is in a
category to which an Originator Concentration Sublimit applies and the
Acquisition Price of such Mortgage Loan, when combined with the aggregate
Acquisition Price of any Purchased Loans in the same category which are then
held by Purchaser, exceeds the applicable Originator Concentration Sublimit.

 

10

 

From and after the Acquisition Date, Originator shall hold a copy of
each Mortgage Note, together with any Credit File Documents, and other
Submission Package Documents or Advance Submission Documents, that are in, or
may thereafter come into, its possession, for the benefit of Purchaser. Such
Credit File Documents, Submission Package Documents, or Advance Submission
Documents, as the case may be, shall be appropriately identified in
Originator’s computer system to clearly reflect the ownership of any Purchased
Loans by Purchaser.

 

SECTION
2.2 SETTLEMENT.

 

In order to effect the purchase of an Eligible Mortgage Loan, Purchaser
shall on the following Business Day pay, or cause to be paid, the Acquisition
Price therefor by wire transfer of immediately available funds, as follows:

 

(a)                                  if such Mortgage Loan has been previously
assigned by Originator to a Warehouse Lender in connection with any interim
financing thereof, the amount owing to the Warehouse Lender shall be disbursed
in accordance with the Warehouse Lender’s Wire Instructions furnished in connection
with such Mortgage Loan; and

 

(b)                                 if such Mortgage Loan has not been previously
assigned by Originator to a Warehouse Lender in connection with any interim
financing thereof, or if any balance of the Acquisition Price remains after
disbursement in accordance with the instructions contained in the Warehouse
Lender’s Release furnished in connection with such Mortgage Loan, then to a
third-party settlement agent acceptable to Purchaser in accordance with the
Originator’s Wire Instructions.

 

Simultaneously with the payment by Purchaser of the Acquisition Price
with respect to any Mortgage Loan in accordance with the provisions of
subsection 2.2.1, Originator shall convey to Purchaser absolutely, and not by
way of collateral assignment, all rights title and interest in and to such
Mortgage Loan, free and clear of any lien, claim or encumbrance. Originator
shall confirm such conveyance by promptly executing a Loan Transfer Form.

 

If, at any time after payment of the Acquisition Price, Originator
holds, or receives, any documents or funds relating to a Purchased Loan,
Originator agrees to immediately notify Purchaser, and to segregate and hold
such documents and/or funds in trust for Purchaser and to deliver such
documents or funds at the time and as directed by Purchaser or the Custodian.

 

The terms and conditions of each purchase of a Mortgage Loan are set
forth in this Agreement and each Loan Transfer Form.

 

If Purchaser rejects any Mortgage Loan pursuant to the provisions of
Section 2.7 hereof, all Submission Package Documents, or Advance Submission
Documents, as the case may be, delivered to Purchaser (or Custodian, as the
case may be) in anticipation of such purchase shall be returned to the
transmitting party.

 

11

 

SECTION
2.3 FEES.

 

After the first ninety (90)
days of the Term, if the average daily aggregate Acquisition Price of all
Eligible Mortgage Loans offered to Purchaser in any Loan Quarter is less than
Fifty Percent (50%) of the Originator Concentration Limit, Originator shall pay
to Purchaser a Shortfall Premium with respect to Purchaser’s agreement
hereunder to hold funds available to acquire from Originator Eligible Mortgage
Loans.

 

Originator shall pay to
Purchaser, within ten (10) days after receipt of a statement therefore, any
outstanding Administrative Costs related to Defective Mortgage Loans.

 

Purchaser reserves the
right, and Originator expressly authorizes Purchaser, to deduct any amounts
owed by Originator to Purchaser, including but not limited to, any Shortfall
Premiums and Administrative Costs owed pursuant to subsections 2.3.1 and 2.3.2
from any Sale Commissions then due and payable.

 

SECTION
2.4 SALE COMMISSIONS.

 

Provided no Default has
occurred and is continuing, Purchaser shall pay to Originator a commission in
connection with the re-sale of each Purchased Loan to a Designated Investor as
compensation for the introduction of such Designated Investor to Purchaser
(each, a “Sale Commission”). The Sale Commission with respect to a Mortgage
Loan shall vary in accordance with the Takeout Price which Originator is able
to negotiate with the Designated Investor, and shall equal the amount, if any,
by which the Adjusted Takeout Proceeds exceed the Adjusted Acquisition Price.
The Sale Commission for each Mortgage Loan shall be deposited into Originator’s
Settlement Account on the Settlement Date for such Mortgage Loan. If a Mortgage
Loan is purchased without a Takeout Commitment from a Designated Investor, or
the Designated Investor fails to honor its Takeout Commitment with respect to a
Purchased Loan, no Sale Commission shall be due.

 

SECTION 2.5 UPDATED REPRESENTATIONS CONCERNING THE ORIGINATOR.

 

Each delivery of a Loan
Purchase Detail by Originator shall be deemed to constitute a representation
that at the time of such delivery:

 

(a)           Originator is solvent and will not be rendered insolvent by the sale of
the Mortgage Loans referred to thereon on the terms indicated; Originator does
not intend to file a petition for relief under any Bankruptcy Law;

 

(b)           no Default has occurred and is continuing; and

 

(c)           all of the representations contained in Section 5.1 hereof are accurate
in all respects as of such date;

 

(d)           the sale of the Mortgage Loans referred to thereon is being entered
into by Originator voluntarily, and in the absence of any omission of fact,
undue influence, duress, coercion or similar constraint;

 

12

 

(e)           this Agreement and the relevant Submission Package Documents represent
the only agreements of the parties thereto with respect to the transfer
Mortgage Loans from the Originator to the Purchaser; and

 

(f)            this Agreement has not been modified and
there has been no waiver of any of the provisions hereof in writing, orally, or
by any other action or conduct of the parties or otherwise.

 

SECTION 2.6 REPRESENTATIONS AND WARRANTIES CONCERNING MORTGAGE LOANS.

 

Each delivery of a Loan Purchase Detail by Originator shall be deemed
to constitute, as of the date of such delivery (or, if another date is
expressly provided in such representation or warranty, as of such other date),
the following representations and warranties concerning the Mortgage Loan to
which the Loan Purchase Detail relates:

 

(a)           Originator is the sole owner of the Mortgage Loan, subject to no lien,
claim or encumbrance whatsoever except the lien, if any, of a Warehouse Lender
reflected by a Warehouse Lender’s Release delivered with the Submission Package
Documents, or Advance Submission Documents, as the case may be, for such Mortgage
Loan; Originator has full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell the same pursuant
to this Agreement;

 

(b)           except for the amount of the Mortgage Note related to any Jumbo Loan,
the Mortgage Loan conforms in all respects to Agency Guidelines for the Agency
specified in the related Takeout Commitment;

 

(c)           any and all Requirements of Law, including, without limitation,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws, and payment of any and
all recording fees, charges and taxes, applicable to the Mortgage Loan have
been complied with, and Originator shall deliver to Purchaser upon demand,
evidence of compliance with all such requirements;

 

(d)           the Document File is accurate and complete and contains all documents
or instruments required by Agency Guidelines for the Agency specified in the
related Takeout Commitment and as dictated by good practice in the industry;
the Document File is either in Purchaser’s or Custodian’s possession,
Originator’s possession and held in trust by Originator for benefit of
Purchaser, or in the possession of the Designated Investor in accordance with
customary practice;

 

(e)           no servicing agreement has been entered into with respect to the
Mortgage Loan, or any such servicing agreement has been terminated and there
are no restrictions, imposed by any contractual agreement or Regulatory
Authority, which would impair the ability of Purchaser to service the Mortgage
Loan;

 

13

 

(f)            the Mortgage is a valid and subsisting first
lien on the Mortgaged Property, subject only to liens for Property Charges not
yet due and payable;

 

(g)           neither Originator nor any prior holder of the Mortgage has modified
the Mortgage in any material respect; satisfied, canceled or subordinated the
Mortgage in whole or in part; or released the Mortgaged Property in whole or in
part from the lien of the Mortgage;

 

(h)           all Monthly Payments and Property Charges due under the Mortgage Loan
prior to the Acquisition Date have been paid when due and the Mortgage Loan is
not otherwise in default; no event has occurred which, with the passage of time
or with notice and the expiration of any grace or cure period, would constitute
a default under the Mortgage Loan; and Originator has not waived any default,
breach, violation or event of acceleration;

 

(i)            the Mortgage Loan was closed by the
originator thereof not more than thirty (30) days prior to the Acquisition
Date;

 

(j)            the Mortgage Loan is 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 or the
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim or defense has
been asserted with respect thereto;

 

(k)           Originator has not advanced funds, or induced or solicited any advance
of funds by a party other than the Mortgagor directly or indirectly, for the
payment of any amount required by the Mortgage Loan; the collection practices
used by each entity which has serviced the Mortgage Loan have been in all
respects legal, proper, prudent, and customary in the mortgage servicing
business; with respect to escrow deposits and payments in those instances where
such were required, there exist no deficiencies in connection therewith for
which customary arrangements for repayment thereof, have not been made and no
escrow deposits or other charges or payments have been capitalized under any Mortgage
or the related Mortgage Note;

 

(l)            all parties to the Mortgage Note and the
Mortgage had legal capacity to execute the Mortgage Note and the Mortgage and
each Mortgage Note and Mortgage have been duly and properly executed by the
Mortgagor; the Mortgage Note and the related Mortgage are genuine and each is
the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms;

 

14

 

(m)          either: (i) Originator and every other holder of the Mortgage, if any,
were authorized and/or licensed to transact and do business in the jurisdiction
in which the Mortgage Loan was originated and/or the Mortgaged Property is
located at all times when such party held the Mortgage; or (ii) the loan of
mortgage funds, the acquisition of the Mortgage (if Originator was not the
original lender), the holding of the Mortgage and the transfer of the Mortgage
did not constitute the transaction of business or the doing of business in such
jurisdiction or require a license from any Regulatory Authority;

 

(n)           the proceeds of the Mortgage Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all requirements as
to completion of any on-site or off-site improvements and as to disbursements
of any escrow funds, therefore, have been complied with; all costs, fees and
expenses incurred in making, or closing or recording the Mortgage Loan were
paid;

 

(o)           the related 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,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (ii) otherwise by judicial foreclosure; 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;

 

(p)           each Mortgage Loan was originated by an institution that is authorized
to issue Mortgage Loans by the Agencies;

 

(q)           at origination, the Mortgaged Property was free and clear of all
mechanics’ and materialmen’s liens or liens in the nature thereof which are or
could be prior to the Mortgage lien, and no rights are outstanding that under
law could give rise to any such lien;

 

(r)            the Mortgaged Property consists of a single
parcel of real property; all of the improvements which are included for the
purpose of determining the appraised value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged Property;

 

(s)           no improvement located on or being part of the Mortgaged Property is in
violation of any applicable zoning law or regulation and all inspections,
licenses and certificates required to be made or issued with respect to the
Mortgaged Property, and with respect to the use and occupancy of the same, including
but not limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate

 

15

 

authorities and the
Mortgaged Property is lawfully occupied under applicable law;

 

(t)            there is no proceeding pending for the total
or partial condemnation of the Mortgaged Property and the Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty;

 

(u)           all buildings upon the Mortgaged Property are insured against loss by
fire and such other hazards as are customary in the area where the Mortgaged
Property is located, pursuant to fire and hazard insurance policies with
extended coverage or other insurance required by Agency Guidelines, in an
amount at least equal to the lesser of (i) the outstanding principal balance of
the Mortgage Loan or (ii) the maximum insurable value (replacement cost without
deduction for depreciation) of the improvements constituting the Mortgaged
Property; if applicable laws limit the amount of such insurance to the
replacement cost of the improvements constituting the Mortgaged Property, or to
some other amount, then such insurance is in an amount equal to the maximum
allowed by such laws; such insurance amount is sufficient to prevent the
Mortgagor or the loss payee under the policy from becoming a co-insurer; the
insurer issuing such insurance is acceptable pursuant to Agency Guidelines; all
individual insurance policies contain a standard mortgagee clause naming
Originator, its successors and assigns, as mortgagee and all premiums thereon
have been paid; each Mortgage obligates the Mortgagor thereunder to maintain
all such insurance at Mortgagor’s cost and expense, and upon the Mortgagor’s
failure to do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at Mortgagor’s cost and expense and to seek reimbursement
therefor from the Mortgagor; any flood insurance required by applicable law has
been obtained;

 

(v)           the related Mortgage Note is payable on each Due Date in self-
amortizing monthly installments of principal and interest, with interest
payable in arrears, providing for full amortization by maturity, over an
original term of not more than thirty years;

 

(w)          the Mortgage Loan conforms in all respects with the requirements of the
Designated Investor, if any, under any applicable Investor Purchase Agreement
and any Takeout Commitment; the related Takeout Commitment, if any, is a bona
fide current, unused and unexpired commitment by a Takeout Investor pursuant to
which such Takeout Investor has irrevocably agreed to acquire the Mortgage Loan
within sixty (60) days of the Acquisition Date, upon the satisfaction only of
those terms and conditions contained in the Takeout Commitment, all of which,
in the reasonably anticipated course of events, can be complied with; and

 

16

 

(x)            any related Takeout Commitment has been duly
assigned to Purchaser, and Takeout Investor has recognized such assignment to
Purchaser;

 

(y)           there are no circumstances or conditions with respect to the Mortgage,
the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that
can be reasonably expected to cause the Takeout Investor or private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent or adversely affect
the value or marketability of the Mortgage Loan.

 

(z)            Originator has in its possession copies of
each of the Submission Package Documents.

 

(aa)         The Mortgage Loan is covered by an ALTA lender’s title insurance policy
or other generally acceptable form of policy of insurance acceptable to FNMA or
FHLMC, issued by a title insurer acceptable to FNMA or FHLMC and qualified to
do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan (or to the
extent that a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), and against
any loss by reason of the invalidity or unenforceability of the lien resulting
from the provisions of the Mortgage providing for adjustment in the mortgage
interest rate and Monthly Payment, subject only to the exceptions permitted
under Agency Guidelines.

 

(bb)         The Assignment in Blank is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located.

 

(cc)         None of the Mortgage Loans are simple interest Mortgage Loans.

 

(dd)         With respect to each Mortgage Loan that has a prepayment fee feature,
each such prepayment fee is enforceable, and each prepayment fee 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 in the applicable Loan
Purchase Detail, with respect to each Mortgage Loan that contains a prepayment
fee, such prepayment fee 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.

 

(ee)         The information contained with respect to each Mortgage Loan on the
Loan Purchase Detail is true, accurate and correct and is consistent with

 

17

 

the Takeout Commitment for
such Mortgage Loan and all the information conveyed to the Takeout Investor
with respect to such Mortgage Loan:

 

and.

 

(ff)           Originator is not an Affiliate of the entity used to receive and
disburse funds and issue title insurance in connection with the settlement of
the Mortgage Loan at origination or in connection with the acquisition of the
Mortgage Loan by Purchaser.

 

The representations and warranties of Originator in subsection 2.6.1(1)
are unaffected by, and supersede any provision in, any endorsement of any
Mortgage Loan or in any assignment with respect to such Mortgage Loan to the
effect that such endorsement or assignment is without recourse or without
representation or warranty, and (2) survive the delivery of the Purchased
Items, the purchase by Purchaser of each Mortgage Loan, the transfer of the
Purchased Loan to Purchaser’s successors and assigns and the termination of
this Agreement. The representations and warranties of Originator in this
Section 2.6 shall inure to the benefit of Purchaser and Purchaser’s successors
and assigns.

 

Subject to Originator’s obligations to re-purchase a Defective Mortgage
Loan under subsection 2.9.1 or re-purchase a Mortgage Loan as to which a first
or second payment default has occurred pursuant to subsection 2.9.2, the sale
of Mortgage Loans hereunder is without recourse to Originator. Originator does
not represent or guaranty that any Mortgagor will not default after the
Acquisition Date, or that any Designated Investor will honor its Takeout
Commitment or that Purchaser will be able to sell any Purchased Loan at the
Adjusted Acquisition Price and Originator shall have no liability with respect
to such matters.

 

SECTION 2.7 REJECTION OF MORTGAGE LOANS.

 

Purchaser’s purchase of any Eligible Mortgage Loan shall be subject to
the following conditions precedent:

 

(a)           all actions required by subsection 2.1.2 to be taken by the Originator
have been taken and, if Purchaser has directed that deliveries thereunder are
to be made to Custodian, Custodian shall have confirmed to Purchaser that such
deliveries have been made to Custodian as required herein;

 

(b)           Originator is solvent;

 

(c)           no Default or Material Adverse Effect has occurred and is continuing;

 

(d)           all of the representations contained in Sections 2.6 and 5.1 hereof are
still accurate in all respects;

 

(e)           the purchase of such Mortgage Loan shall not cause Originator’s
Concentration Limit to be exceeded;

 

(f)            the Settlement Date specified in the related
Takeout Commitment shall not be later than the Commitment Expiration Date;

 

18

 

(g)           this Agreement shall not have been terminated.

 

SECTION
2.8 SALE OF MORTGAGE LOANS TO TAKEOUT INVESTORS.

 

Originator shall designate a Takeout Investor to purchase any Purchased
Loan and each such Purchased Loan shall be purchased by such Takeout Investor
within the Dwell Time. Provided the Adjusted Takeout Proceeds equal or exceed
the Adjusted Acquisition Price, Purchaser agrees to sell each Purchased Loan to
the Designated Investor identified in, and party to, the Takeout Commitment
included as part of the Submission Package Documents furnished in connection
with such Purchased Loan. Such sale shall be made pursuant to the provisions of
such Takeout Commitment. If such Designated Investor fails to honor its Takeout
Commitment, then Purchaser shall have the right, as owner of the Purchased
Loan, to sell the Purchased Loan on such terms and to such third party as Purchaser
deems appropriate.

 

The sale of each Mortgage Loan to Purchaser shall include, and
Originator hereby assigns to Purchaser, free of any security interest, lien,
claim or encumbrance of any kind, Originator’s rights, and by purchasing such
Mortgage Loans Purchaser assumes Originator’s obligations, under each Takeout
Commitment to deliver the Mortgage Loan(s) specified therein to the Designated
Investor, if any, and to receive the Takeout Price therefore from such
Designated Investor.

 

Originator shall cause each Designated Investor to provide Settlement
Information with respect to the Mortgage Loan(s) as to which it has delivered a
Takeout Commitment.

 

The Settlement Date shall occur on the Business Day upon which the
Settlement Information and the applicable Takeout Proceeds are received by
Purchaser (or Custodian, if applicable). Any Settlement Information and/or
Takeout Proceeds received by Purchaser (or Custodian, if applicable) after
12:00 p.m. on a Business Day (or at any time on a day which is not a Business
Day) shall be deemed for all purposes to have been received on the next
Business Day.

 

If a Designated Investor delivers Takeout Proceeds but fails to provide
the Settlement Information or provides Defective Settlement Information,
Purchaser (or Custodian, on Purchaser’s behalf) will notify the Designated
Investor and Originator. If the Designated Investor fails to provide the
Settlement Information or to correct the Defective Settlement Information,
within one (1) Business Day after receipt of such notification, Purchaser may,
in its sole discretion:

 

(a)           return any Takeout Proceeds for which it has incomplete Settlement
Information to the Designated Investor; or

 

(b)           place such Takeout Proceeds in a non-interest bearing account until the
requisite Settlement Information is provided.

 

SECTION 2.9 ORIGINATOR’S OBLIGATIONS WITH RESPECT TO DEFECTIVE MORTGAGE
LOANS.

 

The sale of Mortgage Loans described herein are not Caveat Emptor, it
being understood that the Purchaser is expressly relying on the representations
as to each Mortgage Loan provided in Section 2.6 hereof. Accordingly, if, after
Purchaser purchases a Mortgage Loan, Purchaser

 

19

 

determines or receives notice (whether from Originator, Takeout
Investor, Custodian or otherwise) that a Purchased Loan is a Defective Mortgage
Loan, Purchaser (or Custodian, on Purchaser’s behalf) shall promptly notify
Originator and Originator shall, within one (1) business day, re-purchase such
Purchased Loan at the Adjusted Acquisition Price.

 

The parties further agree that if a payment default occurs on the first
or second date payment was due under a Mortgage Note, Purchaser may notify
Originator and Originator shall, within one (1) business day, re-purchase such
Purchased Loan at the Adjusted Acquisition Price. Notwithstanding the
foregoing, if Originator gives to Purchaser the notice concerning first and
second payment defaults required by paragraph 3.1.1(f) of this Agreement, then
in no event shall the aggregate Acquisition Price for all Mortgage Loans that
Originator is required to re-purchase under this subsection exceed ten percent
(10%) of the aggregate Acquisition Price of all Mortgage Loans theretofore
acquired by Purchaser from Originator.

 

In the case of a Direct Funding, if the Originator fails to deliver or
cause to be delivered to the Purchaser (or Custodian on behalf of Purchaser)
the Submission Package Documents within two (2) Business Days following the
Acquisition Date, Purchaser (or Custodian on Purchaser’s behalf) shall promptly
notify Originator, and Originator shall within one Business Day, re-purchase
such Purchased Loan at the Adjusted Acquisition Price.

 

Upon receipt of the Adjusted Acquisition Price from the Originator,
Purchaser (or Custodian on behalf of Purchaser) shall deliver, or cause to be
delivered, to Originator all Submission Package Documents, or Advance
Submission Documents, as the case may be, previously delivered to Purchaser (or
Custodian, as the case may be).

 

ARTICLE 3

 

SERVICING OF MORTGAGE LOANS

 

SECTION 3.1 SERVICING OF MORTGAGE LOANS.

 

As a condition to purchasing a Mortgage Loan, Purchaser may elect, in
its sole discretion, to require Originator to service such Mortgage Loan as
agent for Purchaser for a period not to exceed ninety (90) days. If, and to the
extent, Purchaser so elects with respect to any Purchased Loan:

 

(a)           no compensation shall be payable to Originator in connection with
interim servicing responsibilities during the first ninety (90) days; and

 

(b)           Originator
shall service and administer such Purchased Loan on behalf of Purchaser in
accordance with prudent mortgage loan servicing standards and procedures
generally accepted in the mortgage banking industry and in accordance with any
Investor Purchase Agreement with the Designated Investor, all requirements of
the Agencies, Requirements of Law, and the requirements of any applicable
guarantor so that any third party liability in respect of any Purchased Loan is
not voided or reduced;

 

20

 

(c)           Originator shall at all times maintain a servicing file consisting of
all documents necessary to service such Purchased Loan and accurate and
complete records of its servicing of such Purchased Loan; Originator’s possession
of such servicing file being for the sole purpose of servicing such Purchased
Loan and such retention and possession by Originator being in a custodial
capacity only;

 

(d)           Purchaser may, at any time during Originator’s business hours on
reasonable notice, examine and make copies of such records;

 

(e)           Originator shall at Purchaser’s request deliver to Purchaser (and
Custodian, if applicable), monthly reports regarding the status of any such
Purchased Loan, which reports shall include, but shall not be limited to, a
description of any default thereunder for more than thirty (30) days, and such
other circumstances that could cause a Material Adverse Effect on any such
Purchased Loan, Purchaser’s title to any such Purchased Loan or the collateral
securing such Purchased Loan; Originator may be required to deliver such
reports until the purchase of such Purchased Loan by a Takeout Investor, or the
re-purchase of such Purchased Loan (in the case of a Defective Mortgage Loan)
by Originator; and

 

(f)            Originator shall immediately notify Purchaser
if it becomes aware of any payment default that occurs on the first or second
date payment is due under a Mortgage Note.

 

Originator shall not attempt to sell or transfer any rights to service
a Purchased Loan without the prior consent of Purchaser or except in accordance
with the exercise of a Takeout Commitment.

 

Originator shall release its custody of the contents of any servicing
file only in accordance with the written instructions of Purchaser, except when
such release is required as incidental to Originator’s servicing of any
Purchased Loan or is in connection with the purchase or re-purchase of any
Purchased Loan pursuant to this Agreement.

 

Purchaser reserves the right to appoint a successor servicer to service
any Purchased Loan (each a “Successor Servicer”). In the event of such an
appointment Originator shall perform all acts and take all action so that any
part of the Document File held by Originator, together with all Custodial
Accounts and receipts relating to such Purchased Loans, are promptly delivered
to Successor Servicer.

 

SECTION
3.2 CUSTODIAL ACCOUNT.

 

Originator shall establish and maintain a segregated trust account for
the benefit of Purchaser (the “Custodial Account”) with an Eligible Bank and
shall promptly deposit into such Custodial Account, any interest and/or
principal payments received with respect to each Purchased Loan (but not any
interest accrued on such Purchased Loan up to but not including the Acquisition
Date for such Loan), and all other receipts in respect of each Purchased Loan
that are payable for the benefit of the owner of each such Purchased Loan
(including, without limitation, any escrows for Property Charges). Under no
circumstances shall Originator deposit any funds belonging to it

 

21

 

into the Custodial Account, or otherwise commingle its own funds with
the funds belonging to Purchaser as owner of any Purchased Loans.

 

Any interest and/or principal payments, and other amounts received with
respect to each Purchased Loan (but not any interest accrued on such Purchased
Loan) up to but not including the Acquisition Date for such Loan, whether or
not deposited in the Custodial Account, shall be held in trust for the
exclusive benefit of Purchaser as the owner of such Purchased Loan and shall be
released only as follows:

 

(a)           following receipt by Purchaser (or Custodian, if applicable) of the
Takeout Proceeds for such Purchased Loan, all amounts deposited in the
Custodial Account with respect to such Purchased Loan shall be paid to the
Takeout Investor unless the Takeout Investor has agreed to release such amounts
to Originator;

 

(b)           if
a Successor Servicer is appointed by Purchaser, all amounts deposited in the
Custodial Account shall be transferred into an account established by the
Successor Servicer pursuant to its agreement with Purchaser;

 

(c)           if no Designated Investor is designated with respect to a Purchased
Loan, or if a Purchased Loan is not purchased by the Designated Investor before
the Commitment Expiration Date, all amounts deposited in the Custodial Account
shall be released only in accordance with a Purchaser’s written instructions.

 

The terms of the Custodial Account shall specifically provide that the
funds therein contained shall be released at the direction of Purchaser upon
occurrence of any Default hereunder.

 

Originator shall not change the identity or location of the Custodial
Account without thirty (30) days prior written notice to Purchaser. Originator
shall from time to time, at its own cost and expense, execute such financing
statements pursuant to the UCC, directions to the applicable Eligible Bank and
other papers, documents or instruments, as may be reasonably requested by
Purchaser to reflect Purchaser’s ownership interest in the Custodial Account,
and Originator hereby authorizes Purchaser to execute and file at any time and
from time to time precautionary financing statements or copies thereof with
respect to the Custodial Account signed only by Purchaser.

 

Originator shall promptly deliver to Purchaser copies of all bank
statements and other records relating to the Custodial Account as Purchaser may
from time to time request.

 

SECTION
3.3 FIDELITY BONDS.

 

Originator shall maintain
fidelity bonds and policies of insurance in form and substance satisfactory to
Purchaser insuring itself and Purchaser and the principals, successors, and
heirs and assigns of Purchaser, in the greatest of (a) the Errors and
Omissions/Fidelity Insurance amount set forth on Schedule B attached hereto,
(b) that amount required by FNMA in Section 1.01 of the FNMA Guaranteed
Mortgage Backed Securities Originators’ and Servicers’ Guide, and (c) that
amount required by any other Agency Guidelines, against loss or damage from any

 

22

 

breach of fidelity by Originator or any officer, director, employee or
agent of Originator, and against any loss or damage from loss or destruction of
documents, fraud, theft, misappropriation, or errors or omissions.

 

ARTICLE 4

 

RECORD TITLE TO MORTGAGE
LOANS;

INTENT OF PARTIES; SECURITY INTEREST

 

SECTION
4.1 TITLE.

 

Purchaser may elect, in its
sole discretion, not to complete and record any Assignments in Blank for the
sole purpose of facilitating the servicing of the related Mortgage Loan. In
such event, Originator agrees until further notice to remain the last named
payee or endorsee of each Mortgage Note and the mortgagee or assignee of record
of each Mortgage in trust for the benefit of Purchaser.

 

SECTION
4.2 BOOKS AND RECORDS.

 

Originator shall maintain a
complete set of books and records for each Purchased Loan which shall be
clearly marked to reflect the Purchaser’s ownership interest in such Purchased
Loan.

 

SECTION
4.3 SECURITY INTEREST.

 

Without prejudice to the
provisions of subsection 1.2.3 and the expressed intent of the parties, in the
event, for any reason, any transaction involving a Mortgage Loan is construed
by any Regulatory Authority as a borrowing rather than as a true sale and
absolute conveyance, the Originator and Purchaser intend and agree that
Purchaser shall have a perfected first priority security interest in the
Purchased Items. In such case, Originator shall be deemed to have hereby
granted to Purchaser (and possession of any promissory notes, instruments and
documents by Custodian shall constitute possession on behalf of Purchaser for
this purpose) a security interest in and lien upon the Purchased Items. In such
an event, the Purchaser agrees that such security interest shall be of first
priority and shall be free and clear of adverse claims, liens and interests. In
such event, this Agreement shall constitute a security agreement, the
Custodian, if any, shall be deemed to be an independent custodian for purposes
of perfection of the security interest granted to Purchaser, and Purchaser
shall have all of the rights of a secured party under applicable law.

 

SECTION
4.4 TRANSFERS OF MORTGAGE LOANS BY PURCHASER.

 

For the avoidance of doubt,
Purchaser may, in its sole discretion, assign all of its right, title and
interest in, or grant a security interest in, any Purchased Loan, subject only
to its obligation to deliver such Purchased Loan to any Designated Investor
pursuant to Section 2.8. No notice of such assignment need be given by Purchaser
to Originator or the Takeout Investor. Assignment by Purchaser of the Mortgage
Loans as provided in this Section 4.4 shall not release Purchaser from its
obligations otherwise under this Agreement.

 

23

 

ARTICLE 5

 

REPRESENTATIONS AND
WARRANTIES

 

SECTION 5.1 REPRESENTATIONS AND WARRANTIES.

 

As a material inducement to enter into this Agreement and the
transactions contemplated hereby, Originator hereby represents and warrants to
Purchaser as of the date hereof that:

 

(a)           Originator is duly organized, validly existing and in good standing
under the laws of the State of its organization and has all licenses necessary
to carry on its business as now being conducted and is licensed, qualified and
in good standing in the state where the Mortgage Loan was originated or the
Mortgaged Property is located, if the laws of such State require licensing or
qualification in order to conduct business of the type conducted by Originator;

 

(b)           Originator has all requisite power and authority (including, if
applicable, corporate power) to execute this Agreement and to perform its
obligations hereunder;

 

(c)           the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by
Originator and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all requisite action (including, if
applicable, corporate action);

 

(d)           this Agreement evidences the valid and binding obligation of
Originator, enforceable against Originator in accordance with its terms;

 

(e)           Originator is an approved originator of Mortgage Loans for purchase or
guarantee by each of the Agencies listed on Schedule D attached hereto;

 

(f)            no consent or approval of any Person
(including, without limitation, any stockholder, partner or other principal of
Originator, or any Regulatory Authority having jurisdiction over Originator or
any of its properties) is required in connection with the execution by Originator
of this Agreement or the performance of the transactions contemplated by this
Agreement or, if required, such consent or approval has been obtained;

 

(g)           the consummation of the transactions contemplated by this Agreement are
in the ordinary course of business of Originator and will not result in the
breach of any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any Material
Agreement, or result in the violation of any Requirement of Law to which
Originator or its property is subject;

 

24

 

(h)           there is no Litigation affecting Originator which would adversely
affect its ability to perform hereunder;

 

(i)            the transfers, assignments and conveyances
provided for herein are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction;

 

(j)            the
information that Originator has delivered, or caused to be delivered to
Purchaser (or any independent agency performing a review of Seller’s credit and
operations on behalf of Purchaser), in connection with this Agreement and the
transactions contemplated herein (including, but not limited to, all documents
related to this Agreement and Originator’s financial statements), is an
accurate reflection of the matters referred to therein; no such information
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements made therein, or herein, in light of the
circumstances under which they were made, not misleading;

 

(k)           each sale of Mortgage Loans by Originator pursuant to this Agreement
will be intended to be a sale in which Originator shall receive new value and
consideration constituting reasonably equivalent value and fair consideration
for such Mortgage Loans;

 

(l)            Originator will not acquire at any time any
direct, or indirect, ownership, or other economic interest in, or other rights
or obligations with respect to, any Purchased Loans, except as expressly
described in Section 2.9 with respect to Defective Mortgage Loans;

 

(m)          Originator will be solvent at all relevant times prior to, will not be
rendered insolvent by, will have a valid business reason for and not have any
intent to hinder, delay or defraud any of Originator’s creditors in connection
with, any sale of Mortgage Loans pursuant to this Agreement; and

 

(n)           under generally accepted accounting principles (“GAAP”) and for federal
income tax purposes, Originator will report each sale of a Mortgage Loan
hereunder as a sale of such Mortgage Loan. Originator will have been advised by
or confirmed with its independent public accountants that such sale can be so
reported under GAAP.

 

SECTION
5.2 SURVIVAL.

 

The representations and
warranties herein contained shall survive execution and termination of this
Agreement.

 

25

 

ARTICLE 6

 

COVENANTS

 

Originator covenants and
agrees that during the Term:

 

SECTION
6.1 CHANGE OF
NAME/ADDRESS.

 

Originator will notify
Purchaser not less than sixty (60) days prior to (i) any change of its name or
use of any trade names, or (ii) any change in the address of the chief
executive office and/or chief place of business of Originator, or (iii) any
change in the location of any part of the Purchased Items being held by
Originator pursuant to the terms hereof, or any records pertaining thereto.

 

SECTION
6.2 PAYMENT OF TAXES,
CLAIMS AND INDEBTEDNESS.

 

Originator will pay and
discharge promptly all taxes, assessments, fees and other governmental charges
or levies imposed upon it or upon any of its properties and all lawful claims
and indebtedness, which, if unpaid, might have a Material Adverse Effect.

 

SECTION
6.3 PROTECTION OF
ASSETS.

 

Originator will do or cause
to be done all things necessary to maintain its properties and assets
(including properties and assets leased by it and the leases related thereto)
in such condition as would prudent Persons engaged in the same or a similar
business similarly situated.

 

Originator will keep
complete and accurate books of record and account with respect to its business
in accordance with GAAP;

 

Originator shall not default
under any Material Agreement, or be in violation of any Requirement of Law to
which it is subject, where such default or violation may have a Material
Adverse Effect;

 

SECTION
6.4 CORPORATE
CHANGES.

 

Originator shall do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence, and all material rights, licenses, permits, franchises
and other authorizations, including, without limitation, taking all action
necessary:

 

(a)                                  to avoid dissolution or liquidation;

 

(b)                                 to remain in good standing with respect to
all governmental licenses authorizations and permits held by Originator which
are necessary for the lawful conduct of Originator’s business (including its
status as an approved originator of Mortgage Loans for purchase or guarantee by
each of the Agencies set forth on Schedule D);

 

26

 

(c)                                  to renew such licenses, authorizations and
permits as the same shall be required to be renewed;

 

(d)                                 to prevent any restriction or condition
limiting the conduct of Originator’s business as now conducted or proposed to
be conducted from being placed on any such license or permit; and

 

(e)                                  to defend such licenses and permits in any
proceedings with respect thereto instituted against Originator before any
Regulatory Authority.

 

Originator shall not enter
into any transaction with Purchaser that it intends to be a loan, whether
secured by collateral or otherwise.

 

SECTION
6.5 PURCHASED ITEMS.

 

Originator shall:

 

(a)                                  not cause or permit any liens to attach to
any of the Purchased Items; or

 

(b)                                 not assign any rights thereto (including any
servicing rights); or

 

(c)                                  not undertake with respect to any Mortgage
Loan, by execution of any document or otherwise, or otherwise expose Purchaser
or its assigns to any liability for cleanup or other obligation under any
Requirement of Law designed to protect the environment;

 

(d)                                 under GAAP and for federal income tax
purposes, report each sale of a Mortgage Loan to the Purchaser as a sale of the
ownership interest in the Mortgage Loan;

 

(e)                                  not sell any Mortgage Loan to the Purchaser
with any intent to hinder, delay or defraud any of the Originator’s creditors;

 

(f)                                    not characterize, whether such
characterization occurs in its books, records, communications or otherwise, the
transactions pursuant to which Purchased Loans are transferred to Purchaser as
loans from (and/or conditional assignments to) Purchaser secured by the
Purchased Loans;

 

(g)                                 not assert or represent to any Person that
the transactions pursuant to which Purchased Loans are transferred to Purchaser
are loans from (and/or conditional assignments to) Purchaser secured by the
Purchased Loans;

 

(h)                                 correct any known misunderstanding with
respect to the nature of the transactions pursuant to which Purchased Loans are
sold and absolutely assigned to Purchaser;

 

(i)                                     oppose all requests by any Person before any
Regulatory Authority or otherwise, seeking a determination that any
transactions pursuant to which

 

27

 

Purchased Loans are
transferred to Purchaser should be re-characterized as loans from (and/or
conditional assignments to) Purchaser secured by the Purchased Loans.

 

SECTION
6.6 FINANCIAL
STATEMENTS AND OTHER REPORTS.

 

Originator will deliver or
cause to be delivered to Purchaser:

 

(a)                                  as soon as practicable after the end of each
fiscal year of Originator, and in any event within ninety (90) days thereafter,
a balance sheet and related statements of income, retained earnings and changes
in financial position of Originator, each prepared in reasonable detail and
audited in accordance with GAAP by a firm of certified public accountants, with
no qualification except as to Receivables;

 

(b)                                 within forty-five (45) days after the end of
each of the first three (3) fiscal quarters of each fiscal year, an unaudited
balance sheet as at the end of such fiscal quarter and unaudited statements of
income and retained earnings of Originator for the period from the beginning of
the fiscal year to the end of such fiscal quarter, each prepared in reasonable
detail and in accordance with GAAP (except for the absence of footnotes and for
year end adjustments which would not have a material effect, and
inconsistencies specifically disclosed therein), and certified by an authorized
financial or accounting officer of Originator;

 

(c)                                  promptly upon receipt thereof, one copy of
each other report submitted to the Originator by any certified public
accountants in connection with any annual, interim or special audit made by
them of the books of the Originator;

 

(d)                                 promptly upon their becoming available, one
copy of:

 

(i)                                     each financial statement, report, notice or
request for a waiver or proxy statement sent by the Originator to shareholders
generally;

 

(ii)                                  any regular or periodic report, registration
statement or prospectus concerning the Originator’s existence, liabilities, assets
or operations filed with, or sent to, or received from (to the extent the
Originator is aware of such filing, transmission or receipt) any Regulatory
Authority.

 

(e)                                  with reasonable promptness, such other data
and information as to the business, operations, properties, assets or
prospects, or the condition, financial or otherwise, of the Originator or the
ability of the Originator to perform its obligations hereunder, as from time to
time may be reasonably requested by Purchaser.

 

28

 

SECTION
6.7 NOTICE OF
DEFAULTS; LITIGATION; FINANCIAL CHANGES.

 

Originator will promptly
give Purchaser written notice of:

 

(a)                                  any Mortgage Loan that is a Defective
Mortgage Loan;

 

(b)                                 any condition or event that constitutes a
Default, specifying the nature and period of existence thereof and the action
which Originator is taking or proposes to take with respect thereto;

 

(c)                                  the cancellation, revocation, suspension or
restriction or expiration of any Material Agreement, authorization, consent,
permit or license (including, specifically, the loss of Agency status for the
origination of Mortgage Loans), or the commencement of a dispute with any
Regulatory Authority;

 

(d)                                 any Litigation affecting Originator;

 

(e)                                  if any holder of indebtedness or security of
the Originator gives any notice or takes any other action in respect to a
claimed default; and

 

(f)                                    any other events or changes in the business,
properties, or condition, financial or otherwise, of Originator, that when
individually or cumulatively viewed in light of prior financial statements, may
have a Material Adverse Effect.

 

In each case Originator
shall advise Purchaser of the action which Originator is taking or proposes to
take with respect to such matter.

 

SECTION
6.8 INSPECTION.

 

Originator will permit
representatives of Purchaser and any lender to the Purchaser and the Custodian
to examine all its books of account and other financial records and reports
related thereto, to make copies and extracts therefrom and to discuss its
affairs, finance and accounts with its employees, officers and certified public
accountants, all at such reasonable times and as often as may reasonably be
requested.

 

SECTION
6.9 FURTHER
ASSURANCES.

 

Originator shall, upon
request of Purchaser, promptly execute and/or deliver to Purchaser all such
confirmatory or supplementary agreements and other and further documents and
instruments of transfer, conveyance and assignment, and shall take such other
action as Purchaser may require more effectively to transfer, convey, assign to
and vest in Purchaser, and to put Purchaser in possession of, the Purchased
Items, and otherwise to carry out more effectively the intent of the provisions
under this Agreement.

 

SECTION
6.10 FINANCIAL
COVENANTS.

 

Originator shall maintain at
least the Minimum Corporate Tangible Net Worth set forth on

 

29

 

Schedule B attached hereto.

 

Originator shall maintain a
Leverage Ratio of not more than that set forth on Schedule B attached hereto.

 

SECTION
6.11 BANKRUPTCY
PROCEEDINGS.

 

Prior to the date one year
and one day after the termination of this Agreement, Originator shall not
commence or instigate proceedings under any Bankruptcy Law with respect to
Purchaser.

 

ARTICLE 7

 

MISCELLANEOUS

 

SECTION
7.1 CUSTODIAN.

 

Purchaser may elect, in its
sole discretion, to nominate a custodian (the “Custodian”) to settle the
transactions contemplated hereby. In the event that Purchaser hereafter
notifies Originator of the appointment of such a Custodian, Originator shall
direct all future deliveries of documents and funds hereunder to such Custodian
at the address/wiring instructions furnished to Originator in writing.
Originator shall accept performance by such Custodian as if it were performance
by Purchaser hereunder.

 

Originator hereby
acknowledges that Custodian, if any, is acting as agent for, and for the
benefit of, Purchaser and/or its assignees. Originator agrees that it shall
have no claim or cause of action against Custodian for any act or failure to
act on the part of Custodian in connection with the transactions contemplated
under this Agreement. Originator waives any such claim or cause of action
against Custodian now existing or hereafter arising.

 

SECTION
7.2 TERM.

 

This Agreement shall
continue indefinitely unless and until terminated as to future transactions (a)
by written instruction signed by either Originator or Purchaser and delivered
to the other, not less than thirty (30) days prior to the date of termination,
in which event termination will not affect the obligations hereunder as to any
of the Mortgage Loans with respect to which Submission Package Documents, or
Advance Submission Documents, as the case may be, have been accepted by
Purchaser or Custodian pursuant to the terms of this Agreement; or (b) by
written notice of immediate termination from Purchaser following the occurrence
of, and during the continuance of, an Event of Default, in which event
termination will not affect the obligations hereunder as to any Purchased
Loans, except that no sales commissions shall be due to Originator in respect
of any Purchased Loan thereafter sold to a Designated Investor unless and until
all Purchased Loans have been sold by Purchaser without recourse to
Originator’s obligation to re-purchase pursuant to Section 2.9 hereof.

 

Notwithstanding anything to
the contrary contained in this Agreement, Purchaser shall have no obligations
to purchase Mortgage Loans during any period from and after the resignation or
termination of any Custodian to the appointment of a successor Custodian.

 

30

 

SECTION
7.3 NOTICES; SERVICE.

 

To be effective, all
notices, consents, approvals, responses or other communications required or
desired to be given hereunder must be in writing (it being understood that
telex and telecopy communications shall be deemed to be “writings” for the
purposes hereof, and shall be deemed given when delivered if delivered in a
sealed envelope by hand, or when received if given by telex or telecopy, or
five (5) days after mailing if sent by United States mail registered or
certified, return receipt requested, postage prepaid, to the following
addresses:

 

	
  If to the Originator:

  	
  to the address set forth
  on page 1 of this Agreement.

  
	
   

  	
  Attention: Michael L.
  Banes, President

  
	
   

  	
   

  
	
   

  	
  Telephone: 

  	
  (214) 637-2972

  
	
   

  	
  Facsimile: 

  	
  (214) 637-0365

  
	
   

  	
   

  
	
  If to Purchaser:

  	
  to the address set forth
  on page 1 of this Agreement.

  
	
   

  	
  Attention: G. Mark Loreto

  
	
   

  	
   

  
	
   

  	
  Telephone: 

  	
  (609) 671-0600

  
	
   

  	
  Facsimile: 

  	
  (609) 671-0661

  

 

or to such other address or
telex or telecopier number as the party to be served may direct by written
notice to the other party in the manner hereinabove provided.

 

ORIGINATOR IRREVOCABLY
CONSENTS TO THE SERVICE IN ANY ACTION OR PROCEEDING BY DELIVERY THEREOF TO IT
BY HAND OR BY MAIL IN THE MANNER PROVIDED FOR UNDER SUBSECTION 7.3.1 HEREOF.
NOTHING CONTAINED HEREIN SHALL AFFECT PURCHASER’S RIGHT TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW.

 

SECTION
7.4 FEES AND
EXPENSES; INDEMNITY.

 

Originator will promptly pay
all costs and expenses incurred by Purchaser in connection with (i) the
protection of the Purchased Items (including, without limitation, all costs of
filing or recording any assignments, financing statements and other documents),
and (ii) the enforcement of Purchaser’s rights hereunder (including, without
limitation, costs and expenses suffered or incurred by Purchaser in connection
with any bankruptcy proceedings relating to Originator, appeals and any
anticipated post-judgment collection services).

 

In addition to its other
rights hereunder, Originator shall indemnify Purchaser and Purchaser’s
directors, officers, agents (including any Custodian) and employees against,
and hold Purchaser and them harmless from, any loss, liabilities, damages,
claims, costs and expenses (including reasonable attorneys’ fees and
disbursements) suffered or incurred by Purchaser or any of them arising out of,
resulting from, or in any manner connected with, the purchase by Purchaser of
any Defective Mortgage Loans

 

31

 

The provisions of this
Section 7.4 shall survive the termination of this Agreement.

 

SECTION
7.5 MODIFICATIONS,
CONSENTS AND WAIVERS; ENTIRE AGREEMENT.

 

No modification, amendment
or waiver of, or with respect to, any provision of this Agreement or any other
instruments and documents delivered pursuant hereto or thereto, nor consent to
any departure by Originator from any of the terms or conditions hereof or
thereof, shall in any event be effective unless it shall be in writing and
signed by Purchaser. Any such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No consent to or demand
on the Originator in any case shall, of itself, entitle it to any other or
further notice or demand in similar or other circumstances. This Agreement
embodies the entire agreement and understanding between Purchaser and
Originator and supersedes all prior agreements and understandings relating to
the subject matter hereof.

 

SECTION
7.6 REMEDIES
CUMULATIVE.

 

Each and every right granted
to Purchaser hereunder or under any other document delivered hereunder or in
connection herewith, or allowed Purchaser by law or equity, shall be cumulative
and may be exercised from time to time. No course of dealing on the part of
Purchaser, nor any failure on Purchaser’s part to exercise, nor any delay in
exercising, any right shall operate as a waiver thereof, or otherwise prejudice
the rights, powers and remedies of Purchaser. No single or partial exercise of
any right shall preclude any other or future exercise thereof or the exercise
of any other right. The due payment and performance of Originator’s obligations
hereunder shall be without regard to any counterclaim, right of offset or any
other claim whatsoever which Originator may have against Purchaser and without
regard to any other obligation of any nature whatsoever which Purchaser may
have to Originator, and no such counterclaim or offset shall be asserted by
Originator, in any action, suit or proceeding instituted by Purchaser to
enforce this Agreement.

 

SECTION
7.7 COUNTERPARTS.

 

This Agreement may be signed
in any number of counterparts with the same effect as if the signatures thereto
and hereto were upon the same instrument.

 

SECTION
7.8 GOVERNING LAW.

 

THIS AGREEMENT IN ALL
RESPECTS, INCLUDING, WITHOUT LIMITATION, ALL MATTERS OF CONSTRUCTION,
INTERPRETATION, VALIDITY, ENFORCEMENT AND PERFORMANCE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
OR NEW JERSEY, IN PURCHASER’S SOLE AND ABSOLUTE DISCRETION, WITHOUT REGARD TO
ITS PRINCIPLES OF CONFLICTS OF LAW.

 

SECTION
7.9 CONSENT TO
JURISDICTION; WAIVER OF TRIAL BY JURY.

 

The Originator waives trial
by jury in any litigation in any court with respect to, in connection with, or
arising out of, this Agreement, or any instrument or document delivered
pursuant hereto, or the validity, protection, interpretation, collection or
enforcement hereof

 

32

 

EXCEPT AS MANDATORILY
REQUIRED BY APPLICABLE LAW WITH RESPECT TO THE ENFORCEMENT OF PURCHASER’S
RIGHTS, ORIGINATOR IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING
AGAINST IT UNDER, ARISING OUT OF, OR IN ANY MANNER RELATING TO, ANY OF THE LOAN
DOCUMENTS MAY BE BROUGHT, IN PURCHASER’S SOLE AND ABSOLUTE DISCRETION, IN ANY
COURT IN THE STATE OF NEW YORK OR NEW JERSEY OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. ORIGINATOR, BY THE EXECUTION OF
THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. ORIGINATOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION
OR PROCEEDING BASED ON, AND AGREES NOT TO ASSERT, ANY ALLEGED LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND ANY DEFENSE GIVEN OR
ALLOWED UNDER THE LAWS OF ANY STATE OTHER THAN THE STATE IN WHICH THE ACTION IS
BROUGHT UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE LAWS OF SUCH STATE.
NOTHING IN THIS SUBSECTION 7.9.2 SHALL AFFECT OR IMPAIR IN ANY MANNER OR TO ANY
EXTENT THE RIGHT OF PURCHASER TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ORIGINATOR IN ANY JURISDICTION. ORIGINATOR AGREES THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW.

 

ANY ACTION OR PROCEEDING
BROUGHT AGAINST PURCHASER (OTHER THAN A COUNTERCLAIM IN AN ACTION PREVIOUSLY
BROUGHT BY PURCHASER IN ANOTHER JURISDICTION) SHALL BE BROUGHT ONLY IN ANY
STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY, NEW YORK OR IN NEW JERSEY.

 

SECTION
7.10 SEVERABILITY.

 

The provisions of this
Agreement are severable, and if any clause or provision hereof shall be held
invalid or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or provision, or
part thereof, in such jurisdiction and shall not in any manner affect any other
clause or provision or such clause or provision in any other jurisdiction.

 

SECTION
7.11 BINDING EFFECT;
ASSIGNMENT OR DELEGATION.

 

This Agreement shall be
binding upon and shall inure to the benefit of Originator, Purchaser and their
respective successors and permitted assigns. It is expressly agreed that
Purchaser may assign its right to enforce this Agreement as to any Mortgage
Loan to any party that subsequently purchases, or provides financing with
respect to, such Mortgage Loan from Purchaser.

 

The rights and obligations
of Originator under this Agreement shall not be assigned or delegated without
the prior written consent of Purchaser, which consent may be withheld in
Purchaser’s sole discretion, and any purported assignment or delegation without
such consent shall be void.

 

33

 

SECTION
7.12 TIME OF THE
ESSENCE.

 

TIME IS OF THE ESSENCE WITH
REGARD TO THE PERFORMANCE OF ORIGINATOR’S OBLIGATIONS UNDER THIS AGREEMENT.

 

SECTION
7.13 MERS.

 

Purchaser reserves the right
to settle the acquisition and re-sale of Mortgage Loans hereunder by use of the
Mortgage Electronic Registry System, provided Originator and the Designated
Investor are subscribers to such System.

 

SECTION
7.14 LIMITED
RECOURSE.

 

Notwithstanding anything to
the contrary contained herein, no recourse under any obligation, covenant,
commitment, representation, warranty or agreement of or relating to the
Purchaser contained in this Agreement shall be had against any incorporator,
stockholder, officer, director, member, manager, authorized person, affiliate,
agent or employee of the Purchaser, or against Lord Securities Corporation, a
Delaware corporation, or against Broad Street Contract Services, Inc., a Delaware
corporation, as such, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Agreement is solely a corporate obligation of
the Purchaser, and that no personal liability whatever shall attached to, or be
incurred by, the incorporators, stockholders, officers, directors, members,
managers, authorized persons, affiliates, agents or employees of the Purchaser,
as such, or any of them under, or by reason of, any of the obligations,
covenants, commitments, representations, warranties or agreements of the
Purchaser contained in this Agreement, or implied therefrom, and that any and
all personal liability for breaches by the Purchaser of any of such
obligations, covenants, commitments, representations, warranties or agreements,
either at common law or in equity, or by statute or constitution, of every such
incorporator, stockholder, officer, director, member, manager, authorized
person, affiliate, agent or employee is hereby expressly waived as a condition
of and in consideration for the execution of this Agreement.

 

IN WITNESS WHEREOF,
Purchaser and Originator have duly executed this Agreement as of the date and
year set forth above.

 

	
  WAREHOUSEONE ACCEPTANCE
  COMPANY, LLC

  	
  AVAILENT MORTGAGE, INC.

  
	
   

  	
   

  
	
  BY: WAREHOUSEONE, INC.,
  ITS AGENT

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ G. MARK LORETO

  	
   

  	
  By:

  	
  /s/ MICHAEL L. BANES

  	
   

  
	
   

  	
  Name: G. Mark Loreto

  	
   

  	
  Name: Michael L. Banes

  
	
   

  	
  Title: Chairman

  	
   

  	
  Title: President

  
						

 

34

 

SCHEDULE A

 

Administrative
Costs

 

All usual and customary cost
and expense incurred by the Purchaser, in connection with processing,
administering and settling of mortgage loans, currently including, without
limitation:

 

(a) A $100 internal
allocation for processing expense per Purchased Loan, an additional $15 per
Purchased Loan for which Purchaser does not have original documents at the time
of funding, and an additional $100 per loan for same day fundings. Loans with a
face amount in excess of $450,000 may be subject to an additional fee;

 

(b) $25 wire transfer fee
for sending or receiving each wire transfer in connection with the acquisition
of any Mortgage Loan by Purchaser or any Takeout Investor;

 

(c) $25 internal allocation for
processing files that are deficient in presentation and require correction;

 

(d) messenger and overnight
courier fees at cost;

 

(e) the usual and customary
fees and charges of the Custodian in connection with the settlement of Mortgage
Loans, if not otherwise included in items, if any, (a) through (d) above;

 

(f) any third party due
diligence expenses;

 

(g) a penalty fee of $500
when original documents have not been received by Purchaser within four (4)
Business Days of the Acquisition Date.

 

“INVESTMENT RETURN RATE”:
the greater of (a) LIBOR plus 4.0% per annum and (b) Federal Funds rate plus
4.0% per annum.

 

The Investment Return Rate
shall be increased by:

 

•  4.0% with respect to any Mortgage
Loan (i) which has not been purchased by a Takeout Investor within 45 days of
the Acquisition Date and for which the Adjusted Takeout Proceeds equal or
exceed the Adjusted Acquisition Price or (ii) which is in Default.

 

•  The Investment Return Rate shall
be increased by 2.0% on those advances for which Submission Package Documents
are not received by Purchaser within two days of funding.

 

In addition, there shall be
a mandatory 5% principal reduction for each Mortgage Loan which has not been
purchased by a Takeout Investor within 45 days of the Acquisition Date.

 

 

SCHEDULE B

 

ORIGINATOR’S CONCENTRATION
LIMIT: $ 5 million

 

SUB-LIMITS

 

	
  Direct (wet) Funding:

  	
  $ 5 million

  
	
   

  	
   

  
	
  Jumbo Sub-limit:

  	
  N/A

  
	
   

  	
   

  
	
  Maximum Face amount for
  Jumbo loan:

  	
  $ 650,000 (larger by
  approval)

  
	
   

  	
   

  
	
  Minimum FICO

  	
  620

  
	
   

  	
   

  
	
  Acquisition Price:

  	
   

  
	
   

  	
   

  
	
   

  	
  Mortgage Loans and Jumbo
  loans less than

  
	
   

  	
   

  
	
   

  	
  $650,000.00 face 98

  
	
   

  	
   

  
	
   

  	
  Jumbo loans $650,001.00 -
  $1,000,000.00 face 95

  
			

 

of the least of (1) the face amount of the
related Mortgage Note; (2) the related Takeout Price, if any; (3) the Adjusted
Takeout Price, and (4) the fair market value of any Mortgage Loan for which a
Takeout Commitment is not furnished, which fair market value shall be
determined by Bear Stearns & Co. Inc. in its sole discretion.

 

MAINTENANCE

 

	
  Minimum Corporate Tangible
  Net Worth

  	
  $ 600,000

  
	
   

  	
   

  
	
  Minimum Combined
  Corporate/Guarantor Tangible Net Worth $ 3,500,000

  
	
   

  	
   

  
	
  Maximum Leverage Ratio

  	
  10:1

  
	
   

  	
   

  
	
  Errors and
  Omissions/Fidelity Insurance

  	
  $ 1,000,000

  
	
   

  	
   

  
	
  Depository Account

  	
  $ 5,000

  

 

 

SCHEDULE C

 

[Deliberately
Left Blank]

 

 

SCHEDULE D

 

AGENCIES

 

FNMA

 

FRMC

 

EHA

 

VA

 

 

EXHIBIT A

 

ADJUSTED
TAKEOUT PRICE CALCULATION

 

Assume

 

	
  Weighted Average Coupon
  Required by Takeout Commitment

  	
   

  	
  6.5

  
	
  Coupon Delivered by
  Originator

  	
   

  	
  5.8

  
	
  Settlement Date

  	
   

  	
  July

  
	
  Funding Date

  	
   

  	
  6-15-2001

  
	
  Takeout Price

  	
   

  	
  101

  

 

Market Price for FNMA
Securities as published on Bloomberg Page OPX on 6/14/01

 

	
  FNMA
  Coupon

  	
   

  	
  Market Price for

  July Settlement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.5

  	
   

  	
   

  	
  94.25

  	
   

  
	
  6

  	
   

  	
   

  	
  96.9375

  	
   

  
	
  6.5

  	
   

  	
   

  	
  99.21875

  	
   

  
	
  7

  	
   

  	
   

  	
  101.0313

  	
   

  
	
  7.5

  	
   

  	
   

  	
  102.375

  	
   

  
	
  8

  	
   

  	
   

  	
  103.625

  	
   

  
	
  8.5

  	
   

  	
   

  	
  105.375

  	
   

  
	
  9

  	
   

  	
   

  	
  105.4963

  	
   

  
	
  9.5

  	
   

  	
   

  	
  105.6563

  	
   

  

 

Calculation of Adjusted
takeout price due to delivery of 5.8% coupon instead of 6.5% agreed to with
Takeout Investor

 

Percentage Price Adjustment
= (Takeout Coupon - Delivered Coupon) / (Takeout Coupon - next lowest coupon
below Delivered Coupon

 

= (6.5 - 5.8) / (6.5 - 5.5)
= 70%

 

Adjusted Takeout Price =
Takeout Price - (Percentage Price Adjustment x (Market Price for Takeout Coupon
- Market Price for next lowest coupon below Delivered Coupon))

 

CALCULATION 101 - (70% x
(99.21875 -94.25)) = 97.52188

 

A-1

 

EXHIBIT B

 

SUBMISSION
PACKAGE DOCUMENTS/ ADVANCE SUBMISSION DOCUMENTS

 

SUBMISSION
PACKAGE DOCUMENTS

 

1.       Takeout Commitment

 

2.       Loan Purchase Detail

 

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

 

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

 

5.       The original Mortgage with evidence of
recording thereon, or a copy thereof together with an Officer’s Certificate of
the Seller certifying that such represents a true and correct copy of the
original and that such original has been submitted for recordation in the
appropriate governmental recording office of the jurisdiction where the Mortgaged
Property is located.

 

6.       The originals of all assumption,
modification, consolidation or extension agreements with evidence of recording
thereon, or copies thereof together with an Officer’s Certificate of the Seller
certifying that such represent true and correct copies of the originals and
that such originals have each been submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the Mortgaged Property
is located.

 

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

 

8.       The originals of all intervening assignments
of mortgage with evidence of recording thereon, showing an unbroken chain of
title from the originator thereof to the Last Endorsee or copies thereof
together with an Officer’s Certificate of the Seller certifying that such
represent true and correct copies of the originals and that such originals have
each been submitted for recordation in the appropriate governmental recording
office of the jurisdiction where the Mortgaged Property is located.

 

B-1

 

9.       LTV/PMI Certificate or other evidence of PMI

 

10.     Warehouse Lender’s Release, if applicable

 

11.     Originator’s Release, if applicable

 

12.     Copy of Limited Power of Attorney [only if
any other Submission Package Documents are signed by a person as attorney-in
fact for the Mortgagor(s)]

 

13.     Copy of Signature/Name Affidavit [only if a
Mortgagor signed any Submission Package Documents in various forms, e.g., “John
Smith” and “John C. Smith”]

 

14.     Takeout Investor Delivery Instructions

 

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

 

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

 

ADVANCE
SUBMISSION DOCUMENTS

 

1.       Takeout Commitment (copy)

 

2.       Loan Purchase Detail

 

3.       Insured Closing Protection Letter (blanket
original on file with Custodian)

 

4.       Escrow Instruction Letter (Purchaser to
Closing Agent) (copy)

 

B-2

 

EXHIBIT C

 

	
  NOTE INFORMATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Submission ID

  	
  MIP

  	
  Funded Amount

  
	
  Name

  	
  Note Rate

  	
  Advance/Withhold

  
	
  Note Amount

  	
  First Pint. Date

  	
  Requested Amount

  
	
  Term

  	
  Other

  	
  Requested Date

  
	
  Note Date

  	
  PITI

  	
   

  
	
  PMI

  	
  PMI Carrier

  	
   

  
	
   

  	
   

  	
   

  
	
  IF ARM

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Index

  	
  Max Interest Rate

  	
  Periodic Rate Cap

  
	
  Gross Margin

  	
  1st Adjustment Date

  	
  Prepay Penalty

  
	
   

  	
   

  	
   

  
	
  BORROWER AND PROPERTY
  INFORMATION

  	
   

  
	
   

  	
   

  	
   

  
	
  BorrowerlName

  	
  CoBorrower Name

  	
   

  
	
  BorrowerlSS#

  	
  CoBorrower SS#

  	
   

  
	
  Borrower Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CREDIT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Gross Income

  	
  Appraiser

  	
   

  
	
  Recurring Pmt

  	
  Value Price

  	
   

  
	
  DebtRatio1

  	
  Lein Position

  	
   

  
	
  DebtRatio2

  	
  LTV

  	
   

  
	
  Credit Score

  	
  CLTV

  	
   

  
	
  Loan Type

  	
  Occupancy

  	
   

  
	
  Transaction Type

  	
  Other Liens

  	
   

  
	
  Property Type

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INVESTOR COMMITMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Investor Name

  	
  Commitment Number

  	
   

  
	
  Takeout Price

  	
  Sale Price

  	
   

  
	
  Lock Exp. Date

  	
  Delivery Date

  	
   

  
	
   

  	
   

  	
   

  
	
  CLOSING AGENT (IF WET AND
  NOT ON FILE)

  	
   

  
	
   

  	
   

  	
   

  
	
  Closing Agent Name

  	
  Closing Agent Email

  	
   

  
	
  Closing Agent Address

  	
  Closing Agent Contact

  	
   

  
	
  Closing Agent Phone

  	
  Closing Agent Fax

  	
   

  
	
   

  	
   

  	
   

  
	
  WIRE INSTRUCTIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Bank Name

  	
   

  	
   

  
	
  Location

  	
   

  	
   

  
	
  ABA/Account Number

  	
   

  	
   

  

 

C-1

 

EXHIBIT D

 

FORM
OF LOAN TRANSFER FORM

 

	
  PARTIES

  	
  The parties to this
  Purchase Confirmation are the following:

  
	
   

  	
   

  
	
  SELLER:

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
  WAREHOUSEONE ACCEPTANCE
  COMPANY, LLC

  
	
   

  	
   

  
	
  MORTGAGE LOANS

  	
  THE MORTGAGE LOAN(S)
  COVERED BY THE PURCHASE CONFIRMATION ARE LISTED AND DESCRIBED IN THE ATTACHED
  SCHEDULE OF MORTGAGE LOANS

  
	
   

  	
   

  
	
  SALE: 

  	
  For value received, the
  Seller hereby conveys to the Purchaser all rights, title and interest in and
  to the following:

  
	
   

  	
   

  
	
   

  	
  (a) The Mortgage Note and
  the related Mortgage for each Mortgage Loan; (b) all rights to payment
  thereunder; (c) all rights related thereto, such as financing statements,
  guaranties and insurance policies (issued by governmental agencies or
  otherwise), including (i) mortgage and title insurance policies, (ii) fire
  and extended coverage insurance policies (including the right, if any, to any
  return premiums), and (iii) if applicable, FHA insurance, VA guaranties, or
  private mortgage insurance and all rights, if any, in escrow deposits
  consisting of impounds, insurance premiums, or other funds held in account
  thereof (d) all right, title and interest of the owner of such loan in the
  real property, including all improvements thereon, and the personal property
  (tangible and intangible) that are encumbered by such mortgage (or deed of
  trust) and/or security agreements; (e) all rights to service, administer,
  and/or collect such loan and all rights to the payment of money on account of
  such servicing, administration and/or collection appraisals, computer
  programs, tapes, discs, cards, accounting records, and other books, records,
  information, and data relating to such loan necessary to the administration
  or servicing of such loan; and (f) all accounts, contract rights (including,
  but not limited to, all contract rights with respect to such loans under the
  Master Loan Purchase Agreement (entered into between Seller and Buyer) and
  the related Takeout Commitment, and general intangibles constituting or
  relating to such loan.

  

 

D-1

 

	
  PRICE

  	
  The price paid for the
  above-described rights was REFER TO SCHEDULE OF MORTGAGE LOANS [Purchase
  Price]

  
	
   

  	
   

  
	
   

  	
  The Seller hereby
  reaffirms the representations, warranties and covenants made in the Master
  Mortgage Loan Purchase Agreement with respect to the Mortgage Loans on and as
  of the date and hereby remakes all such representations, warranties and
  covenants on and as of the effective date of sale set forth below.

  
	
   

  	
   

  
	
  DEFINITIONS

  	
  Terms used but not defined
  herein shall have the meanings assigned to them in the above referenced
  Master Mortgage Loan Purchase Agreement, dated as
  of          .

  
	
   

  	
   

  
	
  EFFECTIVE DATE OF SALE:

  	
                           ,
  2002.

  
	
   

  	
   

  
	
  NAME OF SELLER:

  	
   

  
	
   

  	
   

  
	
  AUTHORIZED SIGNATURE:

  	
   

  
	
   

  	
   

  
	
  NAME AND TITLE:

  	
   

  

 

D-2

 

EXHIBIT E

 

FORM
OF WAREHOUSE LENDER’S RELEASE

 

Warehouse
Lender’s Release

 

Ladies and Gentlemen:

 

We hereby release all right,
interest or claim of any kind with respect to the mortgage loan(s) referenced
below, such release to be effective automatically without any further action by
any party, upon receipt, in one or more installments, from State Street Bank,
in accordance with the wire instructions which we delivered to you in a letter
dated          , 2002, in
immediately available funds.

 

	
  Loan #

  	
   

  	
  Mortgagor

  	
   

  	
  Street Address

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  Zip

  

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [WAREHOUSE LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

E-1

 

EXHIBIT F

 

ACCEPTABLE
LOAN GUIDELINES

 

The purpose of these
Acceptable Loan Guidelines is to address the types of loans that WarehouseOne
Acceptance Company, LLC (“WAC I”) is most likely to purchase.

 

GENERAL DESCRIPTION

 

•                                          15-, 20- and 30-year fixed rate,
fully-amortizing mortgage loans.

 

•                                          30/15-fixed rate, level payment balloon
mortgage loan based on a 30-year amortization, due and payable at the end of 15
years.

 

•                                          LIBOR ARM — 1 Month, 6 Month, 2/6, 3/6, 5/6,
7/9, & 10/6 30-year amortization.

 

•                                          AGENCY UNDERWRITING GUIDELINES SHOULD BE
FOLLOWED

 

•                                          NO BALLOONS

 

MINIMUM LOAN AMOUNT

 

$40,000

 

USE OF “DESKTOP UNDERWRITER”
AND “LOAN PROSPECTOR”

 

WAC I will accept Fannie Mae
“Desktop Underwriter” and Freddie Mac “Loan Prospector” provided the following
restrictions are met with NO EXCEPTIONS.

 

•                                          DU Approval/Eligible

 

•                                          LP “Accept” or “Accept Plus”

 

FHA

 

Maximum LTV 97% - FHA loans
will only be purchased from an originator who has a direct endorsement
underwriter as an employee and the endorsee number is provided.

 

OCCUPANCY

 

PRIMARY RESIDENCES

 

•                                          U.S. Citizens

 

•                                          Permanent resident aliens

 

SECOND/VACATION
HOMES

 

•                                          U.S. Citizens

 

•                                          Permanent resident aliens

 

NON-OWNER
OCCUPIED HOMES

 

•                                          U.S. Citizens

 

•                                          Permanent resident aliens

 

DOCUMENTATION

 

THESE ARE NOT THE DOCUMENTS
REQUIRED TO BE SUBMITTED PRIOR TO PURCHASE BUT MUST BE READILY AVAILABLE UPON
DEMAND. PLEASE SEE SUBMISSION PACKAGE DOCUMENTS FOR DETAIL OF SUBMISSION
REQUIREMENTS.

 

AGE OF DOCUMENTS

 

Credit documentation may not
be over 120 days old for existing construction and 180 days for new
construction (with the exception of W-2s and tax returns). For appraisals, a
recertification of value is required after 120 days for existing construction
and 180 days for new construction (the appraisal may not be over 12 months
old). Pay stubs must be dated within 30 days of closing. Loans must have been
closed within 30 days to be eligible for purchase by WAC I.

 

F-1

 

DOCUMENTATION TYPE

 

FULL/ALTERNATIVE (ALT DOC)

 

Salaried Borrowers:

 

•                                          1003 Application

 

•                                          Written Verification of Employment (VOE), or

 

•                                          Most recent full month pay stub(s), 30-day
period with YTD earnings certified and

 

•                                          2-years’ W-2s

 

•                                          Verbal VOE at time of closing

 

•                                          Written Verification of Deposit (VOD) with 2
months’ average balance or

 

•                                          1-month most recent certified bank statement

 

Non-Salaried Borrowers:

 

•                                          1003 Application

 

•                                          2 years’ tax-returns, including all schedules

 

•                                          IRS from 4506, signed

 

•                                          Verbal VOE at time of closing

 

•                                          Written Verification of Deposit (VOD) with 2
months’ average balance or

 

•                                          1-month most recent certified bank statement

 

STATED INCOME / VERIFIED
ASSETS

 

All Borrowers:

 

•                                          Signed 1003 Application with employment
stated and income stated

 

•                                          Income must be reasonable for employment
stated

 

•                                          Ratios are calculated using stated income

 

•                                          Verbal VOE at time of closing

 

•                                          Written VOD with 2 months’ average balance or
1 month most recent certified bank statement

 

•                                          CPA Certification or copy of business license
for all self-employed borrowers

 

STATED INCOME / STATED
ASSETS

 

•                                          Signed 1003 Application with employment
stated and income stated

 

•                                          Income must be reasonable for employment
stated

 

•                                          Ratios are calculated using stated income

 

•                                          Verbal VOE at time of closing

 

•                                          CPA Certification or copy of business license
for all self-employed borrowers

 

•                                          Assets stated on signed 1003

 

NO RATIOS / VERIFIED ASSETS

 

All Borrowers:

 

•                                          Signed 1003 Application with employment
stated but no income stated

 

•                                          Ratios are not calculated

 

•                                          Verbal VOE at time of closing

 

•                                          Written VOD with 2 months’ average balance or
1 month most recent certified bank statement

 

NO INCOME / NO ASSETS (NO
DOC)

 

All Borrowers

 

•                                          Signed 1003 Application with no employment,
income or assets stated

 

•                                          No ratios are calculated

 

•                                          Daytime and evening telephone numbers are
required for all borrowers

 

F-2

 

ELIGIBLE PROPERTIES

 

•                                          Single Family (1-4 unit)

 

•                                          Condo

 

•           PUD

 

•              Rural

 

•              Town
Homes

 

•              Modular
Housing/Manufactured Housing

 

INELIGIBLE PROPERTIES

 

•              Log
Houses

 

•              Non-Warrantable
Condominiums (low-rise only)

 

•              Mixed-Used

 

•              Condo
Hotels

 

•              Cooperatives

 

•              Unimproved
Land

 

•              Mobile
Homes

 

•              Kiddy
Condos

 

•              Unique
Properties

 

•              Tax-Sheltered
Syndications

 

•              Timeshare
units

 

•              Multi-Family
dwellings containing more than 4 units

 

•              Working
farms

 

•              Ranches
and orchards

 

•              Any
residential properties zoned commercial

 

•                                          Refinanced transactions on properties listed
for sale within the last six (6) months prior to the loan application

 

GEOGRAPHIC RESTRICTIONS

 

•              WAC
I will not purchase loans in Alaska, Hawaii, Puerto Rico, USVI

 

•              Primary
cash-out refinances in Texas are not eligible for purchase.

 

TRANSACTION TYPES

 

PURCHASE TRANSACTIONS

 

Purchase transactions must
adhere to standard Agency guidelines except as noted in the Program Matrix.

 

REFINANCE TRANSACTIONS

 

RATE/TERM REFINANCE

 

•                                          Maximum cash back to the borrower limited to
2% of the loan amount, not to exceed $2,000.

 

•                                          Reasonable and customary closing costs may be
included in the loan amount. Generally, the cost should not exceed 5% of the
loan amount.

 

•              The
LTV is based on the current appraised value.

 

•              Copy
of original HUD-1 is required to verify original purchase price

 

•                                          A refinance that includes the payoff of a
second lien with less than 12 months’ seasoning will be considered cash back to
the borrower, with the following exceptions:

 

A refinance of a first
mortgage and subordinate lien that were recorded simultaneously will be treated
as a rate/term refinance, as long as the HUD-1 shows proceeds were applied to the
purchase of the property with evidence of no cash back to the borrower, or

 

The subordinate lien was
used for documented home improvements.

 

F-3

 

•                                          When a second lien in the form of an equity
line of credit is being paid off, the previous 12-month history should be
reviewed and if total draws exceed $2,000 during the 12-month period, it is
considered cash-out.

 

•                                          If the unseasoned second lien is subordinated
to the new loan, it is considered a rate/term refinance.

 

•                                          Any loan for which the borrower has taken
cash out within the last 12 months, either through a first lien or subordinate
lien, is considered unseasoned. Any refinance transaction paying off an
unseasoned lien will be treated as a cash-out refinance and all cash-out
refinance guidelines apply.

 

•                                          Streamline Refinances must meet standard
Agency guidelines

 

CASH OUT

 

•                                          Maximum cash-out is based on LTV — See
Program Matrix. If the borrower has taken equity out of the property within the
last 12 months, either through a first lien or subordinate lien(s) on the
subject property, that cash is considered when determining the maximum cash-out
limitations.

 

•                                          If the borrower has owned the property for
fewer than 12 months, the LTV is based on the lesser of the original purchase
price plus documented cost of improvements, or the current appraised value.

 

•                                          OWNER OCCUPIED CASH OUT REFINANCES IN TEXAS
ARE NOT ELIGIBLE FOR PURCHASE.

 

SUBORDINATE FINANCING

 

•                                          A subordinate lien that has been opened for
less than 12 months must be considered cash-out unless:

 

The first mortgage and
subordinate lien were recorded simultaneously, and the HUD-1 shows proceeds
were applied to the purchase of the property with no cash back to the borrower;
or

 

The subordinate lien was used
for documented home improvements.

 

•                                          If the second lien involves a home equity
line of credit, the previous 12-month history must be reviewed. If total draws
exceed $2,000 during this 12-month period, it is considered cash-out.

 

•                                          If the unseasoned second lien is subordinated
to the new loan, it is considered a rate/term refinance.

 

ADJUSTABLE RATE MORTGAGES
(ARM)

 

No negative amortization
allowed

 

MORTGAGE INSURANCE

 

Mortgage Insurance is
required on all mortgage loans with an original LTV of GREATER THAN 80.00%.

 

	
  COVERAGE

  	
   

  	
  30 Year

  	
   

  	
  15 Year

  	
   

  
	
  • 80.01% - 85.00%

  	
   

  	
  12.00

  	
  %

  	
  6.00

  	
  %

  
	
  • 85.01% - 90.00%

  	
   

  	
  25.00

  	
  %

  	
  12.00

  	
  %

  
	
  • 90.01% - 95.00%

  	
   

  	
  30.00

  	
  %

  	
  25.00

  	
  %

  

 

F-4

 

NON-OCCUPANT CO-BORROWER

 

•              Owner-occupied
primary and second homes only

 

•              Full/Alt
doc only

 

•              Underwritten
using only the occupant borrower’s income and debt.

 

•              Maximum
90% LTV.

 

•                                          Occupant borrower must meet the 5% down
payment requirement from personal funds.

 

•                                          Non-occupant co-borrower must be an immediate
family member (parent, child, brother, or sister).

 

•                                          Non-occupant co-borrower should add strength
to the transaction by exhibiting stability, good credit history and strong
asset base.

 

•           Non-occupant
co-borrower must be verified

 

•              Non-occupant
co-borrower should have sufficient liquidity to assist the occupant borrower
should the need arise.

 

•                                          The note and deed of trust must be signed by
both occupant and non-occupant borrowers.

 

•                                          80.01% - 90% - occupying borrowers total
debt-to-income ratio may not exceed the allowable qualifying ratio stated in
the Program Matrix by more than 5%.

 

•                                          80% LTV and below — occupying borrowers total
debt-to income ratio may not exceed the allowable qualifying ratio stated in
the Program Matrix by more than 10% of the maximum debt ratio

 

•                                          The occupying borrower and non-occupying
borrower’s combined total debt-to-income ratio may not exceed the maximum
allowable qualifying ratio stated in the Program Matrix.

 

RESIDENT ALIENS

 

PERMANENT RESIDENT ALIENS

 

Made under the same terms as
a U.S. citizen under the following criteria:

 

•                                          Must hold acceptable evidence of permanent
residency issued by the U.S. Immigration and Naturalization Service (I.N.S.)

 

•                                          Must have a minimum two (2) year employment
history with a United States based employer. Income for qualifying purposes
must be from the United States.

 

•              Must
have a minimum two (2) year United States credit history

 

•                                          Must have an established asset base in the
United States. Funds from outside the United States are not acceptable. Must
provide documented evidence of permanent residency.

 

Documents acceptable:

 

•              Alien
Registration Receipt Card I-151 (referred to as a “green card”).

 

•                                          Alien Registration Receipt Card (Resident
Alien Card) I-551 that does not have an expiration date on the back (also
referred to as a “green card”).

 

•                                          Alien Registration Receipt Card (Conditional
Resident Alien Card) I-551 that has an expiration date on the back, as long as
it is accompanied by a copy of a filed INS form I-751.

 

•                                          An unexpired foreign passport that contains
an unexpired stamp reading “Processed for I-551”. Temporary Evidence of Lawful
Admission for Permanent Residence. Valid until (mm-dd-yy). “Employment
authorized.”

 

DETERMINING
REPRESENTATIVE CREDIT SCORE

 

When a representative credit
score is required, WAC I uses the following methods of determining the
representative score:

 

•              One
borrower with two credit scores — use lower score.

 

•              One
borrower with three credit scores — use middle score.

 

•              Multiple
borrowers with one credit score — use lowest score of all borrowers.

 

•              Multiple
borrowers with two credit scores — use lowest score of all borrowers.

 

•                                          Multiple borrowers with three credit scores —
use middle score for each borrower and lowest of the middle scores.

 

•                                          When a borrower has three scores and two of
them are identical, one of the identical scores is considered the middle score.

 

F-5

 

RATIOS

 

The maximum DTI
(debt-to-income) ratio will be applied based on LTV. Ratios between 45% - 55%
may be considered with compensating factors.

 

	
  LTV

  	
   

  	
  DTI

  	
   

  
	
  • 80.01 - 95%

  	
   

  	
  45

  	
  %

  
	
  • 70.01 - 80.00

  	
   

  	
  50

  	
  %

  
	
  • 70.00 - Below

  	
   

  	
  55

  	
  %

  

 

FICO BELOW REQUIRED BUT GREATER THAN 580

 

If the loan is a full/alt doc and the FICO is
below the listed requirement and greater than 580 the maximum LTV ratios apply
as if a NINA loan, and a DISSCO score of 750 or greater for both credit and
property is required to be acceptable. WAC I can supply DISSCO information.

 

F-6

 

	
  MINIMUM FICO (unless
  otherwise noted)

  	
   

  	
   

  	
   

  	
   

  
	
  FIXED (NO SECONDARY
  FINANCING)

  	
  620

  	
   

  	
  ARM (NO SECONDARY
  FINANCING)

  	
  640

  
	
  FIXED (WITH SECONDARY
  FINANCING)

  	
  680

  	
   

  	
  ARM (WITH SECONDARY
  FINANCING)

  	
  680

  

 

 

	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN
AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN
AMOUNT

  	
   

  
	
  95

  	
  %

  	
  100

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  95

  	
  %

  	
  100

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  90

  	
  %

  	
  100

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  
	
  90

  	
  %

  	
  100

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  90

  	
  %

  	
  100

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  85

  	
  %

  	
  100

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  
	
  85

  	
  %

  	
  100

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  85

  	
  %

  	
  100

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  80

  	
  %

  	
  100

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  
	
  80

  	
  %

  	
  100

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  80

  	
  %

  	
  100

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  65

  	
  %

  	
  100

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  
	
  75

  	
  %

  	
  100

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  65

  	
  %

  	
  100

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  60

  	
  %

  	
  100

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  
	
  70

  	
  %

  	
  100

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  60

  	
  %

  	
  100

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  50

  	
  %

  	
  100

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  
	
  60

  	
  %

  	
  100

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  50

  	
  %

  	
  100

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  55

  	
  %

  	
  100

  	
  %

  	
  $

  	
  2,000,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  
	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  
	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  
	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  
	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  
	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  
	
  70

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  
	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  
	
  55

  	
  %

  	
  80

  	
  %

  	
  $

  	
  2,000,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  
	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  
	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  
	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  
	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  
	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  
	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  
	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  

 

F-7

 

	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  
	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  
	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  
	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  
	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  
	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  
	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  
	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  
	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  
	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  
	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  
	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  
	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  
	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  
	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  

 

	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  
	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  
	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  
	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  
	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  
	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  
	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  
	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  

 

F-8

 

	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  
	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  
	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  
	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  
	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  
	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  
	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  
	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  
	
  95

  	
  %

  	
  95

  	
  %

  	
  $

  	
  350,000.00

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Not Allowed

  	
   

  	
   

  	
   

  
	
  90

  	
  %

  	
  90

  	
  %

  	
  $

  	
  400,000.00

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  450,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  85

  	
  %

  	
  85

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,000,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
  Minimum
  FICO 700

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  	
  LTV

  	
   

  	
  CLTV

  	
   

  	
  MAX LOAN

  AMOUNT

  	
   

  	
  MAX CASH

  OUT

  	
   

  
	
  80

  	
  %

  	
  80

  	
  %

  	
  $

  	
  500,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Not Allowed

  	
   

  	
   

  	
   

  
	
  75

  	
  %

  	
  80

  	
  %

  	
  $

  	
  650,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  65

  	
  %

  	
  80

  	
  %

  	
  $

  	
  750,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  60

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  50

  	
  %

  	
  80

  	
  %

  	
  $

  	
  1,500,000.00

  	
   

  	
  No Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

F-9

 

	
  MAX
  CLTV

  	
   

  	
  95

  	
  %

  	
  MAX
  CLTV

  	
   

  	
  95

  	
  %

  	
  MAX
  CLTV

  	
   

  	
  95

  	
  %

  	
  MAX
  CLTV

  	
   

  	
  95

  	
  %

  	
  MAX
  CLTV

  	
   

  	
  95

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MAX
  CLTV

  	
   

  	
  90

  	
  %

  	
  NOT
  ALLOWED

  	
   

  	
  NOT
  ALLOWED

  	
   

  	
  NOT
  ALLOWED

  	
   

  	
  NOT
  ALLOWED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MAX
  CLTV

  	
   

  	
  80

  	
  %

  	
  MAX
  CLTV

  	
   

  	
  80

  	
  %

  	
  MAX
  CLTV

  	
   

  	
  80

  	
  %

  	
  MAX
  CLTV

  	
   

  	
  80

  	
  %

  	
  MAX
  CLTV

  	
   

  	
  80

  	
  %

  

 

F-10

 

GUARANTY

 

AGREEMENT OF GUARANTY (this
“Guaranty”) made as of this 8th day of August 2002, by the undersigned hereof
(“Guarantor”) to WAREHOUSEONE ACCEPTANCE COMPANY, LLC, having an office at 340
Scotch Road, W. Trenton, New Jersey 08628, (together with its successors
and assigns, the “Company”).

 

WITNESSETH:

 

WHEREAS, the Company and
AVAILENT MORTGAGE, INC., a Texas corporation, (“Seller”) have entered into a
Master Loan Purchase Agreement dated of even date herewith (the “Loan Purchase
Agreement”);

 

WHEREAS, Guarantor is a
principal in Seller and has derived, or expects to derive, a financial or other
benefit from the transactions described in the Loan Purchase Agreement; and

 

WHEREAS, as an inducement to
the Company to execute the Loan Purchase Agreement and acquire loans from
Seller, Guarantor has agreed to execute this Guaranty;

 

NOW, THEREFORE, in
consideration of the premises and as part of the consideration for the
execution of the Loan Purchase Agreement, Guarantor hereby unconditionally
covenants and agrees with the Company as follows:

 

Section 1                Guaranty.

 

1.1 Guarantor
unconditionally and irrevocably guarantees to the Company in an unlimited
amount the due and punctual payment and/or performance of all Seller’s
obligations under the Loan Purchase Agreement (the “Obligations”). In case of
the failure of Seller punctually to make any payment, or to perform any act, in
respect of the Obligations, Guarantor hereby agrees to cause such payment to be
made, or such act to be performed, punctually when and as the same shall become
due, or necessary to meet the Obligations as if such payment or performance
were made by Seller.

 

1.2 GUARANTOR AGREES THAT
THIS GUARANTY CONSTITUTES A GUARANTY OF PAYMENT WHEN DUE AND NOT OF COLLECTION
AND WAIVES ANY RIGHT TO REQUIRE THAT ANY RESORT BE HAD BY THE COMPANY TO SELLER
OR TO ANY SECURITY HELD FOR PAYMENT OF THE OBLIGATIONS.

 

Section 2                No Discharge.

 

2.1 The obligations of
Guarantor under this Guaranty shall not be discharged or impaired or otherwise
affected by, and Guarantor hereby expressly waives and surrenders any defense
to Guarantor’s liability hereunder based upon, any of the following:

 

(a) the failure of the
Company to assert any claim or demand or to enforce any right or remedy against
Seller under the provisions of the Loan Purchase Agreement, or any other
agreement, or otherwise;

 

 

(b) any extension or renewal
of any of the Obligations, in whole or in part, without notice to, or further
assent from, Guarantor;

 

(c) the rescission, waiver,
amendment or modification of any of the terms or provisions of the Loan
Purchase Agreement;

 

(d) the release of any
security at any time held by the Company to secure performance of the
Obligations;

 

(e) any sale, assignment or
transfer by Seller or the Company of their respective rights and obligations
under the Loan Purchase Agreement, in whole or in part;

 

(f) any change in the
ownership of Seller;

 

(g) the voluntary or
involuntary liquidation, dissolution, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of Seller or Guarantor, or any other similar
proceeding affecting the status, existence, assets or obligations of Seller or
any other Guarantor, or the limitation of damages for the breach of, or the
disaffirmation of, the Loan Purchase Agreement in any such proceeding;

 

(h) the release of Seller
from performance or observance of any of the agreements, terms or conditions
contained in the Loan Purchase Agreement by operation of law, whether made with
or without notice to Guarantor;

 

(i) any previous recovery
from Seller or Guarantor to the extent any amounts recovered were repaid to
Seller or Guarantor;

 

(j) the accuracy or
inaccuracy of any representations or warranties made by Seller in the Loan
Purchase Agreement or by Guarantor in this Guaranty;

 

(k) forbearance or delay or
other act or omission of the Company or its failure to proceed promptly or
otherwise, or by reason of any action taken or omitted or circumstance which
may or might vary the risk or affect the rights or remedies of Guarantor, or by
reason of any further dealings between Seller and the Company, whether relating
to the Loan Purchase Agreement or otherwise; or

 

(l) any other circumstance
that might otherwise constitute a legal or equitable discharge of Seller
(including a discharge in bankruptcy) or of Guarantor, it being the purpose,
intent and understanding of Guarantor that Guarantor’s obligations hereunder
are absolute and unconditional under any and all circumstances.

 

Section 3                Additional Waivers.

 

3.1 To the fullest extent
permitted by applicable law, Guarantor waives the following:

 

(a) notice of acceptance;

 

(b) notices of default;

 

2

 

(c) any and all rights or
claims of right to cause a marshaling of Seller’s assets or to require that the
Company shall institute any action or proceedings at law or in equity against
Seller, or anyone else, or exhaust Guarantor’s remedies against Seller, or
anyone else, in respect of the Loan Purchase Agreement as a condition precedent
to bringing an action against Guarantor upon this Guaranty; and

 

(d) all other notices of
every kind and description now or hereafter provided by any statute or rule of
law applicable to this Guaranty.

 

Section 4                Representations.

 

Guarantor represents and
warrants to the Company that:

 

4.1 no approval is required
from any Regulatory Authority, nor from any trustee or holder of the
obligations of Guarantor, with respect to the execution of this Guaranty by
Guarantor and the payment and performance by Guarantor of all of Guarantor’s
obligations hereunder;

 

4.2 this Guaranty constitutes
a legal, valid and binding obligation of Guarantor, enforceable in accordance
with its terms, and the execution and performance of this Guaranty will not
violate any Requirement of Law applicable to Guarantor, or constitute a default
under any Material Agreement, or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of Guarantor’s
property of assets other than those which may arise in favor of the Company;

 

4.3 there is no Litigation
pending, or to the knowledge of Guarantor, threatened, which, if determined
adversely, would have a Material Adverse Effect;

 

4.4 no information, exhibit
or report furnished by Guarantor to the Company in connection with the
negotiation of this Guaranty contained as of the date thereof, or, if there be
no such date, the date of furnishing thereof, any material misstatement of fact
or omission of either a material fact or any fact necessary to make the
statements contained therein not misleading; and

 

4.5 Guarantor has filed all
United States income tax returns which have been required to be filed, and has
paid, or has made provisions for the payment of, all taxes which have or may
become due pursuant to said returns or pursuant to any assessment received by
Guarantor, except such taxes, if any, as are being contested in good faith and
as to which adequate reserves have been provided.

 

Section 5                Covenants.

 

Guarantor hereby covenants
that:

 

5.1 no assets of any kind
will be assigned, conveyed, pledged or encumbered to any related or third party
except upon the payment of full and fair consideration, it being understood
that any such assignment, conveyance, pledge or encumbrance for less than full
and fair consideration shall constitute a default hereunder, and under all the
documents evidencing the Obligations; and

 

3

 

5.2 Guarantor will furnish
the Company and any assignee of the Company with reasonable promptness, such
data and information as to the business, operations, properties, assets or
prospects or the condition, financial or otherwise, of Guarantor, or the
ability of Guarantor to perform Guarantor’s obligations under this Guaranty;
and

 

5.3 Guarantor will deliver
or cause to be delivered to the Company as soon as practicable after the end of
each tax year and in any event within ninety (90) days thereafter, such
financial statements and tax returns as the Company shall request.

 

Section 6                Subordination of Rights Against
Seller.

 

6.1 In the event that for
any reason whatsoever Seller is now, or shall hereafter become, indebted to
Guarantor, including, without limitation, by reason of payment by Guarantor to
the Company of any sums hereunder, Guarantor agrees that the amount of such
sums and of such indebtedness and all interest thereon shall at all times be
subordinate as to lien, time of payment and in all other respects to the prior
indefeasible payment of the Obligations, and that Guarantor shall not be
entitled to enforce or receive payment thereof until all sums owing to the
Company have been paid. Nothing herein contained is intended or shall be
construed to give Guarantor any right or subrogation in or under the Loan
Purchase Agreement, notwithstanding any payments made by Guarantor under this
Guaranty.

 

Section 7                Indemnification.

 

7.1 Guarantor hereby agrees
to indemnify the Company against all loss, cost and expense caused by the
assertion by Seller of any defense to the Obligations under the Loan Purchase
Agreement or the assertion by Guarantor of any defense to Guarantor’s
obligations under this Guaranty.

 

Section 8                Termination; Reinstatement.

 

8.1 Subject to the
provisions of subsection 8.2 hereof, this Guaranty shall terminate upon the
termination of the Loan Purchase Agreement and performance in full of all outstanding
Obligations in accordance with the terms and provisions of the Loan Purchase
Agreement and this Guaranty, respectively.

 

8.2 Should the Company be
obligated by any bankruptcy or other law to repay to Seller, Guarantor or to
any trustee, receiver or other representative of Seller or Guarantor, any
amounts previously paid in respect of and/or pursuant to the Note, the Loan
Purchase Agreement or this Guaranty, then this Guaranty shall be reinstated to
include the amount of such repayment. The Company shall not be required to
litigate or otherwise dispute its obligation to make such repayments if the
Company, in good faith and on the advice of counsel, believes that such
obligation exists.

 

Section 9                Notices.

 

9.1 To be effective, all
notices, consents, approvals, responses or other communications required or
desired to be given hereunder must be in writing (it being understood that
telex and telecopy communications shall be deemed to be “writings” for the
purposes hereof, and shall be deemed given when delivered if delivered in a
sealed envelope by hand, or when

 

4

 

received if given by telex or telecopy, or five (5) days after mailing
if sent by United States mail, registered or certified return receipt requested,
postage prepaid, to the following addresses:

 

	
   

  	
  If to Guarantor:

  	
   

  	
  to the address set forth
  on  the signature page of this
  Agreement;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to the Company:

  	
   

  	
  to the address set forth
  on  page 1 of this Agreement;

  
	
   

  	
   

  	
   

  	
  Attention: G. Mark Loreto

  

 

or to such other address or telex or telecopier number as the party to
be served may direct by written notice to the other party in the manner
hereinabove provided.

 

Section 10              Miscellaneous.

 

10.1 If any of the
provisions of this Guaranty, or the application thereof to any persons or
circumstances, shall, to any extent, be held invalid or unenforceable, the
remainder of this Guaranty, or the application of such provision or provisions
to persons or circumstances other than those as to whom or which it is held
invalid or unenforceable, shall not be affected thereby, and every provision of
this Guaranty shall be valid and enforceable to the fullest extent permitted by
law.

 

10.2 This Guaranty shall be
binding upon the respective heirs, legal representatives, successors and
assigns of Guarantor and shall inure to the benefit of the Company and its
successors and assigns.

 

10.3 All uses herein of the
masculine gender or of singular or plural terms shall be deemed to include uses
of the feminine or neuter gender or plural or singular terms, as the context
may require.

 

10.4 This Guaranty, in all
respects, including, without limitation, all matters of construction,
interpretation, validity, enforcement and performance shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New
York, without regard to its principles of conflicts of law.

 

10.5 This Guaranty has been
fully reviewed and negotiated by the parties hereto and their respective
counsel. Accordingly, in interpreting this Guaranty, no weight shall be placed
upon which party hereto or its counsel drafted the provision being interpreted.

 

10.6 GUARANTOR IRREVOCABLY
CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST GUARANTOR UNDER, ARISING
OUT OF OR IN ANY MANNER RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY COURT
OF THE STATES OF NEW JERSEY OR NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK. GUARANTOR, BY THE EXECUTION AND DELIVERY
OF THIS GUARANTY, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. GUARANTOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION
OR PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION,

 

5

 

IMPROPER VENUE OR FORUM NON CONVENIENS OR ANY SUCH ACTION OR PROCEEDING
TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE OTHER THAN
THE STATE OF NEW YORK UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE LAWS
OF THE STATE OF NEW YORK.

 

10.7 IF ANY ACTION, SUIT OR
PROCEEDING WHICH EITHER DIRECTLY OR INDIRECTLY INVOLVES THIS GUARANTY IS
COMMENCED, GUARANTOR WAIVES GUARANTOR’S RIGHT TO ANY JURY TRIAL IN CONNECTION
THEREWITH.

 

IN WITNESS WHEREOF,
Guarantor has executed this Guaranty as of the date first above written.

 

	
   

  	
  By:

  	
   /s/ MICHAEL L. BANES

  	
   

  
	
   

  	
   

  	
  Name: Michael L. Banes,
  President

  
	
   

  	
   

  	
  Address: 2720 Stemmons
  Frwy.

  
	
  Sworn to before me this

  	
   

  	
  Suite 600

  
	
  14th day of August, 2002.

  	
   

  	
  Dallas, TX 75207

  
	
   

  	
   

  	
  Social Security No.
  ###-##-####

  
	
   

  	
   

  	
   

  
	
  /s/ PEGGY J. PAVLECK

  	
   

  	
   

  	
   

  
	
  NOTARY PUBLIC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (NOTARY
  SEAL)

  	
   

  	
   

  
					

 

6

 

CORPORATE
GUARANTY

 

AGREEMENT OF GUARANTY (this
“Guaranty”) made this l3th day of August 2002, by the undersigned hereof
(“Guarantor”) to WAREHOUSEONE ACCEPTANCE COMPANY, LLC, having an office at 340
Scotch Road, W. Trenton, New Jersey 08628 (together with its successors and
assigns, the “Company”).

 

WITNESSETH:

 

WHEREAS, the Company and
AVAILENT MORTGAGE, INC. (“Seller”) have entered into a Master Loan Purchase
Agreement dated of even date herewith (the “Loan Purchase Agreement”); and

 

WHEREAS, Guarantor is an
affiliate of Seller and has derived, or expects to derive, a financial or other
benefit from the transactions described in the Loan Purchase Agreement; and

 

WHEREAS, as an inducement to
the Company to execute the Loan Purchase Agreement and acquire loans from
Seller, Guarantor has agreed to execute this Guaranty;

 

NOW, THEREFORE, in
consideration of the premises and as part of the consideration for the
execution of the Loan Purchase Agreement, Guarantor hereby unconditionally
covenants and agrees with the Company as follows:

 

Section 1           Guaranty.

 

1.1 Guarantor
unconditionally and irrevocably guarantees to the Company in an unlimited
amount the due and punctual payment and/or performance of all Seller’s
obligations under the Loan Purchase Agreement (the “Obligations”). In case of
the failure of Seller punctually to make any payment, or to perform any act, in
respect of the Obligations, Guarantor hereby agrees to cause such payment to be
made, or such act to be performed, punctually when and as the same shall become
due, or necessary to meet the Obligations as if such payment or performance
were made by Seller.

 

1.2 GUARANTOR AGREES THAT
THIS GUARANTY CONSTITUTES A GUARANTY OF PAYMENT WHEN DUE AND NOT OF COLLECTION
AND WAIVES ANY RIGHT TO REQUIRE THAT ANY RESORT BE HAD BY THE COMPANY TO SELLER
OR TO ANY SECURITY HELD FOR PAYMENT OF THE OBLIGATIONS.

 

Section 2          No Discharge.

 

2.1 The obligations of
Guarantor under this Guaranty shall not be discharged or impaired or otherwise
affected by, and Guarantor hereby expressly waives and surrenders any defense
to Guarantor’s liability hereunder based upon, any of the following:

 

(a) the failure of the
Company to assert any claim or demand or to enforce any right or remedy against
Seller under the provisions of the Loan Purchase Agreement, or any other
agreement, or otherwise;

 

 

(b) any extension or renewal
of any of the Obligations, in whole or in part, without notice to, or further
assent from, Guarantor;

 

(c) the rescission, waiver,
amendment or modification of any of the terms or provisions of the Loan
Purchase Agreement;

 

(d) the release of any
security at any time held by the Company to secure performance of the
Obligations;

 

(e) any sale, assignment or
transfer by Seller or the Company of their respective rights and obligations
under the Loan Purchase Agreement, in whole or in part;

 

(f) any change in the ownership
of Seller;

 

(g) the voluntary or
involuntary liquidation, dissolution, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of Seller or Guarantor, or any other similar
proceeding affecting the status, existence, assets or obligations of Seller or
any other Guarantor, or the limitation of damages for the breach of, or the
disaffirmation of, the Loan Purchase Agreement in any such proceeding;

 

(h) the release of Seller
from performance or observance of any of the agreements, terms or conditions
contained in the Loan Purchase Agreement by operation of law, whether made with
or without notice to Guarantor;

 

(i) any previous recovery
from Seller or Guarantor to the extent any amounts recovered were repaid to
Seller or Guarantor;

 

(j) the accuracy or
inaccuracy of any representations or warranties made by Seller in the Loan
Purchase Agreement or by Guarantor in this Guaranty;

 

(k) forbearance or delay or
other act or omission of the Company or its failure to proceed promptly or
otherwise, or by reason of any action taken or omitted or circumstance which
may or might vary the risk or affect the rights or remedies of Guarantor, or by
reason of any further dealings between Seller and the Company, whether relating
to the Loan Purchase Agreement or otherwise; or

 

(l) any other circumstance
that might otherwise constitute a legal or equitable discharge of Seller
(including a discharge in bankruptcy) or of Guarantor, it being the purpose,
intent and understanding of Guarantor that Guarantor’s obligations hereunder
are absolute and unconditional under any and all circumstances.

 

Section 3            Additional Waivers.

 

3.1 To the fullest extent
permitted by applicable law, Guarantor waives the following:

 

(a) notice of acceptance;

 

2

 

(b) notices of default;

 

(c) any and all rights or
claims of right to cause a marshaling of Seller’s assets or to require that the
Company shall institute any action or proceedings at law or in equity against
Seller, or anyone else, or exhaust Guarantor’s remedies against Seller, or
anyone else, in respect of the Loan Purchase Agreement as a condition precedent
to bringing an action against Guarantor upon this Guaranty; and

 

(d) all other notices of
every kind and description now or hereafter provided by any statute or rule of
law applicable to this Guaranty.

 

Section 4         Representations.

 

Guarantor represents and
warrants to the Company that:

 

4.1 no approval is required
from any Regulatory Authority, nor from any trustee or holder of the
obligations of Guarantor, with respect to the execution of this Guaranty by
Guarantor and the payment and performance by Guarantor of all of Guarantor’s
obligations hereunder;

 

4.2 this Guaranty
constitutes a legal, valid and binding obligation of Guarantor, enforceable in
accordance with its terms, and the execution and performance of this Guaranty
will not violate any Requirement of Law applicable to Guarantor, or constitute
a default under any Material Agreement, or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of
Guarantor’s property of assets other than those which may arise in favor of the
Company;

 

4.3 there is no Litigation
pending, or to the knowledge of Guarantor, threatened, which, if determined
adversely, would have a Material Adverse Effect;

 

4.4 no information, exhibit
or report furnished by Guarantor to the Company in connection with the
negotiation of this Guaranty contained as of the date thereof, or, if there be
no such date, the date of furnishing thereof, any material misstatement of fact
or omission of either a material fact or any fact necessary to make the
statements contained therein not misleading; and

 

4.5 Guarantor has filed all
United States income tax returns which have been required to be filed, and has
paid, or has made provisions for the payment of, all taxes which have or may
become due pursuant to said returns or pursuant to any assessment received by
Guarantor, except such taxes, if any, as are being contested in good faith and
as to which adequate reserves have been provided.

 

Section 5          Representations.

 

Guarantor represents and
warrants to the Company that:

 

3

 

5.1 Guarantor is a limited
liability company, duly organized and in good standing under the laws of the
State of its formation; it has the power to execute and perform this Guaranty
and it has duly authorized the execution and performance of this Guaranty;

 

5.2 Guarantor will furnish
the Company and any assignee of the Company with reasonable promptness, such
data and information as to the business, operations, properties, assets or
prospects or the condition, financial or otherwise, of Guarantor, or the
ability of Guarantor to perform Guarantor’s obligations under this Guaranty;
and

 

5.3 Guarantor will deliver
or cause to be delivered to the Company as soon as practicable after the end of
each tax year and in any event within ninety (90) days thereafter, such
financial statements and tax returns as the Company shall request.

 

5.4 Guarantor will maintain
a Tangible Net Worth as defined in the Master Mortgage Loan Purchase Agreement
entered into between the Company and the Seller of one million dollars and
shall maintain a Leverage ratio as defined in the Master Mortgage Loan Purchase
Agreement entered into between the Company and the Seller of not more than
25:1.

 

Section 6       Subordination of Rights Against Seller.

 

6.1 In the event that for
any reason whatsoever Seller is now, or shall hereafter become, indebted to
Guarantor, including, without limitation, by reason of payment by Guarantor to
the Company of any sums hereunder, Guarantor agrees that the amount of such
sums and of such indebtedness and all interest thereon shall at all times be
subordinate as to lien, time of payment and in all other respects to the prior
indefeasible payment of the Obligations, and that Guarantor shall not be
entitled to enforce or receive payment thereof until all sums owing to the
Company have been paid. Nothing herein contained is intended or shall be
construed to give Guarantor any right or subrogation in or under the Loan
Purchase Agreement, notwithstanding any payments made by Guarantor under this
Guaranty.

 

Section 7           Indemnification.

 

7.1 Guarantor hereby agrees
to indemnify the Company against all loss, cost and expense caused by the
assertion by Seller of any defense to the Obligations under the Loan Purchase
Agreement or the assertion by Guarantor of any defense to Guarantor’s
obligations under this Guaranty.

 

Section 8        Termination; Reinstatement.

 

8.1 Subject to the
provisions of subsection 8.2 hereof, this Guaranty shall terminate upon the
termination of the Loan Purchase Agreement and performance in full of all
outstanding Obligations in accordance with the terms and provisions of the Loan
Purchase Agreement and this Guaranty, respectively.

 

8.2 Should the Company be
obligated by any bankruptcy or other law to repay to Seller, Guarantor or to
any trustee, receiver or other representative of Seller or Guarantor, any
amounts previously paid in respect of and/or pursuant to the Note, the Loan
Purchase Agreement or this Guaranty, then this Guaranty shall be reinstated to
include the amount of such repayment.

 

4

 

The Company shall not be
required to litigate or otherwise dispute its obligation to make such
repayments if the Company, in good faith and on the advice of counsel, believes
that such obligation exists.

 

Section 9       Notices.

 

9.1 To be effective, all
notices, consents, approvals, responses or other communications required or
desired to be given hereunder must be in writing (it being understood that
telex and telecopy communications shall be deemed to be “writings” for the
purposes hereof, and shall be deemed given when delivered if delivered in a
sealed envelope by hand, or when received if given by telex or telecopy, or
five (5) days after mailing if sent by United States mail, registered or
certified return receipt requested, postage prepaid, to the following
addresses:

 

	
   

  	
  If to Guarantor:

  	
   

  	
  to the address set forth
  on the signature page of this Agreement;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to the Company:

  	
   

  	
  to the address set forth
  on  page 1 of this Agreement;

  
	
   

  	
   

  	
   

  	
  Attention: G. Mark Loreto

  
	
   

  	
   

  	
   

  	
  Telecopy No.: (609)
  671-0661

  

 

or to such other address or telex or telecopier number as the party to
be served may direct by written notice to the other party in the manner
hereinabove provided.

 

Section 10        Miscellaneous.

 

10.1 If any of the provisions
of this Guaranty, or the application thereof to any persons or circumstances,
shall, to any extent, be held invalid or unenforceable, the remainder of this
Guaranty, or the application of such provision or provisions to persons or
circumstances other than those as to whom or which it is held invalid or
unenforceable, shall not be affected thereby, and every provision of this
Guaranty shall be valid and enforceable to the fullest extent permitted by law.

 

10.2 This Guaranty shall be
binding upon the respective heirs, legal representatives, successors and
assigns of Guarantor and shall inure to the benefit of the Company and its
successors and assigns.

 

10.3 All uses herein of the
masculine gender or of singular or plural terms shall be deemed to include uses
of the feminine or neuter gender or plural or singular terms, as the context
may require.

 

10.4 This Guaranty, in all
respects, including, without limitation, all matters of construction,
interpretation, validity, enforcement and performance shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New
York, without regard to its principles of conflicts of law.

 

5

 

10.5 This Guaranty has been
fully reviewed and negotiated by the parties hereto and their respective
counsel. Accordingly, in interpreting this Guaranty, no weight shall be placed
upon which party hereto or its counsel drafted the provision being interpreted.

 

10.6 GUARANTOR IRREVOCABLY
CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST GUARANTOR UNDER, ARISING
OUT OF OR IN ANY MANNER RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY COURT
OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK. GUARANTOR, BY THE EXECUTION AND DELIVERY OF THIS
GUARANTY, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING. GUARANTOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION
OR PROCEEDING BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS OR ANY SUCH ACTION OR PROCEEDING TO ASSERT ANY
DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE OTHER THAN THE STATE OF
NEW YORK UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE LAWS OF THE STATE
OF NEW YORK.

 

10.7 IF ANY ACTION, SUIT OR
PROCEEDING WHICH EITHER DIRECTLY OR INDIRECTLY INVOLVES THIS GUARANTY IS
COMMENCED, GUARANTOR WAIVES GUARANTOR’S RIGHT TO ANY JURY TRIAL IN CONNECTION THEREWITH.

 

IN WITNESS WHEREOF,
Guarantor has executed this Guaranty as of the date first above written.

 

	
  (NOTARY SEAL)

  	
  AVAILENT FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
  By: /s/ PATRICK A.
  MCGEENEY

  	
   

  
	
   

  	
  Name: Patrick A. McGeeney

  
	
  Sworn to before me this

  	
  Title: President

  
	
  21st day of August, 2002.

  	
  Address:

  	
  2720 Stemmons Frwy

  
	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
  Dallas, TX 75207

  
	
   

  	
   

  	
   

  
	
   

  	
  Federal Tax ID No.
  75-2921626  

  
	
   

  	
   

  
	
  /s/
  PEG J. PAVLECK

  	
   

  	
   

  
	
  Notary Public

  	
   

  
					

 

6Exhibit 4.2

 

AGREEMENT REGARDING STOCK AND WARRANTS

 

This Agreement Regarding
Stock And Warrants (“Agreement”) is entered into by and between Availent
Financial, Inc., a Delaware Corporation with its principal places of business
located at 2720 Stemmons Freeway, South Tower, Suite 600, Dallas, Texas 75207,
the surviving corporation resulting from a merger between Availent Financial,
Inc., (“Availent Financial”) a Texas Corporation, and SeaCrest Industries, Inc.
(“Seacrest”), a Delaware Corporation which was finalized on December 4, 2002,
(“Availent”) and Bergstrom Investment Management, L.L.C. (“Bergstrom”), a
Delaware Limited Liability Company whose address is 714 Roger Avenue,
Kenilworth, IL 60043 as follows:

 

RECITALS:

 

WHEREAS, Availent Financial,
Availent and Bergstrom have heretofore entered into and are entering into
certain loan agreements and amendments to such loan agreements pursuant to
which Bergstrom has lent to Availent Financial or Availent during the past
twelve month period the sum of One Million Three Hundred Fifty Five Thousand
Dollars ($1,355,000); and,

 

WHEREAS, at the time the
initial loan was made by Bergstrom to Availent Financial on or about February
26, 2002, in the original principal amount of Five Hundred Thousand Dollars
($500,000), Availent Financial and/or its shareholders had purchased the
controlling shares of SeaCrest and was negotiating a merger agreement with
Seacrest which would result in Seacrest becoming the surviving shareholder and
with the intention, immediately following the merger, of Seacrest changing its
name to Availent Financial, Inc.; and,

 

WHEREAS, in consideration
for such loans by Bergstrom, Availent Financial and/or Availent has delivered
to Bergstrom certain promissory notes and has agreed to pay certain amounts of
interest, commitment fees, extension fees and other charges and expenses and
has further agreed to issue and has issued, certain shares of Seacrest’s common
stock and warrants for Bergstrom to purchase additional shares of Seacrest
common stock at certain prices as described in the various loan agreements and
warrants; and,

 

WHEREAS, the merger between
Seacrest and Availent Financial became effective on December 4, 2002, and
Seacrest’s name was immediately changed to Availent; and,

 

WHEREAS, Availent has taken
the necessary steps to effectuate a reverse split in its authorized and
outstanding shares of stock which will have the effect of reducing each ten
shares of its common stock to one share, i.e., a 10 to 1 split (“Reverse
Split”), which Reverse Split is anticipated to become effective no later than
January 7, 2003; and,

 

WHEREAS, Availent is in the
process of registering certain shares of its common

 

1

 

stock with the Securities And Exchange Commission (“S.E.C.”) for sale
to the public and is in the process of becoming listed the NASDAQ in order to
have a listing under which the shares of registered stock can be sold; and,

 

WHEREAS, the price at which
Availent initially anticipated selling its stock to the public pursuant to a
registration with the S.E.C. and a listing on NASDAQ has changed following the
decision to effectuate a Reverse Split of its stock and as a result of other
circumstances; and,

 

WHEREAS, in view of the
various changes as described above during the period of time that Bergstrom has
been issued shares of stock and warrants and has received commitments from
Availent or its predecessor to issue shares of stock and warrants and the
parties desire that the “economic value” to Bergstrom remain and was bargained
between the parties at the time the various agreements were entered into and
the loans were made, the parties desire to clarify and reaffirm their
understandings and agreements as follows:

 

1.  LOAN AGREEMENT RE: $500,000 LOAN DATED FEBRUARY 26, 2002.
Concurrently with Availent Financial’s purchase of the controlling interest in
Seacrest but prior to the date the merger between the two companies became
effective, Bergstrom and Availent Financial entered into a Loan Agreement dated
February 26, 2002, whereby Bergstrom lent to Availent the sum of $500,000. As
part of the consideration for Bergstrom making the loan, Availent Financial
caused Seacrest to issue to Bergstrom the following:

 

A.                                   250,000 shares of Seacrest common stock that
was registered with the S.E.C. as stock freely tradeable in the public market;
and,

 

B.                                     Warrants to purchase 250,000 shares of
Seacrest common stock at any time within 36 months from the date the Warrants
were issued at a purchase price equal to fifty percent (50%) of the assumed
fair market value of $2.00 per share at the time Bergstrom might exercise the
Warrants.

 

The Loan Agreement regarding
the $500,000 Loan was amended by a First Amendment To Loan Agreement dated
December 27,2002 which was entered into by and between Availent and Bergstrom
for the purpose of extending the Maturity Date of the loan from December
31,2002, to April 30,2003, and, with Availent’s prepayment of interest for an
extension period by January 31, 2003, for the extension of the loan from April
30, 2003 to June 30, 2003.

 

Although no more stock nor
warrants were issued to Bergstrom pursuant to the Loan Agreement or the First
Amendment To Loan Agreement, another agreement was entered into between
Availent Financial and Bergstrom on November 12, 2002, which is more
specifically described in Paragraph 3 below. Certain provisions and covenants
contained of such loan agreement contained anti-dilution provisions and value
guarantees

 

2

 

with regard to the shares of stock and warrants that were held by
Bergstrom as of the date of the loan agreement, including the stock and
warrants held by Bergstrom as a result of the $500,000 loan described in this
paragraph. Accordingly, Bergstrom gained such protection notwithstanding the
merger pending at the time this Loan agreement was entered into and
notwithstanding the Reverse Split that was anticipated at the time the First
Amendment To Loan Agreement was entered into.

 

2.  LOAN AGREEMENT RE: $75,000 LOAN DATED OCTOBER 15, 2002. Bergstrom
and Availent Financial entered into a Loan Agreement dated October 15, 2002,
whereby Bergstrom lent to Availent the sum of $75,000. As part of the
consideration for Bergstrom making the loan, Availent Financial caused Seacrest
to issue to Bergstrom the following:

 

Warrants to purchase 43,000
shares of Seacrest common stock at any time within 36 months from the date the
Warrants were issued at a purchase price equal to $0.25 each based upon an
assumed fair market value of $2.00 per share at such time as Bergstrom might
exercise the Warrants.

 

The Loan Agreement regarding
the $75,000 Loan was amended by a First Amendment To Loan Agreement dated
December 27,2002 which was entered into by and between Availent and Bergstrom for
the purpose of extending the Maturity Date of the loan from December 31, 2002,
to April 30, 2003, and, with Availent’s prepayment of interest for an extension
period by January 31, 2003, for the extension of the loan from April 30, 2003
to June 30, 2003. As additional consideration for Bergstrom agreeing to renew
and extend the $75,000 Loan, Availent, as the surviving corporation resulting
from the merger between Availent Financial and Seacrest, agreed to issue
Warrants to purchase 4,300 shares of Availent common stock at any time within
36 months from the date the Warrants were issued at a purchase price equal to
$2.50 per share based upon an assumed fair market value of $5.00 per share at
such time the shares are offered for sale pursuant to a registration of such
shares for sale in a public market with the S.E.C.

 

Additionally, certain
anti-dilution provisions and value guarantees were contained in a subsequent
agreement entered into between Bergstrom and Availent on November 12, 2002,
with regard to the shares of stock and warrants that were held by Bergstrom as
of the date of that loan agreement, including the warrants held by Bergstrom as
a result of the $75,000 loan described in this paragraph. Accordingly,
Bergstrom gained such protection notwithstanding the merger pending at the time
this Loan agreement was entered into and notwithstanding the Reverse Split that
was anticipated at the time the First Amendment To Loan Agreement was entered
into.

 

3.  LOAN AGREEMENT RE: $280,000 LOAN DATED NOVEMBER 12, 2002. Prior
to the date the merger between the Availent Financial and Seacrest became
effective, Bergstrom and Availent Financial entered into a Loan Agreement dated
November 12, 2002, whereby Bergstrom lent to Availent the sum of $280,000. As
part of the consideration for Bergstrom making the loan, Availent Financial
caused Seacrest to issue to Bergstrom the following:

 

3

 

A.                                   50,000 shares of Seacrest common stock that
was registered with the S.E.C. as stock freely tradeable in the public market
with the provision that Bergstrom would be entitled to an additional 10,000
shares of stock if certain contingencies did not occur by December 31, 2002;
and,

 

B.                                     Warrants to purchase 150,000 shares of common
stock of Seacrest (or the corporation surviving the anticipated merger) at any
time within 36 months from the date the Warrants were issued at a purchase
price equal to eighty percent (80%) of the assumed fair market value of $5.00
per share at the time Bergstrom might exercise the Warrants with the provision
that Bergstrom would be entitled to Warrants for an additional 30,000 shares if
certain contingencies did not occur by December 31, 2002.

 

The Loan Agreement regarding
the $280,000 Loan contained certain anti-dilution provisions that assured
Bergstrom that its ownership percentage in the surviving corporation
(Availent), would be the same as its ownership percentage in Seacrest prior to
the merger and that it would be issued additional shares and warrants, if necessary
to assure Bergstrom that it maintained the same economic value it had been
assured through the assumptions of share value that had been made at the time
the stock and warrants had been issued pursuant to prior agreements when an
assumption was made that the fair market value at the time the stock was sold
or the Warrants exercised would be $2.00 per share. Availent Financial agreed
that, if necessary, following the merger and the Reverse Split, Bergstrom would
be issued additional shares and/or additional Warrants to ensure that such
anti-dilution protections were received by Bergstrom and that, if necessary, at
the time of an offering of the stock for sale through a registration with the
S.E.C., if the initial price at which the stock was offered was not equal to or
greater than $5.00 per share, Bergstrom would be issued additional stock and
Warrants to off set any deficiency in value experienced by Bergstrom as a
result of the reduced offering price.

 

4.  FIRST AMENDMENT TO LOAN AGREEMENT RE: $780,000 LOAN DATED
DECEMBER 27, 2002. The Loan Agreement regarding the $280,000 Loan described in
Paragraph 3 above was amended by a First Amendment to Loan Agreement dated
December 27, 2002, which provided for Bergstrom to loan an additional $500,000
to Availent and for Availent to execute a Renewal, Extension And Modified
Promissory Note in the principal sum of $780,000 for the purpose of increasing
the principal amount of the loan from $280,000 to $500,000 and extending the
Maturity Date of the loan from December 31, 2002, to April 30, 2003, and, with
Availents prepayment of interest for an extension period by January 31, 2003,
for the extension of the loan from April 30, 2003 to June 30, 2003.

 

As partial consideration for
renewing and extending the original loan of $280,000, Availent agreed to issue
to Bergstrom the following:

 

4

 

A.            60,000 shares of Availent common stock to be
registered with the S.E.C. as stock freely tradeable in the public market; and,

 

B.            Warrants to purchase 180,000 shares of
Availent common stock at any time within 36 months from the date the Warrants
were issued at a purchase price equal to eighty percent (80%) of the assumed
fair market value of $5.00 per share at the time Availent shares of common
stock are registered with the S.E.C. for sale through an offering to the public
as freely tradeable stock.

 

As partial consideration for
modifying the original loan through lending additional principal in the amount
of $500,000, Availent agreed to issue to Bergstrom the following:

 

A.            25,000 shares of Availent common stock to be
registered with the S.E.C. as stock freely tradeable in the public market; and,

 

C.            Warrants to purchase 25,000 shares of
Availent common stock at any time within 36 months from the date the Warrants
were issued at a purchase price equal to fifty percent (50%) of the assumed
fair market value of $5.00 per share at the time Availent shares of common
stock are registered with the S.E.C. for sale through an offering to the public
as freely tradeable stock.

 

5.  POST REVERSE SPLIT-CHANGE IN ANTICIPATED OFFERING PRICE. The
parties agree that as of the effective date of the Reverse Split of Availent’s
common stock, in anticipation that the shares of stock will be registered with
the S.E.C. with an initial offering price of $5.00 per share, in an attempt to
ensure that Bergstrom receives the economic value of shares and warrants that
was intended at the time the above referenced agreements were entered into,
Bergstrom shall be issued the shares and warrants by Availent as are described
on EXHIBIT “A” attached hereto and incorporated herein for all purposes.
Immediately after completion of the Reverse Split of Availent’s common stock
anticipated to occur no later than January 7, 2003, Bergstrom shall deliver to
Availent to the attention of Availent’s Chief Financial Officer, Woody Conradt
(“Conradt”) all Certificates and Warrants representing shares of stock and
Warrants to purchase shares of stock in either Seacrest, Availent Financial
and/or Availent that have heretofore been issued to Bergstrom. Within seven (7)
days following receipt of such Certificates and Warrants, Availent shall cause
to be issued Warrants representing the right of Bergstrom to purchase
additional shares of Availent pursuant to the terms described on EXHIBIT “A”
and shall cause the Transfer Agent of Availent’s common stock to cancel all
shares of stock reflected on its transfer ledger as being theretofore issued to
Bergstrom and to issue new Certificates of Availent common stock in the number
of shares set forth on EXHIBIT “A”. The parties further agree that, to the
extent the anticipated initial offering of Availent’s shares is not effective
at the price of $5.00 per share, Bergstrom shall be issued additional shares
necessary for Bergstrom to achieve the economical value he would have received

 

5

 

as described in the above referenced Loan Agreements and Amendments to
Loan Agreements referred to and summarized above as if the offering price had
been at $5.00 per share.

 

6.  RATIFICATION/CONFLICT. To the extent of any conflict between any
of the Loan Agreements or Amendments To Loan Agreements heretofore entered into
and the terms of this Agreement and the schedule attached hereto as EXHIBIT
“A”, the terms of this Agreement shall prevail; otherwise, such Agreements are
ratified and incorporated herein by reference.

 

Entered into as of the 27th day of December, 2002.

 

	
   

  	
  BERGSTROM INVESTMENT MANAGEMENT, L.L.C.,

  
	
   

  	
   

  
	
   

  	
  a Delaware Limited Liability Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KELLEY A. BERGSTROM

  
	
   

  	
   

  	
  Kelley A. Bergstrom

  President

  
	
   

  	
   

  
	
   

  	
  AVAILENT:

  
	
   

  	
   

  
	
   

  	
  AVAILENT FINANCIAL, INC.,

  a Delaware Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PATRICK A. MCGEENEY

  
	
   

  	
   

  	
  Patrick A. McGeeney

  President

  

 

6

 

 

EXHIBIT
A

 

AVAILENT
FINANCIAL, INC.

BERGSTROM
DEBT TRANSACTION

SUMMARY
OF EFFECT OF REVERSE SPLIT ON STOCK & WARRANTS

 

	
   

  	
   

  	
  ORIGINAL $500K

  (2/02)

  SHARES

  	
   

  	
  $75K

  (10/02)

  SHARES

  	
   

  	
  $280K

  (11/02)

  SHARES

  	
   

  	
  NEW

  $500K

  SHARES

  	
   

  
	
  SUMMARY AFTER RENEWALS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock

  	
   

  	
  100,000

  	
   

  	
  none

  	
   

  	
  56,000

  	
   

  	
  100,000

  	
   

  
	
  Warrants

  	
   

  	
  100,000

  	
  (A)

  	
  30,100

  	
  (A)

  	
  360,000

  	
  (B)

  	
  100,000

  	
  (A)

  

 

(A) — All at 50%
discount using $5.00 price for calculations.

 

(B) — All at 20%
discount using $5.00 price for calculations.

 

7

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