(b)            be received by Lender not later than 2:00 p.m., Central time, on the day on which any such Loans are to be made.

With each delivery of a Borrowing Request to Lender, Borrower represents and warrants to Lender the following:

(i)         Borrower is entitled to receive the requested Loan under the terms and conditions of this Agreement;

(ii)        all items which Borrower is required to furnish to Lender pursuant to this Agreement accompany the Borrowing Request (or, if Wet Loans, shall be delivered to Lender in accordance with the Agreement);

(iii)       all Mortgage Loans offered thereby conform in all respects with the applicable requirements set forth in this Agreement;

(iv)       no Event of Default exists under this Agreement or would result from the Borrowing or the application of the proceeds therefrom;

(v)        no change or event has occurred which with notice and/or the passage of time would constitute an Event of Default;

(vi)       after giving effect to the Loan requested thereby the Loan Balance shall not exceed the lesser of (1) the Collateral Value of the Borrowing Base and (2) the Commitment; and

(vii)      after giving effect to the Loans requested thereby, no Applicable Sublimit will be exceeded.

Additionally, with each Borrowing Request, Borrower represents and warrants that, except as permitted under this Agreement, Borrower holds with respect to each of the Mortgage Notes offered the following:

(i)         unless delivered therewith, the original filed copy of the Mortgage relating to such Mortgage Note;

(ii)        mortgagee policies of title insurance conforming to the requirements of the Lender or binding commitments for the issuance of same;

(iii)       evidence of insurance policies insuring the mortgaged premises as required by the Lender; and

(iv)       unless delivered therewith, an original of any executed Take-Out Commitment or document evidencing any Hedging Arrangement acceptable to Lender in its sole discretion relating to such Mortgage Note.

With the delivery of each Borrowing Request, Borrower agrees that it holds the above referenced items in trust for Lender, and will at any time deliver the same to Lender upon request or, upon

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written instructions from Lender, to any Person designated by Lender, promptly, and in any event within two (2) Business Days after such request or instructions.  Borrower further agrees that it will not deliver any of the above items, nor give, transfer, or assign any interest in same, to any Person other than Lender (or the Person or Persons designated by Lender) without the prior written consent of Lender.

Each such telephonic request shall be deemed a representation, warranty, acknowledgment and agreement by Borrower as to the matters which are required to be set out in such written confirmation.  If all conditions precedent to such Loan have been met Lender will on the date requested promptly remit to Borrower the amount of such Loan in immediately available dollars, by crediting the Funding Account with immediately available funds in the amount of such Loan.

Section 2.4             Fees.

(a)           In consideration of Lender’s commitment to make the Loans, Borrower will pay to Lender a non-refundable commitment fee determined on a daily basis by applying a rate of 12.5 basis points (0.125%) per annum to the Commitment on each day during the term of the Loans.  This commitment fee shall be due and payable in advance for each Fiscal Quarter on the fifteenth day of such Fiscal Quarter.

(b)           Borrower shall pay to Lender, a collateral handling fee in the amount of $10.00 for each Mortgage Loan file.

Section 2.5             Mandatory Repayments.  If at any time the Loan Balance exceeds the lesser of (i) the Collateral Value of the Borrowing Base (as a result of an Applicable Sublimit being exceeded or otherwise) or (ii) the Commitment, then Borrower (x) shall repay the amount of such excess or (y) so long as the Loan Balance does not exceed the Commitment, pledge to Lender additional Eligible Mortgage Loans which have an aggregate Unit Collateral Value equal to or greater than such excess, in each case, within one (1) Business Day after written notice thereof is given by Lender to Borrower; provided that, after giving effect to any pledge of additional Eligible Mortgage Loans, the Unit Collateral Value of such Mortgage Loans when added to the Unit Collateral Value of all other Mortgage Loans in the same Mortgage Loan classification does not exceed the Applicable Sublimit for such Mortgage Loan classification.

Section 2.6             Payments to Lender.  All payments of interest on the Note, all payments of principal, including any principal payment made with proceeds of Mortgage Collateral, and fees hereunder shall be made directly to Lender in federal or other immediately available funds before 1:00 pm (Central time) on the respective dates when due via wire transfer of immediately available funds to the Settlement Account.  Borrower shall send notice to Lender before 1:00 p.m. (Central time) on the day any payment of principal or interest is received by Lender which sets forth the Loans against which such payment is to be applied.  Any payment (or any payment received without a notice regarding application of such payment) received by Lender after such time will be deemed to have been made on the next following Business Day.  Should any such payment become due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day, and, in the case of a payment of principal or past due interest, interest shall accrue and be payable thereon for the period of such extension as provided in the Loan Document under which such payment is due.

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Each payment under a Loan Document shall be payable at the place provided therein and, if no specific place of payment is provided, shall be payable at the place of payment of the Note.  When Lender collects or receives money on account of the Obligations, Lender shall apply all such money so distributed, as follows:

(a)           first, for the payment of all Obligations which are then due, and if such money is insufficient to pay all such Obligations, (i) first to any reimbursements due Lender under Section 5.5, (ii) second, to the payment of the Loans then due, and (iii) then to the partial payment of all other Obligations then due in proportion to the amounts thereof, or as Lender shall otherwise agree;

(b)           then for the prepayment of amounts owing under the Loan Documents if so specified by Borrower;

(c)           then for the prepayment of principal on the Note, together with accrued and unpaid interest on the principal so prepaid; and

(d)           last, for the payment or prepayment of any other Obligations.

All payments applied to principal or interest on any Note shall be applied first to any interest then due and payable, then to principal then due and payable, and last to any prepayment of principal and interest.

Section 2.7             Increased Cost and Reduced Return.

(a)           If, after the date hereof, Lender shall have determined that the adoption of any applicable Law, rule, or regulation regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of Law) of any such Governmental Authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return on the capital of Lender or any corporation controlling Lender, due to the obligations of Lender hereunder, to a level below that which Lender or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then, within fifteen (15) days after demand by Lender, Borrower shall pay to Lender such additional amount or amounts as will compensate Lender for such reduction, but only to the extent that Lender has not been compensated therefor by any increase in the LIBOR.

(b)           Lender shall promptly notify Borrower of any event of which it has knowledge, occurring after the date hereof, which will entitle Lender to compensation pursuant to this Section.  In the event that Lender claims compensation under this Section, Lender shall furnish to Borrower a statement setting forth the additional amount or amounts to be paid to it hereunder which shall be conclusive in the absence of manifest error.  The statement shall describe the change that took place (e.g. citing the Law, rule, regulation or directive), an explanation as to how Lender determined that the reduction in the rate of return was due to its obligations under this Agreement and demonstrate the calculations utilized in arriving at the amount owed from

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Borrower.  In determining such amount, Lender shall act in good faith and may use any reasonable averaging and attribution methods.

ARTICLE III

CONDITIONS PRECEDENT

The obligation of Lender to make Loans hereunder is subject to fulfillment of the conditions precedent stated in this Article III.

Section 3.1             Initial Loan.  The obligation of Lender to fund any Loan hereunder shall be subject to, in addition to the conditions precedent specified in Section 3.2, the following terms and conditions:

(a)           Borrower shall have delivered to Lender the following (each of the following documents being duly executed and delivered and in form and substance satisfactory to Lender, and, with the exception of the Note, each in a sufficient number of originals that Lender and its counsel may have an executed original of each document):

(i)            an executed counterpart of this Agreement and of all instruments, certificates and opinions referred to in this Article III not theretofore delivered (except the Borrowing Request which is to be delivered at the time provided in Subsection 3.2(a) hereof);

(ii)        the Note;

(iii)       the Security Agreement dated of even date herewith;

(iv)       a certificate of the Secretary or Assistant Secretary of Borrower setting forth (i) resolutions of its board of directors authorizing the execution, delivery, and performance of the Loan Documents to which it is a party and identifying the officers authorized to sign such instruments, (ii) specimen signatures of the officers so authorized, and (iii) articles of incorporation of Borrower certified by the appropriate Secretary of State as of a recent date, and (iv) bylaws of Borrower, certified as being accurate and complete;

(v)        a certificate of the existence and good standing for Borrower in its state of incorporation or organization dated no earlier than fifteen days prior to the date hereof;

(vi)       an opinion of counsel for Borrower in form and substance satisfactory to Lender;

(vii)      a Borrowing Request and a Borrowing Base Certificate dated as of the date of the first Loan, certified by the Controller or Senior Vice President of Borrower;

(viii)     a duly executed original of the MERS Agreement; and

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(ix)       such other documents, instruments, certificates and agreements (including, without limitation, UCC tax and lien search results) as Lender or its legal counsel may reasonably request at any time at or prior to the date of the initial Loan hereunder.

(b)           No Person, other than Lender, holds any mortgage, pledge, lien, security interest or other charge or encumbrance in, against or to any of the Mortgage Loans identified by the Borrower as Mortgage Collateral or included in any computation of the Collateral Value of the Borrowing Base.

(c)           Lender shall have received evidence satisfactory to it that all filings and other actions necessary or desirable to perfect and protect the Liens created by the Security Instruments shall have been completed (including, without limitation, the filing of financing statements on form UCC-1 and filing of UCC-3 amendments or termination statements).

(d)           Borrower shall have paid all fees and reimbursements to be paid to Lender pursuant to any Loan Document, or otherwise due Lender and including reasonable fees (not to exceed $20,000) and reasonable expenses of Lender’s attorneys.

Section 3.2             All Loans.  The obligation of Lender to fund any Loan pursuant to this Agreement is subject to the following further conditions precedent:

(a)           Borrower shall have delivered to Lender a Borrowing Request dated as of the date of such Loan, certified by the Controller, a Vice President or Senior Vice President of Borrower, and the Required Mortgage Documents for all Eligible Mortgage Loans other than Wet Loans;

(b)           all other Property in which Borrower has granted a Lien to Lender shall have been physically delivered to the possession of Lender, to the extent required to be so delivered under the Loan Documents;

(c)           the representations and warranties of each Related Person contained in this Agreement or any Security Instrument (other than those representations and warranties which are by their terms expressly limited to the date of this Agreement) shall be true and correct in all material respects on and as of the date of such Loan, as though made on and as of such date, both before and after giving effect to the Borrowing and the application of the proceeds thereof;

(d)           no Default or Event of Default shall have occurred and be continuing or would result from such Borrowing or the application of the proceeds therefrom;

(e)           no change or event which constitutes a Material Adverse Effect shall have occurred and be continuing as of the date of such Loan;

(f)            the Funding Account, the Settlement Account and the Operating Account shall be established and in existence;

(g)           the making of such Loan shall not be prohibited by any Governmental Requirement or contravene or conflict with any Requirement of Law;

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(h)           the delivery to Lender of such other documents, instruments, certificates, agreements and opinions of counsel, including such documents, agreements, certificates and instruments as may be necessary or desirable to perfect, preserve or protect the priority of any Lien granted or intended to be granted hereunder or otherwise and including favorable written opinions of counsel with respect thereto, as Lender may reasonably request; and

(i)            No Person, other than Lender, shall be listed in the field designated “interim funder” on the MERS® System with respect to any Mortgage Loans identified by the Borrower as Mortgage Collateral or included in any computation of the Collateral Value of the Borrowing Base.

Delivery to Lender of a Borrowing Request shall be deemed to constitute a representation and warranty by Borrower on the date thereof and on the date on which the Loan is made of the facts specified in subsections (c) and (d) of this Section.

ARTICLE IV

BORROWER REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows:

Section 4.1             Organization and Good Standing.  Each Related Person (a) is a corporation, limited liability company or limited partnership duly incorporated or organized and existing in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) is duly qualified as a foreign entity and in good standing in all jurisdictions in which its failure to be so qualified could have a Material Adverse Effect, (c) has the corporate or organizational power and authority to own its properties and assets and to transact the business in which it is engaged and is or will be qualified in those states wherein it proposes to transact business in the future, and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, have a Material Adverse Effect.

Section 4.2             Authorization and Power.  Each Related Person has the corporate or organizational power and requisite authority to execute, deliver and perform the Loan Documents to which it is a party; each Related Person is duly authorized to and has taken all action necessary to authorize it to, execute, deliver and perform the Loan Documents to which it is a party and is and will continue to be duly authorized to perform such Loan Documents.

Section 4.3             No Conflicts or Consents.  Neither the execution and delivery by any Related Person of the Loan Documents to which it is a party, nor the consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or with the terms and provisions thereof, will (a) materially contravene or conflict with any Requirement of Law to which any Related Person is subject, or any indenture, mortgage, deed of trust, or other agreement or instrument to which any Related Person is a party or by which any Related Person may be bound, or to which the Property of any Related Person may be subject, or (b) result in the creation or imposition of any Lien, other than the Lien of the Security Agreement, on the Property of any Related Person.  Except as expressly set forth in Section 4.19, all actions, approvals, consents, waivers, exemptions, variances, franchises, orders, permits,

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authorizations, rights and licenses required to be taken, given or obtained, as the case may be, from any Governmental Authority that are necessary in connection with the transactions contemplated by the Loan Documents have been obtained.

Section 4.4             Enforceable Obligations.  This Agreement, the Note, and the other Loan Documents to which any Related Person is a party are the legal, valid and binding obligations of such Related Person, enforceable in accordance with their respective terms, except as limited by Debtor Laws.

Section 4.5             Priority of Liens.  Upon delivery to Lender of each Borrowing Request, Lender shall have valid, enforceable, perfected, first priority Liens and security interests in each Mortgage Note identified therein.

Section 4.6             No Liens.  Borrower has good and indefeasible title to the Mortgage Collateral free and clear of all Liens and other adverse claims of any nature, except for Permitted Liens.

Section 4.7             Financial Condition of Borrower.  Borrower has delivered to Lender copies of its annual audited balance sheet as of December 31, 2006, and the related statements of income, stockholders’ equity and cash flows for the period ended such date; such financial statements fairly present the financial condition of Borrower as of such date and the results of operations of Borrower for the period ended on such date and have been prepared in accordance with GAAP, subject to normal year-end adjustments; as of the date thereof, there were no obligations, liabilities or Indebtedness (including material contingent and indirect liabilities and obligations or unusual forward or long-term commitments) of Borrower which are not reflected in such financial statements and no change which constitutes a Material Adverse Effect has occurred in the financial condition or business of Borrower since December 31, 2006.  Borrower has also delivered to Lender its unaudited quarterly balance sheet for the period ending September 30, 2007 and management reports for September 30, 2007; such reports fairly and accurately present Borrower’s commitment position, pipeline position, servicing and production as of the end of such months and for the fiscal year to date for the periods ending on such dates.

Section 4.8             Full Disclosure.  There is no material fact that Borrower has not disclosed to Lender which could have a Material Adverse Effect.  None of (i) the financial statements referred to in Section 4.7 hereof, (ii) any Borrowing Request or officer’s certificate, or (iii) any statement delivered by any Related Person to Lender in connection with this Agreement, contains any untrue statement of material fact.

Section 4.9             No Default.  No Related Person is in default under any material loan agreement, mortgage, security agreement or other material agreement or obligation to which it is a party or by which any of its Property is bound.

Section 4.10           No Litigation.  There are no material actions, suits or legal, equitable, arbitration or administrative proceedings pending, or to the knowledge of Borrower threatened, against any Related Person the adverse determination of which could constitute a Material Adverse Effect.

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Section 4.11           Taxes.  All tax returns required to be filed by each Related Person in any jurisdiction have been filed and all taxes, assessments, fees and other governmental charges upon each Related Person or upon any of its properties, income or franchises have been paid prior to the time that such taxes could give rise to a Lien thereon, unless protested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been established on the books of such Related Person.  No Related Person has any knowledge of any proposed tax assessment against any Related Person.

Section 4.12           Principal Office, etc.  The principal office, chief executive office and principal place of business of Borrower is at the address set forth in Section 9.1.

Section 4.13           Compliance with ERISA.  No Related Person currently maintains, contributes to, is required to contribute to or has any liability, whether absolute or contingent, with respect to an ERISA Plan.  With respect to all other employee benefit plans maintained or contributed to by each Related Person, each Related Person is in material compliance with ERISA.

Section 4.14           Subsidiaries.  No Related Person presently has any Subsidiary or owns any stock in any other corporation or association except those listed in Schedule 4.14.  As of the date hereof, each Related Person owns, directly or indirectly, the equity interest in each of its Subsidiaries which is indicated in such exhibit.

Section 4.15           Indebtedness.  No Related Person has any indebtedness outstanding other than the Indebtedness permitted by Section 6.2.

Section 4.16           Permits, Patents, Trademarks, etc.

(a)          Each Related Person has all permits and licenses necessary for the operation of its business.

(b)         Each Related Person owns or possesses (or is licensed or otherwise has the necessary right to use) all patents, trademarks, service marks, trade names and copyrights, technology, know-how and processes, and all rights with respect to the foregoing, which are necessary for the operation of its business, without any known material conflict with the rights of others.  The consummation of the transactions contemplated hereby will not alter or impair in any material respect any of such rights of each Related Person.

Section 4.17           Status Under Certain Federal Statutes.  No Related Person is (a) a “public utility,” as such term is defined in the Federal Power Act, as amended, (b) an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1949, as amended or (c) a “rail carrier,” or a “person controlled by or affiliated with a rail carrier,” within the meaning of Title 49, U.S.C., and no Related Person is a “carrier” to which 49 U.S.C. §l1301(b)(1) is applicable.

Section 4.18           Securities Act.  No Related Person has issued any unregistered securities in violation of the registration requirements of the Securities Act of 1933, as amended, or of any other Requirement of Law, and is not violating any rule, regulation, or requirement under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended.

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No Related Person is required to qualify an indenture under the Trust Indenture Act of 1939, as amended, in connection with its execution and delivery of the Note.

Section 4.19           No Approvals Required.  Other than consents and approvals previously obtained and actions previously taken, neither the execution and delivery of this Agreement, the Note and the other Loan Documents to which any Related Person is a party, nor the consummation of any of the transactions contemplated hereby or thereby requires the consent or approval of, the giving of notice to, or the registration, recording or filing by any Related Person of any document with, or the taking of any other action in respect of, any Governmental Authority which has jurisdiction over each Related Person or any of its Property, except for (a) the filing of the Uniform Commercial Code financing statements and other similar filings to perfect the interest of Lender in the Collateral, and (b) such other consents, approvals, notices, registrations, filings or action as may be required in the ordinary course of business of the Related Persons in connection with the performance of the obligations of the Related Persons hereunder.

Section 4.20           Survival of Representations.  All representations and warranties by Borrower herein shall survive the execution and delivery of this Agreement, the Note, the other Loan Documents and the funding of the Loans, and any investigation at any time made by or on behalf of Lender shall not diminish the right of Lender to rely thereon.

Section 4.21           Compliance with Laws.  Borrower is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, including ERISA and FIRREA, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith would not likely be expected to have a Material Adverse Effect.

Section 4.22           Payment of Obligations.  Borrower is not in default in the payment and discharge of its material obligations and liabilities, including all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower.

Section 4.23           Individual Mortgage Loans.  Borrower hereby represents with respect to each Mortgage Note and Mortgage Loan that is part of the Collateral:

(a)           Borrower has good and marketable title to each Mortgage Note and Mortgage, was the sole owner thereof and had full right to pledge the Mortgage Loan to Lender free and clear of any Lien other than Permitted Liens;

(b)           To the knowledge of Borrower, there is no default, breach, violation or event of acceleration existing under any Mortgage or the related Mortgage Note and there is no event which, with the passage of time or with notice and/or the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration and no such default, breach, violation or event of acceleration has been waived;

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(c)           To the knowledge of Borrower, the physical condition of the Property subject to the Mortgage has not deteriorated since the date of origination of the related secured Mortgage Loan (normal wear and tear excepted) and there is no proceeding pending for the total or partial condemnation of any Mortgaged Property;

(d)           Each Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the related Property subject to the Mortgage of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise, by judicial foreclosure;

(e)           Each Mortgage Loan is a first lien or second lien Single Family loan, and has been underwritten by the originator thereof in accordance with such originator’s then current underwriting guidelines, which guidelines have been previously submitted to and approved by Lender; provided that (i) the aggregate amount of Second Lien Loans does not exceed the Applicable Sublimit for Second Lien Loans and (ii) the aggregate amount of all Wet Loans does not exceed the Applicable Sublimit for Wet Loans;

(f)            Each Mortgage Note is either (i) payable in monthly installments of principal and interest, with interest payable in arrears, and requires a monthly payment which is sufficient to amortize the original principal balance over the original term, not to exceed forty (40) years, and to pay interest at the related interest rate, or (ii) payable in monthly installments of interest only, with interest payable in arrears, with principal payments to begin no later than ten (10) years from closing with payments which are sufficient to fully amortize the original principal balance over a period not to exceed forty (40) years; and no Mortgage Note provides for any extension of the original term;

(g)           No Mortgage Loan is a loan in respect of either the purchase of a manufactured home or mobile home or the purchase of the land on which a manufactured home or mobile home will be placed;

(h)           The origination practices used by the originator of the Mortgage Loans and the collection practices used by the Borrower with respect to each Mortgage Loan have been in all material respects legal, proper, prudent and customary in the loan origination and servicing business;

(i)            Each Mortgage Loan was originated in material compliance with all applicable Laws and no fraud or misrepresentation was committed by any Person in connection therewith; and

(j)            For each Mortgage Loan, Borrower has obtained closing protection letters from the underwriter for the respective title insurance policy.

Section 4.24           Environmental Matters.  In the ordinary course of each Related Person’s business, the officers and managers of each Related Person consider the effect of Environmental Laws on the business of such Related Person, in the course of which they identify and evaluate potential risks and liabilities accruing to such Related Person due to Environmental Laws.  On the basis of this consideration, each Related Person has reasonably concluded that neither

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violation of nor compliance with Environmental Laws can reasonably be expected to have a Material Adverse Effect on the business or financial condition of such Related Person or on the ability of Borrower to perform the Obligations.  No Related Person has received any notice to the effect that its operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non-compliance or remedial action could reasonably be expected to have a Material Adverse Effect on the business or financial condition of the Related Persons, taken as a whole, or on the ability of Borrower to perform the Obligations.

Section 4.25           Status as Approved Seller/Servicer.  Borrower is an approved Seller/Servicer for FNMA and FHLMC in good standing and is an approved lender with FHA, VA and HUD.

Section 4.26           Regulation U.  Borrower has not, directly or indirectly, used any of the proceeds of the Loans for the purpose, whether immediate, incidental or ultimate, of buying any “margin stock” or of maintaining, reducing or retiring any Indebtedness originally incurred to purchase a stock that is currently any “margin stock,” or for any other purpose which might constitute this transaction a “purpose credit,” in each case within the meaning of Regulation U, or otherwise taken or permitted to be taken any action which would involve a violation of Regulation U or of Regulation T (12 C.F.R. 220, as amended) or Regulation X (12 C.F.R. 224, as amended) or any other regulation of such board.

ARTICLE V

AFFIRMATIVE COVENANTS

Each Related Person shall at all times comply with (or cause compliances with) the covenants contained in this Article V, from the date hereof and for so long as any part of the Obligations or the Commitment is outstanding unless Lender has agreed otherwise.

Section 5.1             Financial Statements and Reports.

(a)          Borrower shall furnish to Lender the following, all in form and detail reasonably satisfactory to Lender:

(i)             Promptly after becoming available, and in any event within ninety (90) days after the close of each Fiscal Year, Borrower’s audited Consolidated balance sheet as of the end of such Fiscal Year, and the related audited Consolidated statements of income, stockholders’ equity and cash flows of Borrower for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the preceding Fiscal Year.  Such financial statements shall be unqualified and shall be accompanied by the related audit report of independent certified public accountants acceptable to Lender which report shall be to the effect that such statements have been prepared in accordance with GAAP applied on a basis consistent with prior periods except for such changes in such principles with which the independent public accountants shall have concurred;

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(ii)           Promptly after becoming available, and in any event within ninety (90) days after the close of each Fiscal Year, Parent’s audited Consolidated and consolidating balance sheet as of the end of such Fiscal Year, and the related audited Consolidated and consolidating statements of income, stockholders’ equity and cash flows of Parent for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the preceding Fiscal Year, such financial statements shall be unqualified and shall be accompanied by the related audit report of independent certified public accountants acceptable to Lender which report shall be to the effect that such statements have been prepared in accordance with GAAP applied on a basis consistent with prior periods except for such changes in such principles with which the independent public accountants shall have concurred;

(iii)          Promptly after becoming available, and in any event within forty-five (45) days after the end of each Fiscal Quarter, including the fourth Fiscal Quarter in each Fiscal Year, a Consolidated balance sheet of Borrower as of the end of such Fiscal Quarter and the related Consolidated statements of income, stockholders’ equity and cash flows of Borrower for such Fiscal Quarter and the period from the first day of the then current Fiscal Year through the end of such Fiscal Quarter, certified by the Controller or other executive officer of Borrower to have been prepared in accordance with GAAP applied on a basis consistent with prior periods;

(iv)          Promptly after being requested by Lender but not more than twice during any calendar year (unless a Default or Event of Default shall exist), and in any event within thirty (30) days after receiving such request in writing, a Consolidated balance sheet of Borrower as of the end of the calendar month immediately preceding such request and the related Consolidated statements of income, stockholders’ equity and cash flows of Borrower for such month and the period from the first day of the then current Fiscal Year through the end of such month, certified by the Controller or other executive officer of Borrower to have been prepared in accordance with GAAP applied on a basis consistent with prior periods.

(v)           Promptly after becoming available, and in any event within forty-five (45) days after the end of each Fiscal Quarter, a Consolidated and consolidating balance sheet of Parent as of the end of such Fiscal Quarter and the related Consolidated and consolidating statements of income, stockholders’ equity and cash flows of Parent for such Fiscal Quarter and the period from the first day of the then current Fiscal Year through the end of such Fiscal Quarter, certified by the chief financial officer or other executive officer of Parent to have been prepared in accordance with GAAP applied on a basis consistent with prior periods;

(vi)          Promptly and in any event within (x) forty-five (45) days after the end of each Fiscal Quarter of Borrower and (y) within ninety (90) days after the end of each Fiscal Year of Borrower, a completed Officer’s Certificate in the form of Exhibit C  attached hereto, executed by the President, Controller or executive officer of Borrower;

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(vii)         Promptly and in any event within ninety (90) days of the beginning of each Fiscal Year, an annual operating budget of Borrower for such Fiscal Year, in form and substance satisfactory to Lender;

(viii)        Promptly and in any event within thirty (30) days after the end of each calendar month, a monthly pipeline report in form and substance satisfactory to Lender;

(ix)           Promptly and in any event within forty-five (45) days after the end of each Fiscal Quarter, a mortgage loan production report as of the end of such Fiscal Quarter, reflecting Borrower’s Mortgage Loan production and acquisition volumes during such Fiscal Quarter, and such other similar information as reasonably requested by Lender to be in such report;

(x)            Promptly and in any event within seven (7) days after the end of each week, a hedging coverage report showing, in detail and form satisfactory to Lender, Borrower’s hedging coverage of all Eligible Mortgage Loans subject to a Hedging Arrangement;

(xi)           Promptly upon request by Lender, but not more than once per Fiscal Quarter (unless a Default or Event of Default shall exist), a management report in form and substance acceptable to Lender including, without limitation detail on Borrower’s commitment position, repurchase requests by investors, and any other report reasonably requested by Lender;

(xii)          Promptly upon receipt thereof, a copy of each other report submitted to Borrower by independent accountants in connection with any annual, interim or special audit of the books of Borrower; and

(xiii)         such other information concerning the business, properties or financial condition of any Related Person as Lender may reasonably request.

Section 5.2             Taxes and Other Liens.  Each Related Person shall pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon it or upon its income or upon any of its Property as well as all claims of any kind (including claims for labor, materials, supplies and rent) which, if unpaid, might become a Lien upon any or all of its Property; provided, however, each Related Person shall not be required to pay any such tax, assessment, charge, levy or claim if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings diligently conducted by or on behalf of such Related Person and if such Related Person shall have set up reserves therefor adequate under GAAP.

Section 5.3             Maintenance.  Each Related Person shall (a) maintain its corporate or partnership existence, rights and franchises (provided that Borrower may discontinue the existence of any of its Subsidiaries that the Borrower in good faith determines are no longer operating or necessary for the business and operations of Borrower and its other Subsidiaries); (b) observe and comply in all material respects with all Governmental Requirements, and (c) maintain its Properties (and any Properties leased by or consigned to it or held under title retention or conditional sales contracts) in good and workable condition at all times and make all

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repairs, replacements, additions, betterments and improvements to its Properties as are needed and proper so that the business carried on in connection therewith may be conducted properly and efficiently at all times.  Borrower shall maintain good standing as an approved seller and servicer for FNMA and FHLMC and as an approved lender with FHA, VA and HUD.

Section 5.4             Further Assurances.  Borrower shall, within three (3) Business Days after the request of Lender, cure any defects in the execution and delivery of the Note, this Agreement or any other Loan Document and each Related Person shall, at its expense, promptly execute and deliver to Lender upon request all such other and further documents, agreements and instruments in compliance with or accomplishment of the covenants and agreements of each Related Person in this Agreement and in the other Loan Documents or to further evidence and more fully describe the collateral intended as security for the Note, or to correct any omissions in this Agreement or the other Loan Documents, or more fully to state the security for the obligations set out herein or in any of the other Loan Documents, or to make any recordings, to file any notices, or obtain any consents.

Section 5.5             Reimbursement of Expenses.  Borrower shall pay (a) all reasonable legal fees incurred by Lender in connection with the preparation, negotiation, syndication, execution and delivery of this Agreement, the Note and the other Loan Documents (provided such legal fees for the preparation, negotiation, syndication, execution and delivery of the initial Loan Documents shall not exceed $20,000) and any amendments, consents or waivers executed in connection therewith, (b) all fees, charges or taxes for the recording or filing of the Security Instruments, (c) all reasonable out-of-pocket expenses of Lender in connection with the administration of this Agreement, the Note and the other Loan Documents, including courier expenses actually incurred and billed to Borrower in connection with the Mortgage Collateral, (d) all reasonable amounts expended, advanced or incurred by Lender to satisfy any obligation of Borrower under this Agreement or any of the other Loan Documents or to collect the Note, or to protect, preserve, exercise or enforce the rights of Lender under this Agreement or any of the other Loan Documents, (e) all reasonable out-of-pocket costs and expenses (including reasonable fees and expenses of attorneys and other experts employed or retained by such Person) incurred in connection with, arising out of, or in any way related to (i) consulting during a Default with respect to (A) the protection, preservation, exercise or enforcement of any of its rights in, under or related to the Collateral or the Loan Documents or (B) the performance of any of its obligations under or related to the Loan Documents, or (ii) protecting, preserving, exercising or enforcing during a Default any of its rights in, under or related to the Collateral or the Loan Documents, each of (a) through (e) shall include all underwriting expenses, collateral liquidation costs, court costs, attorneys’ fees (including, without limitation, for trial, appeal or other proceedings), fees of auditors and accountants, and investigation expenses reasonably incurred by Lender in connection with any such matters, together with interest at the post-maturity rate specified in the Note on each item specified in clause (a) through (e) from thirty (30) days after the date of written demand or request for reimbursement until the date of reimbursement.  Provided, however, Lender shall not be entitled to any reimbursement under clauses (d) and (e) above if there is a determination in a final, non-appealable judgment by a court of competent jurisdiction that Lender was not entitled to exercise such remedies under the Loan Documents.

Section 5.6             Insurance.  Borrower shall maintain with financially sound and reputable insurers, insurance with respect to its Properties and business against such liabilities, casualties,

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risks and contingencies and in such types and amounts as is customary in the case of Persons engaged in the same or similar businesses and similarly situated, including, without limitation, a fidelity bond or bonds with financially sound and reputable insurers with such coverage and in such amounts as is customary in the case of Persons engaged in the same or similar businesses and similarly situated.  The improvements on the land covered by each Mortgage shall be kept continuously insured at all times by responsible insurance companies against fire and extended coverage hazards under policies, binders, letters, or certificates of insurance, with a standard mortgagee clause in favor of Borrower and its assigns.  Each such policy must be in an amount not less than the highest of the following:  (a) the amount of the Mortgage Loan, (b) 90% of the insurable value of the improvements, and (c) an amount sufficient to prevent co-insurance, without reduction by reason of any co-insurance, reduced rate contribution, or similar clause of the policies or binders.  Upon request of Lender, Borrower shall furnish or cause to be furnished to Lender from time to time a summary of the insurance coverage of Borrower in form and substance satisfactory to Lender and if requested shall furnish Lender copies of the applicable policies.

Section 5.7             Accounts and Records: Servicing Records.  Each Related Person shall keep books of record and account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and activities, in accordance with GAAP.  Each Related Person shall maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate all records pertaining to the performance of such Related Person’s obligations under the Servicing Agreements in the event of the destruction of the originals of such records) and keep and maintain all documents, books, records, computer tapes and other information reasonably necessary or advisable for the performance by each Related Person of its obligations under the Servicing Agreements.

Section 5.8             Right of Inspection.  Each Related Person shall permit authorized representatives of Lender to do the following as it relates to this Agreement:  to discuss the business, operations, assets and financial condition of such Related Person with their officers and employees, to examine their Servicing Records and books of records and account and make copies or extracts thereof and to visit and inspect any of the Properties of each Related Person, all at such reasonable times and as often as Lender may request.  Each Related Person will provide its accountants with a copy of this Agreement promptly after the execution hereof and will instruct its accountants to answer candidly any and all questions that the officers of Lender or any authorized representatives of Lender may address to them in reference to the financial condition or affairs of any Related Person as those conditions or affairs relate to this Agreement.  Each Related Person may have its representatives in attendance at any meetings between the officers or other representatives of Lender and such Related Person’s accountants held in accordance with this authorization.

Section 5.9             Notice of Certain Events.  Borrower shall promptly notify Lender upon (a) the receipt of any notice from, or the taking of any other action by, the holder of any promissory note, debenture or other evidence of Indebtedness of any Related Person with respect to a claimed default that could, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, together with a detailed statement by a responsible officer of Borrower specifying the notice given or other action taken by such holder and the nature of the claimed default and what action Borrower is taking or proposes to take with respect thereto; (b) the

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commencement of, or any determination in, any legal, judicial or regulatory proceedings between any Related Person and any Governmental Authority or any other Person which, if adversely determined, could have a Material Adverse Effect; (c) any change in senior management of Borrower, (d) any material adverse change in the business, operations, prospects or financial condition of any Related Person, including, without limitation, the insolvency of any Related Person, (e) any event or condition which, if adversely determined, could have a Material Adverse Effect, or (f) the occurrence of any Termination Event.

Section 5.10           Performance of Certain Obligations and Information Regarding Investors.  Borrower shall perform and observe in all material respects each of the provisions of each Take-Out Commitment and each of the Servicing Agreements on its part to be performed or observed and will cause all things to be done which are necessary to have each item of Mortgage Collateral covered by a Take-Out Commitment comply with the requirements of such Take-Out Commitment.  Upon request by Lender, Borrower will deliver to Lender financial information concerning any Person Lender is reviewing to determine whether to approve such Person as an Investor; all such financial information must be delivered to Lender prior to any request by Borrower for Mortgage Collateral to be delivered to such Person.

Section 5.11           Use of Proceeds: Margin Stock.  The proceeds of all Loans shall be used by Borrower solely for the origination and purchase of Eligible Mortgage Loans.  None of such proceeds shall be used for the purpose of purchasing or carrying any “margin stock” as defined in Regulation U, or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry margin stock or for any other purpose which might constitute this transaction a “purpose credit” within the meaning of such Regulation U.  Neither Borrower nor any Person acting on behalf of Borrower shall take any action in violation of Regulation U or Regulation X or shall violate Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereafter be in effect.

Section 5.12           Notice of Default.  Borrower shall furnish to Lender immediately upon becoming aware of the existence of any Default or Event of Default, a written notice specifying the nature and period of existence thereof and the action which Borrower is taking or proposes to take with respect thereto.

Section 5.13           Compliance with Loan Documents.  Each Related Person shall promptly comply with any and all covenants and provisions of this Agreement, the Note and the other Loan Documents to be complied with by such Related Person.

Section 5.14           Operations and Properties.  Each Related Person shall comply with all rules, regulations and guidelines applicable to it.  Each Related Person shall act prudently and in accordance with customary industry standards in managing and operating its Property.

Section 5.15           Environmental Matters.

(a)           Each Related Person will comply in all material respects with all Environmental Laws now or hereafter applicable to such Related Person and shall obtain, at or prior to the time required by applicable Environmental Laws, all environmental, health and safety permits,

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licenses and other authorizations necessary for its operations and will maintain such authorizations in full force and effect.

(b)           Borrower will promptly furnish to Lender all written notices of violation, orders, claims, citations, complaints, penalty assessments, suits or other proceedings received by Borrower, or of which it has notice, pending or threatened against Borrower, by any Governmental Authority with respect to any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations in connection with its ownership or use of its properties or the operation of its business that could, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

Section 5.16           MERS Status.

(a)           Borrower will (a) at all times, maintain its status as a MERS member in good standing, (b) at all times remain in full compliance with all terms and conditions of membership in MERS, including the MERSCORP, Inc. “Rules of Membership” most recently promulgated by MERSCORP, Inc., the “MERS Procedures Manual” most recently promulgated by MERS, and any and all other guidelines or requirements set forth by MERS or MERSCORP, Inc., as each of the foregoing may be modified from time to time, including, but in no way limited to, compliance with guidelines and procedures set forth with respect to technological capabilities, drafting and recordation of Mortgages, registration of Mortgages on the MERS System, and registration of the interest of the Lender in such mortgages and membership requirements, (c) promptly, upon the request of the Lender, execute and deliver to the Lender an assignment of mortgage, in blank, with respect to any MERS Mortgage that the Lender determines shall be removed from the MERS System and (d) at all times maintain the Electronic Tracking Agreement executed of even date herewith in full force and effect.

(b)           Borrower shall not de-register or attempt to de-register any Mortgage from the MERS System unless Borrower has complied with the requirements set forth in the Electronic Tracking Agreement and the requirements hereof and of the Security Agreement relating to release of Collateral.

Section 5.17           Hedging Arrangements.  Borrower shall maintain Hedging Arrangements with respect to all Eligible Mortgage Loans not subject to a Take-Out Commitment with Persons reasonably satisfactory to Lender in order to mitigate the risk that the market value of any such Eligible Mortgage Loan will change as a result of a change in interest rates or the market for mortgage loan assets before the Eligible Mortgage Loan is purchased by an Investor or repurchased by Borrower.  Borrower will use its best efforts to cause a Person providing such a Hedging Arrangement to acknowledge Lender’s security interest in the Hedging Arrangement and related collateral granted pursuant to the Security Agreement, by agreement reasonably satisfactory to Lender.

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ARTICLE VI

NEGATIVE COVENANTS

Each Related Person shall at all times comply with (or cause compliance with) the covenants contained in this Article VI, from the date hereof and for so long as any part of the Obligations or the Commitment is outstanding unless Lender has agreed otherwise in writing:

Section 6.1             No Merger; Limitation on Issuance of Securities.  No Related Person shall merge or consolidate with or into any Person; provided that Borrower may merge or consolidate with any wholly owned subsidiary of Borrower if Borrower is the surviving corporation; and provided further that after giving effect thereto, no Default or Event of Default would exist hereunder.  No Related Person shall acquire by purchase, or otherwise, all or substantially all of the assets or capital stock of any Person.  Borrower will not issue any securities other than shares of its common stock and any options or warrants giving the holders thereof only the right to acquire such shares.  No Related Person other than Borrower will issue any additional shares of its capital stock or other securities or any options, warrants or other rights to acquire such additional shares or other securities except to Borrower and only to the extent not otherwise forbidden under the terms hereof.  No Subsidiary of Borrower which is a partnership will allow any diminution of Borrower’s interest (direct or indirect) therein.  There shall be no Change of Control.

Section 6.2             Limitation on Indebtedness.  No Related Person shall incur, create, contract, assume, have outstanding, guarantee or otherwise be or become, directly or indirectly, liable in respect of any Indebtedness or Guaranty Obligations unless at the time of the incurrence of such Indebtedness or Guaranty Obligations (x) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (y) after giving effect to such Indebtedness or Guaranty Obligations, the Borrower is in compliance on a pro forma basis with the covenants set forth in Sections 6.13 through 6.16 as a result thereof; and provided further, to the extent such Indebtedness is in respect of another mortgage warehouse credit facility, Lender is collateral manager and custodian of the collateral thereunder.

Section 6.3             Fiscal Year, Method of Accounting.  No Related Person shall change its Fiscal Year or make any material change in its method of accounting without prior notice to Lender.  Upon such notice and if such change is consistent with GAAP, the reports and financial statement of Borrower and its Consolidated subsidiaries required hereunder may be prepared in accordance with such change but, if such changes are material, all calculations and determinations to be made hereunder may be made in accordance with such change only after notice of such change is given to Lender and Lender agrees to such change insofar as it affects the accounting of Borrower or of Borrower and its Consolidated subsidiaries.

Section 6.4             Business.  No Related Person shall, directly or indirectly, engage in any business which differs materially from that currently engaged in by such Related Person.

Section 6.5             Liquidations, Consolidations and Dispositions of Substantial Assets.  No Related Person shall dissolve or liquidate or sell, transfer, lease or otherwise dispose of any material portion of their property or assets or business; provided, however, nothing in this

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Section 6.5 shall be construed to prohibit any Related Person from selling rights to service mortgage loans and pools of mortgage loans or Mortgage Notes in the ordinary course of their business.

Section 6.6             Loans, Advances, and Investments.  No Related Person shall make any loan (other than Mortgage Loans), advance, extension of credit, or capital contribution to, or investment in (including any investment in any Subsidiary, joint venture or partnership), or purchase or otherwise acquire any of the capital stock, securities, or evidences of indebtedness of, any Person (including, without limitation, any employee or officer of any Related Person) (collectively, “Investment”), or otherwise acquire any interest in, or control of, another Person, except for the following: