ASSET PURCHASE AGREEMENT

Exhibit 10.1

EXECUTION COPY

 

ASSET PURCHASE AGREEMENT

AMERICAN GENERAL FINANCE, INC.
as Purchaser, and

EQUITY ONE, INC. (DE)
EQUITY ONE, INC. (MN)
EQUITY ONE, INCORPORATED
EQUITY ONE CONSUMER LOAN COMPANY, INC.
POPULAR FINANCIAL SERVICES, LLC
EQUITY ONE CONSUMER FUNDING, LLC
as Sellers, and

POPULAR, INC.
(for purposes of Section 12.14 only)

dated as of January 17, 2008

 

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions			1
Section 1.2. Rules of Construction			7
ARTICLE II
PURCHASE AND SALE OF LOANS
Section 2.1. Purchase and Sale			7
Section 2.2. Excluded Assets			8
Section 2.3. Assignment and Assumption of Leases			9
Section 2.4. Excluded Liabilities			9
Section 2.5. Purchase Price			9
Section 2.6. Payment of Purchase Price			9
Section 2.7. Closing			9
Section 2.8. Closing Obligations			10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Section 3.1. Seller Representations and Warranties			11
ARTICLE IV
REPRESENTATIONS AS TO INDIVIDUAL LOANS
Section 4.1. Individual Loans Representations and Warranties			15
Section 4.2. Remedy for Early Payment Default			21
Section 4.3. Purchase Price Protection			22
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 5.1. Purchaser representations and warranties			22
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1. Conduct of Business			24
Section 6.2. Consents, Filings and Authorizations; Efforts to Consummate			25
Section 6.3. Notices of Certain Events			25
Section 6.4. Public Announcements			26
Section 6.5. Access to Information; Confidentiality			26

		Page
Section 6.6. Expenses			27
Section 6.7. Supplements to Disclosure Schedules			27
Section 6.8. Cease Negotiations			28
Section 6.9. Valid Test Tape			28
Section 6.10. Cut-off Date Loan Data			28
Section 6.11. Final Loan Purchase Schedule			28
Section 6.12. Sample Certificates Of Insurance			28
Section 6.13. Collateral Insurance			28
Section 6.14. File Delivery			29
Section 6.15. RESPA			31
Section 6.16. Solicitation of Obligors			31
Section 6.17. Branches and Employees			31
Section 6.18. Commercially Reasonable Efforts			32
Section 6.19. Security Release			32
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1. Conditions to the Obligations of Sellers and Purchaser			32
Section 7.2. Conditions to Obligation of Seller			32
Section 7.3. Conditions to Obligation of Purchaser			33
ARTICLE VIII
TERMINATION; EFFECT OF TERMINATION
Section 8.1. Termination of Agreement			34
Section 8.2. Effect of Termination; Right to Proceed			35
ARTICLE IX
POST-CLOSING COVENANTS
Section 9.1. Interim Servicing			35
Section 9.2. Servicing Released; RESPA Disclosures			36
Section 9.3. Tax Reporting			37
Section 9.4. Removal of Unacquired Assets and Signage			37
ARTICLE X
SURVIVAL; INDEMNIFICATION
Section 10.1. Expiration of Representations and Warranties			37
Section 10.2. Indemnification by Sellers			38
Section 10.3. Indemnification by Purchaser			39
Section 10.4. Notice of Claims			39
Section 10.5. Opportunity to Defend Third Party Claims			39
Section 10.6. Limitation of Liability			40
Section 10.7. Effect of Insurance and Other Sources of Reimbursement			40
Section 10.8. No Additional Warranties			41
Section 10.9. Other Information			41

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		Page
ARTICLE XI
EMPLOYEES
Section 11.1. Consideration of Employees for Employment			41
Section 11.2. Salary and Benefits			42
Section 11.3. No Assumption of Duties or Liabilities			42
Section 11.4. Employment Claims			42
Section 11.5. Seller Employee Retention			43
Section 11.6. Non-solicitation of Employees			43
ARTICLE XII
GENERAL
Section 12.1. Joint and Several Sellers			43
Section 12.2. Notices			43
Section 12.3. Severability			44
Section 12.4. Assignment; Binding Effect			44
Section 12.5. Exhibits and Schedules			45
Section 12.6. Governing Law; Submission to Jurisdiction			45
Section 12.7. Waiver of Jury Trial			45
Section 12.8. Interpretation			46
Section 12.9. Counterparts			46
Section 12.10. Entire Agreement			46
Section 12.11. Waivers and Amendments			46
Section 12.12. No Third Party Beneficiaries			46
Section 12.13. Further Assurances			47
Section 12.14. Guaranty			47

SCHEDULES AND EXHIBITS

Schedule 3.1(a)		Sellers’ States of Organization
Schedule 3.1(c)		No Conflict of Sellers
Schedule 3.1(d)		Sellers’ Consents
Schedule 3.1(j)		Litigation
Schedule 3.1(n)		Assumed Leases
Schedule 3.1(p)		Employees
Schedule 3.1(q)		Taxes
Schedule 5.1(d)		Purchaser’s Consents
Schedule 11.5		Employee Retention Measures
Exhibit 1.1A		Closing Statement
Exhibit 2.8(a)(i)		Bill of Sale
Exhibit 2.8(a)(iv)		Specific Power of Attorney
Exhibit 6.10		Data Tape

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ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT is made as of January 17, 2008, by and among AMERICAN GENERAL FINANCE, INC., an Indiana corporation (“ Purchaser ”), EQUITY ONE, INC., a Delaware corporation (“ EQ1-DE ”), EQUITY ONE, INC., a Minnesota corporation (“EQ1-MN”), EQUITY ONE, INCORPORATED, a Pennsylvania corporation (“ EQ1-PA ”), EQUITY ONE CONSUMER LOAN COMPANY, INC., a New Hampshire corporation (“EQ1-NH”), POPULAR FINANCIAL SERVICES, LLC, a Delaware limited liability company (“PFS”), and EQUITY ONE CONSUMER FUNDING, LLC, a Delaware limited liability company (“EQ1-SPE”) (each of EQ1-DE, EQ1-MN, EQ1-PA, EQ1-NH, PFS and EQ1-SPE shall be referred to herein as a “Seller” and collectively, as “Sellers”), and, for purposes of Section 12.14 only, POPULAR, INC., a corporation organized under the laws of the Commonwealth of Puerto Rico (“ Guarantor ”).

Recitals

     A. Sellers, with the exception of EQ1-SPE and PFS, collectively operate one hundred thirty (130) network branch offices (each, a “ Branch Office ” and, collectively, the “ Branch Offices ”) in fourteen (14) states which are engaged in the diversified consumer lending business and which offer and service a complete line of real estate secured, home improvement and secured and unsecured retail and personal loan products (the “ Business ”).

     B. Subject to the terms and conditions hereof, Sellers desire to sell and transfer to Purchaser, and Purchaser desires to purchase and acquire from Sellers, all of Sellers’ right, title and interest in and to certain specified assets of Sellers (the “ Acquisition ”).

     Accordingly, in order to consummate the Acquisition and in consideration of the mutual agreements and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties (as such term is hereinafter defined), intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1. Definitions.

     As used herein, the following terms shall have the following meanings:

     “ Acquisition ” has the meaning given to such term in the Recitals.

     “ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

     “ Agreement ” means this Asset Purchase Agreement.

     “ Appraisal ” means a written real estate appraisal of a Mortgaged Property made by an appraiser and performed in accordance with industry standards in the area where the Mortgaged Property, which is the subject of such Appraisal, is located.

     “ Appraised Value ” means the market value of a Mortgaged Property as set forth in the Appraisal made for a Seller at the time of and in conjunction with the origination of the Mortgage Loan.

     “ Asserted Liability ” has the meaning given to such term in Section 10.4.

     “ Assignment and Assumption Agreements ” has the meaning given to such term in Section 2.8(a)(iii).

     “ Assumed Leases ” has the meaning given to such term in Section 2.1(a)(ii).

      “ Bills of Sale ” has the meaning given to such term in Section 2.8(a)(i).

      “ Branch Offices ” has the meaning given to such term in the Recitals.

     “ Business ” has the meaning given to such term in the Recitals.

     “ Business Day ” means any day other than a Saturday, Sunday or a day on which banks in New York or New Jersey are authorized or obligated by applicable law to close.

     “ Closing ” has the meaning given to such term in Section 2.7.

     “ Closing Date ” has the meaning given to such term in Section 2.7.

     “ Closing Statement ” means an accounting summary of the transaction which shows the aggregate Unpaid Balance(s) of the Loan(s) as of the Cut-off Date, the Purchase Price percentage, unpaid accrued interest, and all other components that make up the Bill of Sale Purchase Price. The Closing Statement shall also show the Closing Date, Cut-off Date, Servicing Transfer Date and any additional items as agreed between Purchaser and Seller. The form of Closing Statement is attached hereto as Exhibit 1.1A.

     “ Collateral ” means any real or personal property listed in, and for which a security interest is granted by any Security Agreement or Mortgage.

     “ Confidentiality Agreement ” has the meaning given to such term in Section 6.5(c).

     “ Consumer Information ” means, for purposes of Section 6.5(b), any personally identifiable information in any form (written electronic or otherwise) relating to an Obligor, including, but not limited to: an Obligor’s name, address, telephone number, Loan number, Loan payment history, delinquency status, insurance carrier or payment information, tax amount or payment information; the fact that the Obligor has a relationship with a Seller or the originator of the related Loan; and any other non-public personally identifiable information.

     “ Cut-off Date ” means the date as of which the Unpaid Balance of the Loans to be purchased hereunder is determined and which shall be indicated in the Closing Statement.

     “ Data Tape ” has the meaning given to such term in Section 6.10.

     “ Employment Claims ” has the meaning given to such term in Section 11.4.

     “ Environmental Law ” means any applicable federal, state or local law relating to pollution, hazardous substances, hazardous wastes or petroleum or otherwise relating to protection of the environment or natural resources, including the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act and Superfund Amendment Reauthorization Act, the Toxic Substances Control Act, the Emergency Planning and Community Right-to-Know Act, the Hazardous Substances Transportation Act, the Safe Drinking Water Act and the Solid Waste Disposal Act and comparable state laws.

     “ Excluded Liabilities ” has the meaning given to such term in Section 2.4.

     “ Excluded Loan ” means any loan originated or, at any time, serviced at or by the operations of one or more Sellers located in Canonsburg, Pennsylvania or Voorhees, New Jersey.

     “ Executive Order ” has the meaning given to such term in Section 4.1(e).

     “ File ” means, as to each Loan, the documents and materials described in Section 6.14 of this Agreement.

     “ Financial Information ” has the meaning given to such term in Section 3.1(e) .

     “ Fixed Rate Loan ” means a Loan with respect to which the Note is a Fixed Rate Note.

     “ Fixed Rate Note ” means a Note which provides that the annual rate at which interest on the principal balance is calculated is fixed at a set percentage and does not vary based on movements of an index or which provides for precomputed interest.

     “ GAAP ” means generally-accepted United States accounting principles, consistently applied.

     “ Governmental Authority ” means any federal, state or local court, administrative agency, commission or governmental or regulatory authority.

     “ Guarantor ” has the meaning given to such term in the preamble.

     “ Guarantor MAE ” means any change or effect that, individually or in the aggregate, is materially adverse to the Guarantor or the Guarantor’s business as a whole; provided, that in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, or will be, a Guarantor MAE: (a) changes in general economic conditions; (b) changes that are generally applicable to the industry in which the Guarantor operates (which changes do not affect the

Guarantor in a materially disproportionate manner), including any regulatory changes; or (c) changes in GAAP or any law or regulation, or any interpretation thereof.

     “ Hazardous Materials ” means any substance, pollutant or contaminant subject to regulation under any Environmental Law.

     “ Hire Date ” has the meaning given to such term in Section 11.1.

     “ Indemnified Party ” has the meaning given to such term in Section 10.4.

     “ Indemnifying Party ” has the meaning given to such term in Section 10.4.

     “ Indemnity Cap ” has the meaning given to such term in Section 10.6.

     “ Lease Assignments ” has the meaning given to such term in Section 2.8(a)(ii).

     “ Lien ” means any mortgage, lien, pledge, security interest, charge, equitable interest, right-of-way, easement, encroachment, preemptive right, option, right of first refusal or similar restriction or right, title defect or encumbrance.

     “ Loan ” means a mortgage loan or other loan, extension of credit, installment contract or other indebtedness listed on the Loan Purchase Schedule, including without limitation consumer loans, retail installment sales contracts, and revolving charge accounts and such loan includes without limitation the related File, monthly payments, principal prepayments, liquidation proceeds, condemnation proceeds, insurance proceeds, servicing rights and all other rights, benefits, proceeds and obligations arising from or in connection with such Loan.

     “ Loan Purchase Schedule ” means a schedule of Loan(s) sold by Sellers to Purchaser on a Closing Date which schedule shall be furnished by Sellers to Purchaser and annexed as Schedule A to the Bill of Sale by Sellers with respect to the Loans purchased, which Schedule A shall contain the following required fields for each Loan: Account Number; Obligor(s) Name(s); Unpaid Balance as of Cut-off Date; Dollar Amount of Accrued Interest; Number of Days of Accrued Interest; Current Note Rate; Per Diem Interest Amount; Interest Paid Through Date; Next Due Date; Last Paid Date; Lien Position; State of origination (and, if different, the state of the Obligors’ current residence); the existence of any mortgage insurance (PMI); the name of the warehouse lender for each Loan; a code for open-ended credit Loans; Advance Balance; Amount of Required Periodic Installment Payment; the existence of any subordinate lien Mortgage Loan originated by a Seller on the Mortgaged Property. Sellers shall furnish Purchaser with a copy of the Loan Purchase Schedule no later than two (2) Business Days prior to the Closing Date.

     “ Losses ” means any and all claims, debts, obligations and other liabilities, monetary damages, fines, fees, penalties and reasonable expenses (including amounts paid in settlement, court costs, fees and expenses of attorneys, accountants and other experts), but excluding any consequential, special, indirect, incidental and punitive damages.

     “ Material Adverse Effect ” means any change or effect that, individually or in the aggregate, is materially adverse to the Loans, Assumed Leases and the operation of the Business taken as a whole; provided, that in no event shall any of the following, alone or in combination,

be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, or will be, a Material Adverse Effect: (a) changes in general economic conditions; (b) changes that are generally applicable to the industry in which the Business operates (which changes do not affect the Loans, Assumed Leases and the operation of the Business in a materially disproportionate manner), including any regulatory changes; or (c) changes in GAAP or any law or regulation, or any interpretation thereof.

     “ Mortgage ” means the mortgage, deed of trust, security deed, deed to secure debt, or other instrument(s) creating a first or second lien on, or first or second priority security title ownership interest in, real property securing a Mortgage Note, including any riders or addendums.

     “ Mortgage Loan ” means a Loan evidenced by a Mortgage Note and secured by a Mortgage.

     “ Mortgage Note ” means the original note or other evidence of indebtedness of a Mortgagor secured by a Mortgage.

     “ Mortgaged Property ” means the real property, including improvements and related interests, securing repayment of a Mortgage Loan.

     “ Mortgagee ” means the mortgagee, grantee or other person or entity in whose favor or for whose benefit the Mortgage runs and/or, to the extent applicable, any subsequent assignee of the Mortgagee.

     “ Mortgagor ” means the obligor(s) on a Mortgage Loan and any other person who signs a Mortgage.

     “ New Employees ” has the meaning given to such term in Section 11.1.

     “ Note ” means a Mortgage Note, or other evidence of indebtedness related to a Loan in whatever form or nature including without limitation, promissory note, loan contract, credit agreement, installment loan contract, or retail installment sales contract.

     “ Note Rate ” means for interest bearing loans, the annual rate at which interest accrues on the principal balance of the Note at the time of origination, in accordance with the terms of the Note.

     “ Obligor ” means the Mortgagor or for Loans other than Mortgage Loans, the person or persons who are obligated to pay a Seller in accordance with the Loans.

     “ OFAC Regulations ” has the meaning given to such term in Section 4.1(e).

     “ Parties ” means each Seller and Purchaser, collectively.

     “ Party ” means any Seller, on the one hand, or Purchaser, on the other hand, as the context requires.

     “ Person ” means an individual, corporation, partnership, limited partnership, limited liability company, limited liability partnership, person (including a “person” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934), trust, association, entity or government or a political subdivision, agency or instrumentality of a government.

     “ Purchase Price ” has the meaning given to such term in Section 2.5.

     “ Purchaser ” has the meaning given to such term in the preamble.

     “ Purchaser Indemnitee ” has the meaning given to such term in Section 10.2.

     “ Release ” means any release, spill, leaking or discharge into any property.

     “ Representative ” means, with respect to any Party, any of such Party’s directors, officers, managers, employees, attorneys, accountants, brokers, finders, investment bankers or other agents.

     “ Repurchase Price ” means an amount equal to the sum of (i) the then Unpaid Balance, plus (ii) in the case of interest bearing Loans, any accrued and unpaid interest at the Note Rate through the date of repurchase, plus (iii) any other charges accrued thereon, plus (iv) any premium or dealer participation originally paid to the applicable Seller, as set forth in the Closing Statement, plus (v) all reasonable costs and expenses incurred by Purchaser in connection with enforcement of Sellers’ repurchase obligation under Section 4.2 of this Agreement.

     “ RESPA ” means the Real Estate Settlement Procedures Act and HUD Regulation X thereto.

     “ Security Agreement ” means for Loans other than Mortgage Loans, the documents or instruments setting or establishing the security interest in Collateral for Loans, together with any and all certificates of title or other evidences of ownership of the security interest.

     “ Seller ” has the meaning given to such term in the preamble.

     “ Seller Indemnitee ” has the meaning given to such term in Section 10.3.

     “ Sellers ” has the meaning given to such term in the preamble.

     “ Senior Mortgage ” means a Mortgage senior in lien or priority to the lien or priority of a Mortgage securing a Mortgage Loan.

     “ Servicing Transfer Date ” means a date as agreed to by the Purchaser and Sellers, but in no event (a) before the later of (i) twenty-one (21) days after receipt of a Valid Test Tape as described in Section 6.9 or (ii) fifteen (15) days after mailing of notices pursuant to Section 9.2, or (b) provided that the time period under (a) has been satisfied, after the date that is thirty (30) days after the Closing Date. This date is currently estimated to be as indicated in the Closing Statement.

     “ Transaction Documents ” means, collectively, this Agreement and each of the other agreements and instruments to be executed and delivered by any Party in connection with the consummation of the Acquisition.

     “ Unpaid Balance ” means, for interest bearing Loans, the principal amount due and, for each precomputed Loan, the gross balance due less any interest rebate that would be applied to reduce the gross balance if such Loan were prepaid in full as of the date the Unpaid Balance is calculated. The Unpaid Balance shall be reduced by any unpaid fees and insurance premium refunds due to cancellation of insurance.

     “ Valid Test Tape ” has the meaning given to such term in Section 6.9.

     Section 1.2. Rules of Construction.

     The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “but not limited to.” “Or” is disjunctive, but not necessarily exclusive. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. All Exhibits and Schedules attached to this Agreement shall be deemed incorporated herein by reference as if fully set forth herein. Words such as “herein,” “hereof,” “hereto,” “hereby” and “hereunder” refer to this Agreement and to the Schedules and Exhibits, taken as a whole. Except as otherwise expressly provided herein: (a) any reference in this Agreement to any agreement shall mean such agreement as amended, restated, supplemented or otherwise modified from time to time; (b) any reference in this Agreement to any law shall include all amendments to such law, corresponding provisions of any successor law and any regulations and rules promulgated pursuant to such law or such successor law; and (c) all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time. Neither the captions to Articles, Sections or subdivisions thereof shall be deemed to be a part of this Agreement.

ARTICLE II

PURCHASE AND SALE OF LOANS

     Section 2.1. Purchase and Sale.

     (a) Subject to the provisions of this Agreement and the Bill of Sale, on the Closing Date, Purchaser agrees to purchase from Sellers, and Sellers agree to sell, convey, transfer, assign, and deliver to Purchaser all of Sellers’ right, title and interest in and to (i) the Loans set forth on the Loan Purchase Schedule and all incidents of such Loans, including without limitation, all of Sellers’ interest under each and every existing policy or certificate of insurance, if any, to the extent such policy or certificate relates to any Collateral securing any Loan or as relates to the life or lives, health or unemployment of any Obligor, and all pending insurance claims; all claims filed in the future, if any, and the proceeds thereof; (ii) one or more leases of real property on which a Branch Office is

located that Purchaser may elect to assume upon written notice from Purchaser to Sellers no later than fifteen (15) days prior to the Closing Date and in respect of which Sellers have delivered a written consent of the related lessor (to the extent required) and Purchaser has entered into an assignment and assumption agreement or new lease agreement (the “ Assumed Leases ”); and (iii) all rights, claims and causes of action of any Seller against third parties relating to the assets purchased under this Agreement, including any rights, claims and causes of action against any dealer in respect of which a Loan was used to finance the purchase of a product from such dealer. For purposes of clarification, Purchaser shall not be obligated under this Agreement to purchase any loans originated or funded after the Cut-off Date; provided, however, Purchaser may elect to purchase any such loans as provided in Section 2.5.

     The Purchaser shall be entitled to (1) all payments of principal received after the Cut-off Date, (2) all payments of interest received on the Loans after the Cut-off Date and (3) all recoveries with respect to any advances made with respect to the Loans collected after the Cutoff Date. The Unpaid Balance of each Loan as of the Cut-off Date is determined after application of payments of principal received on or before the Cut-off Date. For purposes of clarification, payments received on or before the Cut-off Date of scheduled principal and interest prepaid for a payment due date following the Cut-off Date shall be applied to the principal balance as of the Cut-off Date. Such prepaid amounts shall be the property of Sellers.

     (b) Upon execution of this Agreement, and payment of the Purchase Price by Purchaser, Sellers assign and release all servicing rights and responsibilities including without limitation, all rights to receive servicing fees and other servicing-related income and benefits, with respect to each Loan purchased under this Agreement to and for the benefit of Purchaser, as of the Closing Date. Sellers acknowledge and agree that Purchaser shall enjoy such servicing rights, all freely assignable, with no residual, contingent or other claims thereon remaining in Sellers with respect to any right of Sellers to service the Loans after the Closing Date, until only such time, if any, as Sellers repurchase any Loan from Purchaser pursuant to Section 4.2 of this Agreement, and then only as to the Loans repurchased. Purchaser hereby agrees to assume the servicing obligations of the assigned Loans at the Servicing Transfer Date. Sellers will notify the Obligor under each Loan purchased hereunder of the transfer of servicing at Sellers’ cost and in accordance with any applicable laws.

     (c) Purchaser shall, effective upon Closing, assume and agree to discharge any liability relating to the Loans and arising from acts, events or occurrences after the Closing Date (other than any liabilities arising from the acts or omissions of any Seller).

     Section 2.2. Excluded Assets.

     For purposes of clarification, Purchaser is not purchasing, and no Seller is assigning, selling or transferring, any assets of any Seller except the Loans or as otherwise specifically set forth in Section 2.1.

     Section 2.3. Assignment and Assumption of Leases.

     In the event Purchaser elects to assume any Assumed Leases pursuant to Section 2.1(a)(ii), Purchaser shall, effective upon Closing, assume and agree to discharge any liability arising after the Closing under the Assumed Leases (other than any liability arising out of or relating to any breach of such Assumed Leases that occurred prior to the Closing).

     Section 2.4. Excluded Liabilities.

     Except as otherwise specifically provided in Section 2.1(c) and Section 2.3, Purchaser shall not assume or be bound by any obligations or liabilities of any Seller of any kind or nature, known, unknown, accrued, absolute, fixed, contingent, or otherwise, whether or not existing or hereafter arising whatsoever, including, but not limited to obligations or liabilities arising, or purported by a third party to arise, from an act, event or occurrence related to the Business, the Loans or the Assumed Leases prior to Closing (the “ Excluded Liabilities ”).

     Section 2.5. Purchase Price.

     The aggregate purchase price payable by Purchaser to Sellers for the Loans sold hereunder shall be an amount (the “ Purchase Price ”) equal to one hundred and three percent (103.0%) of the aggregate Unpaid Balance as of the Cut-off Date of the Loans as set forth on the Loan Purchase Schedule, plus, for all Loans except precomputed Loans, one hundred percent (100.0%) of interest that has accrued at the Note Rate from the date interest has been paid to the Closing Date, up to a maximum of twenty-nine (29) days of such accrued interest. For purposes of clarification, in the event that Purchaser agrees to purchase any loan originated or funded by a Seller after the Cut-off Date, (a) Sellers shall provide a new Loan Purchase Schedule including such loans, (b) the Parties may agree to a subsequent Closing, and (c) this Agreement shall govern such purchase (all references in this Agreement to defined terms shall be deemed to include such loans and such purchase as if those loans were included on the initial Loan Purchase Schedule). Sellers and Purchaser shall execute a Bill of Sale and Closing Statement for each such subsequent Closing.

     Section 2.6. Payment of Purchase Price.

     At the Closing, Purchaser shall pay to Sellers the Purchase Price in immediately available funds by federal wire transfer of U.S. currency to the account or accounts designated in writing by Sellers not less than two (2) Business Days prior to the Closing Date.

     Section 2.7. Closing.

     The consummation of the Acquisition in accordance with this Agreement (the “ Closing ”) shall commence on such date, and at such time and place, as the Parties shall agree upon in writing (but subject to the provisions of Section 8.1 hereof). The date of the Closing is referred to as the “ Closing Date. ” The Parties shall deliver at the Closing such documents, certificates of officers and other instruments of transfer as are set forth in Article VII hereof and as may reasonably be required to effect the transfer by Sellers of the Loans pursuant to and as contemplated by this Agreement and to consummate the Acquisition. All events occurring at the

Closing shall be deemed to occur simultaneously (with the concurrent payment of the Purchase Price and delivery of the documents required to be delivered pursuant to Articles VI and VII).

     Section 2.8. Closing Obligations.

     In addition to any other documents to be delivered under other provisions of this Agreement, at the Closing:

     (a) Sellers shall deliver or cause to be delivered to Purchaser:

     (i) one or more bills of sale for the Loans to be purchased under this Agreement, in the form attached hereto as Exhibit 2.8(a)(i) (the “ Bills of Sale ”) executed by the appropriate Seller;

     (ii) for the Assumed Leases, an Assignment and Assumption of Lease in a form mutually agreed to by the Parties prior to Closing (the “ Lease Assignments ”) or such other appropriate document or instrument of transfer, as the case may require, each in form and substance satisfactory to Purchaser and executed by the appropriate Seller, together with any written consents obtained from lessors under the Assumed Leases pursuant to Section 6.2 hereof;

     (iii) one or more assignments of the assets to be purchased pursuant to Section 2.1(a)(iii), in a form mutually agreed to by the Parties prior to Closing (the “ Assignment and Assumption Agreements ”) executed by the appropriate Seller;

     (iv) A Specific Power of Attorney, executed by each Seller, in the form attached hereto as Exhibit 2.8(a)(iv);

     (v) A certificate of an executive officer of each Seller, dated the Closing Date, confirming the matters set forth in Sections 7.3(a), (b) and (d); and

     (vi) A certificate of the Secretary or Assistant Secretary of each Seller, dated the Closing Date, certifying, among other things, that attached or appended to such certificate: (A) is a true and correct copy of its certificate of incorporation and bylaws or comparable charter documents, and all amendments thereto; (B) is a true copy of all corporate actions taken by such Seller, including resolutions of its board of directors or shareholders, as applicable, authorizing the consummation of the Acquisition and the execution, delivery and performance of this Agreement and each of the Transaction Documents to be delivered by it pursuant hereto; and (C) are the names and signatures of its duly elected or appointed officers who are authorized to execute and deliver this Agreement and the other Transaction Documents to which it is a party

     (b) Purchaser shall deliver to Sellers:

     (i) the Purchase Price by wire transfer of immediately available funds to an account specified by Sellers in writing at least two (2) Business Days prior to the Closing Date;

     (ii) the Lease Assignments executed by Purchaser;

     (iii) A certificate, dated the Closing Date, of an executive officer of Purchaser confirming the matters set forth in Sections 7.2(a), (b) and (c); and

     (iv) A certificate, dated the Closing Date, of the Secretary or Assistant Secretary of Purchaser certifying that attached or appended to such certificate: (A) is a true and correct copy of the certificate of incorporation and by-laws of Purchaser, and all amendments thereto; (B) is a true copy of all corporate actions taken by it, including resolutions of its board of directors, authorizing the consummation of the Acquisition and the execution, delivery and performance of this Agreement and each of the Transaction Documents to be delivered by Purchaser pursuant hereto; and (C) are the names and signatures of its duly elected or appointed officers who are authorized to execute and deliver this Agreement and the other Transaction Documents to which Purchaser is a party.

     Section 2.9. Assumed Lease Consents.

     If the written consent of any lessor under any lease in respect of which Purchaser has provided written notice to Sellers of its intention to assume, as provided in Section 2.1(a), has not been obtained as of the Closing, the Parties may mutually agree to have Sellers continue their efforts to obtain such consent. If the Parties mutually agree to have Sellers continue their efforts to obtain the related consent, Sellers shall exercise commercially reasonable efforts to obtain such consent as quickly as practicable. Once such consent is obtained, Sellers shall promptly convey, transfer, assign and deliver the related lease to Purchaser, and Purchaser shall assume the obligations under such lease from and after assignment to Purchaser, pursuant to a Lease Assignment, whereupon such lease shall constitute an Assumed Lease under this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLERS

     Section 3.1. Seller Representations and Warranties.

     Sellers hereby, jointly and severally, represent and warrant to Purchaser as of the date hereof as follows:

     (a) Organization and Qualification . Each Seller is a corporation or a limited liability company, as appropriate, duly organized, validly existing and in good standing under the laws of the jurisdiction set forth opposite its name on Schedule 3.1(a) attached hereto. Each Seller has all requisite corporate or limited liability company, as appropriate, power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. Each Seller is duly qualified and licensed to do business (or in the case of licensing required for originating or purchasing

loans, was so licensed at the time of origination or purchase of each Loan) and is in good standing, in each jurisdiction where the assets and properties owned, leased or operated by it or the nature of its business, including making, holding, servicing, transferring and assigning the Loans, makes such qualification or licensing necessary, except for failures to be so qualified or licensed and in good standing that do not have a Material Adverse Effect.

     (b) Authority Relative to this Agreement. Each Seller has all necessary corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party, to perform its obligations hereunder and thereunder and to make, hold, service, transfer and assign each Loan. The execution and delivery of this Agreement and the other Transaction Documents by each Seller which is a party thereto and the consummation by such Seller of the Acquisition have been duly and validly authorized by all necessary corporate action on the part of such Seller, and no other corporate proceedings on the part of such Seller are necessary to authorize this Agreement or such other Transaction Documents or to consummate the Acquisition. This Agreement and the other Transaction Documents have been or will be duly executed and delivered by each Seller which is a party thereto and, assuming the due authorization, execution and delivery by Purchaser, this Agreement constitutes, and each other Transaction Document upon execution will constitute, a legal, valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, subject to the effect of any applicable bankruptcy, moratorium, insolvency, fraudulent conveyance, reorganization or other similar law affecting the enforceability of creditors’ rights generally and to the effect of general principles of equity which may limit the availability of remedies (whether in a proceeding at law or in equity).

     (c) No Conflict. Except as set forth on Schedule 3.1(c), the execution and delivery by Sellers of this Agreement and each other Transaction Document to which any Seller is a party do not, and the performance by Sellers of their obligations hereunder and thereunder and the consummation of the Acquisition will not: (a) conflict with or violate any provision of the certificate of incorporation or bylaws of any Seller; (b) assuming that all filings and notifications described in Section 3.1(d) have been made, conflict with or violate any law or order applicable to Sellers or by which any of Sellers’ assets are, or property is, bound or affected; or (c) to the knowledge of any Seller, result in any material breach of or constitute a material default under, or require notice or consent (other than any notice to or consent of a lessor under an Assumed Lease) under, any mortgage, indenture, deed of trust, lease, contract, agreement, license or other instrument to which any Seller is a party or by which any Seller’s assets or properties are bound, except, in the case of clauses (b) and (c), for any conflict, violation, breach or default that would not reasonably be expected to have a Material Adverse Effect.

     (d) Required Filings and Consents. The execution and delivery by Sellers of this Agreement and each other Transaction Document to which any Seller is a party do not, and the performance by Sellers of their respective obligations hereunder and thereunder and the consummation of the Acquisition will not, require any consent, approval, authorization or permit of, or filing by Sellers with or notification by Sellers to any Governmental Authority or other third party, except for (a) the consents, approvals,

authorizations, permits and filings set forth on Schedule 3.1(d), (b) such consents, approvals, authorizations, permits and filings which, if not obtained, would not reasonably be expected to have a Material Adverse Effect, and (c) any required consents or approvals of a lessor under an Assumed Lease .

     (e) Summary Financial Information. The summary financial information (the “ Financial Information ”) provided on page 16 in the Confidential Offering Memorandum of Equity One dated September 2007 is true, accurate and complete.

     (f) No Finder. Except for Citigroup Global Markets, the fees and expenses of which in connection with the Acquisition shall be solely the responsibility of Sellers, no Seller has agreed to pay to any broker, finder, investment banker or any other Person a brokerage, finder’s or other fee or commission in connection with this Agreement or the Acquisition.

     (g) Accuracy of Information. Neither this Agreement nor any statement, report or other document prepared by a Seller and delivered to Purchaser relating to this Agreement, the Loans, the Assumed Leases or any Seller’s ability to perform its obligations under this Agreement, contains any untrue statement or fact or omits to state a fact or circumstance necessary to make the statements contained herein or therein accurate and not misleading.

     (h) Fair Consideration. The consideration received by Sellers upon the sale of the Mortgage Loans under this Agreement shall constitute fair consideration and reasonably equivalent value for the Loans.

     (i) Sale Treatment. Sellers have determined that the disposition of the Loans pursuant to this Agreement will be afforded sale treatment for accounting and tax purposes.

     (j) Litigation. Except as set forth on Schedule 3.1(j), as of the date hereof, there are no claims, actions, suits or proceedings pending or, to the knowledge of Sellers, threatened, against any Seller before any Governmental Authority or arbitrator which relate to the Business, except for such claims, actions, suits or proceedings as would not reasonably be expected to have a Material Adverse Effect.

     (k) Reserved.

     (l) Reserved.

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

will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws.

     (n) Assumed Leases. Schedule 3.1(n) sets forth an accurate description (by location of property, name of lessor, name of lessee, date of lease, term expiry date, renewal terms (if any) and annual rent) of all Assumed Leases. Each Seller listed on Schedule 3.1(n) as leasing or subleasing property under an Assumed Lease has a valid and subsisting leasehold interest in the related real property, subject to the terms of the applicable Assumed Lease and subject to no encumbrances. Each of the Assumed Leases is in effect and there does not exist under any such Assumed Lease any default by the related Seller or any event which with notice or lapse of time or both would constitute a default by such Seller. Sellers have delivered to Purchaser true and complete copies of all Assumed Leases listed on Schedule 3.1(n).

     (o) Environmental Matters.

     (i) To the knowledge of Sellers, all environmental permits, licenses or approvals required under Environmental Laws for the conduct of the Business by Sellers at the Branch Offices subject to the Assumed Leases (if any) have been obtained and have not been rescinded or terminated;

     (ii) Sellers have not received any written notice, notification, demand, request for information, citation, summons or order from any Governmental Authority or any other Person alleging a violation of, or liability under, any Environmental Law with respect to the use of the Branch Offices subject to the Assumed Leases;

     (iii) To the knowledge of Sellers, there has been no Release of any Hazardous Materials at, on, under or from any of the Branch Offices subject to the Assumed Leases in amounts or under circumstances that would require remediation pursuant to or otherwise result in liability under any Environmental Law;

     (iv) There are no pending or, to the knowledge of Sellers, threatened claims, actions, suits or proceedings against any Seller by any Governmental Authorities or other Persons relating to the Branch Offices subject to the Assumed Leases, and which further relate to or arise out of any Environmental Law; and

     (v) Sellers have delivered to Purchaser copies of all environmental investigations, studies, audits, tests, or analyses in their possession relating to the Branch Offices subject to the Assumed Leases.

     (p) Employees. Set forth on Schedule 3.1(p) is a complete and accurate list of the following information for each of Sellers’ current employees: employer; name; job title; department for which he/she works; job location; full or part-time status; date of hire; date of last performance review; date of last compensation increase; bonuses paid for the year ended December 31, 2006; target bonus percentages for 2007; and current

annual base salary or wage rates. Except as set forth on Schedule 3.1(p), all of such employees are employed on an “at will” basis.

     (q) Taxes. Sellers have filed or caused to be filed on a timely basis (subject to any extensions) all tax returns that are or were required to be filed prior to the Closing Date. All such tax returns filed by Sellers were true, correct and complete in all material respects. Sellers have paid, or made provision for the payment of, all taxes that have or may have become due for all periods covered by such tax returns, or pursuant to any assessment received by Sellers, except such taxes, if any, as are listed in Schedule 3.1(q) and are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP) have been provided. There are no Liens on any of the assets transferred under this Agreement that arose in connection with any failure (or alleged failure) to pay any tax, and no Seller has any knowledge of any taxing authority in the process of asserting a claim attributable to taxes which, if adversely determined, would result in any such Lien.

ARTICLE IV

REPRESENTATIONS AS TO INDIVIDUAL LOANS

     Section 4.1. Individual Loans Representations and Warranties.

     Each Seller hereby, jointly and severally, represents and warrants to the Purchaser in respect of each Loan (or, as applicable, each Mortgage Loan) that, as of the date of this Agreement and as of the related Closing Date or such other date specified herein or in the Bill of Sale:

     (a) Loan Purchase Schedule. The information contained in the Data Tape and the Loan Purchase Schedule is true, accurate and complete.

     (b) No Escrow Accounts. There are no escrow accounts relating to any Mortgage Loans.

     (c) Modifications. The terms of the Mortgage or Security Agreement and Note have not been impaired, waived, altered, or modified in any respect, except by agreement filed of record in the appropriate real property records of the county, parish or other political entity within which the Collateral is located, and the original or certified true copy of such agreement is contained in the File.

     (d) No Fraud. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Loan has taken place on the part of Sellers or the Obligor, any appraiser, any builder or any developer, or any other party involved in the solicitation, origination or servicing of the Loan or in the application for any insurance in relation to such Loan or in connection with the sale of such Loan to the Purchaser, and there are no circumstances existing with respect to the Loan which would permit the primary mortgage guaranty insurer to deny coverage under any insurance policy.

     (e) Compliance . The Loan, including without limitation the origination, servicing and transfer thereof, the Mortgage or Security Agreement, the Note and any insurance policy, certificate and coverage relating thereto, and any Seller’s activities in connection therewith, comply with all applicable federal, state and local laws, rules, regulations and ordinances including without limitation all usury, truth-in-lending, predatory lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Loan. Sellers have used reasonable origination, servicing and acquisitions procedures to ensure such regulatory compliances. No Mortgage Loan is (i) a “high cost” mortgage loan under The Home Ownership and Equity Protection Act of 1994, as amended, (ii) a “high cost home,” “threshold,” “covered,” (excluding New Jersey “Covered Home Loans” as that term was defined in clause (1) of the definition of that term in the New Jersey Home Ownership Security Act of 2002 during the period between November 26, 2003 and July 7, 2004), “high risk home,” “predatory,” “abusive,” or similarly defined loan, including refinance loans, under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees) or (iii) categorized as “high cost” or “covered” pursuant to Appendix E of Standard & Poor’s LEVELS ^® Glossary, as revised from time to time. No Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the “ Executive Order ” ) or the regulations promulgated by the Office of Foreign Assets Control of the United States Department of the Treasury (the “ OFAC Regulations ” ) or in violation of the Executive Order or the OFAC Regulations, and no Mortgagor is subject to the provisions of such Executive Order or the OFAC Regulations nor listed as a “specially designated national” or “blocked person” for purposes of the OFAC Regulations.

     (f) Underwriting Guidelines. Each Loan was underwritten in accordance with the underwriting guidelines of the applicable Seller provided to the Purchaser, which underwriting guidelines satisfy the standards of prudent lenders of the same type of loans as the loans in the secondary market.

     (g) Hazard Insurance. With respect to each Mortgage Loan, all buildings on the Mortgaged Property are insured against loss by (a) fire, (b) hazards of extended coverage, and (c) such other hazards as are customary in the area under policies and terms that are appropriate for said buildings. To the knowledge of Sellers, all such individual insurance policies contain a standard loss payee clause naming the lender or originator of the related Loan and its successors and assigns as loss payee. Subject to applicable law, the Mortgage or Security Agreement obligates the Obligor thereunder to maintain appropriate insurance at the Obligor’s cost and expense and allows but does not obligate the Mortgagee to advance funds to procure such insurance in the event Obligor does not and to seek reimbursement therefor from the Obligor.

     (h) Title Insurance. With respect to each Mortgage Loan, the lien of the Mortgage is insured under an American Land Title Association form lenders title insurance policy (using the most current such form approved for use in the state in which the Mortgaged Property is located as of the date of origination of any particular Loan) or a commitment therefor.

     (i) Reserved.

     (j) No Release . The Mortgage or Security Agreement has not been satisfied, cancelled, rescinded or subordinated, in whole or in part. The Obligor has not been released, in whole or in part, from such Obligor’s obligations under the Note, and the Mortgaged Property or other Collateral has not been released, in whole or in part, from the lien of the Mortgage or Security Agreement.

     (k) Valid Lien . The Note and Mortgage or Security Agreement, as transferred to Purchaser, is valid, subsisting and enforceable as set forth in the Loan Purchase Schedule and the Data Tape, and the Mortgage securing each Loan or other necessary security document is valid and has been properly filed, recorded or otherwise perfected in accordance with applicable law. Such lien and Mortgaged Property are subject only to (a) the lien of current real property taxes, water and sewer rents, rates and assessments not yet due and payable, (b) covenants, conditions and restrictions, rights of way, easements and other matters of the public record acceptable to mortgage lending institutions generally which do not impair the value of the Mortgaged Property or the Loan, and (c) any Senior Mortgage of record which is noted in the title insurance policy in the case of a second lien Mortgage Loan. With respect to each Mortgage Loan, there are no liens for unpaid taxes, ground rent, water charges or sewer rents or rates affecting the Mortgaged Property which are due and payable.

     (l) Perfection of Security Interest . No instruments other than those delivered to Purchaser are required under applicable law to evidence the indebtedness represented by the Loan or to perfect the security interest in the Mortgaged Property or other Collateral.

     (m) Obligor . All parties to the Note and Mortgage or Security Agreement were the real parties in interest on the Loan and were not mere nominees or accommodation parties for any other persons and had full legal capacity to execute same. Except as set forth on the Loan Purchase Schedule, none of the Obligors is deceased, and each signature is the genuine and authentic signature of the person it purports to be.

     (n) Ownership . The applicable Seller has good and marketable title to the Loan and is the sole owner thereof and has full and unrestricted right to sell, assign and transfer the Loan, the Note, the Mortgage or Security Agreement and the File to Purchaser free and clear of any liens, encumbrances, equities, loans, pledges, charges, claims, or security interests. The applicable Seller is transferring the Loan free and clear of any and all encumbrances, liens, pledges, equities, participation interests, claims, agreements with other parties to sell or otherwise transfer the Loan, charges or security interests of any nature encumbering such Loan.

     (o) No Defenses . The Note and the Mortgage or Security Agreement are not subject to any right of rescission, set-off claim, counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of the Note and the Mortgage or Security Agreement, or the exercise of any right thereunder, render the Mortgage or Security Agreement unenforceable, in whole or in part, or subject to any such right of

rescission, set-off, counterclaim or defense and no such right of rescission, set-off, counterclaim or defense, including the defense of usury, has been asserted with respect thereto.

     (p) No Default . There is no default, breach, violation or event of default and/or acceleration existing under the Note or Mortgage or Security Agreement or to any Seller’s knowledge under the Senior Mortgage, if any, nor has there occurred any event which, with the passage of time or the giving of notice or both, could give rise to such default, breach, violation or event of default and/or acceleration. No Seller has waived any default, breach, violation or event of default or acceleration under the Note, Mortgage or Security Agreement or under the Senior Mortgage, if any. No Seller has received any notice of default, breach or acceleration under the Senior Mortgage, if any.

     (q) No Mechanic’s Liens . To the knowledge of Sellers, there are no mechanic’s or materialman’s liens or claims for work, labor or materials affecting the Mortgaged Property or Collateral which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage or Collateral.

     (r) Collateral. The Note is not and has not been secured by any Collateral except the Mortgaged Property or other Collateral specified in the Mortgage or Security Agreement.

     (s) Customary Provisions . The Mortgage or Security Agreement contains customary and enforceable provisions, subject to applicable law, so as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property or other Collateral of the benefits of the security provided thereby. No Loan provides for negative amortization. With respect to each Mortgage Loan, there is no homestead or other exemption (other than under the Servicemembers Civil Relief Act or similar state or local laws) available to a Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage.

     (t) Dwelling Type . The Mortgaged Property is improved by either a single family residential dwelling or a two to four unit family residential dwelling, which is not a cooperative apartment.

     (u) Proceeds Disbursed . Excepting any open-ended credit Loans as set forth on the Loan Purchase Schedule, the proceeds of the Loan have been fully disbursed, there is no obligation on the part of the holder of the Note to make future advances thereunder, any and all requirements as to completion of any on-site or off-site improvements have been complied with, and any disbursement of any escrow funds has been made. All costs, fees and expenses incurred in making, closing or recording the Loan have been paid. The Obligor is not entitled to any refund of any amounts paid or due under the Note or the Mortgage or Security Agreement.

     (v) No Additional Payment Obligation . There is no obligation on the part of Sellers or any other party to make payments on account of the Loan which are in addition to those made by the Obligor.

     (w) Appraisal . With respect to each Mortgage Loan, the File contains an Appraisal on a form then currently acceptable under FNMA and FHLMC guidelines setting forth the Appraised Value of the Mortgaged Property at the time of origination of the Mortgage Loan. The Appraisal was conducted in good faith by an appraiser who meets the minimum requisite qualifications to perform such valuation in accordance with the Uniform Standards of Professional Appraisal Practices standards, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation was not affected by the approval or disapproval of the Loan. None of the Mortgage Loans are in an area identified in the Federal Register by the Flood Emergency Management Agency as having flood hazards.

     (x) Accurate Loan File; Obligor’s Credit . All information and each document contained in each File is true, complete, accurate, and correct. Sellers have no actual knowledge of any circumstances or conditions with respect to the Mortgage or Security Agreement, the Mortgaged Property or other Collateral, the Obligor or the Obligor’s credit standing that, in each Seller’s opinion, could cause the Loan to become delinquent.

     (y) Credit Report . Each credit report obtained in connection with the origination of a Loan was properly obtained from a major credit reporting agency, and was less than sixty (60) days old at the time of origination.

     (z) Additional Compensation . None of Sellers nor any stockholder, director or officer of any Seller has received any benefit, consideration or value, other than the increased business to the applicable Seller and its affiliated corporations represented by the Loan, a prepaid finance charge disclosed to the Obligor on the Loan, or insurance commissions from time to time heretofore paid, from any Obligor or anyone else in connection with the Loan.

     (aa) Governing Laws . The governing laws with respect to the origination, servicing and foreclosure of any Loans are the applicable provisions of the laws of the state in which the Obligors reside or where the Collateral is located, or the laws of the United States, and not any tribal law, and no tribal court has exclusive jurisdiction of the same.

     (bb) No Funds Advanced . Sellers have not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the Obligor, directly or indirectly, for the payment of any amount required under the Loan. All payments shown on the records relating to the Loans were made on the dates indicated on said records, and none of the credits entered on the records were gratuitous or were given for a payment made by an Affiliate, employee or agent of any Seller.

     (cc) Servicemember’s Civil Relief Act . The Obligor has not notified any Seller and no Seller has actual knowledge of any relief requested by or allowed to the Obligor under the Servicemembers Civil Relief Act of 2003, or any similar state law or regulation.

     (dd) Deed of Trust. With respect to each Mortgage Loan, in the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage or in a properly recorded substitution of trustee, and no fees or expenses are or will become payable by the Purchaser to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.

     (ee) Occupancy; Licenses . To the knowledge of Sellers, with respect to each Mortgage Loan, the Mo