HOME EQUITY LINE OF CREDIT (HELOC) REVOLVING CREDIT LOAN PURCHASE, SALE & SERVICING AGREEMENT dated as of February 3, 2004 between WACHOVIA BANK, N.A. Purchaser AND E-LOAN, INC. Seller

Section 5.01 Seller to Act as Servicer; Servicing Standards; Additional Documents; Consent of the Purchaser. The parties acknowledge that Seller shall transfer the servicing of the Revolving Credit Loans, normally within forty (40) days of the applicable Funding Date, and as such services Revolving Credit Loans only on an interim basis. Accordingly, all references in this Agreement to the "Servicer" shall mean Seller, but the servicing obligations of Seller shall relate only to the period of time between the Funding Date and the transfer of the subject Revolving Credit Loans. Any obligations of Servicer set forth in this Agreement that logically relate to servicing responsibilities beyond interim servicing shall not apply to Seller.

1. The Servicer, as independent contract servicer, shall service and administer the Revolving Credit Loans and REO Property from and after each Funding Date in accordance with the terms and provisions of the Revolving Credit Loans, applicable law and the terms and provisions of this Agreement for and on behalf of, and in the best interests of, the Purchaser (without taking into account any relationship the Servicer may have with any Mortgagor or other Person, the participation, if any, of the Servicer in any financing provided in connection with the sale of any Mortgaged Property, or the Servicer's obligation to advance any expenses or incur any costs in the performance of its duties hereunder) in accordance with a standard that is not less than the higher of (a) the same care, skill, prudence and diligence with which it services similar assets held for its own or its Affiliates' account, (b) the same care, skill, prudence and diligence with which it services similar assets for third party institutional investors, and (c) Accepted Servicing Practices, in each case giving due consideration to Purchaser's reliance on Servicer. Subject to the foregoing standards, in connection with such servicing and administration, the Servicer shall seek to maximize the timely recovery of principal and interest on the Mortgage Notes.
2. To the extent consistent with Section 5.01(a) and further subject to any express limitations set forth in this Agreement, the Servicer (acting alone or, solely in the circumstances permitted hereunder, acting through a subservicer) shall have full power and authority to do or cause to be done any and all things that it may deem necessary or desirable in connection with such servicing and administration, including the power and authority (a) to execute and deliver, on behalf of the Purchaser, customary consents or waivers and other instruments and documents (including estoppel certificates), (b) to consent to transfers of any Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages, (c) to submit claims to collect any Insurance Proceeds and Liquidation Proceeds, (d) to consent to the application of any Insurance Proceeds or Condemnation Proceeds to the restoration of the applicable Mortgaged Property or otherwise, (e) to bring an action in a court of law, including an unlawful detainer action, to enforce rights of the Purchaser with respect to any Mortgaged Property, (f) to execute and deliver, on behalf of the Purchaser, documents relating to the management, operation, maintenance, repair, leasing, marketing and sale of any Mortgaged Property or any REO Property, and (g) to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Revolving Credit Loan; provided that the Servicer shall not take any action not provided for in this Agreement that is materially inconsistent with or materially prejudices the interest of the Purchaser in any Revolving Credit Loan or under this Agreement. If reasonably requested by the Servicer, the Purchaser shall furnish the Servicer with any powers of attorney and other documents reasonably necessary or appropriate to enable the Servicer to service and administer the Revolving Credit Loans and the REO Properties, including documents relating to the foreclosure, receivership, management, operation, maintenance, repair, leasing, marketing and sale (in foreclosure or otherwise) of any Mortgaged Property or any REO Property.

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Servicer, on behalf of Purchaser, shall service and administer the Revolving Credit Loans and Mortgagor information and records in accordance with the terms of the Revolving Credit Loan documents and the requirements of applicable federal, state and local laws, regulations and executive orders. Servicer, at all times during the term of this Agreement shall service and administer the Revolving Credit Loans and Mortgagor information and records in a commercially reasonable manner in accordance with the ▇▇▇▇▇-▇▇▇▇▇- ▇▇▇▇▇▇ Act (together with regulations and guidelines promulgated thereunder, the "Act"), as amended from time to time.

Servicer and Purchaser shall, in a commercially reasonable manner, cooperate with each other to assure continuing compliance of both parties with all amendments to the Act as applicable to servicers and investors of the character of Servicer and Purchaser, respectively. In the event that (i) the legal or regulatory requirements applicable to Purchaser pertaining to Mortgagor privacy or data security are not fulfilled in any material respect by Servicer's duties pursuant to the provisions of this Agreement, or (ii) Servicer's servicing practices would result in a violation by the Purchaser of regulatory requirements applicable to the Purchaser, Purchaser shall provide written notice to Servicer. Servicer agrees to use its reasonable best efforts to service the Revolving Credit Loans in a manner which satisfies the requirements of Purchaser's regulators about which Purchaser informs Servicer.

If either party receives a complaint concerning a violation or alleged violation of privacy rights or other notice with respect to information sharing involving an opt out of sharing any non-public personal information relating to the Mortgagor or any Revolving Credit Loan, then such party shall promptly notify the other party.

3. The Servicer shall, in accordance with the customary and usual standards of practice of prudent mortgage servicers of variable rate open- end home equity mortgage loans, approve and make disbursements of principal in connection with Mortgagor drafts upon the Credit Line approved in connection with each Revolving Credit Loan. The Servicer shall provide to the Mortgagors all checks, drafts or other documentation necessary for such Mortgagors to obtain a Credit Line Advance. On each Business Day, with respect to each Credit Line Advance disbursed by the Servicer and reported to the Purchaser, the Servicer shall be entitled to (i) reimbursement of the principal amount of each Credit Line Advance disbursed by Servicer with respect to a Revolving Credit Loan reported to the Purchaser on such date, and (ii) interest, at the Credit Advance Rate, on the principal amount of each such Credit Line Advance from the date such Credit Line Advance was disbursed by Servicer to but not including such date reimbursement is received by the Servicer. In the event that the Purchaser fails to reimburse the Servicer, within two (2) Business Days of receipt of notice thereof, for any Credit Line Advance disbursed by the Servicer and reported to the Purchaser, the Servicer shall be entitled to withdraw the amount calculated in clauses (i) and (ii) of the previous sentence (including interest to but not including the date of withdrawal) with respect to any such Credit Advance, from the Collection Account pursuant to Section 5.05(c) hereof.

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4. Notwithstanding anything to the contrary contained herein:

1. the Servicer acknowledges that the Purchaser will retain title to, and ownership of, the Revolving Credit Loans and the REO Properties and that the Servicer does not hereby acquire any title to, security interest in, or other rights of any kind in or to any Revolving Credit Loan or REO Property or any portion thereof;
2. the Servicer shall not file any lien or any other encumbrance on, exercise any right of setoff against, or attach or assert any claim in or on any Revolving Credit Loan or REO Property, unless authorized pursuant to a judicial or administrative proceeding or a court order;
3. the Servicer shall, in servicing the Revolving Credit Loans, follow and comply with the servicing guidelines established by FNMA, and the Servicer may waive, modify or vary any term of any Revolving Credit Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if in the Servicer's reasonable and prudent determination such waiver, modification, postponement or indulgence is in the best interests of the Purchaser and is consistent with the terms of this Agreement. The Servicer may, with respect to any Specially Serviced Revolving Credit Loan or REO Property, make Servicing Advances, without the Purchaser's consent to the extent that each related Servicing Advance is (i) in the best interests of the Purchaser or other owner of the Revolving Credit Loan and (ii) is deemed to be recoverable by the Servicer. Notwithstanding anything to the contrary herein, the Servicer shall not, without specifically notifying the Purchaser in writing and obtaining the Purchaser's prior written consent:

1. make any future advances with respect to a Revolving Credit Loan in excess of the Credit Line with respect to such Revolving Credit Loan,
2. permit any modification with respect to any Revolving Credit Loan that would change the Mortgage Interest Rate, defer or forgive the payment of principal or interest, reduce or increase the outstanding principal balance or change the final maturity date on such Revolving Credit Loan;
3. sell any Specially Serviced Revolving Credit Loan;
4. principal or interest on, or permitting to be satisfied at a discount, any Revolving Credit Loan; or
5. accept substitute or additional collateral, or release any collateral, for a Revolving Credit Loan.

If the Purchaser has not approved or rejected in writing any proposed action(s) recommended by the Servicer to be taken hereunder within 10 Business Days of the date such recommendation is made, then the Purchaser shall be deemed to have rejected such recommended action(s) and the Servicer shall not take any such action(s).

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4. subject to the Purchaser's consent, when required in accordance with paragraph (c) above, upon any modification, waiver or amendment of any term of any Revolving Credit Loan the Servicer shall inform the Purchaser of the date thereof and shall deliver to the Purchaser, for deposit in the related Mortgage File, an original counterpart of the agreement relating to such modification, waiver or amendment promptly following the execution thereof;
5. the Servicer shall remain primarily liable for the full performance of its obligations hereunder notwithstanding any appointment by the Servicer of a subservicer or subservicers hereunder;
6. with respect to any Revolving Credit Loan not in the Seller's Affinity Service Program, the Purchaser may at any time and from time to time, in its sole discretion, upon 10 Business Days written notice to the Servicer, terminate the Servicer's servicing rights and obligations hereunder, at no cost to Purchaser, with respect to (1) any REO Property or (2) any Revolving Credit Loan (A) pending foreclosure or deed in lieu thereof, (B) as to which the related obligor has filed for bankruptcy; (C) which is 90 days or more delinquent, or (D) in accordance with the Purchaser's internal credit classification criteria, has been classified as "doubtful" or a "loss." The Servicer shall be entitled to reimburse itself, pursuant to Section 5.05(d) hereof, for any unreimbursed Servicing Advances with respect to the transfer of any REO Property or Revolving Credit Loan pursuant to the previous sentence. Upon the effectiveness of any such termination of the Servicer's servicing obligations with respect to any such REO Property or Revolving Credit Loan, the Servicer shall deliver all agreements, documents, and instruments related thereto to the Purchaser, and perform in accordance with Sections 10 and 11 hereunder, commercially reasonable servicing transfer practices and with applicable law;
7. with respect to any Revolving Credit Loan in the Seller's Affinity Service Program or any Revolving Credit Loan not terminated pursuant to clause (vi) above, the Servicer may, in accordance with the servicing standard set forth in Section 5.01(a) hereof, foreclose on any Revolving Credit Loan (1) which is 90 days or more delinquent, or (2) as to which the related obligor has filed for bankruptcy; or (3) in accordance with the Purchaser's internal credit classification criteria, has been classified as "doubtful" or a "loss." Within 5 Business Days of the foreclosure of any such Revolving Credit Loan, the Servicer shall transfer the servicing of such Revolving Credit Loan or REO Property to Purchaser or its designee, and the Servicer's servicing obligations hereunder shall be terminated, at no cost to Purchaser, with respect to any such REO Property or Revolving Credit Loan. The Servicer shall be entitled to reimburse itself, pursuant to Section 5.05(d) hereof, for any unreimbursed Servicing Advances with respect to the transfer of any REO Property or Revolving Credit Loan pursuant to the previous sentence. The Servicer shall deliver all agreements, documents, and instruments related to any Revolving Credit Loan referred to in this paragraph to the Purchaser or its designee, and perform in accordance with Sections 11 and 12 hereof, commercially reasonable servicing transfer practices and with applicable law; and

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8. the Servicer, at its discretion and in accordance with the customary and usual standards of practice of prudent mortgage servicers of variable rate open-end home equity mortgage loans, may perform any of the following actions in connection with a Revolving Credit Loan:

1. with the approval of the Purchaser, increase the amount of the related Credit Line;
2. terminate a dormant Revolving Credit Loan;
3. permit payments from the Mortgagor of interest only during the period when Credit Line Advances may be made; or
4. eliminate the ability of the Mortgagor to make future drafts upon the Credit Line, or reduce the Credit Line.

Section 5.02 Collection of Revolving Credit Loan Payments.

Continuously from the date hereof until the principal and interest on all Revolving Credit Loans are paid in full, the Servicer will proceed diligently to collect all payments due under each Revolving Credit Loan when the same shall become due and payable and shall, to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any related Purchaser-Paid Mortgage Insurance Policy, follow such collection procedures as it follows with respect to mortgage loans comparable to the Revolving Credit Loans, which procedures shall in any event comply with the servicing standards set forth in Section 5.01. If the Servicer becomes aware of any failure by a Mortgagor to timely pay insurance premiums on the related Mortgaged Property, it shall use reasonable efforts to notify the servicer of the related first mortgage loan of such failure.

Section 5.03 Reports for Foreclosure Sales.

The Servicer shall, within five (5) Business Days following the occurrence of any foreclosure sale with respect to any Mortgaged Property, deliver to the Purchaser a notice of foreclosure sale substantially in the form of Exhibit 5.03 attached hereto.

Section 5.04 Establishment of Collection Account; Deposits in Collection Account.

The Servicer shall segregate and hold all funds collected and received pursuant to each Revolving Credit Loan separate and apart from any of its own funds and general assets and shall establish and maintain one or more Collection Accounts, in the form of time deposit or demand accounts. On or before the Closing Date, Servicer shall establish a Collection Account (the "Collection Account") and shall ensure that all payments subject to this Agreement will be held solely in the Collection Account. The creation of any Collection Account shall be evidenced by a certification in the form of Exhibit 5.04-1 attached hereto, in the case of an account established with the Servicer, or a letter agreement in the form of Exhibit 5.04- 2 attached hereto, in the case of an account held by a depository other than the Servicer. In either case, a copy of such certification or letter agreement shall be furnished to the Purchaser.

The Servicer shall deposit in the Collection Account within two Business Days after receipt (or as otherwise required pursuant to this Agreement in the case of clauses (g), (h) and (i) of this Section 5.04) and retain therein the following payments and collections received or made by it subsequent to each Funding Date, or received by it prior to the Funding Date and allocable to a period subsequent to the Cutoff Date, other than in respect of principal and interest on the Revolving Credit Loans due on or before the Cutoff Date (regardless of when received):

1. all payments on account of principal on the Revolving Credit Loans;
2. all payments on account of interest on the Revolving Credit Loans less the related Servicing Fee;
3. all Liquidation Proceeds;
4. all REO Proceeds;
5. all Insurance Proceeds, including amounts required to be deposited pursuant to Section  5.08, other than proceeds released to the applicable Mortgagors in accordance with the Servicer's normal servicing procedures, the related Mortgages or applicable law;
6. all Condemnation Proceeds affecting any Mortgaged Property which are not released to a Mortgagor in accordance with the Servicer's normal servicing procedures, the related Mortgage or applicable law;
7. any amounts required to be deposited by the Servicer pursuant to Section 5.08 in connection with the deductible clause in any blanket hazard insurance policy, such deposit to be made from the Servicer's own funds without reimbursement therefor;
8. interest on amounts on deposit in the Collection Account and any amounts required to be deposited by the Servicer pursuant to Section 5.12 in connection with any losses on Permitted Investments; and
9. any amounts required to be deposited in the Collection Account pursuant to Sections 7.01, 7.02, or otherwise pursuant to the terms hereof.

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The foregoing requirements for deposit in the Collection Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of assumption fees, to the extent permitted by Section 7.01, need not be deposited by the Servicer in the Collection Account and shall be retained by the Servicer as additional compensation.

Section 5.05 Permitted Withdrawals from the Collection Account.

The Servicer may, from time to time in accordance with the provisions hereof, withdraw amounts from the Collection Account for the following purposes (without duplication):

1. to reimburse itself for unreimbursed Servicing Advances that the Servicer has determined to be Non-Recoverable Advances as provided in Section 6.04;
2. to make payments to the Purchaser in the amounts, at the times and in the manner provided for in Section 6.01;
3. to reimburse itself for the amount of any Credit Line Advances made by Servicer and not timely reimbursed by the Purchaser in accordance with Section 5.01(c) hereof.
4. to reimburse itself for unreimbursed Servicing Advances, the Servicer's right to reimburse itself pursuant to this Subsection (d) with respect to any Revolving Credit Loan being limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other amounts as may be collected by the Servicer from the Mortgagor or otherwise relating to the Revolving Credit Loan, it being understood that, in the case of such reimbursement, the Servicer's right thereto shall be prior to the rights of the Purchaser, except that, where a Seller or the Servicer is required to repurchase (or substitute a Qualified Substitute Revolving Credit Loan for) a Revolving Credit Loan pursuant to Sections 2.04, 3.04 and/or 7.02, the Servicer's right to such reimbursement shall be subsequent and subordinate to the payment to the Purchaser of the applicable Repurchase Price (or delivery of a Qualified Substitute Revolving Credit Loan) and all other amounts required to be paid to the Purchaser with respect to such Revolving Credit Loan;
5. to pay to itself, solely out of the interest portion of the Monthly Payment due and actually received with respect to a Revolving Credit Loan during the period ending on the most recent Determination Date, the Servicing Fee with respect to such Revolving Credit Loan;
6. to pay to itself as additional servicing compensation (a) any interest earned on funds in the Collection Account (all such interest to be withdrawn monthly not later than each Remittance Date) and (b) any prepayment penalties or premiums relating to any principal prepayments; provided that no such amounts shall be payable as servicing compensation to the extent they relate to a Revolving Credit Loan with respect to which a default, breach, violation or event of acceleration exists or would exist but for the lapse of time, the giving of notice, or both;
7. to pay to itself with respect to each Revolving Credit Loan that has been repurchased pursuant to Sections 2.04, 3.04 and/or 7.02 all amounts received thereon and not distributed as of the date on which the related Repurchase Price is determined (except to the extent that such amounts constitute part of the Repurchase Price to be remitted to the Purchaser);

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8. to reimburse itself, without duplication, for the amount of any premiums paid with respect to Purchaser-Paid Mortgage Insurance pursuant to Section 5.06;
9. to remove any amounts deposited into the Collection Account in error; and
10. to clear and terminate the Collection Account upon the termination of this Agreement, with any funds contained therein to be distributed in accordance with the terms of this Agreement.

On each Remittance Date, the Servicer shall withdraw all funds from the Custodial Account except for those amounts that the Servicer is not obligated to remit on such Remittance Date pursuant to Section 6.01. The Servicer may use such withdrawn funds only for the purposes described in this Section 5.05. The Servicer shall keep and maintain a separate, detailed accounting, on a Revolving Credit Loan-by-Revolving Credit Loan basis, for the purpose of justifying any withdrawal from the Collection Account pursuant to this Section.

Section 5.06 Maintenance of Primary Insurance Policies; Collections Thereunder.

The Servicer shall cooperate with the Purchaser in maintaining in full force and effect any Purchaser-Paid Mortgage Insurance Policy, to the extent purchased by the Purchaser. Such coverage will not be maintained after such time, if any, as such insurance is required to be released in accordance with the provisions of applicable law including, but not limited to, the Homeowners Protection Act of 1998. The Servicer shall not take any action which would result in noncoverage under any applicable Purchaser-Paid Mortgage Insurance Policy of any loss which, but for the actions of the Servicer, would have been covered thereunder. In connection with any assumption or substitution agreement entered into or to be entered into pursuant to Section 7.01, the Servicer shall promptly notify the insurer under the related Purchaser-Paid Mortgage Insurance Policy, if any, or Lender-Paid Insurance Policy, if required, of such assumption or substitution of liability in accordance with the terms of such policy and shall take all actions which may be required by such insurer as a condition to the continuation of coverage under the Purchaser-Paid Mortgage Insurance Policy.

Section 5.07 Transfer of Accounts.

The Servicer may transfer the Collection Account to a different depository institution from time to time; provided that (i) no such transfer shall be made unless all certifications or letter agreements required under Sections 5.04 and 5.06 have been executed and delivered by the parties thereto; and (ii) concurrently upon any such transfer, the Servicer shall give written notice thereof to the Purchaser. Notwithstanding anything to the contrary contained herein, the Collection Account shall at all times constitute an Eligible Account.

Section 5.08 Maintenance of Mortgage Impairment Insurance Policy.

The Servicer shall obtain and maintain a blanket policy issued by an issuer that has a Best's Key rating of A:V insuring against hazard losses on all of the Revolving Credit Loans. In connection with its activities as servicer of the Revolving Credit Loans, the Servicer agrees to prepare and present, on behalf of the Purchaser, claims under any blanket policy in connection with any hazard losses on the Revolving Credit Loans in a timely fashion in accordance with the terms of such policy. Upon request of the Purchaser, the Servicer shall cause to be delivered to the Purchaser a certified true copy of such policy and a statement from the insurer thereunder that such policy shall in no event be terminated or materially modified without 30 days' prior written notice to the Purchaser.

Section 5.09 Fidelity Bond; Errors and Omissions Insurance.

The Servicer shall maintain, at its own expense, a blanket fidelity bond and an errors and omissions insurance policy, with broad coverage with responsible companies that would meet the requirements of FNMA and FHLMC on all officers, employees or other Persons acting in any capacity with regard to the Revolving Credit Loan to handle funds, money, documents and papers relating to the Revolving Credit Loans. The Fidelity Bond and errors and omissions insurance shall be in the form of the "Mortgage Banker's Blanket Bond" and shall protect and insure the Servicer against losses, including losses arising by virtue of any Revolving Credit Loan not being satisfied in accordance with the procedures set forth in Section  7.02 and/or losses resulting from or arising in connection with forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of or by such Persons. Such Fidelity Bond shall also protect and insure the Servicer against losses in connection with the failure to maintain any insurance policies required pursuant to this Agreement and the release or satisfaction of a Revolving Credit Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section 5.09 requiring the Fidelity Bond and errors and omissions insurance shall diminish or relieve the Servicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such bond and insurance policy shall be at least equal to the corresponding amounts required by FNMA in the FNMA Guide and by FHLMC in the FHLMC Servicing Guide. The Servicer shall cause to be delivered to the Purchaser on or before the Funding Date: (i)  a certified true copy of the Fidelity Bond and insurance policy; (ii) a written statement from the surety and the insurer that such Fidelity Bond or insurance policy shall in no event be terminated or materially modified without 30 days' prior written notice to the Purchaser; and (iii) written evidence reasonably satisfactory to the Purchaser that such Fidelity Bond or insurance policy provides that the Purchaser is a beneficiary or loss payee thereunder.

Section 5.10 Management of REO Properties.

If title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure (each, an "REO Property"), the deed or certificate of sale shall be taken in the name of the Purchaser or the Person (which may be the Servicer for the benefit of the Purchaser) designated by the Purchaser, or in the event the Purchaser notifies the Servicer that the Purchaser or such Person is not authorized or permitted to hold title to real property in the state where the REO Property is located, or would be adversely affected under the "doing business" or tax laws of such state by so holding title, the deed or certificate of sale shall be taken in the name of such Person or Persons as shall be consistent with an opinion of counsel obtained by the Purchaser from an attorney duly licensed to practice law in the state where the REO Property is located. The Servicer shall have no further obligation under this Agreement with respect to any REO Property.

Section 5.11 Realization Upon Specially Serviced Revolving Credit Loans.

Subject to Section 5.01(d), the Servicer shall foreclose upon or otherwise comparably convert the ownership of properties securing such of the Specially Serviced Revolving Credit Loans as come into and continue in default and as to which (a) in the reasonable judgment of the Servicer, no satisfactory arrangements can, in accordance with prudent lending practices, be made for collection of delinquent payments pursuant to Section 5.01 and (b) such foreclosure or other conversion is otherwise in accordance with Section 5.01. The Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration, repair, protection or maintenance of any property unless it shall determine that such expenses will be recoverable to it as Servicing Advances either through Liquidation Proceeds or through Insurance Proceeds (in accordance with Section 5.05) or from any other source relating to the Specially Serviced Revolving Credit Loan. The Servicer shall be required to advance funds for all other costs and expenses incurred by it in any such foreclosure proceedings (other than funds necessary to pay of the first lien, if any, on the related Mortgaged Property); provided that it shall be entitled to reimbursement thereof from the proceeds of liquidation of the related Mortgaged Property, as contemplated by Section 5.05.

Upon any Mortgaged Property becoming an REO Property, the Servicer shall promptly notify the Purchaser thereof, specifying the date on which such Mortgaged Property became an REO Property and the Servicer shall proceed in accordance with the provisions of Section 5.10 hereof.

Notwithstanding anything to the contrary contained herein, the Purchaser shall not, and the Servicer shall not on the Purchaser's behalf, acquire any real property (or personal property incident to such real property) except in connection with a default or a default that is imminent on a Revolving Credit Loan. If the Purchaser acquires any real property (or personal property incident to such real property) in connection with such a default, then such property shall be disposed of by the Servicer in accordance with this Section  as soon as possible but in no event later than 3 years after its acquisition by the Servicer on behalf of the Purchaser, unless the Servicer obtains, at the expense of the Purchaser, in a timely fashion an extension from the Internal Revenue Service for an additional specified period.

Any recommendation of the Servicer to foreclose on a defaulted Revolving Credit Loan shall be subject to a determination by the Servicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding.

If, in the exercise of its servicing obligations with respect to any Mortgaged Property hereunder, the Servicer deems it is necessary or advisable to obtain an Environmental Assessment, then the Servicer shall obtain an Environmental Assessment, it being understood that all reasonable costs and expenses incurred by the Servicer in connection with any such Environmental Assessment (including the cost thereof) shall be deemed to be Servicing Advances recoverable by the Servicer pursuant to Section 5.05(d). Such Environmental Assessment shall (a) assess whether (1) such Mortgaged Property is in material violation of applicable Environmental Laws or (2) after consultation with an environmental expert, taking the actions necessary to comply with applicable Environmental Laws is reasonably likely to produce a greater recovery on a net present value basis than not taking such actions, and (b) identify whether (1) any circumstances are present at such Mortgaged Property relating to the use, management or disposal of any hazardous materials for which investigation, testing, monitoring, containment, clean-up or re mediation could be required under any federal, state or local law or regulation, or (2) if such circumstances exist, after consultation with an environmental expert, taking such actions is reasonably likely to produce a greater recovery on a present value basis than not taking such actions. (The conditions described in the immediately preceding clauses (a) and (b) shall be referred to herein as "Environmental Conditions Precedent to Foreclosure.") If any such Environmental Assessment so warrants, the Servicer is hereby authorized to and shall perform such additional environmental testing as it deems necessary and prudent to establish the satisfaction of the foregoing Environmental Conditions Precedent to Foreclosure or to proceed as set forth below (such additional testing thereafter being included in the term "Environmental Assessment ").

If an Environmental Assessment deemed necessary or advisable by the Servicer in accordance with this Section 5.11 establishes that any of the Environmental Conditions Precedent to Foreclosure is not satisfied with respect to any Mortgaged Property, but the Servicer in good faith reasonably believes that it is in the best economic interest of the Purchaser to proceed against such Mortgaged Property and, if title thereto is acquired, to take such remedial, corrective or other action with respect to the unsatisfied condition or conditions as may be prescribed by applicable law to satisfy such condition or conditions, then the Servicer shall so notify the Purchaser. If, pursuant to Section 5.01(d), the Purchaser has notified the Servicer in writing to proceed against such Mortgaged Property, then the Servicer shall so proceed. The cost of any remedial, corrective or other action contemplated by the preceding sentence in respect of any of the Environmental Conditions Precedent to Foreclosure that is not satisfied shall not be an expense of the Servicer and the Servicer shall not be required to expend or risk its own funds or otherwise incur any financial liability in connection with any such action.

If an Environmental Assessment deemed necessary or advisable by the Servicer in accordance with this Section  5.11 establishes that any of the Environmental Conditions Precedent to Foreclosure is not satisfied with respect to any Mortgaged Property and, in accordance with Section 5.01(d)(iii), the Purchaser elects or is deemed to have elected not to proceed against such Mortgaged Property, then the Servicer shall, subject to Section 5.01(d)(iii), take such action as it deems to be in the best economic interest of the Purchaser (other than proceeding against the Mortgaged Property or directly or indirectly becoming the owner or operator thereof) as determined in accordance with the servicing standard set forth in Section 5.01 and is hereby authorized at such time as it deems appropriate to release such Mortgaged Property from the lien of the related Mortgage.

Prior to the Servicer taking any action with respect to the use, management or disposal of any hazardous materials on any Mortgaged Property, the Servicer shall request the approval of the Purchaser in accordance with Section 5.01(d)(iii) and, if such action is approved by the Purchaser, (a) keep the Purchaser apprised of the progress of such action; and (b) take such action in compliance with all applicable Environmental Laws.

Section 5.12 Investment of Funds in the Collection Account.

The Servicer may direct any depository institution which holds the Collection Account to invest the funds in the Collection Account in one or more Permitted Investments bearing interest. All such Permitted Investments shall be held to maturity, unless payable on demand. In the event amounts on deposit in the Collection Account are at any time invested in a Permitted Investment payable on demand, the Servicer shall:

1. consistent with any notice required to be given thereunder, demand that payment thereon be made on the last day such Permitted Investment may otherwise mature hereunder in an amount equal to the lesser of (1) all amounts then payable thereunder and (2) the amount required to be withdrawn on such date; and
2. demand payment of all amounts due thereunder promptly upon determination by the Servicer or notice from the Purchaser that such Permitted Investment would not constitute a Permitted Investment in respect of funds thereafter on deposit in the Collection Account.

All income and gain realized from investment of funds deposited in the Collection Account shall be for the benefit of the Purchaser and shall be subject to its withdrawal in accordance with Section 6.01. The Servicer shall deposit in the Collection Account the amount of any loss incurred in respect of any Permitted Investment immediately upon realization of such loss.

Except as otherwise expressly provided in this Agreement, if any default occurs in the making of a payment due under any Permitted Investment, or if a default occurs in any other performance required under any Permitted Investment, the Purchaser may elect to take such action, or instruct the Servicer to take such action, as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings, at the expense of the Servicer.

Section 6.01 Remittances.

1. On each Remittance Date, the Servicer shall remit to the Purchaser all amounts credited to the Collection Account as of the close of business on the last day of the related Due Period (including the amount of any Payoff), net of charges against or withdrawals from the Collection Account in accordance with Section 5.05, which charges against or withdrawals from the Collection Account the Servicer shall make solely on such Remittance Date.
2. In the event that, for any Remittance Date, the calculation described in Section 6.01(a) results in a negative amount for any Due Period, Purchaser shall remit to Servicer, on such Remittance Date, the amount of any such negative calculation by wire transfer of immediately available funds to such account as the Servicer shall direct.

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3. All remittances made to the Purchaser or the Servicer on each Remittance Date will be made to the Purchaser or the Servicer by wire transfer of immediately available funds accordingly to the instructions that will be provided by Purchaser to the Servicer.
4. In the event that the amount of Estimated Accrued Interest paid by Purchaser on the Funding Date is less than the actual accrued interest on the Revolving Credit Loans adjusted to the Revolving Credit Loan Remittance Rate for the period from and including the Cut-off Date to but not including the Funding Date, Servicer shall withdraw the amount of such shortage from the Collection Account on the first Remittance Date under this Agreement. In the event that the amount of Estimated Accrued Interest is greater than the actual accrued interest on the Revolving Credit Loans adjusted to the Revolving Credit Loan Remittance Rate for such period, Servicer shall deposit the amount of such overage into the Collection Account for distribution to Purchaser on the first Remittance Date under this Agreement.
5. With respect to any remittance received by the Purchaser after the Business Day on which such payment was due, the Servicer shall pay to the Purchaser interest on any such late payment at an annual rate equal to One- month LIBOR (as published in the Wall Street Journal), but in no event greater than the maximum amount permitted by applicable law. Such interest shall be paid by the Servicer to the Purchaser on the date such late payment is made and shall cover the period commencing with the Business Day on which such payment was due and ending with the Business Day on which such payment is made, both inclusive. Such interest shall be remitted along with such late payment. Neither the payment by the Servicer nor the acceptance by the Purchaser of any such interest shall be deemed an extension of time for payment or a waiver by the Purchaser of any Event of Default.
6. With respect to any reimbursement by the Purchaser to the Servicer for any Credit Line Advance pursuant to Section 5.01(c) hereof received by the Servicer after the Business Day on which such payment was due, the Purchaser shall pay to the Servicer interest on any such late payment at an annual rate equal to One-month LIBOR (as published in the Wall Street Journal) plus 200 basis points, but in no event greater than the maximum amount permitted by applicable law. Such interest shall be paid by the Purchaser to the Servicer on the date such late payment is made and shall cover the period commencing with the Business Day on which such payment was due and ending with the Business Day on which such payment is made, both inclusive. Such interest shall be remitted along with such late payment. Neither the payment by the Purchaser nor the acceptance by the Servicer of any such interest shall be deemed an extension of time for payment.

Section 6.02 Reporting.

On or before the 5th Business Day of each month during the term hereof, the Servicer shall deliver to the Purchaser monthly accounting reports in the form of Exhibits 6.02(a) through 6.02(e) attached hereto with respect to the most recently ended Due Period. Such monthly accounting reports shall include with respect to each Revolving Credit Loan the following loan-level information: (i) the loan number, (ii) the ending unpaid principal balance of all Credit Line Advances outstanding as of the last day of the immediately preceding Due Period, (iii) principal collections, (iv) interest collections, (v) Payoffs, (vi) the amounts and dates of any Credit Line Advances made by Servicer within such Due Period, (vii) the principal balance of Credit Line Advances outstanding as of the last day of the Due Period, (viii) the average daily balance, (ix) the Credit Line, (x) the remaining credit, (xi) the Mortgage Interest Rate, (xii) the Index, (xiii) the Margin, and (xiv) the last paid Monthly Payment (xv) any Revolving Credit Loan which is thirty (30), sixty (60), or ninety (90) days delinquent, in foreclosure proceedings, a REO Property, or in bankruptcy; all as of the most recently ended Determination Date. The reports referred to in this paragraph shall be provided to Purchaser by the Servicer on or before the second Business Day of each month.

The Servicer shall provide the Purchaser with such information concerning the Revolving Credit Loans as is necessary for the Purchaser to prepare its federal income tax return as the Purchaser may reasonably request from time to time.

Section 6.03 [Reserved].

Section 6.04 Non-recoverable Advances.

The determination by the Servicer that it has made a Non- recoverable Advance or that any Servicing Advance, if made, would constitute a Non-recoverable Advance shall be evidenced by an Officers' Certificate delivered to the Purchaser detailing the reasons for such determination.

Section 6.05 Itemization of Servicing Advances.

The Servicer shall provide the Purchaser with an itemization of all Servicing Advances incurred or made by the Servicer hereunder as the Purchaser may from time to time reasonably request.

Section 6.06 Officer's Certificate.

The Seller shall deliver to the Purchaser an Officer's Certificate in the form attached hereto as Exhibit 9 on the initial Funding Date and upon Purchaser's reasonable request thereafter.

Section 7.01 Enforcement of Due-on-Sale Clauses, Assumption Agreements.

1. The Servicer will, to the extent it has knowledge of any conveyance or prospective conveyance by any Mortgagor of the Mortgaged Property (whether by absolute conveyance or by contract of sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Revolving Credit Loan under any " due-on-sale" clause applicable thereto; provided that the Servicer shall not exercise any such rights if prohibited by law from doing so or if the exercise of such rights would impair or threaten to impair any recovery under the related Purchaser-Paid Mortgage Insurance Policy, if any.

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2. If the Servicer is prohibited from enforcing such "due- on-sale" clause, then the Servicer will enter into an assumption agreement with the Person to whom the Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to which such Person becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon. (For purposes of this Section 7.01, the term "assumption" is deemed to also include a sale of the Mortgaged Property subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.) If any Revolving Credit Loan is to be assumed, then the Servicer shall inquire into the creditworthiness of the proposed transferee and shall use the same underwriting criteria for approving the credit of the proposed transferee that are used with respect to underwriting mortgage loans of the same type as the Revolving Credit Loans. Where an assumption is allowed, the Servicer, with the prior written consent of the primary mortgage insurer, if any, and subject to the conditions of Section 7.01(c), shall, and is hereby authorized to, enter into a substitution of liability agreement with the Person to whom the Mortgaged Property is proposed to be conveyed pursuant to which the original mortgagor is released from liability and such Person is substituted as mortgagor and becomes liable under the related Mortgage Note. Any such substitution of liability agreement shall be in lieu of an assumption agreement. In no event shall the Note Rate, the amount of the Monthly Payment or the final maturity date be changed. The Servicer shall notify the Purchaser that any such substitution of liability or assumption agreement has been completed by forwarding to the Purchaser the original of any such substitution of liability or assumption agreement, which document shall be added to the related Purchaser's Mortgage File and shall, for all purposes, be considered a part of such Purchaser's Mortgage File to the same extent as all other documents and instruments constituting a part thereof. Any fee collected by the Servicer for entering into an assumption or substitution of liability agreement shall be retained by the Servicer as additional compensation for servicing the Revolving Credit Loans.
3. If the credit of the proposed transferee does not meet such underwriting criteria, then the Servicer shall, to the extent permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate the maturity of the Revolving Credit Loan.

Section 7.02 Satisfaction of Mortgages and Release of Mortgage Files.

Upon the payment in full of any Revolving Credit Loan, the Servicer will immediately notify the Purchaser by a certification of a Servicing Officer, which certification shall include a statement to the effect that all amounts received or to be received in connection with such payment which are required to be deposited in the Collection Account pursuant to Section 5.04 have been or will be so deposited and shall request delivery to it of the Purchaser's Mortgage File held by the Purchaser. Upon receipt of such certification and request, the Purchaser shall promptly release the related mortgage documents to the Servicer and the Servicer shall promptly prepare and process any satisfaction or release. No expense incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Collection Account.

If the Servicer satisfies or releases a Mortgage without having obtained payment in full of the indebtedness secured by the Mortgage, or should it otherwise take such action which materially and adversely affects the value or marketability of a Revolving Credit Loan, or results in a reduction of the coverage under the Purchaser-Paid Mortgage Insurance Policy, if any, then the Servicer shall promptly give written notice thereof to the Purchaser, and, within 10 Business Days following written demand therefor from the Purchaser to the Servicer, the Servicer shall repurchase the related Revolving Credit Loan by paying to the Purchaser the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser's Account.

From time to time and as appropriate for the servicing or foreclosure of the Revolving Credit Loan, including for this purpose collection under any Purchaser-Paid Mortgage Insurance Policy, the Purchaser shall, upon request of the Servicer and delivery to the Purchaser or its designee of a servicing receipt signed by a Servicing Officer, release the Purchaser's Mortgage File held by the Purchaser or its designee to the Servicer. Such servicing receipt shall obligate the Servicer to return the related mortgage documents to the Purchaser or its designee when the need therefor by the Servicer no longer exists, unless the Revolving Credit Loan has been liquidated and the Liquidation Proceeds relating to the Revolving Credit Loan have been deposited in the Collection Account or the Purchaser's Mortgage File or such document has been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or nonjudicially, and the Servicer has delivered to the Purchaser a certificate of a Servicing Officer certifying as to the name and address of the Person to which such Purchaser's Mortgage File or such document was delivered and the purpose or purposes of such delivery. Upon receipt of a certificate of a Servicing Officer stating that such Revolving Credit Loan was liquidated and the Liquidation Proceeds were deposited in the Collection Account, the servicing receipt shall be released by the Purchaser to the Servicer.

Section 7.03 Servicing Compensation.

As compensation for its services hereunder, the Servicer shall be entitled to retain from interest payments on the Revolving Credit Loans the amounts provided for as the Servicing Fee. The Servicing Fee in respect of a Revolving Credit Loan for a particular month shall become payable only upon the receipt by the Servicer from the Mortgagor of the full Monthly Payment in respect of such Revolving Credit Loan. Additional servicing compensation in the form of assumption fees, as provided in Section 7.01, returned check fees, dormancy fees and other servicer compensation for modifications, short sales, late payment charges accrued and collected by Servicer with respect to any Revolving Credit Loan, and similar ancillary income shall be retained by the Servicer to the extent not required to be deposited in the Collection Account.

Section 7.04 Annual Statement as to Compliance.

The Servicer will deliver to the Purchaser on or before March 31 of each year, beginning with March 31, 2004, an Officers' Certificate stating that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement has been made under such officers' supervision, (ii) the Servicer has fully complied with the provisions of this Agreement and (iii) to the best of such officers' knowledge, based on such review, the Servicer has fulfilled all of its obligations under this Agreement throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof.

Section 7.05 Annual Independent Certified Public Accountants' Servicing Report.

On or before April 15 of each year beginning April 15, 2004, the Servicer at its expense shall cause a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to furnish a statement to the Purchaser to the effect that such firm has examined certain documents and records relating to the servicing of mortgage loans by the Servicer generally that include a sampling of the Revolving Credit Loans, and, on the basis of such an examination conducted substantially in accordance with the Uniform Single Attestation Program for Mortgage Bankers, such servicing has been conducted in compliance with the minimum standards set forth in such program, except for (i) such exceptions as such firm shall believe to be immaterial, and (ii) such other exceptions as shall be set forth in such statement.

Section 7.06 ICSA Data Security Reviews.

At least quarterly Servicer shall obtain a computer security review and certification of all computer and other systems, software, processes, and sites (including those of business units, Affiliates and permitted subcontractors) used in servicing the Revolving Credit Loans, by the International Computer Security Association or another nationally recognized computer security certification organization applying state-of-the-art computer security standards. Such review shall include Internet perimeter intrusion checking and assessment, yield a certification or rating of the highest level that such organization can provide, and a full copy of all reports, scores, certificates and recommendations resulting therefrom shall be provided promptly to Purchaser. Such rating organization shall enter into a reasonable confidentiality agreement with Servicer and Purchaser as a condition to such review.

Section 7.07 Purchaser's Right to Examine Servicer Records.

The Purchaser, its officers, employees, accountants, regulators, and auditors (collectively its "Representatives") shall have the right to examine and audit, during business hours or at such other times as are reasonable under applicable circumstances, upon ten days advance notice any and all of (i) the credit and other loan files relating to the Revolving Credit Loans or the Mortgagors, (ii) any and all books, records, documentation or other information of the Servicer (whether held by the Servicer or by another) relating to the servicing of the Revolving Credit Loans and (iii) any and all books, records, documentation or other information of the Servicer (whether held by the Servicer or by another) that are relevant to the performance or observance by the Servicer of the terms, covenants or conditions of this Agreement. The Servicer shall be obligated to make the foregoing information available to the Purchaser and its Representatives at the site where such information is stored; provided that the Purchaser and its Representatives shall be required to pay all reasonable out-of pocket costs and expenses incurred by the Servicer in making such information available.

Section 7.08 Optional Purchase of Delinquent Revolving Credit Loans.

Servicer shall have the option to repurchase any Delinquent Revolving Credit Loan and substitute in its place a Qualified Substitute Revolving Credit Loan (up to a maximum of 5% of the original aggregate Funding Date Scheduled Principal Balance of all Revolving Credit Loans purchased by Purchaser under this Agreement).

Section 8.01 The Servicer's Reporting Requirements.

1. Electronic Format. The Servicer shall supply any and all information regarding the Revolving Credit Loans and the REO Properties, including all reports required to be delivered pursuant to Section 5.03, Section 6.02 and this Section 8.01, to the Purchaser in electronic format via the Servicer's secure website, unless otherwise limited by the servicing system utilized by the Servicer.
2. Additional Reports; Further Assurances. On or before the 3rd Business Day following each Determination Date, the Servicer shall deliver to the Purchaser (i) a report (substantially in the form of Exhibit 8.01 attached hereto), acceptable to the Purchaser, describing in reasonable detail all Revolving Credit Loans that are 60 days or more delinquent and the Servicer's activities in connection with such delinquencies. The Servicer shall furnish to the Purchaser during the term of this Agreement such periodic, special or other reports, information or documentation, whether or not provided for herein, as shall be reasonably requested by the Purchaser or required by its regulators with respect to Revolving Credit Loans or REO Properties (provided the Purchaser shall have given the Servicer reasonable notice and opportunity to prepare such reports, information or documentation), including any reports, information or documentation reasonably required to comply with any regulations of any governmental agency or body having jurisdiction over the Purchaser, all such reports or information to be as provided by and in accordance with such applicable instructions and directions as the Purchaser may reasonably request. If any of such reports are not customarily prepared by the Servicer or require that the Servicer program data processing systems to create the reports, then the Purchaser shall pay to the Servicer a fee mutually agreed to by the Purchaser and the Servicer taking into account the Servicer's actual time and cost in preparing such reports. The Servicer agrees to execute and deliver all such instruments and take all such action as the Purchaser, from time to time, may reasonably request in order to effectuate the purposes and to carry out the terms of this Agreement.
3. Financial Statements.

The Servicer understands that, in connection with marketing the Revolving Credit Loans, the Purchaser may make available to any prospective purchaser of the Revolving Credit Loans the Servicer's audited financial statements for its fiscal year 2001 and its audited financial statements for fiscal year 2002, together with any additional statements provided pursuant to the next sentence. During the term hereof, the Servicer will deliver to the Purchaser audited financial statements for each of its fiscal years following the Funding Date and all other financial statements prepared following the Funding Date to the extent any such statements are available upon request to the public at large.

The Servicer also agrees to make available upon reasonable notice and during normal business hours to any prospective purchasers of the Revolving Credit Loans a knowledgeable financial or accounting officer for the purpose of answering questions respecting recent developments affecting the Servicer or the financial statements of the Servicer which may affect, in any material respect, the Servicer's ability to comply with its obligations under this Agreement, and to permit any prospective purchasers upon reasonable notice and during normal business hours to inspect the Servicer's servicing facilities for the purpose of satisfying such prospective purchasers that the Servicer has the ability to service the Revolving Credit Loans in accordance with this Agreement.

Section 9.01 Indemnification; Third Party Claims.

The Seller shall indemnify and hold harmless the Purchaser, its directors, officers, agents, employees, and assignees (each, an "Indemnified Party") from and against any costs, damages, expenses (including reasonable attorneys' fees and costs, irrespective of whether or not incurred in connection with the defense of any actual or threatened action, proceeding, or claim), fines, forfeitures, injuries, liabilities or losses ("Losses") suffered or sustained in any way by any such Person, no matter how or when arising (including Losses incurred or sustained in connection with any judgment, award, or settlement), in connection with or relating to (i) a breach by Seller of any of its representations and warranties contained in Article III or (ii) a breach by Seller of any of its covenants and other obligations contained herein. The Seller shall immediately (i) notify the Purchaser if a claim is made by a third party with respect to this Agreement, any Revolving Credit Loan and/or any REO Property (ii) assume (with the prior written consent of the Purchaser) the defense of any such claim and pay all expenses in connection therewith, including attorneys' fees, and (iii) promptly pay, discharge and satisfy any judgment, award, or decree that may be entered against it or the Purchaser in respect of such claim. Nothing contained herein shall prohibit the Purchaser, at its expense, from retaining its own counsel to assist in any such proceedings or to observe such proceedings; provided that Seller, shall not be obligated to pay or comply with any settlement to which it has not consented.

The Servicer shall indemnify and hold harmless each Indemnified Party from and against any Losses suffered or sustained in any way by any such Person, no matter how or when arising (including Losses incurred or sustained in connection with any judgment, award, or settlement), in connection with or relating to (i) a breach by Servicer of any of its representations and warranties contained in Article III or (ii) a breach by Servicer of any of its covenants and other obligations contained herein including any failure to service the Revolving Credit Loans in compliance with the terms hereof and in accordance with the standard of care in Section 9.03. The Servicer shall immediately (i) notify the Purchaser if a claim is made by a third party with respect to this Agreement, any Revolving Credit Loan and/or any REO Property (ii) assume (with the prior written consent of the Purchaser) the defense of any such claim and pay all expenses in connection therewith, including attorneys' fees, and (iii) promptly pay, discharge and satisfy any judgment, award, or decree that may be entered against it or the Purchaser in respect of such claim. Nothing contained herein shall prohibit the Purchaser, at its expense, from retaining its own counsel to assist in any such proceedings or to observe such proceedings; provided that the Servicer, as applicable, shall not be obligated to pay or comply with any settlement to which it has not consented. The Servicer shall be reimbursed from amounts on deposit in the Collection Account for all amounts advanced by it pursuant to the second preceding sentence except when the claim in any way relates to the Servicer's indemnification for any Losses pursuant to this Section 9.01.

Section 9.02 Merger or Consolidation of the Seller.

Seller will keep in full effect its existence, rights and franchises as a corporation or a Delaware business trust, as applicable, under the laws of the state of its organization and will obtain and preserve its qualification to do business as a foreign entity in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement or any of the Revolving Credit Loans and to perform its duties under this Agreement.

Any Person into which Seller may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation (including by means of the sale of all or substantially all of Seller's assets to such Person) to which the Seller shall be a party, or any Person succeeding to the business of the Seller, shall be the successor of the Seller hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided that, unless otherwise consented to by the Purchaser, the successor or surviving Person, in the case of a merger or consolidation, etc. of the Servicer, shall be an institution qualified to service mortgage loans on behalf of FNMA and FHLMC in accordance with the requirements of Section 3.02(a), shall not cause a rating on any security backed by a Revolving Credit Loan to be downgraded and shall satisfy the requirements of Section 12.01 with respect to the qualifications of a successor to such Servicer.

Section 9.03 Limitation on Liability of the Seller and Others.

Neither the Seller nor the Servicer, nor any of the officers, employees or agents of the Seller or Servicer shall be under any liability to the Purchaser for any reasonable action taken or for refraining from the taking of any reasonable action in good faith pursuant to this Agreement or pursuant to the express written instructions of the Purchaser, or for reasonable errors in judgment made in good faith; provided that this provision shall not protect the Seller, the Servicer, or any such Person against any breach of warranties or representations or covenants made herein, or failure to perform its obligations in compliance with any standard of care set forth in this Agreement, or any liability which would otherwise be imposed by reasons of willful misfeasance, bad faith, negligence or any breach in the performance of the obligations and duties hereunder. The Seller, the Servicer and any officer, employee or agent of the Seller and Servicer may rely in good faith on any document of any kind reasonably believed by the Seller, the Servicer, or such Person to be genuine and prima facie properly executed and submitted by any Person respecting any matters arising hereunder.

The Seller or the Servicer, as applicable, shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to their duties hereunder and which in their opinion may involve them in any expense or liability; provided that the Seller or the Servicer may in their discretion undertake any such action that it may deem necessary or desirable in respect of this Agreement and the rights and duties of the parties hereto. In such event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Seller or the Servicer as applicable, and the Servicer shall be entitled to be reimbursed out of the Collection Account for customary and reasonable legal expenses with the express written consent of the Purchaser. This indemnity shall survive the termination of this Agreement.

Section 9.04 Servicer Not to Resign.

With respect to the retention by Seller of the servicing of the Revolving Credit Loans and the REO Properties hereunder, Seller acknowledges that the Purchaser has acted in reliance upon Seller's independent status, the adequacy of its servicing facilities, plan, personnel, records and procedures, its integrity, reputation and financial standing and the continuance thereof. Consequently, Seller shall not assign the servicing rights retained by it hereunder to any third party nor resign from the obligations and duties hereby imposed on it except (i) with 120 days written notice to Purchaser and the written approval of the Purchaser, such approval not to be unreasonably withheld, or (ii) 3 Business Days following any determination that its duties hereunder are no longer permissible under applicable law and such incapacity cannot be cured by Seller. Any determination permitting the transfer of the servicing rights or the resignation of Seller under Subsection (ii) hereof shall be evidenced by an opinion of counsel to such effect delivered to the Purchaser, which opinion of counsel shall be in form and substance reasonably acceptable to the Purchaser.

Section 10.01 Events of Default.

In case one or more of the following events shall occur and be continuing:

1. any failure by the Servicer to remit to the Purchaser any payment required to be made under the terms of this Agreement which continues unremedied for a period of 3 Business Days unless such failure to remit is due to a cause beyond the Servicer's control, including an act of God, act of civil, military or governmental authority, fire, epidemic, flood, blizzard, earthquake, riot, war, or sabotage, provided that the Servicer gives the Purchaser notice of such cause promptly and uses its reasonable efforts to correct such failure to remit and does so remit within 2 Business Days following the end of the duration of the cause of such failure to remit;
2. Servicer shall commingle funds unrelated to the Revolving Credit Loans or shall fail to make remittances to Purchaser when and as required under this Agreement, provided however, the infrequent accidental misallocation of funds on the part of the Servicer in the performance of its duties hereunder shall not be deemed to be an Event of Default hereunder provided that Servicer has taken commercially reasonable steps to prevent such occurrence, Servicer promptly corrects such misallocations, and ; or
3. any filing of an Insolvency Proceeding against a Seller/Servicer that remains undismissed or unstayed for a period of 30 days after the filing thereof;
4. Servicer shall fail to pay, or any event of default by Servicer shall occur under the terms of, any indebtedness of Servicer for borrowed money exceeding $ 100,000 due Purchaser or any other person or entity and such failure shall continue beyond any applicable grace period, and in Purchaser's judgment, such failure is indicative of an adverse change in the operations or financial condition of the Servicer or its ability or willingness to satisfactorily perform its obligations hereunder; or

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5. any filing of an Insolvency Proceeding by or on behalf of a Seller or Servicer, any consent by or on behalf of a Seller or Servicer to the filing of an Insolvency Proceeding against a Seller or Servicer, or any admission by or on behalf of a Seller or Servicer of its inability to pay its debts generally as the same become due;
6. Any Insolvency Proceeding is commenced by or against a Seller or Servicer and the petition shall not be dismissed within 30 days after commencement of the case, or a court having jurisdiction in the premises shall enter a decree or order for relief in respect of Servicer in an involuntary case, under any applicable bankruptcy, insolvency or other similar law now or here after in effect, or any other similar relief shall be granted under any applicable federal or state law; or;
7. any issuance of any attachment or execution against, or any appointment of a conservator, receiver or liquidator with respect to, all or substantially all of the assets of a Seller or Servicer;
8. any failure or inability of Seller to be eligible to service Revolving Credit Loans for FNMA or FHLMC;
9. any sale, transfer, assignment, or other disposition by a Seller or Servicer of all or substantially all of its property or assets to a Person who does not meet the qualifications enumerated or incorporated by reference into Section 9.02, any assignment by a Seller or Servicer of this Agreement or any of a Seller's or Servicer's rights or obligations hereunder except in accordance with Section 9.04, or any action taken or omitted to be taken by a Seller or Servicer in contemplation or in furtherance of any of the foregoing, without the consent of the Purchaser; or
10. any failure by the Seller or Servicer to be in compliance with applicable "doing business" or licensing laws of any jurisdiction where Mortgaged Property is located;

then, and in each and every such case, so long as an Event of Default shall not have been remedied, the Purchaser, by notice in writing to the Seller and/or Servicer may, in addition to whatever rights the Purchaser may have at law or in equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Seller and/or Servicer under this Agreement and in and to the Revolving Credit Loans and the proceeds thereof subject to Section 12.01, without the Purchaser's incurring any penalty or fee of any kind whatsoever in connection therewith; provided that, upon the occurrence of an Event of Default under Subsection (3), (4) or (5) of this Section 10.01, this Agreement and all authority and power of the Seller and/or Servicer hereunder (whether with respect to the Revolving Credit Loans, the REO Properties or otherwise) shall automatically cease. On or after the receipt by the Seller of such written notice, all authority and power of the Seller under this Agreement (whether with respect to the Revolving Credit Loans or otherwise) shall cease. Notwithstanding the occurrence of an Event of Default, the Seller or the Servicer, as applicable, shall be entitled to all amounts due to such party and remaining unpaid on such date of termination.

Section 11.01 Term and Termination of Servicing.

1. The servicing obligations of the Servicer under this Agreement may be terminated as provided in Section 10.01 hereof.
2. In any case other than as provided under Subsection (a) hereof, the respective obligations and responsibilities of the Servicer hereunder shall terminate upon: (a) the later of the final payment or other liquidation (or any advance with respect thereto) of the last Revolving Credit Loan or the disposition of all REO Property and the remittance of all funds due hereunder; or (b) written notice by Purchaser, and transfer of servicing in accordance with Section 12.01,
3. Upon any termination of this Agreement or the servicing obligations of the Servicer hereunder, then the Servicer shall prepare, execute and deliver all agreements, documents and instruments, including all Servicer Mortgage Files, and do or accomplish all other acts or things necessary or appropriate to effect such termination, all at the Servicer's sole expense. In any such event, the Servicer agrees to cooperate with the Purchaser in effecting the termination of the Servicer's servicing responsibilities hereunder, including the transfer to the Purchaser or its designee for administration by it of all cash amounts which shall at the time be contained in, or credited by the Servicer to, the Collection Account or thereafter received with respect to any Revolving Credit Loan or REO Property.
4. Purchaser and Seller may, by written notice to the other parties at any time, terminate their respective obligations to purchase or sell mortgage loans hereunder, provided, however, each such party shall be obligated to purchase and sell, as applicable, any mortgage loans such party committed to purchase or sell subject to any Purchase Price and Terms Letter predating the other party's receipt of any such notice of termination.

Section 11.02 Survival.

Notwithstanding anything to the contrary contained herein, the representations and warranties of the parties contained herein and in any certificate or other instrument delivered pursuant hereto, as well as the other covenants hereof (including those set forth in Section 9.01) that, by their terms, require performance after the termination by this Agreement, shall survive the delivery and payment for the Revolving Credit Loans on each Funding Date as well as the subsequent transfer of any Revolving Credit Loan, and the termination of this Agreement and shall inure to the benefit of the parties, their successors and assigns. Seller further agree that the representations, warranties and covenants made by Seller herein and in any certificate or other instrument delivered pursuant hereto shall be deemed to be relied upon by Purchaser notwithstanding any investigation heretofore made by Purchaser or on Purchaser's behalf.

Section 12.01 Successor to the Servicer.

Upon the termination of the Servicer's servicing responsibilities and duties under this Agreement pursuant to Section 9.04, 10.01, or 11.01, the Purchaser shall (i) succeed to and assume all of the Servicer 's responsibilities, rights, duties and obligations under this Agreement or (ii) appoint a successor servicer which shall succeed to all rights and assume all of the responsibilities, duties and liabilities of the Servicer under this Agreement prior to the termination of the Servicer's responsibilities, duties and liabilities under this Agreement. If the Servicer's duties, responsibilities and liabilities under this Agreement should be terminated pursuant to the aforementioned sections, then the Servicer shall continue to discharge such duties and responsibilities during the period from the date it acquires knowledge of such termination until the effective date thereof (if applicable) all on the terms and conditions contained herein and shall take no action whatsoever that might impair or prejudice the rights or financial condition of its successor. The termination of the Servicer's servicing responsibilities pursuant to any of the aforementioned Sections shall not, among other things, relieve the Servicer of its obligations pursuant to Section 2.04 and/or 7.02, the representations and warranties or other obligations set forth in Sections 2.04, 3.01, 3.02 and 3.03 and the remedies available to the Purchaser under the various provisions of this Agreement. In addition, such termination shall not affect any claims that the Purchaser may have against the Servicer arising prior to any such termination.

Section 12.02 Governing Law.

This Agreement is to be governed by, and construed in accordance with the internal laws of the State of North Carolina without giving effect to principles of conflicts of laws. The obligations, rights, and remedies of the parties hereunder shall be determined in accordance with such laws.

Section 12.03 Notices.

Any notices or other communications permitted or required hereunder shall be in writing and shall be deemed conclusively to have been given if personally delivered, sent by courier with delivery against signature therefor, mailed by registered mail, postage prepaid, and return receipt requested or transmitted by telex, telegraph or telecopier and confirmed by a similar writing mailed or sent by courier as provided above, to (i) in the case of the Purchaser, Wachovia Bank, N.A., 301 S. College St., Mail Stop NC0602, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention : ▇▇▇▇ ▇▇▇▇▇▇, Vice President, Structured Products, (ii) ) in the case of the Seller, E-Loan, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention : ▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, E-Loan's General Counsel at the same address, or (iii) such other address as may hereafter be furnished to the other parties in writing by the Purchaser or applicable Seller. Any notification or communication provided by transmission of e-mail shall not, for purposes of this Agreement, constituted valid notice.

Section 12.04 Severability of Provisions.

If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, the invalidity of any such covenant, agreement, provision or term of this Agreement shall in no way affect the validity or enforceability of the other provisions of this Agreement.

Section 12.05 Schedules and Exhibits.

The schedules and exhibits that are attached to this Agreement are hereby incorporated herein and made a part hereof by this reference.

Section 12.06 General Interpretive Principles.

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

1. the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
2. any reference in this Agreement to this Agreement or any other agreement, document, or instrument shall be a reference to this Agreement or any other such agreement, document, or instrument as the same has been amended, modified, or supplemented in accordance with the terms hereof and thereof (as applicable);
3. accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
4. references herein to "Articles," "Sections," "Subsections," "Paragraphs, " and other subdivisions without reference to a document are to designated articles, sections, subsections, paragraphs and other subdivisions of this Agreement, unless the context shall otherwise require;
5. a reference to a subsection without further reference to a section is a reference to such subsection as contained in the same section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
6. a reference to a "day" shall be a reference to a calendar day;
7. the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
8. the terms "include" and "including" shall mean without limitation by reason of enumeration .

Section 12.07 Waivers and Amendments, Noncontractual Remedies; Preservation of Remedies.

This Agreement may be amended, superseded, canceled, renewed or extended and the terms hereof may be waived, only by a written instrument signed by authorized representatives of the parties or, in the case of a waiver, by an authorized representative of the party waiving compliance. No such written instrument shall be effective unless it expressly recites that it is intended to amend, supersede, cancel, renew or extend this Agreement or to waive compliance with one or more of the terms hereof, as the case may be. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege, or any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have at law or in equity.

Section 12.08 Captions.

All section titles or captions contained in this Agreement or in any schedule or Exhibit annexed hereto or referred to herein, and the table of contents to this Agreement, are for convenience only, shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement.

Section 12.09 Counterparts; Effectiveness.

This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. This Agreement shall become effective as of the date first set forth herein upon the due execution and delivery of this Agreement by each of the parties hereto.

Section 12.10 Entire Agreement; Amendment.

This Agreement (including the schedules and exhibits annexed hereto or referred to herein), together with each and every Purchase Price and Terms Letter to be provided in connection with any Revolving Credit Loan and Funding Date, and the Seller Guide, contains the entire agreement between the parties hereto with respect to the transactions contemplated hereby and supersedes all prior agreements, written or oral, with respect thereto. No amendment, modification or alteration of the terms or provisions of this Agreement shall be binding unless the same shall be in writing and duly executed by the authorized representatives of the parties hereto.

Section 12.11 Further Assurances.

Each party hereto shall take such additional action as may be reasonably necessary to effectuate this Agreement and the transactions contemplated hereby. The Seller will promptly and duly execute and deliver to the Purchaser such documents and assurances and take such further action as the Purchaser may from time to time reasonably request in order to carry out more effectively the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of the Purchaser.

Section 12.12 Intention of the Seller.

Seller intends that the conveyance of Seller's right, title and interest in and to the Revolving Credit Loans to the Purchaser shall constitute a sale and not a pledge of security for a loan. If such conveyance is deemed to be a pledge of security for a loan, however, the Seller intends that the rights and obligations of the parties to such loan shall be established pursuant to the terms of this Agreement. Seller also intends and agrees that, in such event, (i) the Seller shall be deemed to have granted to the Purchaser and its assigns a first priority security interest in Seller's entire right, title and interest in and to the Revolving Credit Loans, all principal and interest received or receivable with respect to the Revolving Credit Loans, all amounts held from time to time in the accounts mentioned pursuant to this Agreement and all reinvestment earnings on such amounts, together with all of the Seller's right, title and interest in and to the proceeds of any title, hazard or other insurance policies related to such Revolving Credit Loans and (ii) this Agreement shall constitute a security agreement under applicable law. All rights and remedies of the Purchaser under this Agreement are distinct from, and cumulative with, any other rights or remedies under this Agreement or afforded by law or equity and all such rights and remedies may be exercised concurrently, independently or successively.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be signed hereto by their respective officers as of the date first written above.

By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name : ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title : Vice President

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President

*Exhibits and schedules have been omitted in accordance with Item 601 of Regulation S-K, and will be provided upon request.