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Published: 2008-03-26

Conventional Loan Purchase Agreement - Crestar Mortgage Corp. and E Loan Inc.



                      CONVENTIONAL LOAN PURCHASE AGREEMENT

         This Purchase Agreement dated as of July 1, 1998, by and between
CRESTAR MORTGAGE CORPORATION, a Virginia corporation with its principal office
at 901 Semmes Avenue, Richmond, VA 23224, ("Purchaser"), and E. LOAN, Inc., a
California corporation with its principal office at 6200 Village Parkway # 102
Dublin, CA 94568 ("Seller"), provides as follows:

         Section 1. RECITALS. Seller desires to originate and sell to Purchaser
on a servicing released basis certain conventional residential Mortgage Loans as
set forth in the Manual, defined below, provided to Seller by Purchaser.
Purchaser and Seller desire to set forth in this Agreement the terms and
conditions under which Mortgage Loans originated by Seller will be purchased by
Purchaser, in consideration of the mutual promises and covenants contained
herein, Seller agrees to sell Mortgage Loans to Purchaser and Purchaser agrees
to purchase Mortgage Loans from Seller, all subject to the following terms and
conditions of this Agreement.

         Section 2. DEFINITIONS. As used herein, the term:

                  Section 2.1. "BORROWER" means the Individual(s) obligated to
repay a Mortgage Loan.

                  Section 2.2. "BUSINESS DAY" means any day on which Purchaser
is open to the public for business, Purchaser is normally open to the public for
business on any day other than (i) a Saturday or Sunday or (ii) New Year's Day,
Martin Luther King Day, President's Day, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day.

                  Section 2.3. "CLOSING" means the time when a Borrower signs a
Note evidencing a Mortgage Loan and the Mortgage securing payment of such Note.

                  Section 2.4. "CLOSING PACKAGE" shall have the same meaning as
defined in the Manual.

                  Section 2.5. "CONFORMING" means that the Loan Amount of a
Mortgage Loan is within FHLMC/FNMA Requirements.

                  Section 2.6. "CONSUMER DISCLOSURES" means all disclosures or
notices required, or customarily used by residential mortgage lenders, to comply
with all applicable federal, state and local laws and regulations applying to
consumer credit transactions Involving loans secured by residential real estate,
including, without limitation, the Truth-In-Lending Act, the Real Estate
Settlement Procedures Act, the Equal Credit Opportunity Act, and the Fair Credit
Reporting Act.

                  Section 2.7. "CREDIT PACKAGE" shall have the same meaning as
defined in the Manual.

                  Section 2.8. "DELINQUENT" means that all or any part of the
monthly installment of principal and interest due on a Note is unpaid after the
due date set forth in the Note or that Escrows or other amounts required by the
Mortgage to be paid have not been paid.

                  Section 2.9. "ESCROWS" means all funds collected from the
Borrower to pay expenses required to be paid pursuant to the Mortgage,
including, without limitation, hazard Insurance premiums, mortgage insurance
premiums, taxes, special assessments, ground rents, water, sewer and other
governmental charges that, if not paid, may result in liens on the Secured
Property with priority over the Mortgage Loan.


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                  Section 2.10. "FALLOUT LOAN" means a Mortgage Loan subject to
a Lock-In which cannot be delivered according to the terms of the Lock-In,
including, without limitation, (i) a Mortgage Loan which never reaches Closing
due to Seller's denial of the Borrower's loan application or the Borrower's
withdrawal of the loan application, or (ii) a Mortgage Loan which cannot be
delivered under the terms of the Lock-In because of a change in the type of loan
requested by the Borrower, or (iii) a Mortgage Loan which Purchaser for any
reason declines to purchase.

                  Section 2.11. "FHLMC" means the Federal Home Loan Mortgage
Corporation.

                  Section 2.12. "FNMA" means the Federal National Mortgage
Association.

                  Section 2.13. "FHLMC/FNMA REQUIREMENTS" mean the requirements,
representations and warranties established from time to time by FHLMC and FNMA
as set forth in the FHLMC Sellers' and Servicers" Guide, the FNMA Selling Guide
or the FNMA Servicing Guide.

                  Section 2.14. "LOAN AMOUNT" means the principal amount of a
Mortgage Loan at the time of Closing.

                  Section 2.15. "LOCK-IN" means an agreement between Seller and
Purchaser establishing the price and terms for the purchase of a Mortgage Loan.

                  Section 2.16. "MANUAL" means the manual provided to Seller by
Purchaser, as the same may be amended and updated from time to time by
Purchaser.

                  Section 2.17. "MORTGAGE" means the security instrument
securing a Mortgage Loan with real property, Including, without limitation, a
mortgage, a deed of trust, a deed to secure debt, a security deed or any other
security instrument.

                  Section 2.18. "MORTGAGE LOAN" means any eligible conventional
Mortgage Loan product as set forth in the Manual and meeting all the
requirements of Section 4 of this Agreement. The term Mortgage Loan encompasses
all of the Seller's right, title and interest in and to the Mortgage Loan,
including, without limitation, the servicing rights, all Escrows, the Note, the
Mortgage, all applicable insurance policies and all other documentation and
Information collected by Seller in connection with the Mortgage Loan.

                  Section 2.19. "NON-CONFORMING" means the Loan Amount of the
Mortgage Loan exceeds FHLMC/FNMA Requirements.

                  Section 2.20. "NOTE" means the written Instrument evidencing
the Borrower's promise to repay the Loan Amount, plus interest, of the Mortgage
Loan.

                  Section 2.21. "POST CLOSING DOCUMENTS" shall have the same
meaning as defined in the Manual.

                  Section 2.22. "PURCHASE DATE" means the date on which the
Purchaser remits funds to Seller or to Seller's warehouse lender for the
purchase of a Mortgage Loan.

                  Section 2.23. "PURCHASE PRICE" means the price paid by
Purchaser for a Mortgage Loan exclusive of any Servicing-Release Premium.

                  Section 2.24. "SECURED PROPERTY" means the land and
improvements thereon subject to the lien of the Mortgage securing a Mortgage
Loan.

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                  Section 2.25. "SERVICING RELEASE PREMIUM" means the amount in
addition to the Purchase Price that Purchaser pays, if any, to obtain a Mortgage
Loan without reservation by Seller of the servicing right for such Mortgage
Loan.

                  Section 3. GENERAL. This Agreement sets forth the conditions
and procedures under which Seller will sell Mortgage Loans to Purchaser and
Purchaser will purchase Mortgage Loans from Seller. No obligation is created by
this Agreement for Seller to sell or Purchaser to purchase a particular amount
of Mortgage Loans or any particular Mortgage Loan.

                  Section 4. MORTGAGE LOANS ELIGIBLE FOR PURCHASE. A Mortgage
Loan must meet the following criteria to be eligible for purchase by Purchaser
pursuant to this Agreement:

                  Section 4.1. ELIGIBLE PROPERTY AND LIEN STATUS. A Mortgage
Loan must be secured by a first priority lien Mortgage on a one-to-four family
residential dwelling located in a state or jurisdiction in the United States
approved by Purchaser, as set forth in the Manual.

                  Section 4.2. PURCHASE OF LOANS ORIGINATED BY A PARTY OTHER
THAN SELLER. Purchaser shall have no obligation to purchase a Mortgage Loan
originated by a person other than Seller. For purposes of this Section 4.2,
origination by a person other than Seller shall mean that any or all of the
following conditions, as applicable, exist: (i) the loan application was taken
by, or (ii) documents evidencing the credit-worthiness of the Mortgage Loan were
collected by, or (iii) the appraisal of the Secured Property was obtained by, or
(iv) the Mortgage Loan was closed by and/or in the name of a person other than
Seller or other than a person in the direct and principal employment of Seller
or other than a settlement agent acting on behalf of Seller. Notwithstanding the
foregoing, for purposes of this paragraph Section 4.2, loan applications
transferred from another lender to Seller for the convenience of the borrower
and not as part of any business arrangement between the lender and Seller shall
not be considered by Purchaser to be an origination by a person other than
Seller.

                  Section 4.3. UNDERWRITING GUIDELINES. Each Mortgage Loan
purchased by Purchaser pursuant to this Agreement must conform to Purchaser's
underwriting guidelines as set forth in the Manual as of the date the Credit
Package is received by Purchaser or by Purchaser's designated underwriter.

                  Section 4.4. SUBJECT TO LOCK-IN. Each Mortgage Loan purchased
by Purchaser pursuant to this Agreement must be subject to a Lock-In no later
than one Business Day prior to delivery of the Mortgage Loan to Purchaser.

         Section 5. TERMS OF LOCK-IN.

                  Section 5.1. LOCK-IN OF PURCHASE TERMS. Seller must obtain
from Purchaser a Lock-In for each Mortgage Loan to be offered for sale to
Purchaser not later than one Business Day prior to delivery of the Mortgage Loan
to Purchaser. The Lock-In shall establish the agreement of Seller to sell and
Purchaser to purchase a particular Mortgage Loan subject to the terms and
conditions of this Agreement and the Manual. Each Lock-In must relate to a
particular Mortgage Loan. Seller may obtain a Lock-In of the Purchase Price and
purchase terms for a particular Mortgage Loan according to procedures described
in the Manual. Each Lock-In will have a stated expiration date. In addition to
the purchase terms established by the Lock-In, Purchaser may charge to Seller
fees in connection with the purchase or underwriting of Mortgage Loans,
including without limitation underwriting and funding fees as set forth in the
Manual.

                  Section 5.2. TIME WHEN LOCK-IN PRICES ARE ESTABLISHED.
Purchaser will establish each Business Day, the Purchase Price and
Servicing-Release Premium it will pay for Mortgage Loans and will communicate
such information to Seller in the time and manner set forth in the Manual.

                  Section 5.3. CONFIRMATION OF LOCK-IN. Purchaser will confirm
any Lock-In in writing according to procedures described in the Manual.

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                  Section 5.4. CLOSING OF MORTGAGE LOAN SUBJECT TO A LOCK-IN.
Seller agrees to close and deliver the Mortgage Loan on or before the expiration
of a Lock-In. If the Mortgage Loan is not closed and delivered on or before the
expiration of the Lock-In, the Mortgage Loan shall be subject to repricing as
described in the Manual.

                  Section 5.5. DELIVERY OF MORTGAGE LOAN SUBJECT TO A LOCK-IN.
Seller agrees to deliver the Mortgage Loan to Purchaser for purchase within
fifteen calendar days after its Closing. If such delivery is not made, the
Mortgage Loan shall be subject to repricing as described in the Manual.

                  Section 5.6. BEST EFFORTS LOCK-INS AND MANDATORY LOCK-INS.
Purchaser may offer either "best efforts" Lock-Ins or "mandatory" Lock-Ins, or
both. The terms of best efforts Lock-Ins include: (1) Seller will use its best
efforts to close the Mortgage Loan according to the terms of the Lock-In, (2) if
the Borrower changes the type of Mortgage Loan requested with the result that
the terms of the Mortgage Loan no longer agree with the terms of the Lock-In,
Seller will notify Purchaser in accordance with the procedures in the Manual and
the Lock-In price may be changed at Purchaser's discretion, and (3) after
Closing, the Mortgage Loan is required to be delivered to Purchaser. Seller must
notify Purchaser of any Mortgage Loan subject to a Lock-In that does not reach
Closing in accordance with the procedures with the Manual. Purchaser reserves
the right to verify with the Borrower or by other means that the Mortgage Loan
did not reach Closing. If Seller fails to deliver to Purchaser after Closing a
Mortgage Loan subject to a best efforts Lock-In, such failure constitutes an
Event of Default under this Agreement and, notwithstanding any other remedies
set forth in Section 13 of this Agreement, Purchaser in its sole discretion may
assess a pair-off fee as described and calculated in accordance with the
provisions of the Manual. If the Lock-In is designated as a mandatory Lock-In,
Seller must deliver the Mortgage Loan to Purchaser or pay Purchaser a pair-off
fee, as described and calculated in accordance with the provisions of the
Manual, regardless of whether or not the Mortgage Loan closes.

                  Section 5.7. FALLOUT LOANS.

                           a. NOTIFICATION. Seller shall notify Purchaser 
immediately in accordance with the procedures in the Manual of any Mortgage Loan
which is a Fallout Loan. Such Notification must include the reason the Mortgage
Loan became a Fallout Loan, documented in accordance with the Manual.

                           b. MONITORING THE AMOUNT OF FALLOUT LOANS. Purchaser 
shall evaluate Seller's performance in managing Fallout Loans according to
parameters described in the Manual. Seller's failure to manage Fallout Loans
effectively may cause Purchaser to terminate this Agreement pursuant to 17
below.

         Section 6. APPROVAL OF MORTGAGE LOANS.

                  Section 6.1. SUBMISSION OF CREDIT PACKAGE. Prior to closing a
Mortgage Loan, Seller shall submit to Purchaser or Purchaser's designated
underwriter the Credit Package for such Mortgage Loan as described and defined
in the Manual. Seller agrees to pay an underwriter fee as set forth in the
Manual for each conforming Mortgage Loan purchased and for each non-conforming
Mortgage Loan submitted to Purchaser for review. Underwriting fees will be
deducted from the funding on conforming and non-conforming Mortgage Loans. The
FHLMC/FNMA Requirements and the requirements of the Manual applicable to credit
and appraisal standards in effect as of the date a Credit Package is received by
Purchaser shall apply to the related Mortgage Loan.

                  Section 6.2. NOTIFICATION OF APPROVAL DECISION. Purchaser will
use its best efforts to review and notify Seller of its purchase decision within
two Business Days, but in no event later than five Business Days, after
receiving the Credit Package for a Conforming Mortgage Loan. For Non-conforming
Mortgage Loans, the underwriting may be performed by a mortgage insurance
company or Investor designated by Purchaser and that company's policy concerning
turnaround time shall apply. If the Credit Package is incomplete, Purchaser or
Purchaser's designated underwriter shall notify Seller of the missing
documentation, and Purchaser shall have no obligation to make a purchase
decision on the Mortgage Loan until such documentation is received.

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                  Section 6.3. ISSUANCE OF UNDERWRITER'S APPROVAL. Upon approval
of a Credit Package for purchase, Purchaser shall issue to Seller a notification
that the Mortgage Loan has been approved (the "Underwriter's Approval"), stating
the conditions upon which purchase shall be made. The Lock-In, rather than the
Underwriter's Approval, shall establish the Purchase Price for the Mortgage
Loan. Unless an Underwriter's Approval has been issued with respect to a Credit
Package, Purchaser shall have no obligations under this Agreement to purchase
the related Mortgage Loan. The purchase will be subject to the conditions set
forth in the Underwriter's Approval, the Lock-In, the Manual and this Agreement.
Each Underwriter's Approval shall state an expiration date. If Seller does not
close a Mortgage Loan on or before such expiration date, Seller shall resubmit
to Purchaser the Credit Package along with such updated information as may be
required by Purchaser for reapproval and issuance of a new Underwriter's
Approval.

                  Section 6.4. RETENTION OF CREDIT PACKAGE. If an Underwriter's
Approval has been issued, Purchaser will retain the Credit Package pending
Closing and purchase of the Mortgage Loan unless alternative arrangements are
agreed to by Purchaser and Seller.

         Section 7. CLOSING OF MORTGAGE LOANS.

                  Section 7.1. CLOSING A MORTGAGE LOAN SUBJECT TO A LOCK-IN.
Seller agrees to notify Purchaser of the Closing not later than one Business Day
after the Closing of any Mortgage Loan subject to a Lock-In. Seller agrees not
to close any Mortgage Loan subject to a Lock-In unless Purchaser has issued an
Underwriter's Approval which is in effect at the Closing.

                  Section 7.2. TRANSMITTAL OF CLOSING PACKAGE TO PURCHASER.
Within fifteen calendar days after the Closing of a Mortgage Loan, Seller shall
provide to Purchaser the Closing Package as described and defined in the Manual.
Seller agrees to do all acts necessary to transfer ownership of Mortgage Loan to
Purchaser and shall assign and deliver the Closing Package to Purchaser with
respect to the purchase of each Mortgage Loan, subject to the approval of
Purchaser as to proper form, content and execution of all documents related to
the Mortgage Loan. Purchaser shall use its best efforts to notify Seller within
two Business Days, but in no event in more than five Business Days, if the
Closing Package complies with Purchaser's requirements. The Closing Package will
not be satisfactory if (i) it does not satisfy the terms and conditions of the
Underwriter's Approval, the Lock-In, the Manual and this Agreement, or (ii) it
contains one or more errors or is incomplete. If Purchaser determines that a
Closing Package is not satisfactory due to an error or an omission that can be
corrected, Purchaser shall grant to Seller an additional period of five Business
Days, starting on the date that Purchaser notifies Seller of an unsatisfactory
Mortgage Loan or starting fifteen calendar days After Closing, whichever occurs
later, to correct any defect. If Seller corrects the defect within such five
Business Day period, Purchaser shall purchase the Mortgage Loan in accordance
with the Lock-In terms. If the defect is corrected after this time period,
Purchaser shall have the option to establish a new Purchase Price for the
Mortgage Loan.

                  Section 7.3. ORIGINAL NOTE. If a copy of the Note was provided
to Purchaser with the Closing Package, Seller agrees to deliver the original
Note, properly endorsed, to Purchaser prior to the Purchase Date.

                  Section 7.4. PURCHASE FUNDS. In the event Purchaser determines
that a Mortgage Loan is acceptable for purchase, Purchaser shall transmit the
purchase funds for the Mortgage Loan within five Business Days after receiving
the Closing Package for such Mortgage Loan, provided, however, if the Note is
received by Purchaser five or more Business Days after receipt of the Closing
Package, Purchaser shall have two Business Days after receipt of the Note in
which to transmit the purchase funds. The purchase funds will be transmitted net
of any amounts due Purchaser in connection with such purchase, including,
without limitation, all funds held in Escrow. Any funds due Seller by Purchaser
in connection with such purchase, including, without limitation, per diem
interest and any Servicing-Release Premium that may be owed, will be added to
the purchase funds transmitted to Seller on the Purchase date. Purchaser shall
have the right to offset any amount owed by Seller to Purchaser against any and
all balances, credits, deposits, accounts or monies of Seller then or thereafter
held by Purchaser.

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title insurance policy with respect to the Secured Property issued by a title
insurance company acceptable to Purchaser on standard ALTA mortgagee policy
forms in an amount satisfactory to Purchaser and containing all applicable
endorsements. By assignment or endorsement of Seller's Interest, Purchaser, its
successors and assigns, is designated as a mortgagee and additional named
insured with regard to the title insurance. Seller has not done, by act or
omission, anything which would impair the title insurance coverage.

                  Section 8.6. SECURED PROPERTY INTACT. The Secured Property has
not been damaged so as to adversely and materially affect its value and is
otherwise in good repair. There are no proceedings pending for the partial or
total condemnation of the Secured Property.

                  Section 8.7. HAZARD AND CASUALTY INSURANCE. There is in force
for the Mortgage Loan adequate hazard and casualty insurance coverage with
respect to the Secured Property in an amount and pursuant to a policy of
insurance satisfactory to Purchaser insuring against fire or other casualty,
and, if required by federal law, flood insurance. By assignment or endorsement
of Seller's Interest, Purchaser, its successors and assigns, is designated as a
mortgagee and additional named insured with regard to such insurance.

                  Section 8.8. DELINQUENT STATUS. As of the Purchase Date, the
Mortgage Loan is not sixteen calendar days or more Delinquent and Seller has no
knowledge of any default or breach existing or threatened under the Security
Instrument or Note.

                  Section 8.9. MODIFICATION OF MORTGAGE LOAN DOCUMENTATION. The
terms of the Mortgage Loan have in no way been changed or modified and the lien
of the Security Instrument has not been released or subordinated. All Mortgage
Loan documentation submitted to Purchaser is genuine, complete and accurate, and
all representations as to each Mortgage Loan are true and correct and meet the
requirements and specifications of all parts of this Agreement.

                  Section 8.10. TAXES. All taxes due and payable on or prior to
the Purchase date with respect to the Secured Property have been paid in full.

                  Section 8.11. ACCEPTABLE INVESTMENT. Seller has no knowledge
of any circumstances or conditions with respect to the Mortgage Loan, the real
property secured by the Security Instrument, the Borrower or the Borrower's
credit standing that can reasonably be expected to: (i) cause private
institutional investors to regard the Mortgage Loan as an unacceptable
Investment; or (ii) cause the Mortgage Loan to become delinquent; or (iii)
adversely affect the Mortgage Loan's value or marketability.

                  Section 8.12. ASSIGNMENT. A valid and recordable instrument of
assignment, recorded, has been duly executed and delivered by the proper
person(s) or entity(ies) to Purchaser, and such assignment is not subject to any
other assignment, claim, lien, mortgage, pledge, charge, security interest or
encumbrance.

                  Section 8.13. QUALIFICATION OF SELLER. Seller has been duly
incorporated and is validly existing and in good standing under the laws of the
state of its incorporation. Seller is duly and validly qualified and authorized
to do business and to originate and sell the Mortgage Loans in each state where
the Secured Property is located or, in the event Seller is not so qualified, the
lending of money and the acquisition and holding of Mortgage Loans does not
constitute doing business in such state. Seller has all licenses required to
engage in such transactions in each state where it originates Mortgage Loans.

                  Section 8.14. QUALIFICATION OF APPRAISER. All appraisers
performing and furnishing appraisals with respect to a Mortgage Loan must meet
the qualifications set forth in the Manual.

         Section 9. OTHER WARRANTIES AND REPRESENTATIONS. Seller represents and 
warrants to Purchaser as of the date of this Agreement as follows:

                  Section 9.1. DUE EXECUTION AND DELIVERY. The execution and
delivery of this Agreement are within the corporate powers of Seller and have
been duly authorized by all necessary action on the part of the

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Seller and neither the execution and delivery of this Agreement by Seller, nor
the consummation by Seller of the transactions herein contemplated nor
compliance with the provisions hereof by Seller will (i) conflict with or result
in a breach of, or constitute a default under, any of the provisions of the
articles of Incorporation or bylaws of Seller or any law, governmental rule or
regulation, or any Judgment, decree, or order binding on Seller, or any of its
properties, or any of the provisions of any indenture, mortgage, deed of trust,
contract or other instrument to which it is a party or by which it is bound or
(ii) result in the creation or imposition of any lien, charge, or encumbrance
upon any of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument.

                  Section 9.2. BINDING AGREEMENT. This Agreement has been
executed and delivered by Seller and constitutes a legal, valid and binding
agreement of Seller, enforceable in accordance with Its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, Insolvency,
or other similar laws affecting creditors rights generally from time to time in
effect, and to general principles of equity.

         Section 9A. SURVIVAL OF WARRANTIES. The representations and warranties
made in this Agreement in Sections 8 and 9 above or elsewhere, shall survive the
Purchase Date and shall Inure to the benefit of Purchaser, its successors,
affiliates and assigns and with respect to any Mortgage Loan, regardless of any
review or investigation made by or on behalf of Purchaser.

         Section 10. COVENANT REGARDING TAXES. Seller hereby covenants and
agrees with Purchaser that if any taxes relating to the Secured Property are due
within the sixty calendar days following the Closing date, and the bills for
such taxes are available as of the Closing date, Seller will cause the taxes to
be paid in full by the due date.

         Section 11. REPURCHASE REQUIREMENTS. In addition to any other rights
and remedies which Purchaser may have against Seller, Seller agrees to
repurchase any Mortgage Loan within ten calendar days after Purchaser's demand,
and to indemnify Purchaser for any incurred loss or liability resulting from the
occurrence of any of the following events:

                  Section 11.1. BREACH OF WARRANTY OR REPRESENTATION. Purchaser
has determined that there exists a breach of any representation or warranty made
pursuant to this Agreement, provided that Seller shall have fifteen calendar
days following notice thereof to cure any breach resulting from a clerical
error.

                  Section 11.2. TIMELY DELIVERY OF POST-CLOSING DOCUMENTS. The
Post-closing Documents or any other documentation or corrections of any
documentation have not been delivered within the time periods set forth in this
Agreement.

                  Section 11.3. FALSE OR MISLEADING STATEMENTS. Purchaser
determines that any information submitted to seller or any statement, report or
document furnished by Seller to Purchaser hereunder was incomplete, inaccurate,
false, or misleading in any material respect when made or delivered. This
provision includes any condominium or PUD warranties made by Seller to
Purchaser.

                  Section 11.4. REPURCHASE OF EARLY DEFAULTS. Seller agrees to
repurchase any conforming or non-conforming conventional Mortgage Loan from
Purchaser if a default occurs with respect to the payment of any installment of
principal and interest due on the first payment due date after the Purchase
Date.

         Section 12. REPURCHASE PRICE. In the event Seller is obligated to
repurchase a Mortgage Loan, the repurchase price shall be at par or at the
purchase price paid by Purchaser, whichever is greater, in an amount equal to
the then unpaid principal balance of such Mortgage Loan, plus all accrued and
unpaid interest and any costs or expenses, including, without limitation,
reasonable attorney's fees and expenses and court costs incurred by Purchaser in
connection with the repurchase of any such Mortgage Loan, enforcing such
repurchase obligation, enforcing any obligation of the Borrower arising under
the Note or foreclosing on the Secured Property. In addition, Seller shall repay
to Purchaser any Servicing-Release Premium paid by Purchaser in connection with
such repurchased Mortgage Loan. Purchaser shall have the right to offset the

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amount owed by Seller to Purchaser against any and all balances, credits,
deposits, accounts or monies of Seller then or thereafter held by Purchaser.
Purchaser may, at the request of Seller, perform the servicing of a Mortgage
Loan that Seller is required to repurchase pursuant to the provisions of this
Agreement. The repurchase obligations under this Agreement shall survive (i)
purchase of the Mortgage Loan; (ii) any transfer or grant of any interest in or
sale of the Mortgage Loan by Purchaser or its affiliates or any of their
successors or assignees; and (iii) termination of this Agreement.

         Section 13. EVENTS OF DEFAULT. Purchaser, at its option, shall have the
right to immediately terminate this Agreement without notice should an Event of
Default occur. In the event this Agreement is terminated, no additional Lock-Ins
will be permitted. The following shall be Events of Default under this
Agreement:

                  Section 13.1. Repeated breaches by Seller of any warranty or
representation contained in this Agreement, regardless of any action by Seller
to cure breaches.

                  Section 13.2. Repeated failure by Seller to deliver to
Purchaser any Closing Documents or Post-closing Documents within the time
periods required by the Manual or this Agreement.

                  Section 13.3. Detection by Purchaser of participation by
Seller or any of Seller's employees in fraudulently documenting one or more
Mortgage Loans that are sold or offered for sale to Purchaser.

                  Section 13.4. Failure by Seller to use its best efforts to
close and deliver Mortgage Loans subject to a Lock-In to Purchaser for purchase
pursuant to the terms of this Agreement.

         Section 14. INDEMNITY. Seller hereby agrees to indemnify and hold
harmless Purchaser and its affiliates and the successors and assigns of
Purchaser and its affiliates collectively referred to herein as "Indemnities"
from and against any and all claims, losses, damages, fines, penalties,
forfeitures, legal fees, judgments and any costs, fees and expenses relating to
(i) a breach by Seller of any representation, warranty or obligation contained
in or made pursuant to the Manual, this Agreement or any other agreement between
Seller and Purchaser relating to the purchase of Mortgage Loans, (ii) a failure
by Seller to disclose any information that renders any such representation or
warranty misleading or inaccurate, or (iii) any material inaccuracy in
information provided to Purchaser or misrepresentation made to Purchaser
concerning any Mortgage Loan which is known to Seller or which Seller should
have known if it exercised practices customarily undertaken by prudent
residential mortgage lenders. This indemnification shall survive purchase, sale
or transfer of the Mortgage Loan or any Interest therein by any of the
indemnities, the liquidation of the Mortgage Loan or the termination of this
Agreement.

         Section 15. RELATIONSHIP OF PARTIES. The parties understand and agree
that neither party shall be deemed an agent, employee or legal representative of
the other party, and that each party is acting solely on its own behalf and as
an independent contractor. Neither party to this Agreement shall have the power
or authority to represent, act for, bind or commit the other party in connection
with any action taken pursuant to this Agreement. Neither execution nor
performance of this Agreement shall be construed to establish any partnership or
joint venture between the parties.

         Section 16. NOTICES. All Notices required to be given hereunder shall
be in writing; provided, however, that at Seller's request Purchaser may give
any notice orally to Seller, and provided further, that in the event any notice
is given orally by Purchaser, Purchaser shall not be liable or responsible in
any respect for any error, omission or delay in providing such oral notice. Any
written notice required or permitted to be given hereunder shall be sufficient,
if either personally delivered or sent by U.S. Mail, postage prepaid, to the
following addresses:

              If to Purchaser:          Crestar Mortgage Corporation
                                        901 Semmes Avenue
                                        Richmond, Virginia 23224
                                        Attention: Correspondent Loan Department

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              If to Seller:                     E LOAN, Inc.
                                                6200 Village Parkway #102
                                                Dublin, CA 94568
                                                Attn: Frank Mu??

         Section 17. TERM OF AGREEMENT. This Agreement may be terminated by
either party at any time without cause by giving fifteen calendar days notice to
the other party. In addition, this Agreement may be terminated by Purchaser
pursuant to the provision of Section 13 hereof. Upon such notification,
Purchaser shall cease accepting Mortgage Loans for credit approval as of the
effective date of termination, but purchase pursuant to the terms of this
Agreement any Mortgage Loans for which as Underwriter's Approval is in effect as
of the termination date. Seller's representations, warranties, covenants and its
obligation to indemnify Purchaser as to repurchase Mortgage Loans shall survive
termination of this Agreement.

         Section 18. FINANCIAL STATEMENTS. Seller will deliver to Purchaser
financial statements of Seller, as specified in the manual, within ninety
calendar days after the end of the Seller's fiscal year.

         Section 19. ASSIGNMENT. This Agreement may not be assigned by Seller
without prior written consent of Purchaser.

         Section 20. THE MANUAL. The Manual provided to Seller by Purchaser is
incorporated herein by reference and shall be deemed to supplement this
Agreement. All Mortgage Loans purchased pursuant to the Agreement will be
subject to the terms of the Manual and this Agreement. Purchaser reserves the
right to amend the Manual in its sole discretion from time to time by giving
written notice of such amendments to Seller.

         Section 21. ENTIRE AGREEMENT. This Agreement and the Manual constitute
the entire understanding of the parties with respect to the purchase and safe of
Mortgage Loans covered by this Agreement. No modification or amendment of this
Agreement shall be valid unless set forth in writing and executed by both Seller
and Purchaser

         Section 22. NO WAIVER; RIGHTS AND REMEDIES CUMULATIVE. No failure or
any delay on the part of Purchaser in exercising its rights, powers, privileges
or remedies hereunder shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise or the exercise of
any other rights, powers, privileges or remedies, all of which shall be
cumulative

         Section 23. CAPTIONS. The captions of the various sections of this
Agreement have been inserted only for purposes of convenience. Such captions are
not part of this Agreement and shall not be deemed in any manner to modify,
explain, enlarge or restrict any provisions of this Agreement.

         Section 24. APPLICABLE LAW. This Agreement shall be enforced and
interpreted in accordance with the laws of the Commonwealth of Virginia.

         Section 25. TRAINING FEES. Seller agrees to reimburse Purchaser for
travel expenses incurred during training of Seller should training be mutually
agreed upon as necessary.

         Section 26. VALID AGREEMENT. This Agreement is not valid until accepted
and signed by Purchaser.

         Section 27. AGREEMENT OF NON-SOLICITATION. Seller agrees it will not,
after the execution of this Agreement, make any direct solicitation of any kind
of the Borrowers, including, without limitation, solicitation to refinance any
of the Mortgage Loans, or take any other action which would otherwise encourage
the prepayment of any of the Mortgage Loans. In addition, Seller agrees that it
will neither transfer or otherwise disclose any

                                       10
   10

information with respect to the Mortgage Loans to a third party, nor assist any
other person or entity in making any direct solicitation of the respective
Borrowers.

IN WITNESS WHEREOF, each party has caused this Agreement to be executed by its
duly authorized officer, all as of the date first above written.

CRESTAR MORTGAGE CORPORATION              SELLER

By: /s/ Signature Illegible               By: /s/ Steve M. Majerus

Title: /s/ Signature Illegible            Title: Director, Mortgage Banking

                                       11


EX-10.18
24
GMAC MORTAGE CORPORATION SELLER'S AGREEMENT

   1
                                                                   EXHIBIT 10.18

                  GMAC MORTGAGE CORPORATION SELLER'S AGREEMENT

                           RESIDENTIAL MORTGAGE LOANS

                                     BETWEEN

                                  E-LOAN, INC.

                                    "SELLER"

                                       AND

                            GMAC MORTGAGE CORPORATION

                                   "PURCHASER"

                                   DATED AS OF

                                  JULY 1, 1998


   2




                                TABLE OF CONTENTS

                                    ARTICLE I
                                   DEFINITIONS

SECTION Page Definitions 1 ARTICLE II SALE AND DELIVERY OF MORTGAGE LOANS 2.1 Offer 4 2.2 Acceptance 4 2.3 Exclusions 4 2.4 Closing 4 2.5 Computation; Adjustment 5 2.6 Refund of Premium 5 ARTICLE III GENERAL REPRESENTATIONS AND WARRANTIES OF SELLER 3.1 Due Organization and Good Standing 6 3.2 Authority and Capacity 6 3.3 Effective Agreement 6 3.4 Compliance with Contracts and Regulations 6 3.5 Sale Treatment 6 3.6 Litigation; Compliance with Laws 6 3.7 Statements Made 7 3.8 Bulk Sales 7 3.9 Compliance 7 3.10 Agency Approvals 7 3.11 Financial Statements 7 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER RELATING TO MORTGAGE LOANS 4.1 Origination of Mortgage Loans 8 4.2 Information 8 4.3 Mortgage File 8 4.4 Ownership of Mortgage Loans 8 4.5 Compliance with Applicable Law 8 4.6 Right of Rescission 8 4.7 Enforceability; No Setoff 8 4.8 Enforceable Provisions 8 4.9 Lien Priority 9
i 3
SECTION Page 4.10 Assignment of Mortgage 9 4.11 No Modifications 9 4.12 Mortgage In Effect 9 4.13 No Default 9 4.14 Trustee 9 4.15 Title Insurance 9 4.16 Hazard and Flood Insurance 10 4.17 Appraisals 10 4.18 No Condemnation 10 4.19 Property Condition 10 4.20 Senior Lienholders 10 4.21 Proceeds Disbursed 10 4.22 Mechanic's Liens 10 4.23 No Accrued Liabilities 11 4.24 No Adverse Selection 11 4.25 Acceptable Investment 11 4.26 Environmental Conditions 11 4.27 Fraud 11 4.28 Reverse Mortgages 11 4.29 Qualified Originator 11 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER 5.1 Due Organization and Good Standing 12 5.2 Authority and Capacity 12 5.3 Effective Agreement 12 5.4 Litigation 12 5.5 Consent 12 5.6 Agency Approval 12 ARTICLE VI COVENANTS 6.1 Further Assurances and Corrective Instruments 13 6.2 Transfer of Insurance 13 6.3 Insurance Prepayment 13 6.4 Post-closing Payments 13 6.5 No Solicitation 13 6.6 Use of Name 13 6.7 Limited Power of Attorney 13 6.8 Public Announcement 14 6.9 Certain Notifications 14 6.10 Post-closing Reporting 14 6.11 Ongoing Due Diligence Review 15
ii 4
SECTION Page ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER 7.1 Representations 16 7.2 Compliance with this Agreement 16 7.3 Documentation and Files; Compliance 16 7.4 Corporate Resolution 16 7.5 Opinion 16 7.6 Officer's Certificate 16 7.7 Material Adverse Change 16 ARTICLE VIII REMEDIES 8.1 Indemnification by Seller 17 8.2 Repurchase 17 8.3 Indemnification by Purchaser 18 8.4 Notice of Claim 18 8.5 Limitation of Liability 18 ARTICLE IX TERMINATION 9.1 Termination without Cause 19 9.1 Termination without Cause 19 9.3 Seller's Termination for Cause 19 9.4 Effect of Termination 20 9.5 Survival of Obligations and Covenants 20 ARTICLE X MISCELLANEOUS 10.1 Costs and Expenses 21 10.2 Confidentiality of Information 21 10.3 Broker's Fees 21 10.4 Survival 21 10.5 Notices 21 10.6 Applicable Law 22 10.7 Jurisdiction and Venue 22 10.8 Integration 22 10.9 Modification 22 10.10 Third Party Beneficiaries 22 10.11 Construction 22 10.12 Captions 22 10.13 Counterparts 22
iii 5
SECTION Page 10.14 Attorneys' Fees 23 10.15 Binding Effect and Assignment 23 10.16 Incorporation of Exhibits 23 EXHIBITS -------- EXHIBIT A Mortgage Loan Schedule EXHIBIT B Contents of Mortgage File EXHIBIT C Purchaser's Guidelines EXHIBIT D Form of Corporate Resolution EXHIBIT E Form of Opinion of Counsel EXHIBIT F Form of Officer's Certificate EXHIBIT G GMAC Mortgage Servicing Released Delivery Transmittal
iv 6 GMAC MORTGAGE CORPORATION SELLER'S AGREEMENT (MORTGAGE LOANS - FLOW DELIVERY) GMAC MORTGAGE CORPORATION SELLER'S AGREEMENT (the "Agreement"), dated as of June 29, 1998 by and between E-LOAN, INC. ("Seller"), a Massachusetts corporation with its principal office located at 6200 Village Parkway, Suite 102, Dublin, CA 94568 and GMAC MORTGAGE CORPORATION ("Purchaser"), a Pennsylvania corporation with its principal office located at 100 Witmer Road, Horsham, Pennsylvania 19044. RECITALS 1. Seller is engaged in the origination and sale of Mortgage Loans (as hereinafter defined); and 2. Seller desires to sell on a servicing-released basis, from time to time, and Purchaser desires to purchase, from time to time, all right, title, and interest in and to Mortgage Loans originated by Seller in accordance with the terms and conditions of this Agreement. This Agreement shall apply to every sale transaction and transfer between Purchaser and Seller with respect to Mortgage Loans, except as otherwise agreed by the parties. NOW, THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS All words or phrases defined in this Article I (except as herein otherwise expressly provided or unless the context otherwise requires) shall, for the purposes of this Agreement, have the respective meanings specified in this Article. 1.1 AFFILIATE means with respect to any party hereto, any person or entity which controls, is controlled by, or is under common control with, such party. 1.2 AGENCIES means The Federal National Mortgage Association and The Federal Home Loan Mortgage Corporation, The Department of Housing and Urban Development, and the Government National Mortgage Association or any successor organizations thereto. 1.3 AGREEMENT means this GMAC Mortgage Corporation Seller's Agreement and all exhibits, schedules, amendments and supplements attached hereto, and any written amendments or modifications hereto signed by both Seller and Purchaser. 7 1.4 APPLICABLE LAW means all applicable federal, state and local legal and regulatory requirements (including statutes, rules, regulations and ordinances), all other requirements and guidelines of each governmental agency, board, commission, instrumentality and other governmental body or officer having jurisdiction, and all applicable judicial and administrative judgments, orders, stipulations, awards, writs and injunctions. Applicable Law includes without limitation applicable provisions of the Equal Credit Opportunity Act, the Truth-in-Lending Act, the Real Estate Settlement Procedures Act, the Flood Disaster Protection Act, the Fair Credit Reporting Act, the Fair Housing Act, the Home Mortgage Disclosure Act and regulations promulgated with respect thereto. 1.5 ASSIGNMENT OF MORTGAGE means an assignment of all of Seller's right, title and interest in and to a Mortgage, in a form acceptable to Purchaser, to be executed by Seller in connection with each Mortgage Loan purchased hereunder. 1.6 BUSINESS DAY means a day of the week other than Saturday, Sunday, or a day which is a legal holiday in the Commonwealth of Pennsylvania, or the State of Florida. 1.7 CLOSING DATE means, with respect to each purchase of Mortgage Loans hereunder, the date on which such purchase shall occur and the applicable Purchase Price shall be paid, all as specified in the related Confirmation. 1.8 CONFIRMATION means a written confirmation letter delivered by Purchaser to Seller which shall provide, with respect to a purchase of Mortgage Loans hereunder, a Mortgage Loan Schedule, the Purchase Price to be paid by Purchaser for each Eligible Mortgage Loan to be purchased, additional terms and conditions pertaining to the purchase of Eligible Mortgage Loans, and the scheduled Closing Date. 1.9 CUTOFF DATE means, with respect to a purchase of Mortgage Loans, the date on which on which the unpaid principal balance of such Mortgage Loans shall be fixed for the purpose of calculating the Purchase Price, all as specified in the related Confirmation. 1.10 DEFECT means a determination by Purchaser, in its sole judgment, that with respect to a Mortgage Loan (a) any representation or warranty made by Seller herein is untrue or incorrect in any respect; (b) Seller has failed to comply with any covenant herein contained; (c) any document constituting a part of the Mortgage Loan Documents is defective, inaccurate or incomplete in any respect, and/or (d) any closing document shall not be valid and binding. 1.11 ELIGIBLE MORTGAGE LOAN means a Mortgage Loan which complies, in all material respects, with Purchaser's Guidelines. 1.12 MORTGAGE means a valid and enforceable mortgage, deed of trust, or other security instrument creating a first or second lien, as the case may be, upon described real property improved by a one-to-four family dwelling which secures a Mortgage Note. 1.13 MORTGAGE FILE means the Mortgage Loan Documents, records and other items referred to in Exhibit B attached hereto pertaining to a particular Mortgage Loan. Except to the extent required by Applicable Law, the Mortgage File may be retained in microfilm, microfiche, optical storage or magnetic media in lieu of hard copy. 1.14 MORTGAGE LOAN means an individual mortgage loan or home equity line of credit originated by Seller which is secured by an interest in residential (1 to 4 family) real estate, and which is the subject of a purchase under this Agreement. 2 8 1.15 MORTGAGE LOAN DOCUMENTS means the Mortgage Notes, Mortgages and all accompanying instruments, insurance policies, if applicable, evidence of compliance with Applicable Law, and other writings that document, evidence or relate to the Mortgage Loans purchased hereunder which include, without limitation, all documents required to be delivered by Seller to Purchaser pursuant to the terms of this Agreement, the related Confirmation and Purchaser's Guidelines. 1.16 MORTGAGE NOTE means a written promise by a Mortgagor to pay a sum of money at a stated interest rate during a specified term that evidences a Mortgage Loan. 1.17 MORTGAGE LOAN SCHEDULE means a list of Mortgage Loans to be purchased by Purchaser, as may be supplemented or amended from time to time, the form of which is attached hereto as Exhibit A. 1.18 MORTGAGED PROPERTY means the real property and improvements subject to a Mortgage, constituting security for repayment of the debt evidenced by the related Mortgage Note. 1.19 MORTGAGOR means the Mortgagor on a Mortgage Note. 1.20 PURCHASE PRICE means the purchase price to be paid with respect to a Mortgage Loan, which shall be calculated, as of the related Closing Date, as the sum of (a) the unpaid principal balance of the Mortgage Loan as of the Cutoff Date, (b) any accrued and unpaid interest thereon, and (c) any purchase premium or discount which shall be specified in the related Confirmation. 1.21 PURCHASER'S GUIDELINES means the Purchaser's written guidelines attached as Exhibit C hereto with respect to loan terms, minimum loan amount, underwriting criteria, sale criteria, and other matters relating to the eligibility of loans for purchase by Purchaser, which shall include without limitation applicable requirements of the Agencies, and which may be supplemented or amended in writing from time to time. 1.22 REPURCHASE PRICE means the sum of (a) the unpaid principal balance of a Mortgage Loan as of the date of repurchase, (b) all accrued and unpaid interest thereon calculated at the Mortgage Note rate through the last day of the month of repurchase, (c) any and all costs and expenses incurred by Purchaser with respect to such Mortgage Loan, including without limitation reasonable attorneys' fees and expenses incurred by Purchaser to secure a priority lien position with respect to the Mortgage Loan, and (d) any premium paid by Purchaser as part of the Purchase Price for such Mortgage Loan. 1.23 WIRE TRANSFER means (a) a bank wire transfer of immediately available funds or (b) an ACH transaction resulting in availability of funds on the same date as would have been the case had a bank wire transfer of immediately available funds been employed. 3 9 ARTICLE II SALE AND DELIVERY OF MORTGAGE LOANS 2.1 OFFER. From time to time during the term of this Agreement, Seller shall submit, for Purchaser's review and approval, (a) an offer to sell mortgage loans having a specified aggregate unpaid principal balance on a servicing-released basis under the terms of this Agreement, or (b) a proposed Mortgage Loan Schedule containing information concerning one or more mortgage loans offered by Seller for sale on a servicing-released basis under the terms of this Agreement. Such information shall be furnished in accordance with the requirements of Purchaser's Guidelines and in a format acceptable to Purchaser. 2.2 ACCEPTANCE. Upon receipt and review of any proposed Mortgage Loan Schedule, and any related information requested by Purchaser, Purchaser shall, in its absolute and sole discretion, approve or decline each loan for purchase. Within a mutually agreeable period of time, Purchaser shall issue a Confirmation with respect to the Eligible Mortgage Loans to be purchased by Purchaser, which shall include, without limitation, a preliminary Mortgage Loan Schedule which shall identify such Eligible Mortgage Loans, the Purchase Price to be paid for each Eligible Mortgage Loan, Purchaser's delivery requirements, and the scheduled Closing Date. The Confirmation shall also provide for liquidated damages in the event that Seller should fail to deliver the required Mortgage Loans. Only loans which are Eligible Mortgage Loans shall be accepted for purchase by Purchaser. When executed by both parties, the Confirmation shall constitute an acceptance of Seller's offer, and shall be incorporated herein and made part of this Agreement. Notwithstanding anything to the contrary contained in this Agreement, in the absence of a binding Confirmation issued by Purchaser with respect to an Eligible Mortgage Loan and accepted by Seller in a timely fashion, Purchaser shall have no obligation to purchase any loan offered by Seller. 2.3 EXCLUSIONS. At any time prior to the Closing Date, either Seller or Purchaser shall have the right to exclude from the related sale transaction any loan subject to a Confirmation, in the event that either party should determine that such loan will not be an Eligible Mortgage Loan as of the related Closing Date. 2.4 CLOSING. On each Closing Date hereunder: (a) No later than two (2) Business Days prior to such Closing Date, Seller shall deliver to Purchaser a final Mortgage Loan Schedule acceptable to Purchaser, and, with respect to each Mortgage Loan, and the related Mortgage Loan Documents specified in Exhibit B hereto, including a duly executed Assignment of Mortgage, Seller shall pay all costs of preparing and furnishing to Purchaser all Mortgage Files, including original or certified copies of the respective Mortgage Loan Documents and the Assignments of Mortgage. (b) Subject to, and upon the terms and conditions of, this Agreement, Seller shall sell, transfer, assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase, all right, title and interest in and to the Mortgage Loans. (c) The Purchaser shall deposit funds in an amount equal to the Purchase Price by Wire Transfer, (i) in accordance with the terms of any bailee letter delivered to Purchaser by Seller, (ii) in the 4 10 absence of any such bailee letter, to a bank account to be designated in writing by Seller, or (iii) as otherwise agreed upon in writing by the parties. (d) Upon payment of the Purchase Price, title to the Mortgage Loans, Mortgage Loan Documents, and all rights, benefits, collateral, payments, recoveries, proceeds and obligations arising from or in connection with the Mortgage Loans shall vest in Purchaser. 2.5 COMPUTATION; ADJUSTMENT. It is understood and agreed that: (a) All wiring instructions and Purchase Price information necessary to effect payment of the Purchase Price shall be provided to Purchaser at least two Business Days prior to the date of payment. (b) If the principal balance of any of the Mortgage Loans used in computing the payment of the Purchase Price shall be found to be incorrectly computed, the Purchase Price shall be promptly and appropriately adjusted and payment promptly made by the appropriate party. 2.6 REFUND OF PREMIUM. In the event that a purchase premium is paid by the Purchaser to the Seller with respect to a Mortgage Loan and such Mortgage Loan is prepaid in full, within a six month period following the related Closing Date, by the related Mortgagor, other than through refinancing by Purchaser or any Affiliate of Purchaser, Seller shall, upon demand by Purchaser, refund to Purchaser such purchase premium. 5 11 ARTICLE III GENERAL REPRESENTATIONS AND WARRANTIES OF SELLER As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants as follows, as of each Closing Date: 3.1 DUE ORGANIZATION AND GOOD STANDING. Seller is a corporation validly existing and in good standing under the laws of the state of its incorporation during the time of its activities with respect to the Mortgage Loans. To the extent required by Applicable Law, Seller is properly licensed and qualified to transact business in all appropriate jurisdictions and to conduct all activities performed with respect to the origination of the Mortgage Loans. 3.2 AUTHORITY AND CAPACITY. Seller has all requisite corporate power, authority and capacity to enter into this Agreement and to perform the obligations required of it hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have each been duly and validly authorized by all necessary corporate action. This Agreement constitutes the valid and legally binding agreement of Seller enforceable in accordance with its terms, subject to bankruptcy laws and other similar laws of general application affecting rights of creditors and subject to the application of the rules of equity, including those respecting the availability of specific performance. 3.3 EFFECTIVE AGREEMENT. The execution, delivery and performance of this Agreement by Seller, its compliance with the terms hereof and consummation of the transactions contemplated hereby (assuming receipt of the various consents required pursuant to this Agreement) will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of incorporation, bylaws, or any instrument or agreement to which it is a party or by which it is bound or which affects the Mortgage Loan, or under Applicable Law. 3.4 COMPLIANCE WITH CONTRACTS AND REGULATIONS. Prior to each Closing Date, Seller will have complied with all material obligations under all contracts to which it was a party, and under Applicable Law, to the extent that such obligations might affect any of the Mortgage Loans being purchased by Purchaser hereunder. Seller has done and Seller will do, no act or thing which may adversely affect the Mortgage Loans. 3.5 SALE TREATMENT. The sale of each Mortgage Loan shall be reflected on Seller's balance sheet and other financial statements as a sale of assets by Seller, Seller will not take any action or omit to take any action which would cause the transfer of the Mortgage Loans to Purchaser to be treated as anything other than a sale to Purchaser of all of Seller's right, title and interest in and to each Mortgage Loan. 3.6 LITIGATION; COMPLIANCE WITH LAWS. There is no litigation, proceeding or governmental investigation pending, or any order, injunction or decree outstanding which might materially affect any of the Mortgage Loans. Additionally, there is no litigation, proceeding or governmental investigation existing or pending or, to the knowledge of Seller threatened, or any order, injunction or decree outstanding against or relating to Seller, that has not been disclosed by Seller to Purchaser or its counsel in writing prior to the execution of this Agreement, which could have a material adverse effect upon the Mortgage Loans, nor does Seller know of any basis for any such litigation, proceeding, or governmental investigation. Seller has not violated any applicable law, regulation, ordinance, order, injunction or decree, or any other requirement 6 12 of any governmental body or court, which may materially affect any of the Mortgage Loans or the Servicing. 3.7 STATEMENTS MADE. No representation, warranty or written statement made by Seller in this Agreement or in any exhibit, schedule, written statement or certificate furnished to Purchaser in connection with the transactions contemplated hereby by Seller contains or will contain any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading. 3.8 BULK SALES. The transfer, assignment and conveyance of Mortgage Loans by Seller pursuant to this Agreement are in the ordinary course of Sellers' business and are not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction. Seller is not transferring the Mortgage Loans with an actual intent to hinder, delay or defraud any of its creditors. Seller is solvent and will not be rendered insolvent by the sale of any Mortgage Loans. 3.9 COMPLIANCE. The sale, transfer, assignment and conveyance of the Mortgage Loans by Seller to Purchaser pursuant to this Agreement does not and shall not violate Applicable Law or the terms of any license held by Seller. 3.10 AGENCY APPROVAL. Seller is an approved seller/servicer for either one or both of the Agencies in good standing and is a mortgagee approved by the Secretary of the U.S. Department of Housing and Urban Development pursuant to Section 203 of the National Housing Act. 3.11 FINANCIAL STATEMENTS. Seller's financial statements furnished to Purchaser were prepared in accordance with generally accepted accounting principles consistently applied, and fully and fairly represent the financial condition of Seller as of the respective dates thereof, and the results of operations for the respective periods indicated therein, and there has been no material adverse change in the financial condition or business of Seller since the date of the last of such financial statements. 7 13 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER RELATING TO MORTGAGE LOANS As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of each Closing Date, with respect to each Mortgage Loan sold and transferred to Purchaser thereon, as follows: 4.1 ORIGINATION OF MORTGAGE LOANS. Except as disclosed in writing to Purchaser and accepted by Purchaser prior to the Closing Date, each Mortgage Loan has been originated in accordance with applicable Purchaser's Guidelines and the terms and conditions of the applicable Confirmation. 4.2 INFORMATION. All information set forth as to each Mortgage Loan in each Mortgage Loan Schedule, is true and correct as of the date thereof. All other information furnished to Purchaser in writing by Seller with respect to the Mortgage Loan is true and correct. 4.3 MORTGAGE FILE. For each Mortgage Loan, the related Mortgage File contains each of the documents and instruments specified to be included therein. 4.4 OWNERSHIP OF MORTGAGE LOANS. Except with respect to the liens of certain warehouse lenders, as identified in Schedule 4.4 hereto, (a) Seller is the sole owner of the Mortgage Loan and has good and marketable title thereto, and has the right to assign, sell and transfer the Mortgage Loan to Purchaser free and clear of any encumbrance, lien, pledge, charge, claim or security interest, and (b) Seller has not sold, assigned or otherwise transferred any right or interest in or to the Mortgage Loan and has not pledged the Mortgage Loan as collateral for any debt or other purpose. 4.5 COMPLIANCE WITH APPLICABLE LAW. Each Mortgage Loan has been originated and, where applicable, serviced, in accordance with Applicable Law. Each Mortgage Loan meets or its exempt from Applicable Law and/or other requirements pertaining to usury, and the Mortgage Loan is not usurious. The forms of the related Mortgage Note, Mortgage, and other Mortgage Loan Documents are acceptable to the Agencies and comply with Applicable Law. The originator of each Mortgage Loan, whether Seller or any other entity, was duly licensed to participate in the making of such loan to the extent required by Applicable Law. 4.6 RIGHT OF RESCISSION. Any applicable period during which the Mortgagor may rescind the Mortgage Loan has expired. 4.7 ENFORCEABILITY; NO SETOFF. All parties to each Mortgage Note and Mortgage had legal capacity to enter into the respective Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage, and no Mortgagor has been released in whole or in part from any liability under the Mortgage Note. The Mortgage Note and the Mortgage have been duly and properly executed and delivered by such parties, and are in every respect genuine and each is the legal, valid and binding obligation of the maker thereof and is not subject to any discount, allowance, setoff, counterclaim, presently pending bankruptcy, or other defenses. 4.8 ENFORCEABLE PROVISIONS. The Mortgage Note and Mortgage contain customary, valid, legal and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the mortgage property of the benefits of the security created thereby. The Mortgage Note and Mortgage contain a provision for the acceleration of the payment of the unpaid 8 14 principal balance of the Mortgage Loan in the event that the related real property is sold without the prior consent of the mortgage thereunder. 4.9 LIEN PRIORITY. Each Mortgage Loan is secured by a valid, enforceable Mortgage lien, of the agreed-upon priority, on the fee simple title to the related real property, and the Mortgage has been duly and properly filed, recorded or otherwise perfected in accordance with Applicable Law in order to give constructive notice thereof to all subsequent purchasers or encumbrances of the Mortgaged Property. 4.10 ASSIGNMENT OF MORTGAGE. Each Assignment of Mortgage is in recordable form and is acceptable for recording under Applicable Law. The endorsement of each Mortgage Note and the delivery to Purchaser of the original endorsed Mortgage Note and of the related Assignment of Mortgage are sufficient to permit Purchaser to avail itself of all protection available under Applicable Law against the claims of any present of future creditors of Seller, and are sufficient to prevent any other sale, transfer, assignment, pledge or hypothecation of the Mortgage and the Mortgage Note by the Seller from being enforceable. 4.11 NO MODIFICATION. The terms, covenants and conditions of each Mortgage Loan have not been waived, altered, impaired or modified in any respect. The monthly payments of each Mortgage Loan, whether fixed or adjusted from time to time under the terms of the Note, are sufficient to amortize the original principal balance over the original term and to pay interest in arrears at the interest rate on the Note. 4.12 MORTGAGE IN EFFECT. The Mortgage securing any Mortgage Loan has not been satisfied, released, canceled, deferred or subordinated, in whole or in part, and the Real Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would affect any satisfaction, release, cancellation, subordination, deferral or rescission. 4.13 NO DEFAULT. All payments required under the terms of the Mortgage Note to have been made up to the Closing Date have been made. There is no default, breach, violation or event of acceleration existing under the terms and covenants of each Mortgage Loan nor has any event occurred which, upon the giving of notice or the lapse of time, or both, would constitute a default, breach, violation or event of acceleration, nor has Seller waived any of the foregoing. All requirements set forth in the Mortgage Loan Documents and all requirements of any applicable Laws have been fully met and complied with. All costs, fees and expenses incurred in making, closing and recording each Mortgage Loan have been paid and all proceeds of each Mortgage Loan have been fully disbursed and received by, or for the benefit of, the Mortgagor. There is no requirement or obligation for future advances under each Mortgage Loan. There is not outstanding any advance of funds by Seller to or on behalf of the Mortgagor to be used by the Mortgagor for the payment on any monthly installment, principal, interest or other charges payable under any Mortgage Loan. 4.14 TRUSTEE. If the Mortgage is 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, and no fees or expenses are or will become payable by Purchaser to such trustee, except in connection with a trustee's sale after default by the related Mortgagor. 4.15 TITLE INSURANCE. Seller holds a title insurance policy issued by a title insurer reasonably acceptable to Purchaser and qualified to do business in the jurisdiction where the Mortgaged Property is located insuring the Mortgage to be a lien of the agreed-upon priority upon the Mortgaged Property therein described (except for agreed-upon senior mortgages, the lien of current real property taxes and 9 15 assessments not yet due and payable, other matters to which like properties are commonly subject, and standard printed policy exceptions) having a liability limit at least as great as the unpaid principal balance of the Mortgage Loan and naming Seller and/or its successors and/or assigns as loss payee. 4.16 HAZARD AND FLOOD INSURANCE. The Mortgaged Property is insured against loss by fire or other casualty under a standard hazard and casualty insurance policy (including fire and extended coverage and other matters as are customary in the area of the Mortgaged Property) with a standard mortgagee clause naming Seller as loss payee "and/or its successors or assignees as their interests may appear." The insurance policy must be for an amount not less than the full replacement cost of the Mortgaged Property, and must be issued by an insurer reasonably acceptable to Purchaser and qualified to do business in the jurisdiction where the Mortgaged Property is located. The insurance policy must be in a form such that it may be endorsed to Purchaser as loss payee as required hereunder, and there are no facts or circumstances which could provide a basis for revocation of any policies or defense to any claims made thereon. With respect to any Mortgage Loan secured by Mortgaged Property located in a federally designated flood hazard area, as identified by the Federal Emergency Management Agency, such Mortgaged Property is insured by a flood insurance policy which complies with Applicable Law, and where applicable provisions of this Section 4.16 pertaining to hazard and casualty insurance policies. 4.17 APPRAISALS. All real estate appraisals made in connection with the Mortgage Loan have been performed in accordance in all material respects with industry standards in the appraising industry in the area where the appraised property is located, and are completed on forms acceptable to the Agencies. 4.18 NO CONDEMNATION. There is pending no proceeding for total or partial condemnation of the Mortgaged Property or any part thereof and the Mortgaged Property is free of material damage. No improvement encumbered by the Mortgage Loan is in violation of any applicable zoning law or regulation, building code or any valid restrictive or protective covenant or setback line. No improvement on the Mortgaged Property is a mobile home or manufactured home unless specifically approved by Purchaser in writing prior to purchase. 4.19 PROPERTY CONDITION. The Mortgaged Property is free of material damage and waste and is in good repair. 4.20 SENIOR LIENHOLDERS. Where required or customary in the jurisdiction in which the Mortgaged Property is located, Seller has filed for record a request for notice of any action by a senior lienholder under a senior lien, and Seller has notified any senior lienholder in writing of the existence of the Mortgage Loan and requested notification of any action to be taken against the Mortgagor by the senior lienholder. Seller shall, upon request of Purchaser, cooperate in recording a new request for action in favor of Purchaser and in providing senior lienholders with written requests for notification to Purchaser of actions against the Mortgagor. 4.21 PROCEEDS DISBURSED. The proceeds of the Mortgage Loan, including any escrows of such proceeds, have been fully disbursed, and any and all requirements as to completion of on-site and off-site improvements and disbursements of any escrow funds therefor have been complied with. 4.22 MECHANIC'S LIENS. There are no mechanic's liens or similar liens or claims which have been filed for work, labor or material affecting the Mortgaged Property which are or may be liens prior to or equal with the lien of the Mortgage. 10 16 4.23 NO ACCRUED LIABILITIES. There are and shall be no accrued liabilities, including any recording fees, of Seller with respect to the Mortgage Loans, or circumstances which occurred prior to the Closing Date, which could result in such accrued liabilities being asserted against Purchaser as successor to Seller. 4.24 NO ADVERSE SELECTION. Seller did not use any adverse selection procedures in selecting the Mortgage Loans from among the outstanding loans in Seller's portfolio. 4.25 ACCEPTABLE INVESTMENT. Except as disclosed to Purchaser in writing and as accepted by Purchaser, Seller has no knowledge of any circumstances or conditions with respect to any Mortgage Loan, the relative Mortgage, real property, Mortgagor, or Mortgagor's credit standing that can be reasonably expected to cause the Agencies or prudent private investors in the secondary market to regard the Mortgage Loan as an unacceptable investment, increase the likelihood that the Mortgage Loan will become delinquent, or adversely affect the value or marketability of the Mortgage Loan. 4.26 ENVIRONMENTAL CONDITIONS. Seller has not been advised, has received no notice or report of, and has no knowledge that, any hazardous or toxic materials, wastes, products regulated by Applicable Law, asbestos or asbestos products or material, polychlorinated biphenyls or urea formaldehyde insulation have been used or employed in the construction, use or maintenance of the Mortgaged Property or have ever been stored, treated at, or disposed of on the Mortgaged Property, or that there has occurred or that any person or entity has alleged that there has occurred upon the Mortgaged Property any spillage, leakage, discharge or release into the air, soil or groundwater of any hazardous material or regulated wastes. 4.27 FRAUD. No fraud has taken place on the part of the Seller, any Affiliate of the Seller, or any third-party originator in connection with the origination of any Mortgage Loan. 4.28 REVERSE MORTGAGES. None of the Mortgage Loans are reverse mortgage loans. 4.29 QUALIFIED ORIGINATOR. Each Mortgage Loan was originated by the Seller or, as identified on the Mortgage Loan Schedule, by a third-party originator possessing all necessary licenses, qualifications and approvals for the origination of mortgage loans in the jurisdiction in which the related Mortgaged Property is located. 11 17 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants as follows, as of each Closing Date: 5.1 DUE ORGANIZATION AND GOOD STANDING. Purchaser is a corporation validly existing and in good standing under the laws of the state of its incorporation. To the extent required by Applicable Law, Purchaser is properly licensed and qualified to transact business in all appropriate jurisdictions. 5.2 AUTHORITY AND CAPACITY. Purchaser has all requisite corporate power, authority and capacity to enter into this Agreement and to perform the obligations required of it hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have each been duly and validly authorized by all necessary corporate action. This Agreement constitutes the valid and legally binding agreement of the Purchaser enforceable in accordance with its terms, subject to bankruptcy laws and other similar laws of general application affecting rights of creditors and subject to the application of the rules of equity, including those respecting the availability of specific performance. 5.3 EFFECTIVE AGREEMENT. The execution, delivery and performance of this Agreement by Purchaser, its compliance with the terms hereof and the consummation of the transactions contemplated hereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of incorporation, bylaws, or any instrument or agreement to which it is a party or by which it is bound. 5.4 LITIGATION. There is no action, suit or proceeding or investigation pending, or to Purchaser's knowledge, threatened, against Purchaser that, if determined adversely to Purchaser, would adversely affect the sale of the Mortgage Loans, the execution, delivery or enforceability of this Agreement. 5.5 CONSENT. No consent, approval, authorization or order of any court or governmental authority is required for the execution and delivery of this Agreement by Purchaser or for the performance by Purchaser of its obligations hereunder, other than such consent, approval, authorization or order as has been or will be obtained prior to each Closing Date. 5.6 AGENCY APPROVAL. Purchaser is an approved seller/servicer for the Agencies in good standing and is a mortgagee approved by the Secretary of the U.S. Department of Housing and Urban Development pursuant to Section 203 of the National Housing Act. 12 18 ARTICLE VI COVENANTS 6.1 FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. To the extent permitted by Applicable Law, Purchaser and Seller agree that they shall cooperate and assist each other, as reasonably requested, in carrying out the other's covenants, agreements, duties and responsibilities under this Agreement, and, in connection therewith, shall from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such additional instruments, assignments, endorsements, papers and documents as may reasonably be required or appropriate to further express the intention, or to facilitate the performance, of this Agreement during the term hereof. 6.2 TRANSFER OF INSURANCE. Seller shall advise any relevant insurance carrier of the sale of each Mortgage Loan and shall effect an assignment to the Purchaser of the loss payee endorsement for hazard and flood insurance, any credit life and disability insurance, and any and all other insurance respecting the Mortgaged Property and/or the improvements located thereon. 6.3 INSURANCE PREPAYMENT. Insurance refunds or credits of any kind whatsoever shall be the sole responsibility of Seller in the event of prepayment of any Mortgage Loan, cancellation of insurance or any other event requiring refunding or crediting of unearned insurance premiums. Upon Purchaser's demand, Seller shall pay to Purchaser, from Seller's own funds, any required insurance premium rebate resulting from the prepayment, cancellation, refinancing or other termination of any Mortgage Loan. Upon any such payment and upon Seller's request, Purchaser shall assign to Seller any rights of Purchaser against the related insurer for any payment made to the Mortgagor. 6.4 POST-CLOSING PAYMENTS. All monies received by Seller after the Closing Date relating to any Mortgage Loan shall be promptly turned over to Purchaser, and until so remitted shall be held in trust for Purchaser and segregated from all other assets of Seller. 6.5 NO SOLICITATION. Seller agrees that neither Seller nor any Affiliate of Seller shall use information derived from the origination and/or sale of the Mortgage Loans for the purpose of soliciting, or assisting in the solicitation, directly or indirectly, for any purpose including without limitation refinance, home equity or insurance, any of the Mortgage Loans. Seller further agrees to use its best efforts to cause any third-party originator of the Mortgage Loans to refrain from taking any action which is prohibited under this section with respect to the Mortgage Loans and/or Mortgagors. Seller shall not provide a listing of Mortgagors to any third party. Nothing contained in this Section 6.6 shall be construed to prohibit advertising or communications directed to the general public. In the event that any Mortgagor contacts Seller with respect to any new loan to be secured by Mortgaged Property which secures a Mortgage Loan, Seller agrees that Purchaser shall have a right of first refusal with respect to the purchase of such new loan. 6.6 USE OF NAME. Seller shall not engage in any form of advertising whatsoever utilizing either the name of Purchaser or of any affiliate of Purchaser unless specifically authorized by Purchaser in writing to do so. 6.7 LIMITED POWER OF ATTORNEY. Seller hereby appoints Purchaser, its agents, employees, successors and assigns, the true and lawful attorney in fact of Seller with the full power of substitution for and in the place and stead of Seller on behalf and for the benefit of Purchaser, to demand and control 13 19 any and all of the sums due on the Mortgage Loans, and to enforce any and all rights with respect thereto, and to endorse the name of Seller where Seller's name is designated as the payee upon any notes, collateral, security, acceptances, checks, drafts, money orders or other evidences of payment coming into the hands of Purchaser in full or partial payment of any of the Mortgage Loans, and to make "satisfied" and to release or cause to be marked or release, all liens and securities related thereto, when and if Purchaser may reasonably so determine. 6.8 PUBLIC ANNOUNCEMENT. The timing and content of any press release or other public announcement relating to the transactions contemplated by this Agreement shall be subject to the approval of Seller and Purchaser. 6.9 CERTAIN NOTIFICATIONS. (a) Seller shall promptly notify the Purchaser in writing of the occurrence of any event which will or could reasonably be expected to result in the failure to satisfy any of the conditions to the obligations of Purchaser specified in Article VII of the Agreement. (b) Seller shall immediately notify Purchaser should there by any material and/or adverse change to Seller's financial condition, corporate structure or senior management personnel, or to Seller's relationship with or authority from any Agency. In addition, Seller shall immediately notify Purchaser of any threatened or pending lawsuit or of any threatened or pending administrative, judicial, governmental or agency hearing or proceeding involving Seller or any of Seller's principals, the outcome of which may materially and/or adversely affect Seller's ability to do business or to perform under the terms and conditions of this Agreement. 6.10 POST-CLOSING REPORTING. During the term of this Agreement, and any extension or renewal thereof, Seller shall provide Purchaser with the following information: (a) Audited financial statements for Seller shall be submitted annually, within ninety (90) days after the end of Seller's fiscal year. (b) A Uniform Standard Audit Program ("USAP") letter shall be prepared by independent auditors with respect to mortgage loans serviced by Seller. The USAP letter shall be submitted to Purchaser along with Seller's audited financial statements. (c) Unaudited quarterly financial statements for Seller shall be submitted within forty-five (45) days after the end of each quarter, and shall be certified as complete and accurate by an officer of Seller. (d) Seller shall provide Purchaser with immediate written notice of (i) the filing of a petition for relief under the U.S. Bankruptcy Code on behalf of Seller, (ii) institution of any receivership or conservatorship with respect to Seller, (iii) any material change in the senior management of Seller, (iv) any change in material ownership of Seller, (v) any event which effects a material, adverse change in Seller's financial condition, and (vi) any change in Seller's Fidelity Bond/E&O coverage. (e) Evidence of Fidelity Bond/E&O coverage in conformity with Investor requirements shall be submitted to Purchaser annually. 14 20 6.11 ONGOING DUE DILIGENCE REVIEW. From time to time during the term of this Agreement, Purchaser shall, upon reasonable notice and during regular business hours, have access to materials and facilities necessary to conduct an on-site or off-site due diligence review. At Purchaser's option, the pertinent materials may be delivered to Purchaser. In the absence of a material breach of any representation, warranty and/or covenant contained in this Agreement, Purchaser agrees that such reviews may be conducted no more frequently than four (4) times in any calendar year during the term of this Agreement. Purchaser's ongoing due diligence review will include its verification that: (a) The books, records and accounts of Seller with respect to the Mortgage Loans are in order pursuant to Applicable Law and Agency requirements, and the information provided to Purchaser in connection with the Mortgage Loans is true and correct; and (b) The Mortgage Loans meet Purchaser's credit underwriting and quality control standards, and Seller's origination practices are satisfactory to Purchaser. 15 21 ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER The obligations of Purchaser hereunder with respect to each purchase of Mortgage Loans, shall be subject to satisfaction of each of the following conditions: 7.1 REPRESENTATIONS. The representations and warranties made by Seller in this Agreement are true and correct in all material respects and shall continue to be true and correct in all material respects on each Closing Date. 7.2 COMPLIANCE WITH THIS AGREEMENT. All of the terms, covenants, and conditions of this Agreement required to be complied with and performed by Seller at or prior to each Closing Date shall have been duly complied with and performed in all material respects. 7.3 DOCUMENTATION AND FILES; COMPLIANCE. Prior to each Closing Date, Purchaser shall have determined that (a) The books, records and accounts of Seller with respect to the Mortgage Loans are in order pursuant to Applicable Law, and the information provided to Purchaser in connection with the Mortgage Loans is true and correct; (b) The Mortgage Loans meet Purchaser's credit underwriting and quality control standards, and Seller's origination practices are satisfactory to Purchaser; and (c) Any pending class action litigation against Seller, and any settlement or consent decree entered into by Seller with respect to class action litigation, will not have a material adverse effect on the Servicing. 7.4 CORPORATE RESOLUTION. A certified copy of duly adopted board resolutions, in the form attached as Exhibit D to this Agreement, shall be delivered to Purchaser simultaneously with the execution and delivery of this Agreement. 7.5 OPINION. An opinion of counsel of Seller in the form attached as Exhibit E to this Agreement, shall be delivered to Purchaser simultaneously with the execution and delivery of this Agreement. 7.6 OFFICER'S CERTIFICATE. An Officer's Certificate of a senior officer of Seller in the form attached as Exhibit F to this Agreement, shall be delivered to Purchaser simultaneously with the execution and delivery of this Agreement. 7.7 MATERIAL ADVERSE CHANGE. There shall not have occurred, prior to any Closing Date, any event which constitutes a change in the Mortgage Loans and/or Seller's financial condition, which change, in the judgment of Purchaser, materially and adversely affects Seller's ability to perform its obligations under this Agreement, including without limitation Seller's obligation to provide indemnification and/or repurchase pursuant to Article VIII. 16 22 ARTICLE VIII REMEDIES 8.1 INDEMNIFICATION BY SELLER. Seller shall indemnify and hold Purchaser harmless from and shall reimburse Purchaser for any losses, damages, deficiencies, claims, causes of action or expenses of any nature (including reasonable attorneys' fees and expenses) incurred by Purchaser before or after the Closing Date which arise out of, result from, or in any way relate to: (a) Any breach of any representation and/or warranty of Seller contained in this Agreement, or in any exhibit, schedule, statement or certificate furnished by Seller pursuant to this Agreement; (b) Any breach of any covenant or obligation of Seller contained in this Agreement, or in any exhibit, schedule, statement or certificate furnished by Seller pursuant to this Agreement; (c) Any Defect in any Mortgage Loan existing as of the Closing Date (including those Defects subsequently discovered), or as a result of any act or omission of Seller prior thereto; (d) Damage to any Mortgaged Property which is security for a Mortgage Loan, from fire, earthquake, or other casualty, or environmental hazard, or any similar circumstances or conditions occurring prior to the Closing Date, which would cause any Mortgage Loan to become delinquent, or adversely affect the value or marketability of the Mortgage Loan; (e) Errors in originating any of the Mortgage prior to the Closing Date or as a result of Seller's acts or omissions prior thereto. Such errors may include improper action or failure to act when required to do so, and (f) Any litigation pending or threatened against Purchaser arising out of events occurring on or prior to the Closing Date in connection with the Seller's origination or sale of the Mortgage Loans. 8.2 REPURCHASE. (a) Following the purchase of any Mortgage Loan, and notwithstanding the review of the Mortgage Loan Documents by Purchaser, if there is a Defect in any Mortgage Loan, Seller shall cure, to Purchaser's satisfaction, such Defect within thirty (30) days from its receipt of notice of the existence thereof, or such shorter period as may be required by Applicable Law, or by Agency or investor requirements. If the Defect is not cured within such thirty (30) day period, or such shorter period, if applicable, Seller shall, not later than the expiration of the thirty (30) day period or such shorter period, repurchase the related Mortgage Loan or Mortgage Loans for the Repurchase Price. (b) In the event that any Mortgagor fails to make the initial payment due with respect to a Mortgage Loan more than thirty (30) days following the related Closing Date, Purchaser may, at its option, require Seller to repurchase such Mortgage Loan, upon demand, for the Repurchase Price. (c) In the event of repurchase, Purchaser shall, upon receipt of the Repurchase Price, assign and deliver the related Mortgage Documents to Seller without recourse, representation or warranty. 17 23 If Seller fails to repurchase a defective Mortgage Loan or Mortgage Loans at the time and in the manner provided in this Section, Purchaser shall have all other rights and remedies provided in this Agreement or by law or equity. 8.3 INDEMNIFICATION BY PURCHASER. Purchaser shall indemnify and hold Seller harmless from and shall reimburse Seller for any losses, damages, deficiencies, claims, causes of action or expenses of any nature (including reasonable attorneys' fees and expenses) incurred by Seller and arising after the Closing Date which result from any breach of any representation, warranty or covenant made by Purchaser under this Agreement. 8.4 NOTICE OF CLAIM. If any action is brought against any person entitled to indemnification pursuant to Section 8.1 or Section 8.3 (a "Claimant") in respect of a claim under Section 8.1 or Section 8.3, as applicable (an "Indemnifiable Claim"), the Claimant shall promptly notify Purchaser or Seller, as the case may be, in writing of the institution of such action (but the failure so to notify shall not relieve Seller or Purchaser, as the case may be (the "Indemnifying Party") from any liability the Indemnifying Party may have except to the extent such failure materially prejudices the Indemnifying Party). Unless otherwise agreed to by the Seller or Purchaser, as the case may be, the Indemnifying Party shall assume and direct the defense of such action, including the employment of counsel, and all fees, costs and expenses incurred in connection with defending or settling the Indemnifiable Claim shall be borne solely by the Indemnifying Party; provided, however, that such counsel shall be satisfactory to the Claimant in the exercise of its reasonable judgment and that the Indemnifying Party shall not compromise any claim without the prior written consent of the Claimant, which consent shall not be unreasonably withheld. If the Indemnifying Party shall undertake to compromise or defend any such asserted liability, it shall promptly notify the Claimant of its intention to do so, and the Claimant agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise of, defense against, any such asserted liability. Notwithstanding an election by the Indemnifying Party to assume the defense of such action or proceeding, the Claimant shall have the right to employ separate counsel and to participate in the defense of such action or proceeding, and the Indemnifying Party shall bear the reasonable fees, costs and expenses of such separate counsel (and shall pay such fees, costs and expenses at least quarterly), if (a) the use of counsel chosen by the Indemnifying Party to represent the Claimant would present such counsel with a conflict of interest; (b) the defendants in, or targets of, any such action or proceeding include both a Claimant and the Indemnifying Party, and the Claimant shall have reasonably concluded that there may be legal defenses available to it or to other Claimants which are different from or additional to those available to the Indemnifying Party (in which case the Indemnifying Party shall not have the right to direct the defense of such action or proceeding on behalf of the Claimant); or (c) the Indemnifying Party shall authorize the Claimant to employ separate counsel at the expense of the Indemnifying Party. All costs and expenses incurred in connection with a Claimant's cooperation shall be borne by the Indemnifying Party. In any event, the Claimant shall have the right at its own expense to participate in the defense of such asserted liability. 8.5 LIMITATION OF LIABILITY. In no event will either Purchaser or Seller be liable to the other party to this Agreement for incidental or consequential damages, including, without limitation, loss of profit or loss of business or business opportunity, regardless of the form of action whether in contract, tort or otherwise. 18 24 ARTICLE IX TERMINATION 9.1 TERMINATION WITHOUT CAUSE. Either Purchaser or Seller may terminate this Agreement without cause on thirty (30) days prior written notice (such notice in compliance with Section 10.5 below) to the other party. Following the effective date of such termination without cause, Purchaser will purchase Mortgage Loans subject to the terms and conditions of any outstanding Confirmation issued prior to such effective date. 9.2 PURCHASER'S TERMINATION FOR CAUSE. Notwithstanding anything to the contrary contained herein, Purchaser shall have the right to immediately terminate this Agreement for cause. For purposes of this section 9.2, "cause" shall include any of the following: (a) Seller's breach of any of the representations, warranties and/or covenants contained in this Agreement; including without limitation its obligations under Article VIII; (b) the filing of a petition for relief by or against Seller, under the U.S. Bankruptcy Code or any other applicable insolvency or reorganization statute; (c) institution of any receivership or conservatorship with respect to Seller, including without limitation receivership or conservatorship imposed by the FDIC; (d) Seller's admission in writing of its inability to pay its debts generally as they become due; (e) termination of Seller's status as an approved Agency seller/servicer or as an approved FHA mortgagee; (f) any material change in the senior management or ownership of Seller; and/or; (g) any event which, in Purchaser's opinion, constitutes a material, adverse change in Seller's financial condition. 9.3 SELLER'S TERMINATION FOR CAUSE. Notwithstanding anything to the contrary contained herein, Seller shall have the right to immediately terminate this Agreement for cause. For purposes of this section 9.3, "cause" shall include any of the following: (a) Purchaser's material, uncured breach of any of the representations, warranties and/or covenants contained in this Agreement; (b) the filing of a petition for relief by Purchaser, under the U.S. Bankruptcy Code or any other applicable insolvency or reorganization statute; (c) institution of any receivership or conservatorship with respect to Purchaser; 19 25 (d) Purchaser's admission in writing of its inability to pay its debts generally as they become due; or (e) termination of Purchaser's status as an approved Agency seller/servicer or as an approved FHA mortgagee; 9.4 EFFECT OF TERMINATION. Upon termination of this Agreement under section 9.2 above, Purchaser shall have no further obligation to purchase, or accept transfer of mortgage loan servicing from Seller, and this Agreement shall be null and void and have no further force and effect except for those provisions identified in Section 9.4 of this Agreement, which provisions shall survive any such termination and continue in effect thereafter. 9.5 SURVIVAL OF OBLIGATIONS AND COVENANTS. Notwithstanding anything to the contrary expressed in this Agreement, the termination of this Agreement shall not affect any obligations of Seller under this Agreement. The representations, warranties, covenants and indemnification of Seller under Articles III, IV and VI hereof shall continue without regard to any termination hereof. 20 26 ARTICLE X MISCELLANEOUS 10.1 COSTS AND EXPENSES. Except as specifically provided to the contrary in this Agreement, Purchaser and Seller shall each bear its own accounting, legal and related costs and expenses in connection with the negotiation and preparation of this Agreement and the performance by each of Purchaser and Seller of its respective obligations arising under this Agreement. 10.2 CONFIDENTIALITY OF INFORMATION. Seller and Purchaser and their Affiliates shall, and shall cause their respective directors, officers, employees and authorized representatives to, hold in strict confidence and not use or disclose to any other party except their respective Affiliates without the prior written consent of the other party all information concerning customers or proprietary business procedures, servicing fees or prices, policies or plans of the other party or any of its affiliates received by them from the other party in connection with the transactions contemplated hereby. 10.3 BROKER'S FEES. Each party hereto represents and warrants to the other that it has made no agreement to pay any agent, finder, or broker or any other representative, any fee or commission in the nature of a finder's or originator's fee arising out of or in connection with the subject matter of this Agreement, and both the parties hereto covenant with each other and agree to indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys' fees and expenses) any claim based upon the other party's actions in connection with such obligation. 10.4 SURVIVAL. Each party hereto covenants and agrees that the representations and warranties, covenants and obligations contained in Articles III through VI, VIII, and Sections 10.2 through 10.4 of this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the execution hereof, and the Closing Date, and any inspection, investigation, or determination made by, or on behalf of, either party, and expiration or termination of this Agreement. 10.5 NOTICES. All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered, sent by overnight courier, or mailed by certified mail, return receipt requested, postage prepaid, or transmitted by facsimile and confirmed by a similar mailed writing: (a) If to the Purchaser, to: GMAC Mortgage Corporation 100 Witmer Road Horsham, PA 19044 Attention: Chief Financial Officer with a copy to: Glen W. Snyder General Counsel 21 27 GMAC Mortgage Corporation 100 Witmer Road Horsham, PA 19044 (b) If to Seller, to: E-LOAN, INC. 6200 Village Parkway Suite 102 Dublin, CA 94568 Attn: Steven Majerus or to such other address as Purchaser or Seller shall have specified in writing to the other. 10.6 APPLICABLE LAW. The construction of this Agreement and the rights, remedies, and obligations arising by, under, through, or on account of it shall be governed by the internal laws of the Commonwealth of Pennsylvania (without regard to its conflicts of laws principles) except to the extent the same are preempted by the laws of the United States of America. 10.7 JURISDICTION AND VENUE. Purchaser and Seller mutually agree that any legal cause of action arising out of a dispute concerning this Agreement or the enforceability of any part thereof shall be subject to the jurisdiction of the United States District Court in and for the Eastern District of Pennsylvania. 10.8 INTEGRATION. This Agreement constitutes a final and complete integration of the Agreement of the parties respecting the subject matter hereof, thereby superseding all previous oral or written agreements. There are no contemporaneous oral agreements. 10.9 MODIFICATION. This Agreement may not be changed orally but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification, or discharge is sought. Subject to the foregoing, any of the terms or conditions of this Agreement may be waived or modified at any time by the party entitled to the benefit thereof, but no such waiver, express or implied, shall affect or impair the right of the waiving party to require observance, performance, or satisfaction of either (1) the same term or condition as it applies on a subsequent or previous occasion or (2) any other term or condition hereof. 10.10 THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto only. There shall be no third party beneficiaries hereof. 10.11 CONSTRUCTION. In construing the words of this Agreement, plural constructions shall include the singular, and singular constructions shall include the plural. The words "herein", "hereof", and other similar compounds of the word "here" shall mean and refer to this entire Agreement, not to any particular provision, section, or subsection of it. 10.12 CAPTIONS. Paragraph captions in this Agreement are for ease of reference only and shall be given no substantive or restrictive meaning or significance whatsoever. 10.13 COUNTERPARTS. This Agreement may be executed in two counterparts, each of which shall be an original regardless of whether all parties sign the same document. Regardless of the number of counterparts, they shall constitute only one agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than one counterpart. 22 28 10.14 ATTORNEYS' FEES. If any action of law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees from the other party. Such fees may be set by the court in the trial of such action or may be enforced in a separate action brought for that purpose. Such fees shall be in addition to any other relief that may be awarded. 10.15 BINDING EFFECT AND ASSIGNMENT. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto and their successors and assigns, any rights, obligations, remedies or liabilities. No party may, or shall have the power to, assign this Agreement without the prior written consent of the other, except that Purchaser may assign this Agreement to an affiliated entity having all necessary resources to complete the transactions contemplated herein. 10.16 INCORPORATION OF EXHIBITS. Exhibits A through F attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement. [THIS SPACE INTENTIONALLY LEFT BLANK.] 23 29 IN WITNESS WHEREOF, each of the undersigned parties to this GMAC Mortgage Corporation Seller's Agreement has caused this GMAC Mortgage Corporation Seller's Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written. PURCHASER: ATTEST: GMAC MORTGAGE CORPORATION By: By: /s/ Signature Illegible ----------------------------- Name: Barry Bior Title: Senior Vice President ---------------------- SELLER: ATTEST: E-LOAN, INC. By: /s/ Steve M. Majerus By: /s/ Chris Larsen ----------------------------- Name: Chris Larsen Title: CEO 24 30 EXHIBIT "B" CONTENTS OF MORTGAGE FILES Mortgage Files (where applicable, original microfiche files or hard copy files) shall include, without limitation the following: a) All origination documentation including: - Transmittal Summary FNMA/FHLMC Form 1008 - Loan Application Form 1003 (initial and final signed application) - Credit Report - Final Truth-in-Lending Disclosure Statement - Verification of Employment - IRS Form 4506 for self-employed borrowers (Request for copy of Tax Form) - Verification of Deposit - HUD 1 on previous property, if applicable - HUD 1/Settlement Statement on subject property - Appraisal - Satisfactory Completion Certificate Form 442, if applicable - Executed Sales Contract; b) Original Note endorsed to GMAC Mortgage Corporation; c) Original limited power of attorney, if applicable; d) Original recorded Mortgage/Deed of Trust or copy of the original, certified by the recording agency to be a true and exact copy of the recorded document; e) Original final Title Policy; f) Original PMI Certificate (if applicable); g) Original LGC/MIC (if applicable); h) Original recorded intervening Assignment to GMAC Mortgage Corporation; i) Abstract of Title - in states where required other than those where evidence exists indicating sent to borrower; and j) Previous assumption information, if applicable. 25 31 EXHIBIT "C" PURCHASER'S GUIDELINES ---------------------- Conventional Loans: Must be eligible for sale to the Federal National Mortgage Association (FNMA) through it's Mortgage Backed Securities program and must have been originated, underwritten and closed in conformity with the FNMA Seller's Guide. Government Loans: Must be eligible for sale through the Government National Mortgage Association's Mortgage Backed Security program. All loans must have the required insurance certificate from the VA or FHA as required. Seller will be responsible for providing all documents necessary for initial and final certification of the pools. All loans sold will not be 30 days or greater delinquent prior to the receipt of the first payment. All loan documents will be received in a timely manner. 26 32 EXHIBIT "D" FORM OF SECRETARY'S CERTIFICATE ------------------------------- 27 33 EXHIBIT "E" FORM OF OPINION OF COUNSEL -------------------------- GMAC Mortgage Corporation 100 Witmer Road Horsham, PA 19044-0963 Dear Sirs: You have requested my opinion, as counsel to E-LOAN, INC., a Massachusetts corporation (the "Seller"), with respect to certain matters in connection with the sale by the Seller pursuant to that certain GMAC Mortgage Corporation Seller's Agreement, dated as of ______, 199_ (the "Purchase and Sale Agreement") between you and the Seller, of certain Mortgage Loans as defined in the Purchase and Sale Agreement. Capitalized terms not otherwise defined herein have their respective meanings set forth in the Purchase and Sale Agreement. I have examined the following documents: 1. the Purchase and Sale Agreement; and 2. such other documents, records and papers as I have deemed necessary and relevant as a basis for this opinion. I have assumed that each party other than the Seller had the power and authority to enter into and perform all obligations thereunder and, as to each such party, I also have assumed the due authorization by all requisite corporate action, the due execution and delivery and the validity and binding effect and enforceability of such documents. Based upon the foregoing, and subject to the qualification set forth at the end of this letter, it is my opinion that: 1. The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida. 2. The Seller has the requisite power to engage in the transactions contemplated by the Purchase and Sale Agreement and all requisite power, authority and legal right to execute and deliver the Purchase and Sale Agreement and to perform and observe the terms and conditions of such instrument. 3. The Purchase and Sale Agreement has been duly authorized, executed and delivered by the Seller and is a legal, valid and binding agreement enforceable in accordance with its terms against the Seller, subject to bankruptcy laws and other similar laws of general application affecting rights of creditors and subject to the application of the rules of equity, including those respecting the availability of specific performance. 28 34 4. No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Seller of, or of compliance by the Seller with, the Purchase and Sale Agreement, or the consummation of the transactions contemplated by the Purchase and Sale Agreement. 5. Neither the consummation of the transactions contemplated by, nor the fulfillment of the terms of the Purchase and Sale Agreement conflicts or will conflict with or results or will result in a breach of or constitutes or will constitute a default under the charter or by-laws of the Seller, the terms of any material indenture or other material agreement or instrument to which the Seller is a party or by which it is bound or to which it is subject, or any statute or order, rule, regulation, writ, injunction or decree of any court, governmental authority or regulatory body to which the Seller is subject or by which it is bound. 6. There is no action, suit, proceeding or investigation pending or, to the best of my knowledge, threatened against the Seller which, in my judgment, either in any one instance or in the aggregate, may reasonably be expected to result in any material adverse change in the business, operations, financial condition, properties or assets of the Seller or in any material impairment of the right or ability of the Seller to carry on its business substantially as now conducted or in any material liability on the part of the Seller or which would draw into question the validity of the Purchase and Sale Agreement or of any action taken or to be taken in connection with the transactions contemplated thereby, or which would be likely to impair materially the ability of the Seller to perform under the terms of the Purchase and Sale Agreement. In rendering this opinion letter, I do not express any opinion concerning any law other than the federal common law of the United States of America (excluding federal securities law) and the law of the ____ of _____. Additionally, I do not express any opinion on any issue not expressly addressed above. I bring to your attention the fact that my legal opinions are an expression of professional judgment and are not a guarantee of a result. I do not undertake to advise you of matters which may come to my attention subsequent to the date hereof which may affect my legal opinions expressed herein. This opinion is delivered to you solely for your use in connection with the execution and delivery of the Purchase and Sale Agreement. This opinion is not to be used, circulated, quoted or otherwise referred to for any other purpose, or to or by any other person, with or without reference to my name, without my prior express written consent. Very truly yours, 29 35 EXHIBIT "F" FORM OF OFFICER'S CERTIFICATE ----------------------------- OFFICER'S CERTIFICATE I, ____________________ hereby certify that I am the duly elected _______________ of E-LOAN, INC. (the "Company"), a corporation organized and existing under the laws of the State of California, and further as follows: 1. Attached hereto is a true and correct copy of the Articles of Incorporation and By-laws of the Company and a Certificate of Good Standing for the Company, all of which are in full force and effect on the date hereof. 2. There are no actions, suits or proceedings pending (nor are any actions, suits or proceedings threatened) against or affecting the Company which if adversely determined, individually or in the aggregate, would adversely affect the Company's obligations under the GMAC Mortgage Corporation Seller's Agreement (the "Purchase and Sale Agreement") dated as of _______________, 199_, between the Company and GMAC Mortgage Corporation. 3. Each person who, as an officer or representative of the Company, signed (a) the Purchase and Sale Agreement, and (b) any other document delivered prior hereto or on the date hereof in connection with the transaction described in the Purchase and Sale Agreement was, at the respective times of such signing and delivery duly elected or appointed, qualified and acting as such officer or representative, and the signatures of such persons appearing on such documents are their genuine signatures. 4. Each of the Mortgage Loans referred to in the Purchase and Sale Agreement was originated or acquired by the Company. 5. The Mortgage Loans referred to in the Purchase and Sale Agreement are not subject to any security interest, pledge or hypothecation for the benefit of any entity, institution or person. 6. Attached hereto is a certified true copy of the resolution of the Board of Directors of the Company with respect to the transactions governed by the Agreement. IN WITNESS WHEREOF, I have hereunto signed my name on behalf of the Company. Dated: ______, 199_ By: ____________________ Name: Title: 30 36 I, ________________, Secretary of E-LOAN, INC., hereby certify that ___________________ is the duly elected, qualified and acting ________________ of the Company and that the signature appearing above is his genuine signature. IN WITNESS WHEREOF, I have hereunto signed my name. Dated: __________, 199_ By:__________________________ Name: Title: 31