MORTGAGE LOAN PURCHASE AND SALE AGREEMENT Among WASHINGTON MUTUAL BANK, FA WASHINGTON MUTUAL BANK fsb WASHINGTON MUTUAL BANK (Sellers) and GOLDMAN SACHS MORTGAGE COMPANY (Purchaser) Dated as of December 1, 2003 Residential First Lien Mortgage Loans...
Among
WASHINGTON
MUTUAL BANK, XX
XXXXXXXXXX
MUTUAL BANK fsb
WASHINGTON
MUTUAL BANK
(Sellers)
and
XXXXXXX
SACHS MORTGAGE COMPANY
(Purchaser)
Dated
as of December
1, 2003
Residential
First Lien Mortgage Loans
Schedule/Schedule
Flow Delivery Program
TABLE
OF CONTENTS
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Page
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ARTICLE
1. DEFINITIONS
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1
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ARTICLE
2. SALE AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF FILES;
PAYMENT OF
PURCHASE PRICE; DELIVERY OF MORTGAGE LOAN DOCUMENTS; RECORDATION
OF
ASSIGNMENTS OF MORTGAGE
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10
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Section
2.1.
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Sale
and Conveyance of Mortgage Loans; Possession of Files
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10
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Section
2.2.
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Delivery
of Mortgage Loan Documents Regarding Mortgage Loans; Recordation
of
Assignments of Mortgage
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11
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Section
2.3.
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Purchaser’s
Due Diligence Review
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14
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ARTICLE
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS CONCERNING
MORTGAGE LOANS; REPURCHASE OF MORTGAGE LOANS
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14
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Section
3.1.
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Individual
Mortgage Loans
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14
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Section
3.2.
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Seller
Representations
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24
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Section
3.3.
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Repurchase
and Substitution
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25
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ARTICLE
4. COVENANTS
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28
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Section
4.1.
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Cooperation
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28
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Section
4.2.
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Representations,
Warranties, Covenants and Indemnities
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29
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Section
4.3.
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Delivery
of Documents
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29
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Section
4.4.
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Consents
and Approvals
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29
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Section
4.5.
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Confidentiality
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29
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Section
4.6.
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Servicing
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30
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ARTICLE
5. CONDITIONS TO PURCHASE
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30
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Section
5.1.
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Effective
Date and Closing Date Documents
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30
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Section
5.2.
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Correctness
of Representations and Warranties
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30
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Section
5.3.
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Compliance
With Conditions
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30
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ARTICLE
6. PASS-THROUGH AND WHOLE LOAN TRANSFERS
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31
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Section
6.1.
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Pass-Through
Transfers or Whole-Loan Transfers
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31
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Section
6.2.
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Designation
of a Master Servicer
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33
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ARTICLE
7. MISCELLANEOUS PROVISIONS
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34
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Section
7.1.
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Amendment
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34
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Section
7.2.
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Recordation
of Agreement
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34
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Section
7.3.
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Governing
Law
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34
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Section
7.4.
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General
Interpretive Principles
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34
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i
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Section
7.5.
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Reproduction
of Documents
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35
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Section
7.6.
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Notices
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35
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Section
7.7.
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Severability
of Provisions
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37
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Section
7.8.
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Exhibits
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37
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Section
7.9.
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Counterparts;
Successors and Assigns
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37
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Section
7.10.
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Effect
of Headings
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37
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Section
7.11.
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Other
Agreements Superseded; Entire Agreement
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37
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Section
7.12.
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Survival
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38
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Section
7.13.
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Intention
of the Parties
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38
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Section
7.14.
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Nonsolicitation
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38
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Section
7.15.
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Costs
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38
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Section
7.16.
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Obligations
of the Sellers
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39
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Section
7.17.
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Attorneys’
Fees
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39
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ii
EXHIBITS
& SCHEDULES
| · |
Exhibit
A-1 CONTENTS
OF COLLATERAL FILE
|
| · |
Exhibit
A-2 CONTENTS
OF CREDIT FILE
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| · |
Exhibit
BTERM
SHEET
|
Schedule
I to Term Sheet MORTGAGE
LOAN SCHEDULE
| · |
Exhibit
C FORM
OF INDEMNIFICATION AGREEMENT
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| · |
Exhibit
D REPRESENTATIONS
AND WARRANTIES
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iii
THIS
MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
(this
“Agreement”)
dated
as of December 1, 2003 is among Xxxxxxx Xxxxx Mortgage Company, a New York
limited partnership, as purchaser (the “Purchaser”),
and
Washington Mutual Bank, FA, a savings association organized under the laws
of
the United States, Washington Mutual Bank fsb, a savings bank organized under
the laws of the United States and Washington Mutual Bank, a Washington state
chartered stock savings bank, as sellers (each, a “Seller”
and,
collectively, the “Sellers”).
PRELIMINARY
STATEMENT
WHEREAS,
in
reliance upon the representations, warranties and covenants of each Seller
contained herein, the Purchaser desires to purchase from each Seller, from
time
to time, and each Seller desires to sell to the Purchaser, from time to time,
certain residential first lien mortgage loans, subject to the terms and
conditions of this Agreement, without recourse and exclusive of the related
servicing rights;
WHEREAS,
the
Purchaser and the Sellers desire to prescribe in this Agreement the manner
of
sale by each Seller and purchase by the Purchaser of such mortgage
loans;
WHEREAS,
the
Purchaser and the Sellers desire that Washington Mutual Bank, FA service the
mortgage loans in the manner described in the Servicing Agreement;
and
WHEREAS,
following its purchase of the mortgage loans from the Sellers, the Purchaser
may
desire to sell some or all of the mortgage loans to one or more purchasers
as a
whole loan transfer or a public or private mortgage-backed securities
transaction;
NOW,
THEREFORE,
the
Purchaser and the Sellers agree as follows:
ARTICLE
1.
DEFINITIONS
Capitalized
terms used in this Agreement shall have the meanings specified in the Servicing
Agreement, except that, whenever used herein, the following words and phrases,
unless the context otherwise requires, shall have the following
meanings:
Acceptable
Servicing Procedures:
As
defined in the Servicing Agreement.
Account:
As
defined in the Servicing Agreement.
Agreement:
This
Mortgage Loan Purchase and Sale Agreement, including all exhibits, attachments
and schedules hereto, and all amendments hereof and supplements
hereto.
ALTA:
The
American Land Title Association or any successor thereto.
1
Appraised
Value:
With
respect to any Mortgage Loan, the lesser of (i) the value set forth on the
appraisal made in connection with the origination of the related Mortgage Loan
as the value of the related Mortgaged Property, or (ii) the purchase price
paid for the Mortgaged Property, provided, however, that in the case of a
Mortgage Loan
originated
in connection with
the
refinance of a mortgage loan,
such
value shall be based solely on the appraisal made
in
connection with the origination
of such Mortgage Loan
and
provided, further, that in the case of a Streamlined Mortgage Loan, such value
shall be based solely on the appraisal made in connection with the origination
of the mortgage loan being refinanced.
ARM
Loan:
A
Mortgage Loan as to which the related Mortgage Note provides that the Mortgage
Interest Rate may be adjusted periodically.
Assignment
of Mortgage:
An
assignment of mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under and complying with the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the transfer of the Mortgage Loan to the assignee named
therein.
Breaching
Seller:
As
defined in Section 3.3(b).
Business
Day:
A day
other than (i) a Saturday or Sunday, or (ii) a day on which banking or savings
and loan institutions in the States of Washington, California, Illinois or
New
York are authorized or obligated by law or executive order to be
closed.
Closing
Date:
With
respect to any Loan Pool, the date on which the Purchaser purchases the Mortgage
Loans included in such Loan Pool.
Code:
The
Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto, and applicable U.S. Department of the Treasury regulations
issued pursuant thereto.
Collateral
Documents:
With
respect to any Mortgage Loan, the mortgage loan documents pertaining to such
Mortgage Loan which are specified in Exhibit A-1
attached
hereto and any additional mortgage documents pertaining to such Mortgage Loan
required to be added to the related Collateral File pursuant to the terms of
this Agreement.
Collateral
File:
With
respect to any Mortgage Loan, a file pertaining to such Mortgage Loan that
contains each of the related Collateral Documents.
Commitment
Letter:
With
respect to each Loan Pool, a commitment letter entered into between one or
more
Sellers and the Purchaser that provides for the purchase of Mortgage Loans
pursuant to the terms of this Agreement and sets forth the purchase price for
and certain other terms and conditions of the sale and purchase of such Mortgage
Loans.
Coop
Ownership Interests:
With
respect to any Cooperative Loan, the ownership interest in a single Cooperative
Apartment, including (i) the shares issued by the cooperative housing
corporation, (ii) the leasehold interest in the Cooperative Apartment and (iii)
all attendant right, title and interest thereto.
2
Cooperative
Apartment:
A
dwelling unit in a multi-dwelling building owned or leased by a cooperative
housing corporation, which unit the Mortgagor has an exclusive right to occupy
pursuant to the terms of a proprietary lease in accordance with the laws of
the
state in which the building is located.
Cooperative
Loan:
A
Mortgage Loan evidenced by a Mortgage Note and secured by a first lien against
the Coop Ownership Interests in a Cooperative Apartment.
Credit
File:
With
respect to any Mortgage Loan, a file pertaining to such Mortgage Loan which
contains the mortgage loan documents described on
Exhibit A-2
attached
hereto together with the credit documentation relating to the origination of
such Mortgage Loan and copies of the Collateral Documents, which file shall
be
retained by the Servicer and may be maintained on microfilm or any other
comparable medium.
Custodian:
With
respect to the Mortgage Loans in any Loan Pool, the custodian designated by
the
Purchaser in the related Commitment Letter, or any successor
custodian.
Cut-off
Date:
As to
each Mortgage Loan purchased on a particular Closing Date, the cut-off date
specified in the Commitment Letter relating to the purchase and sale of the
related Loan Pool.
Cut-off
Date Principal Balance:
As to
each Mortgage Loan, the outstanding principal balance of such Mortgage Loan
as
of the close of business on the applicable Cut-off Date, after deduction and
application of all payments of principal due on
or
before such Cut-off Date,
whether
or not received.
Deleted
Mortgage Loan:
A
Mortgage Loan that is removed from a Loan Pool and replaced with a Qualified
Substitute Mortgage Loan as set forth in Section 3.3.
Delinquent
Monthly Payment:
Any
scheduled Monthly Payment that (i) has not been received by the Due Date of
the
next Monthly Payment and (ii) remains unpaid as of the related Closing
Date.
Disclosure
Document:
As
defined in Section 6.1(d).
Due
Date:
With
respect to any Mortgage Loan, the day of the month on which Monthly Payments
on
such Mortgage Loan are due, exclusive of any days of grace, which day shall
be
the first day of the month unless otherwise specified on the related Mortgage
Loan Schedule.
Due
Period:
With
respect to any Mortgage Loan, the period beginning on the first day of any
month
and ending on the last day of such month.
Effective
Date:
December 23, 2003.
3
Effective
Date Documents:
(A) two
fully-executed counterparts of this Agreement;
(B) two
fully
executed counterparts of the Servicing Agreement; and
(C) two
fully-executed counterparts of the Term Sheet.
Escrow
Account:
As
defined in the Servicing Agreement.
Escrow
Holdback Mortgage Loan:
A
Mortgage Loan subject to an escrow withhold agreement for the express purpose
of
completing designated improvements on the Mortgaged Property.
Xxxxxx
Xxx:
Xxxxxx
Xxx (formerly known as the Federal National Mortgage Association) and any
successor thereto.
Xxxxxxx
Mac:
Xxxxxxx
Mac (formerly known as The Federal Home Loan Mortgage Corporation) and any
successor thereto.
Gross
Margin:
With
respect to any ARM Loan, the fixed percentage amount set forth in the related
Mortgage Note and described in the related Mortgage Loan Schedule, which amount
is added to the Index in accordance with the terms of the related Mortgage
Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD:
The
United States Department of Housing and Urban Development, or any successor
thereto.
Indemnified
Party:
As
defined in Section 6.1(d).
Index:
With
respect to any ARM Loan, the index set forth in each adjustable rate Mortgage
Note, which index is added to the Gross Margin to determine the Mortgage
Interest Rate on each Interest Rate Adjustment Date.
Initial
Closing Date:
December 23, 2003.
Initial
Rate Cap:
With
respect to any ARM Loan, the maximum increase or decrease in the Mortgage
Interest Rate on the initial Interest Rate Adjustment Date.
Interest
Rate Adjustment Date:
With
respect to any ARM Loan, the date specified in the related Mortgage Note as
the
date on which the Mortgage Interest Rate for the related Mortgage Loan is
subject to adjustment.
Interest
Rate Decrease Maximum:
With
respect to any ARM Loan, the maximum amount, if any, that the Mortgage Interest
Rate can adjust downwards on any Interest Rate Adjustment Date, as determined
in
accordance with the related Mortgage Note.
4
Interest
Rate Increase Maximum:
With
respect to any ARM Loan, the maximum amount, if any, that the Mortgage Interest
Rate can adjust upwards on any Interest Rate Adjustment Date, as determined
in
accordance with the related Mortgage Note.
Loan-to-Value
Ratio:
With
respect to each Mortgage Loan, the original principal balance of such Mortgage
Loan divided by the Appraised Value of the related Mortgaged
Property.
Loan
Pool:
A pool
of Mortgage Loans sold by one or more Sellers to the Purchaser on any Closing
Date pursuant to the terms of this Agreement and the related Commitment Letter
(which Mortgage Loans shall be identified on the related Mortgage Loan Schedule
delivered pursuant to this Agreement).
Master
Servicer:
As
defined in Section 6.2.
Maturity
Date:
With
respect to each Mortgage Loan, the maturity date of the related Mortgage Note,
as specified therein.
Maximum
Mortgage Interest Rate:
With
respect to any ARM Loan, the maximum rate of interest that may be charged
pursuant to the related Mortgage Note.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, and
any
successor thereto.
MERS
Loan:
Any
Mortgage Loan registered on the MERS® System and for which MERS is listed as the
record mortgagee or beneficiary on the related Mortgage or assignment
thereof.
MERS®
System:
The
system of electronically recording transfers of Mortgages maintained by
MERS.
MIN:
The
mortgage identification number issued to each MERS Loan.
Minimum
Mortgage Interest Rate:
With
respect to any ARM Loan, the minimum rate of interest, if any, that may be
charged pursuant to the related Mortgage Note.
MOM
Loan:
A
Mortgage Loan that was registered on the MERS® System at the time of origination
thereof and for which MERS appears as the record mortgagee or beneficiary on
the
related Mortgage.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage Loan which
is
payable by a Mortgagor from time to time under the related Mortgage
Note.
Mortgage:
The
mortgage, deed of trust, or other instrument creating a first lien on or first
priority ownership interest in real property or, in the case of a Cooperative
Loan, the security agreement or other instrument creating a first lien on the
related Coop Ownership Interests, in each case, including any riders, addenda,
assumption agreements, or modifications relating thereto.
5
Mortgage
Interest Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues on
such
Mortgage Loan.
Mortgage
Loan:
An
individual mortgage loan that is sold pursuant and subject to this Agreement,
each such mortgage loan being identified on the related Mortgage Loan Schedule.
The term Mortgage Loan includes a Cooperative Loan.
Mortgage
Loan Schedule:
With
respect to the Mortgage Loans included in a Loan Pool to be sold pursuant to
this Agreement on any Closing Date, the schedule or schedules of Mortgage
Loans agreed to by the parties that describes such Mortgage Loans, which
schedule shall set forth at least the following information with respect to
each Mortgage Loan to the extent applicable: (1) the Mortgage Loan
identifying number, (2) xxx xxxxxx xxxxxxx, xxxx, xxxxx and zip code of
the Mortgaged Property, (3) the Mortgage Interest Rate as of the
applicable Cut-off Date, (4) the Net Rate as of the applicable Cut-off
Date, (5) the amount of the Monthly Payment as of the applicable Cut-off Date,
(6) with respect to each ARM Loan, (A) the Index, (B) the Gross Margin, (C)
the Maximum Mortgage Interest Rate, (D) the Minimum Mortgage Interest Rate,
(E)
the Initial Rate Cap, (F) the periodic rate cap, (G) the first Interest Rate
Adjustment Date immediately following the Closing Date for such Mortgage Loan,
and (H) the first Interest Rate Adjustment Date after origination, (7) the
scheduled or stated Maturity Date, (8) the Cut-off Date Principal Balance
of the Mortgage Loan, (9) the Loan-to-Value Ratio at origination,
(10) the Mortgagor’s first and last name, (11) a
code
indicating the occupancy status of the Mortgaged Property (i.e., owner-occupied,
non-owner, second home), (12) the
type of residential dwelling constituting the Mortgaged Property,
(13) the original months
to
maturity, (14) the original date
of
the Mortgage Loan and the remaining months to maturity from the Cut-off Date
based on the original amortization schedule, (15) the
date on which the first Monthly Payment was due on the Mortgage Loan,
(16) the
amount of the Monthly Payment at origination, (17) the
last Due Date on which a Monthly Payment was actually applied to the Unpaid
Principal Balance, (18) the
original principal amount of the Mortgage Loan, (19) a
code indicating the purpose of the loan (i.e., purchase financing, rate/term
refinancing, cash-out refinancing), (20) the
Mortgage Interest Rate at origination,
(21) a
code
indicating whether the Mortgage Loan is an ARM Loan or a fixed rate Mortgage
Loan, (22) a
Primary Mortgage Insurance Policy insurer code, percent and policy number (if
applicable), (23) the
Appraised Value of the Mortgaged Property, (24) the
sale price of the Mortgaged Property, if applicable, (25) a
code indicating if the Mortgage Loan is subject to a prepayment fee,
(26) the
Servicing Fee Rate, (27) a
code indicating the negative amortization percentage, if applicable,
(28) if
the Due Date is other than the first day of the month, the Due Date,
(29) a
code indicating the document type (e.g., full, alt, etc.), (30) a
credit score or mortgage score, (31) the Mortgagor’s social security number,
(32) the
Seller, (33) a
code indicating if the Mortgage Loan is a MERS Loan, (34) with
respect to each MERS Loan, the MIN, (35) the appraisal type, and (36) a code
indicating whether such Mortgage Loan is an Escrow Holdback Mortgage Loan.
“Mortgage Loan Schedule” is the collective reference to each of the Mortgage
Loan Schedules delivered by the Sellers to the Purchaser pursuant to this
Agreement.
6
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage,
including any riders or addenda thereto.
Mortgaged
Property:
The
property securing a Mortgage Note pursuant to the related Mortgage or, in the
case of a Cooperative Loan the related Coop Ownership Interests.
Mortgagor:
The
obligor(s) on a Mortgage Note.
Net
Rate:
With
respect to each Mortgage Loan, the annual rate at which interest thereon shall
be remitted to the Purchaser (in each case computed on the basis of a 360-day
year consisting of twelve 30-day months), which annual rate shall be equal
to
the Mortgage Interest Rate less the Servicing Fee Rate.
Pass-Through
Transfer:
The
sale or transfer of some or all of the Mortgage Loans by the Purchaser to a
trust to be formed as part of a publicly issued or privately placed mortgage
backed securities transaction.
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Primary
Mortgage Insurance Policy:
With
respect to each Mortgage Loan, the policy of primary mortgage insurance
(including all endorsements thereto) issued with respect to such Mortgage Loan,
if any, or any replacement policy.
Purchase
Price:
For
each Mortgage Loan purchased hereunder, an amount equal to the Cut-off Date
Principal Balance of such Mortgage Loan, multiplied by the Purchase Price
Percentage.
Purchase
Price Percentage:
For
each Mortgage Loan included in a Loan Pool, the percentage of par set forth
in
the related Commitment Letter that is used to calculate the Purchase Price
of
each Mortgage Loan in such Loan Pool, subject to any adjustments specified
in
the related Commitment Letter.
Purchaser:
Xxxxxxx
Xxxxx Mortgage Company, a New York limited partnership, and all successors
in
interest pursuant to Sections 6.1 and 7.9 hereof.
Qualification
Defect:
With
respect to a Mortgage Loan, (a) a materially defective document in the
Collateral File delivered as such by the Seller, (b) the absence of a material
document in the Collateral File due to a failure by the Seller to deliver such
document as required by Section 2.2, or (c) the breach of any material
representation, warranty or covenant with respect to the Mortgage Loan made
by
the Seller, but, in each case, only if the affected Mortgage Loan ceases to
qualify as a “qualified mortgage” for purposes of the REMIC
Provisions.
7
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by a Breaching Seller for a Deleted
Mortgage Loan, which must have the following qualities on the date of
substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution, not in excess of the
outstanding principal balance of the Deleted Mortgage Loan (the amount of any
shortfall shall be deposited in the Account by such Breaching Seller out of
its
own funds without right of reimbursement as provided in Section 3.3(e)),
(ii) have a current Mortgage Interest Rate not less than 1% less than, and
not more than 1% greater than, the current Mortgage Interest Rate of the Deleted
Mortgage Loan, (iii) have a remaining term to maturity not greater than and
not more than one year less than that of the Deleted Mortgage Loan,
(iv) have a Net Rate not less than 1% less than, and not more than 1%
greater than, the Net Rate of the Deleted Mortgage Loan, (v) be of the same
type as the Deleted Mortgage Loan (i.e., if the Deleted Mortgage Loan is a
fixed
rate Mortgage Loan, the substituted loan shall be a fixed rate Mortgage Loan,
and if the Deleted Mortgage Loan is an ARM Loan, the substituted loan shall
be
an ARM Loan which is the same ARM type and with the same Mortgage Interest
Rate
caps, Index and Gross Margin as the Deleted Mortgage Loan), and (vi) comply
with each representation and warranty respecting individual Mortgage Loans
set
forth in Section 3.1 hereof, provided, that for purposes of applying such
representations and warranties to each such Qualified Substitute Mortgage Loan,
references in such Sections to the related Closing Date shall be deemed to
be
references to the date of substitution of such Qualified Substitute Mortgage
Loan. If one or more Mortgage Loans are substituted for one or more Deleted
Mortgage Loans pursuant to Section 3.3, the amounts described in clause (i)
hereof shall be determined on the basis of the aggregate principal balances;
the
Mortgage Interest Rate, the term to maturity and the Net Rate described in
clauses (ii)-(iv) hereof shall be determined on the basis of weighted average
Mortgage Interest Rates, original terms to maturity and Net Rates
respectively.
Repurchase
Price:
With
respect to any Mortgage Loan,
unless
otherwise specified in the related Commitment Letter, an amount equal to the
sum
of (a) (i) if such repurchase occurs during the first twelve months following
the related Closing Date, (A) the Unpaid Principal Balance of such Mortgage
Loan, multiplied by (B) the Purchase Price Percentage, and (ii) if such
repurchase occurs after the first twelve months following the related Closing
Date or after such Mortgage Loan has been subject to a Pass-Through Transfer,
the Unpaid Principal Balance of such Mortgage Loan, plus (b) the amount of
interest on such Unpaid Principal Balance at the applicable Net Rate, from
the
date to which interest has last been paid and distributed to the Purchaser,
to
and including the last
day
of the month in which such repurchase occurs, plus (c) any costs and
damages (including, without limitation, late fees) actually incurred and paid
by
or on behalf of the trust in the applicable Pass-Through Transfer in connection
with the fact that such Mortgage Loan at the time it was made failed to comply
in all material respects with applicable federal, state or local predatory
and
abusive lending laws, to the extent such costs and damages result from a breach
by the Seller of the representation and warranty set forth in Section
3.3(gg).
Seller:
As the
context requires, any of Washington Mutual Bank, FA, Washington Mutual Bank
fsb
and/or Washington Mutual Bank and their respective assigns and successors in
interest.
Seller’s
Information:
As
defined in Section 6.1(d).
8
Servicer:
Washington Mutual Bank, FA, in its capacity as Servicer under the Servicing
Agreement, and any permitted successor to or assignee of any servicing rights
or
obligations under the Servicing Agreement.
Servicing
Agreement:
That
certain Servicing Agreement of even date herewith between the Purchaser as
owner
and the Servicer.
Servicing
Cut-off Date:
As to
each Mortgage Loan purchased on a Closing Date, the last day of the Due Period
in which such Closing Date occurs.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee payable to the
Servicer as compensation for servicing and administering such Mortgage Loan.
Such fee shall, for a period of one full month, be equal to one-twelfth of
the
product of (i) the related Servicing Fee Rate, multiplied by (ii) the
outstanding Unpaid Principal Balance of such Mortgage Loan.
Servicing
Fee Rate:
With
respect to each Mortgage Loan, the annual rate at which the Servicing Fee shall
be calculated, which annual rate is set forth in the related Commitment Letter
and Term Sheet. In the event that the Index and Gross Margin of an ARM Loan
are
adjusted pursuant to the terms of the related Mortgage Note.
Streamlined
Mortgage Loan:
A
Mortgage Loan originated in connection with the refinance of a mortgage loan
pursuant to the related Seller’s streamlined loan documentation program then in
effect.
Subsequent
Transfer Settlement Date:
As
defined in Section 6.1(a).
Term
Sheet:
A term
sheet with respect to the Mortgage Loans purchased on a Closing Date, in the
form attached hereto as Exhibit
B.
Unpaid
Principal Balance:
With
respect to each Mortgage Loan that is not a Qualified Substitute Mortgage
Loan,
as of
any date of determination, (i) the Cut-off Date Principal Balance, minus
(ii) the principal portion of all payments made by or on behalf of the
Mortgagor after such Cut-off Date and received by the Purchaser. With respect
to
each Mortgage Loan that is a Qualified Substitute Mortgage Loan, as of any
date
of determination, (i) the outstanding principal balance of such Mortgage
Loan as of the close of business on the date of substitution, after deduction
and application of the principal portion of all payments due on or before such
date of substitution
whether
or not received,
minus
(ii) the principal portion of all payments made by or on behalf of the
Mortgagor after such date of substitution and received by the
Purchaser.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Purchaser to a
third party, which sale or transfer is not a Pass-Through Transfer.
9
ARTICLE
2.
SALE
AND CONVEYANCE OF MORTGAGE LOANS;
POSSESSION
OF FILES; PAYMENT OF PURCHASE
PRICE;
DELIVERY OF MORTGAGE LOAN DOCUMENTS;
RECORDATION
OF ASSIGNMENTS OF MORTGAGE
Section
2.1. Sale
and Conveyance of Mortgage Loans; Possession of Files
(a) On
each
Closing Date for any Loan Pool, upon the receipt of the requisite consideration,
the applicable Seller or Sellers shall deliver a Term Sheet with respect to
the
Loan Pool. By such delivery, each Seller shall sell, transfer, assign, set
over,
and convey to the Purchaser, without recourse, but subject to the
representations, warranties, terms and provisions of this Agreement, all the
right, title, and interest of the Seller in and to the Mortgage Loans included
in such Loan Pool, exclusive of the related servicing rights.
(b) Pursuant
to Section 2.2, the applicable Seller or Sellers shall deliver to the
Custodian the documents comprising the Collateral File with respect to each
related Mortgage Loan included in a Loan Pool to be purchased by the Purchaser.
Such documents shall, prior to payment for the related Mortgage Loan pursuant
to
Section 2.1(c) below, be held by the Custodian as custodian for the
applicable Seller or Sellers. The documents comprising each Collateral File
that
are not required to be delivered to the Custodian pursuant to
Section 2.2(a) and the documents comprising each Credit File shall, subject
to payment for the related Mortgage Loan pursuant to
Section 2.1(c) below, be held in trust by the Servicer for the benefit
of the Purchaser as the owner thereof. The Servicer’s possession of such
documents so held is at the will of the Purchaser, and such holding and
possession is in trust for the Purchaser as the owner thereof and only for
the
purpose of servicing the Mortgage Loans. Upon payment for the related Mortgage
Loan pursuant to Section 2.1(c) below, the beneficial ownership of
each Mortgage Note, each Mortgage, and each of the other documents comprising
the Collateral File and the Credit File with respect to such Mortgage Loan
is
and shall be vested in the Purchaser, and the ownership of all records and
documents with respect to such Mortgage Loan prepared by or which come into
the
possession of the applicable Seller or Sellers or any agent or designee thereof
shall immediately vest in the Purchaser and shall be delivered to the Custodian
(in the case of the Collateral Documents) or the Servicer (in the case of the
Credit Files or any other documents) to hold the same in a custodial capacity
for Purchaser.
(c) In
full
consideration for the sale of each of the Mortgage Loans pursuant to
Section 2.1(a) hereof, and upon the terms and conditions of this
Agreement, on the related Closing Date the Purchaser shall pay to the applicable
Seller or Sellers by wire transfer of immediately available funds (i) the
applicable Purchase Price for each Mortgage Loan purchased on such Closing
Date,
plus (ii) the amount of interest (computed, as to each Mortgage Loan, at
the Net Rate) that has accrued on the Cut-off Date Principal Balance of such
Mortgage Loans from and including the Cut-off Date to but not including the
Closing Date.
10
(d) As
of
each Closing Date, the Purchaser shall own and be entitled to receive with
respect to each Mortgage Loan purchased on such Closing Date all Monthly
Payments and all other recoveries of principal and interest (computed, as to
each Mortgage Loan, at the Net Rate) due after the applicable Cut-off Date,
subject to the rights of the Servicer under the Servicing Agreement to
reimbursement for certain costs, expenses and advances incurred or made pursuant
thereto. All such amounts that are collected after the applicable Cut-off Date
through and including the related Closing Date shall be held and remitted by
the
Servicer in accordance with the terms of the Servicing Agreement.
(e) On
or
before the Closing Date specified in the related Commitment Letter for any
Loan
Pool, the applicable Seller or Sellers shall deliver to the Purchaser with
the
Term Sheet the related Mortgage Loan Schedule, which shall be in hard copy
or
“read-only” electronic format (as reasonably acceptable to such Seller and the
Purchaser).
Section
2.2. Delivery
of Mortgage Loan Documents Regarding Mortgage Loans; Recordation of Assignments
of Mortgage
(a) On
or
before the date specified in the related Commitment Letter, each Seller shall
deliver or cause to be delivered to the Custodian, at such Seller’s expense,
with respect to each Mortgage Loan sold by such Seller hereunder, each of the
following items or documents (unless otherwise agreed by the applicable Seller
and the Purchaser):
(i) With
respect to each Mortgage Loan (other than a Cooperative Loan):
(A)
(1) the
original Mortgage Note, endorsed (on the Mortgage Note or an allonge attached
thereto) “Pay to the order of _______________________, without recourse,” (or as
otherwise specified in the related Commitment Letter), and signed by facsimile
signature in the name of such Seller by an authorized officer, with all
intervening endorsements showing a complete, valid and proper chain of title
from the originator of such Mortgage Loan to such Seller;
(2)
or a
lost note affidavit, providing indemnification to the holder thereof for any
losses incurred due to the fact that the original Mortgage Note is missing,
together with a copy of the Mortgage Note; provided, however, that unless
otherwise specified in the related Commitment Letter or Term Sheet, the
aggregate Unpaid Principal Balance of Mortgage Loans in the related Loan Pool
as
to which lost note affidavits shall be accepted by the Purchaser shall not
exceed one percent (1%) of the aggregate Unpaid Principal Balance of all
Mortgage Loans in such Loan Pool.
11
(B) the
original Mortgage, with evidence of recording thereon, (and, in the case of
a
MOM Loan, with evidence of the MIN); provided that (i) if the original Mortgage
has been delivered for recording to the appropriate public recording office
of
the jurisdiction in which the Mortgaged Property is located but has not yet
been
returned to such Seller by such recording office, such Seller shall, no later
than 270 days following the related Closing Date, deliver to the Custodian
the
original of such Mortgage, with evidence of recording thereon, and (ii) if
such
Mortgage has been lost or if such public recording office retains the original
recorded Mortgage, such Seller may deliver or cause to be delivered to the
Custodian a photocopy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage;
(C) unless
such Mortgage Loan is a MERS Loan, the original Assignment of Mortgage, from
such Seller signed by original signature of an authorized officer, in blank
(or
as otherwise specified in the related Commitment Letter), which assignment
shall
be in form and substance acceptable for recording (except for the insertion
of
the name of the assignee and the recording information);
(D) unless
such Mortgage Loan is a MOM Loan, originals of all intervening Assignments
of
Mortgage, with evidence of recording thereon, showing a complete chain of title
from the originator to such Seller (or in the case of a MERS Loan other than
a
MOM Loan, showing a complete chain of title from the originator to MERS);
provided that (i) if any original intervening Assignment of Mortgage has been
delivered for recording to the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located but has not yet been
returned to such Seller by such recording office, such Seller shall, no later
than 270 days following the related Closing Date, deliver to the Custodian
the
original of such intervening Assignment of Mortgage, with evidence of recording
thereon, and (ii) if such intervening Assignment of Mortgage has been lost
or if
such public recording office retains the original recorded intervening
Assignment of Mortgage, such Seller may deliver or cause to be delivered to
the
Custodian a photocopy of such intervening Assignment of Mortgage certified
by
such public recording office to be a true and complete copy of the original
recorded intervening Assignment of Mortgage; and
(E) originals
of all assumption and modification agreements, if any, unless such originals
are
unavailable (in which event such Seller shall deliver to the Custodian a
photocopy of each such original, certified by the Seller to be a true and
complete copy of the original).
(ii) With
respect to each Cooperative Loan, as applicable and as required by the
applicable laws of the state in which the related Cooperative Apartment is
located, copies of: (A) the proprietary lease, (B) the security agreement,
(C)
the assignment of the proprietary lease, with all intervening assignments
showing a complete chain of title and an assignment thereof by such Seller,
(D)
the original stock certificate evidencing the ownership of the Cooperative
Apartment endorsed or accompanied by a stock power relating to such stock
certificate executed in blank, (E) a recognition agreement in form approved
by
Seller’s underwriting guidelines, in substantially the same form as the standard
“AZTECH” form, (F) copies of the financing statement filed by the applicable
Seller as secured party and, if applicable, a filed UCC-3 assignment of the
subject security interest showing a complete chain of title, together with
an
executed UCC-3 Assignment of such security interest by the Seller in a form
sufficient for filing, and (G) such other documents as are necessary for the
perfection of a lien against the related Coop Ownership Interests under
applicable law.
12
(b) In
connection with the transfer of any MERS Loan pursuant to Section 2.1
hereof, the Servicer shall cause the MERS® System to indicate that such MERS
Loan has been assigned to the Purchaser. The Purchaser may, in its discretion,
direct the Servicer to deliver for recording to the appropriate public recording
office of the jurisdiction in which the Mortgaged Property is located, and
cause
to be duly recorded, any or all of the original Assignments of Mortgage referred
to in Section 2.2(a)(i)(C). The Seller shall pay all recording fees
relating to the recordation of the Assignments of Mortgage from its own funds.
If any such Assignment of Mortgage is returned unrecorded to a Seller because
of
any defect therein, such Seller shall cause such defect to be cured and such
Assignment of Mortgage to be recorded in accordance with this Section 2.2
within 30 days after the date on which the rejected document was received by
such Seller from the public recording office.
(c) Whenever
a certified copy of a document certified by a Seller is required to be delivered
to the Purchaser pursuant to this Section 2.2, the following form of
certification is permitted: “Certified true, correct and complete copy of the
original. [Name of Seller], By _________________, Its
_________________.”
(d) Promptly
following receipt thereof, but in no event later than
270
days
after the related Closing Date, such Seller shall deliver to the Custodian
the
following documents with respect to each Mortgage Loan included in the Loan
Pool
purchased on such Closing Date to the extent not previously delivered to the
Custodian: (i) the original Mortgage, with evidence of recording thereon,
(ii) unless such Mortgage Loan is a MOM Loan, all original intervening
Assignments of Mortgage, with evidence of recording thereon and (iii) if a
lost
note affidavit was previously delivered without a copy of the related Mortgage
Note, a copy of such Mortgage Note. If any original Mortgage or intervening
Assignment of Mortgage has been delivered for recording to the appropriate
public recording office of the jurisdiction in which the related Mortgaged
Property is located and such recording office retains such original document,
or
if an original Mortgage or intervening Assignment of Mortgage has been lost,
then Seller shall deliver to the Custodian in lieu of such original document
a
photocopy certified by such recording office to be a true and correct copy
of
such original. In the event that a Seller does not comply with the delivery
requirements set forth in this Section 2.2, the related Mortgage Loan
shall, upon the request of the Purchaser, be repurchased by such Seller at
the
Repurchase Price and in the manner specified in Section 3.3(b).
Notwithstanding the foregoing, a Seller shall not be deemed to be in breach
of
this Agreement if such Seller fails to deliver to the Custodian within the
time
period specified above any of the documents described in this
Section 2.2(d) and provides evidence to the Custodian that such
failure is due solely to the failure of the applicable recorder’s office to
return a Collateral Document that was properly submitted for recordation. Such
Seller shall use reasonable efforts to obtain such original recorded document
or
copy of the original showing recording information certified by the appropriate
recording office to be a true and complete copy of the recorded original as
soon
as practicable.
13
(e) If
requested by the Purchaser, the Servicer shall, at Purchaser’s sole expense,
create a xeroxed copy or an imaged copy of the documents contained in the Credit
File of any Mortgage Loan and deliver, or cause to be delivered, each such
xeroxed copy or, through an electronic medium, each such imaged copy to the
Custodian or the Purchaser.
Section
2.3. Purchaser’s
Due Diligence Review
With
respect to each Loan Pool, the Purchaser shall be entitled to conduct a due
diligence review in order to ensure that the Mortgage Loans included in such
Loan Pool meet the requirements set forth in the related Commitment Letter
and
this Agreement. Such due diligence review shall be conducted in accordance
with
the timetable and any additional terms and conditions set forth in the related
Commitment Letter. The Purchaser’s due diligence review shall not result in a
waiver of or impair or diminish the rights of the Purchaser under this Agreement
with respect to a breach of representations or warranties of the applicable
Seller or Sellers.
ARTICLE
3.
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF
THE
SELLERS CONCERNING MORTGAGE LOANS;
REPURCHASE
OF MORTGAGE LOANS
Section
3.1. Individual
Mortgage Loans
Each
of
the Sellers hereby, severally and not jointly, represents and warrants to and
covenants to and agrees with the Purchaser that, as to each Mortgage Loan sold
by such Seller hereunder, as of the related Closing Date:
(a) The
information with respect to such Mortgage Loan set forth on the related Mortgage
Loan Schedule is true and correct in all material respects. If the related
information on the Mortgage Loan Schedule is left blank, then there is no data
associated with that information related to such Mortgage Loan.
(b) Immediately
prior to the transfer of the Mortgage Loan to the Purchaser pursuant to
Section 2.1, neither the related Mortgage nor the Mortgage Note were
assigned or pledged to any Person and the Seller had good and marketable title
thereto. Immediately prior to the transfer of the Mortgage Loan to the Purchaser
pursuant to Section 2.1, the Seller was the sole owner and holder of such
Mortgage Loan, free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges, or security interests
of
any nature, and had full right and authority to sell and assign such Mortgage
Loan pursuant to this Agreement. Upon the transfer of the Mortgage Loan to
the
Purchaser pursuant to Section 2.1, the Seller shall have taken all actions
necessary on its part to be taken so that the Purchaser will have good
indefeasible title to, and will be sole owner of, the related Mortgage and
the
Mortgage Note, free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges, or security interests
of
any nature.
14
(c) With
respect to each Mortgage Loan other than a Cooperative Loan, (i) the Mortgage
is
a valid, subsisting and enforceable first lien on the Mortgaged Property,
including all buildings, fixtures, installations and improvements to the
Mortgaged Property, and the Mortgaged Property is free and clear of all
encumbrances and liens having parity with or priority over the first lien of
the
Mortgage except for (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements, mineral right reservations and other
matters of public record as of the date of recording of such Mortgage, such
exceptions generally being acceptable under prudent mortgage lending standards
and specifically reflected in the appraisal made in connection with the
origination of such Mortgage Loan or specifically referred to in the mortgagee’s
policy of title insurance and (C) other matters to which like properties
are commonly subject that do not materially interfere with the value (as
determined by the Appraised Value), use, enjoyment or marketability of the
Mortgaged Property and (ii) there are no security agreements, pledged accounts,
chattel mortgages, or equivalent documents related to the Mortgage.
(d) The
terms
of the Mortgage and the Mortgage Note have not been impaired, waived, altered,
or modified in any respect, except by a written instrument that has been
recorded, if necessary, to protect the interest of the Purchaser and that is
a
part of the Collateral File. The substance of any such alteration or
modification is reflected on the related Mortgage Loan Schedule.
(e) No
mortgagor has been released, in whole or in part, except in connection with
an
assumption agreement or modification agreement that is part of the Collateral
File and that has been approved by the private mortgage guaranty insurer, if
any.
(f) There
is
no default, breach, violation, or event of acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
such a default, breach, violation, or event of acceleration, and neither the
Seller, nor to the best of the Seller’s knowledge, any seller or servicer, has
waived any such default, breach, violation, or event of acceleration. All taxes,
governmental assessments (including assessments payable in future installments),
insurance premiums, leasehold payments, or ground rents which previously became
due and owing in respect of or affecting the related Mortgaged Property have
been paid, or an escrow of funds has been established in an amount sufficient
to
pay for every such item that remains unpaid and that has been assessed but
is
not yet due and payable. The Seller has not advanced funds, or induced,
solicited, or knowingly received any advance of funds by a party other than
the
Mortgagor, directly or indirectly, for the payment of any amount required by
the
Mortgage or the Mortgage Note. No foreclosure action has been commenced with
respect to such Mortgage Loan.
15
(g) The
Mortgaged Property is free of material damage or waste and in good repair.
There
is no proceeding pending or, to the best of the Seller’s knowledge, threatened
for the total or partial condemnation of the Mortgaged Property and no notice
of
any such pending or threatened proceeding has been received so as to adversely
impair the value or marketability of the Mortgaged Property.
(h) There
are
no mechanics’ or similar liens or claims which have been filed for work, labor,
or material (and no rights are outstanding that under law could give rise to
such liens) affecting the related Mortgaged Property that are, or may be, liens
prior or equal to, or coordinate with, the lien of the related Mortgage and
that
are not insured against by the related mortgagee’s policy of title
insurance.
(i) All
of
the improvements which were included for the purpose of determining the
Appraised Value of the Mortgaged Property were completed at the time that such
Mortgage Loan was originated and lie wholly within the boundaries and building
restriction lines of such Mortgaged Property; provided, that if such Mortgage
Loan is an Escrow Holdback Mortgage Loan, the improvements described in the
applicable agreement governing escrow arrangement may not have been made at
the
time such Mortgage Loan was originated. No improvements on adjoining properties
encroach upon the Mortgaged Property
except
those that are insured against by the title insurance policy referred to in
Section 3.1(q).
No
improvement located on or being part of the Mortgaged Property is in violation
of any applicable zoning law or regulation, subdivision law or
ordinance.
(j) The
Seller is (or, if the Seller did not originate the Mortgage Loan, the
originator, during the period in which it held and disposed of such Mortgage
Loan, was): (i) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located
and (ii)(A) organized under the laws of such state, (B) qualified to
do business in such state, (C) a federal savings and loan association or
national bank having principal offices in such state, (D) not doing
business in such state, or (E) not required to qualify to do business in
such state.
(k) No
Monthly Payment with respect to such Mortgage Loan is a Delinquent Monthly
Payment. All payments required to be made under the related Mortgage and
Mortgage Note through and including the related Cut-off Date, have been made.
Unless otherwise stated in the related Commitment Letter, not more than one
payment required to be made under the related Mortgage and Mortgage Note has
remained unpaid through its next Due Date (excluding any applicable grace
period) during the twelve months immediately preceding the related Cut-off
Date.
(l) There
are
no custodial agreements in effect adversely affecting the right or ability
of
the Seller to make the deliveries specified in Section 2.2(a) or
Section 2.2(d).
(m) The
Mortgage Note and the Mortgage are genuine, and each is the legal, valid and
binding obligation of the maker thereof and each party assuming liability
therefor, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting the enforcement of creditors’ rights generally and except
that the equitable remedy of specific performance and other equitable remedies
are subject to the discretion of the courts. All parties to the Mortgage Note
and the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage and convey the estate therein purported to be conveyed, and the
Mortgage Note and the Mortgage have been duly and properly executed by such
parties or pursuant to a valid power-of-attorney that has been recorded with
the
Mortgage.
16
(n) The
Mortgage has been duly assigned and the Mortgage Note has been duly endorsed
as
provided in Section 2.2(a). Any Assignment of Mortgage delivered to the
Purchaser pursuant to Section 2.2(a)(i)(C) is in recordable form except for
the insertion of the name of the assignee and recording information and is
acceptable for recording under the laws of the applicable
jurisdiction.
(o) Any
and
all requirements of any federal, state, or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, fair housing, predatory and abusive
lending or disclosure laws applicable to such Mortgage Loan, including
applicable regulations, have been complied with and the Seller shall maintain
(or cause the Servicer to maintain) in its possession, available for the
Purchaser’s inspection and shall deliver (or cause to be delivered) to the
Purchase promptly upon demand evidence of compliance with all such requirements
to the extent such evidence constitutes a document required to be part of the
Collateral File. The consummation of the transactions contemplated by this
Agreement shall not cause the violation of any such laws.
(p) The
proceeds of such Mortgage Loan have been fully disbursed; provided that, if
such
Mortgage Loan is an Escrow Holdback Mortgage Loan, all of the proceeds of such
Mortgage Loan have been or will be disbursed (i) upon the completion of the
improvements described in the applicable agreement governing the escrow
arrangement, and (ii) in a manner acceptable to the Seller. There is no
requirement for, and the Seller shall not make any, future advances under the
terms of the Mortgage Loan. Any future advances made prior to the applicable
Cut-off Date have been consolidated with the principal balance secured by the
Mortgage, and such principal balance, as consolidated, bears a single interest
rate and single repayment term reflected on the related Mortgage Loan Schedule.
Unless such Mortgage Loan is subject to negative amortization, the Unpaid
Principal Balance as of the applicable Cut-off Date does not exceed the original
principal amount of such Mortgage Loan. Any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements
of
any escrow funds therefor have been complied with, and certificates of
completion with respect thereto are contained in the related Credit File;
provided that, if such Mortgage Loan is an Escrow Holdback Mortgage Loan, the
improvements described in the applicable agreement governing the escrow
arrangement may not have been completed and escrow funds related to such
improvements may not have been disbursed pursuant to the terms of such
agreement. All costs, fees and expenses incurred in making, or closing or
recording such Mortgage Loan have been paid or shall be paid in the ordinary
course of business.
17
(q) Such
Mortgage Loan (unless it is a Cooperative Loan) is covered by an ALTA mortgage
title insurance policy in a form acceptable to Xxxxxx Xxx or Xxxxxxx Mac, with,
in the case of an ARM Loan, an adjustable rate mortgage endorsement,
substantially in the form of ALTA Form 6.1 or 6.2, or such other generally
used
and acceptable form of policy and applicable endorsements acceptable under
the
Seller’s underwriting guidelines. Each such policy affirmatively insures ingress
and egress and insures against encroachments by or upon the Mortgaged Property.
Each such policy was issued on the date of the origination of such Mortgage
Loan
by a title insurer acceptable under Seller’s underwriting guidelines and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, and its successors and assigns, as to the first
priority lien of the Mortgage in the original principal amount of such Mortgage
Loan. Each such policy has been duly and validly endorsed to the Purchaser
or
the assignment to the Purchaser of the Seller’s interest does not require the
consent of or notification to the insurer, and such mortgage title insurance
policy is in full force and effect. Where required by law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. No claims have been made under such lender’s title
insurance policy, and no prior holder of the related Mortgage, including the
Seller, has taken any action that would impair the enforceability of such
policy.
(r) All
buildings and other improvements upon the Mortgaged Property are insured against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, pursuant to
insurance policies conforming to the requirements of Section 2.10 of the
Servicing Agreement and issued by an insurer acceptable under Seller’s
underwriting guidelines. If the Mortgaged Property is a condominium unit, it
is
included under the coverage afforded by a blanket policy for the project; the
insurance policy contains a standard clause naming the originator of such
Mortgage Loan, its successor and assigns, as insured mortgagee. If the Mortgaged
Property is in an area that, at the time of origination of the related Mortgage
Loan, was identified on a flood hazard boundary map or flood insurance rate
map
issued by the Federal Emergency Management Agency as having special flood
hazards and such flood insurance is available, a flood insurance policy is
in
effect meeting the requirements of the current guidelines of the Federal
Insurance Administration with an insurance carrier acceptable to Seller. Each
individual insurance policy has been validly issued and is in full force and
effect. The Seller has caused to be performed all acts required to preserve
the
rights and interests of the Purchaser in all insurance policies required by
this
Agreement, including, without limitation, notification of insurers, and
assignment of policies or interests therein. Each individual insurance policy
contains a standard mortgagee clause naming the Seller, and its successors
and
assigns, as mortgagee and loss payee. All premiums due thereon have been paid.
The Mortgage obligates the Mortgagor to maintain all such insurance at the
Mortgagor’s cost and expense, and upon the Mortgagor’s failure to do so,
authorizes the servicer or the owner of the Mortgage to obtain and maintain
such
insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor
from the Mortgagor. No claims have been made under such policies since
origination of the Mortgage Loan, and the Seller has taken no action that would
impair the coverage of any such insurance policy, the benefits of any
endorsement or the validity, binding effect and enforceability of the
foregoing.
18
(s) There
is
no valid offset, defense, counterclaim or right of rescission as to the related
Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay
the
unpaid principal of or interest on such Mortgage Note. The operation of any
of
the terms of such Mortgage Note or Mortgage, or the exercise of any right
thereunder, shall not render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, recoupment, counterclaim or defense, including, without limitation,
the
defense of usury, and no such right of rescission, set-off, recoupment,
counterclaim or defense has been asserted with respect thereto. Such Mortgage
Loan is not subject to any pending bankruptcy, insolvency, reorganization or
moratorium. If such Mortgage Loan is an ARM Loan, all the applicable terms
of
the Mortgage Note pertaining to adjustments of the Mortgage Interest Rate and
the Monthly Payments and payment adjustments in connection therewith are
enforceable and shall not affect the priority of the Mortgage lien. If such
Mortgage Loan is an ARM Loan, the related Mortgage Note has been timely and
appropriately adjusted, if such adjustment is required, and the respective
Mortgagor timely and appropriately advised. All such adjustments have been
made
in compliance with applicable law and in accordance with the terms of the
Mortgage Loan documents.
(t) Such
Mortgage Loan was originated by (i) the Seller, (ii) a savings and
loan association, savings bank, commercial bank, credit union, insurance company
or similar institution that is supervised and examined by a Federal or state
authority, or (iii) a
mortgagee
approved
by the Secretary of HUD
pursuant to Section 203 or 211 of the National Housing Act.
(u) Principal
payments on such Mortgage Loan commenced or are required to commence no more
than two months after funds were disbursed in connection with such Mortgage
Loan. Unless such Mortgage Loan is subject to negative amortization as indicated
on the related Mortgage Loan Schedule, the Mortgage Note requires a Monthly
Payment which is sufficient to fully amortize the original principal balance
over the remaining term thereof and to pay interest at the Mortgage Interest
Rate.
(v) Such
Mortgage Loan is a residential mortgage loan having an original term to maturity
as set forth on the related Mortgage Loan Schedule, and if no such term is
specified in the related Mortgage Loan Schedule, the term to maturity does
not
exceed forty years, with interest payable in arrears on the first day of each
month, or such other day of the month as may be noted on the related Mortgage
Loan Schedule. If such Mortgage Loan is an ARM Loan, the Mortgage Interest
Rate
is subject to adjustment periodically on each Interest Rate Adjustment Date
to a
new Mortgage Interest Rate (rounded as provided in the related Mortgage Note)
equal to the then current Index plus the Gross Margin as specified on the
related Mortgage Note, subject to the Initial Rate Cap (if applicable), Maximum
Mortgage Interest Rate, the Minimum Mortgage Interest Rate, the Interest Rate
Increase Maximum and the Interest Rate Decrease Maximum, in each case if and
to
the extent specified in the related Mortgage Loan Schedule.
(w) The
Mortgage Note is not and has not been secured by any collateral, pledged account
or other security, except the lien of the Mortgage.
19
(x) The
Mortgage contains customary and enforceable provisions which render the rights
and remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee’s sale and
(ii) otherwise by judicial foreclosure. There is no homestead, dower,
curtesy or other exemption or right available to the Mortgagor or any other
Person which would interfere with the right to sell the Mortgaged Property
at a
trustee’s sale or the right to foreclose the Mortgage. The Mortgage or Mortgage
Note contains a provision that is, to the extent not prohibited by federal
or
state law, enforceable and that provides for the acceleration of the payment
of
the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent
of
the mortgagee thereunder. The Mortgagor has not notified the Seller and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Soldiers and Sailors Civil Relief Act of 1940, as amended, or any
similar state law.
(y) If
the
Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable
law to serve as such, has been properly designated and currently so serves
and
is named in such Mortgage, and no fees or expenses are or shall become payable
by the Purchaser to the trustee under the deed of trust, except in connection
with a trustee’s sale after default by the Mortgagor.
(z) The
Mortgaged Property consists of (x) a single parcel of real property
separately assessed for tax purposes, upon which is erected a detached or an
attached one-to-four-family residence, an individual condominium or an
individual unit in a planned unit development or (y) in the case of a
Cooperative Loan, the related Coop Ownership Interests, in each case that is
in
compliance with Seller’s applicable requirements. Such Mortgaged Property is not
(i) a property held in trust (other than a revocable inter vivos trust that
is in compliance with Xxxxxx Mae’s requirements applicable to Seller, or, if the
Mortgaged Property is located in Illinois, an Illinois land trust), (ii) a
mobile home or manufactured home, or (iii) a recreational vehicle. Such
Mortgage Loan is not considered an agricultural loan. The related Mortgaged
Property does not consist of a log home, earthen home, underground home or
a
home which is situated on more than twenty acres of property. At the time of
origination of such Mortgage Loan, no portion of the related Mortgaged Property
was used for commercial purposes.
(aa) The
Loan-to-Value Ratio of such Mortgage Loan at the time of origination was not
greater than the Loan-to-Value Ratio set forth in the related Mortgage Loan
Schedule, and if no such percentage is specified, not greater than 95%. If
such
Mortgage Loan had at the time of origination a Loan-to-Value Ratio in excess
of
80%, unless otherwise specified in the related Commitment Letter, such Mortgage
Loan is subject to a Primary Mortgage Insurance Policy. All provisions of such
Primary Mortgage Insurance Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been
paid. No Mortgage Loan requires payment of such premiums, in whole or in part,
by the Purchaser. No action has been taken and no event has occurred that has,
or shall result in the exclusion from, denial of, or defense to coverage. Any
Mortgage Loan subject to a Primary Mortgage Insurance Policy obligates the
Mortgagor to maintain the Primary Mortgage Insurance Policy and to pay all
related premiums and charges. The Mortgage Interest Rate for the Mortgage Loan
as set forth on the Mortgage Loan Schedule is net of any such insurance premium.
None of the Mortgage Loans are covered by a “lender-paid” Primary Mortgage
Insurance Policy.
20
(bb) Such
Mortgage Loan was underwritten generally
in
accordance with the underwriting guidelines of the Seller in effect at the
time
such Mortgage Loan was originated.
(cc) There
exist no deficiencies in excess of $1000 with respect to escrow deposits and
payments, if such are required, for which customary arrangements for repayment
thereof have not been made or which the Seller expects not to be cured, and
no
escrow deposits or payments of other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note.
(dd) Such
Mortgage Loan does not have a shared appreciation feature or other contingent
interest feature, and such Mortgage Loan does not involve buydowns, balloons,
timeshares or graduated payments. If such Mortgage Loan is an ARM Loan, it
is
not convertible to a Mortgage Loan with a fixed Mortgage Interest Rate, unless
otherwise indicated in the related Mortgage Loan Schedule.
(ee) The
origination, servicing and collection practices used with respect to such
Mortgage Loan (including without limitation, the establishment, maintenance
and
servicing of the Escrow Accounts, if any), have been, in all material respects,
in accordance with applicable laws and regulations, the terms of the Mortgage
Loan documents and Acceptable Servicing Procedures. All escrow payments have
been collected in all material respects in compliance with applicable law,
Acceptable Servicing Procedures and the provisions of the Mortgage Loan
documents. If such Mortgage Loan is the subject of an escrow, escrow of funds
is
not prohibited by applicable law and has been established in an amount
sufficient to pay for every escrowed item that remains unpaid and has been
assessed but is not yet due and payable. Any Escrow Account interest required
to
be paid pursuant to applicable law has been properly paid and
credited.
(ff) The
appraisal report with respect to the Mortgaged Property contained in the Credit
File was made in accordance with the relevant provisions of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as in effect on
the
date such Mortgage Loan was originated and was signed by a qualified appraiser,
who met the requirements of the Seller’s appraisal policies and procedures, who
had no interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of such application and who otherwise meets the
requirements of Seller.
(gg) No
Mortgage Loan is subject to the Home Ownership and Equity Protection Act of
1994, as amended, or Section 226.32 of Regulation Z, or is a "high-cost" loan
or
a "predatory" loan as defined under any federal, state or local law or
regulation applicable to the originator of such Mortgage Loan or is a loan
which
would result in liability to the purchaser or assignee of such Mortgage Loan
under any predatory or abusive lending law.
21
(hh) If
such
Mortgage Loan is an ARM Loan, it does not have an interest rate step-down
feature or similar feature that would result in a downwards adjustment to the
Mortgage Interest Rate, the Gross Margin or the Index as a result of the related
Mortgagor’s payment method or payment history (e.g., no downwards adjustment in
return for allowing the automatic withdrawal of funds from the related
Mortgagor’s bank account to make the Monthly Payments on such Mortgage Loan, or
for making payments when due on such Mortgage Loan).
For
avoidance of doubt, standard ARM Loan features that are subject to caps and
floors do not constitute the features described in the immediately preceding
sentence.
(ii) No
misrepresentation or fraud has taken place on the part of the Seller, the
Mortgagor or any third party originator of such Mortgage Loan, or to the
Seller’s knowledge, any other Person, including without limitation, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan.
(jj) At
the
time of origination of such Mortgage Loan, the related Mortgaged Property was
lawfully occupied under applicable law and all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property (and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy) were made or
obtained from the appropriate authorities.
(kk) The
Seller has no knowledge of any circumstances or condition existing as of the
related Closing Date with respect to the Mortgage, the Mortgaged Property,
the
Mortgagor or the Mortgagor’s credit standing that can reasonably be expected to
cause the Mortgage Loan to be an unacceptable investment as of such Closing
Date.
(ll) To
the
best of the Seller’s knowledge, the Mortgaged Property is in material compliance
with all applicable environmental laws pertaining to environmental hazards
including, without limitation, asbestos, and neither the Seller nor, to the
Seller’s knowledge, the related Mortgagor, has received any notice of any
violation or potential violation of such law.
(mm) Such
Mortgage Loan was selected from among the outstanding mortgage loans of the
same
type in the Seller’s portfolio on the related Closing Date and such selection
was not made in a manner so as to affect adversely the interests of the
Purchaser.
(nn) Interest
on each Mortgage Loan is calculated on the basis of a 360-day year consisting
of
twelve 30-day months.
(oo) If
such
Mortgage Loan is a Cooperative Loan, the security instruments create a valid,
enforceable and subsisting first priority security interest in the related
cooperative shares securing the related cooperative note, subject only to
(x) the lien of the related cooperative for unpaid assessments representing
the Mortgagor’s pro rata share of payments for a blanket mortgage, if any,
current and future real property taxes, insurance premiums, maintenance fees
and
other assessments to which like collateral is commonly subject and (y) other
matters to which like collateral is commonly subject and which do not materially
interfere with the benefits of the security intended to be provided; provided,
however, that the related proprietary lease for the Cooperative Apartment may
be
subordinated or otherwise subject to the lien of a mortgage on the cooperative
building.
22
(pp) If
such
Mortgage Loan is a Cooperative Loan, a search for filings of financing
statements has been made by a party competent to make the same, which party
is
acceptable to Seller in accordance with its underwriting guidelines and is
qualified to do business in the jurisdiction where the cooperative unit is
located; and such search did not disclose any lien or security interest that
would materially and adversely affect the Cooperative Loan.
(qq) If
such
Mortgage Loan is a Cooperative Loan, the cooperative corporation that owns
title
to the related Cooperative Apartment is a “cooperative housing corporation”
within the meaning of Section 216 of the Code, and is in material compliance
with applicable laws that, if not complied with, could have a material adverse
effect on the Mortgaged Property.
(rr) If
such
Mortgage Loan is a Cooperative Loan: (i) the term of the related
proprietary lease or occupancy agreement is longer than the term of the
Cooperative Loan, (ii) there is no provision in such proprietary lease or
occupancy agreement which requires the Mortgagor to offer for sale the
cooperative shares owned by such Mortgagor first to the Cooperative and
(iii) there is no prohibition against pledging the shares of the
cooperative corporation or assigning the cooperative lease.
(ss) The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, release, cancellation, subordination or
rescission.
(tt) Each
document or instrument in the related Collateral File is in a form acceptable
to
Xxxxxx Xxx or Xxxxxxx Mac in its transactions with the Seller or is in a form
generally acceptable to prudent mortgage lenders that regularly originate or
purchase mortgage loans comparable to the Mortgage Loans for sale to prudent
investors in the secondary market that invest in mortgage loans such as the
Mortgage Loans.
(uu) As
a
condition to origination of such Mortgage Loan, the Mortgagor was not required
to purchase single-premium credit insurance policies.
(vv) The
Seller has furnished (or caused to be furnished) information regarding its
borrower credit files to Equifax, Experian and Trans Union Credit Information
Company (three of the credit repositories) in compliance with the provisions
of
the Fair Credit Reporting Act and its implementing regulations applicable to
the
Seller.
(ww) No
Mortgage Loan originated on or after October 1, 2002 will impose a prepayment
premium for a term in excess of three years after its origination. No Mortgage
Loan originated before October 1, 2002 will impose a prepayment premium for
a
term in excess of five years after its origination.
23
Section
3.2. Seller
Representations
Each
of
the Sellers hereby, severally and not jointly, represents and warrants to the
Purchaser as to such Seller as of the Initial Closing Date and each Closing
Date
on which such Seller sells Mortgage Loans hereunder, and with respect to the
Mortgage Loans sold by such Seller, as of the related Closing Date:
(a) If
the
Seller is Washington Mutual Bank, FA, the Seller is a federally chartered
savings association, duly organized, validly existing and in good standing
under
the laws of the United States. If the Seller is Washington Mutual Bank fsb,
the
Seller is a savings bank, duly organized, validly existing and in good standing
under the laws of the United States. If the Seller is Washington Mutual Bank,
the Seller is a Washington state chartered stock savings bank, duly organized,
validly existing and in good standing under the laws of the State of
Washington.
(b) The
Seller has the corporate power and authority to hold each Mortgage Loan, to
sell
each Mortgage Loan, to enter into, execute and deliver this Agreement, the
Term
Sheet and all documents and instruments executed and delivered pursuant hereto
and to perform its obligations in accordance therewith. The execution, delivery
and performance of this Agreement by the Seller and the consummation of the
transactions contemplated hereby, including, without limitation, the repurchase
obligations hereinafter contained, have been duly and validly authorized. This
Agreement, the Term Sheet and all other documents and instruments contemplated
hereby, in each case assuming due authorization, execution and delivery by
the
Purchaser, evidence the valid, binding and enforceable obligations of the
Seller, subject as to enforcement, (i) to bankruptcy, insolvency,
receivership, conservatorship, reorganization, arrangement, moratorium, and
other laws of general applicability relating to or affecting creditor’s rights
and (ii) to general principles of equity, whether such enforcement is
sought in a proceeding in equity or at law. All requisite corporate action
has
been taken by the Seller to make this Agreement valid and binding upon the
Seller in accordance with its terms.
(c) No
consent, approval, authorization, or order of any court or governmental agency
or body relating to the transactions contemplated by this Agreement and the
transfer of legal title to the Mortgage Loans to the Purchaser, is required
as
to the Seller or, if required, such consent, approval, authorization, or order
has been or shall, prior to the Effective Date, be obtained, except for any
recordations of Assignments of the Mortgages to or for the benefit of the
Purchaser pursuant to this Agreement.
(d) The
consummation of the transactions contemplated by this Agreement, including
without limitation the transfer and assignment of the Mortgage Loans to or
for
the benefit of the Purchaser pursuant to this Agreement and the fulfillment
of
or compliance with the terms and conditions of this Agreement, are in the
ordinary course of business of the Seller and shall not (i) conflict with
any term or provision of the charter or by-laws of the Seller, (ii) result
in the breach of any term or provision of, or conflict with or constitute a
default under, or result in the acceleration of any obligation under, any
material agreement, indenture, loan or credit agreement or other instrument
to
which the Seller or its property is subject, or (iii) result in the
violation of any law, rule, regulation, order, judgment, or decree to which
the
Seller or its property is subject.
24
(e) There
is
no action, suit, proceeding or investigation pending or, to the best of the
Seller’s knowledge, threatened against the Seller which, either in any one
instance or in the aggregate, is likely (in the Seller’s reasonable judgment) to
draw
into
question the validity of this Agreement or the Mortgage Loans, or of any action
taken or to be taken in connection with the obligations of the Seller
contemplated herein or therein, or which would be likely to impair materially
the ability of the Seller to perform its obligations hereunder or
thereunder.
(f) The
Seller is a HUD approved mortgagee pursuant to Section 203
of
the National Housing Act. No event has occurred, including but not limited
to,
a change
in insurance coverage, which would make the
Seller
unable to comply with eligibility
requirements of
HUD.
(g) There
has
been no material adverse change in the business, operation, financial conditions
or assets of the Seller since the date of the Seller’s most recent financial
statements that would affect the Seller’s ability to perform its obligations
under this Agreement.
Section
3.3. Repurchase
and Substitution
(a) It
is
understood and agreed that the representations and warranties set forth in
Sections 3.1 and 3.2 shall survive the sale of Mortgage Loans by each Seller
to
the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment
of
Mortgage or the examination of any Collateral File or Credit File.
(b) Upon
discovery by a Seller (the “Breaching
Seller”)
or the
Purchaser of a Qualification Defect with respect to a Mortgage Loan sold by
the
Breaching Seller or a breach of any of the representations and warranties set
forth in Sections 3.1 or 3.2 made by the Breaching Seller, in each case, that
materially and adversely affects the value of any Mortgage Loan or the interest
of the Purchaser in any Mortgage Loan sold by the Breaching Seller hereunder
(or, in the case of the representations and warranties set forth in
Section 3.2, the value of the Mortgage Loans or the interest of the
Purchaser in the Mortgage Loans sold by the Breaching Seller hereunder), the
party discovering such breach shall give prompt written notice to the other.
The
Breaching Seller shall either
(A) cure
in
all material respects any such breach or defect within 90 days (75 days with
respect to a Qualification Defect) of the earlier of either discovery by or
notice to the Breaching Seller of such breach or defect, or
(B)
in the
case of a breach of a representation and warranty set forth in Section 3.1
or a Qualification Defect, repurchase the affected Mortgage Loan(s), and, in
the
case of a breach of a representation and warranty set forth in Section 3.2,
repurchase either (1) all of the Mortgage Loans or (2) such of the
Mortgage Loans selected by the Purchaser so that, after such repurchase, such
breach or defect is cured in all material respects. Any such repurchase shall
be
at a price equal to the applicable Repurchase Price, shall occur on the next
Monthly Remittance Date and shall be accomplished by deposit in the Account
of
the amount of the Repurchase Price pursuant to Section 2.4 of the Servicing
Agreement. Notwithstanding the foregoing, if the Breaching Seller discovers
or
receives notice of any such breach or defect, and if the affected Mortgage
Loan
has not been subject to a Pass-Through Transfer, the Breaching Seller may remove
any such Mortgage Loan (a “Deleted
Mortgage Loan”),
rather than repurchase any such Mortgage Loan as provided above, and substitute
in its place a Qualified Substitute Mortgage Loan(s). If the Breaching Seller
has
no
Qualified Substitute Mortgage Loan(s) or if the Breaching Seller discovered
or
received notice of such breach or defect no earlier than one year after the
related Closing Date, then the Breaching Seller shall repurchase the
Mortgage
Loan
or
Mortgage Loans, as the case may be, in the manner provided in this
Section 3.3(b).
25
(c) For
each
of the Qualified Substitute Mortgage Loans substituted for a Deleted Mortgage
Loan, the Breaching Seller shall deliver to the Custodian the documents
specified in Section 2.2(a), with the Mortgage Note endorsed as required by
Section 2.2(a) and, where applicable, original documents having evidence of
recording thereon. The Breaching Seller shall also take such actions with
respect to the documents pertaining to each such Qualified Substitute Mortgage
Loan as are required to be taken pursuant to Section 2.2(d) with respect to
the
Mortgage Loans originally subject to this Agreement. For purposes of applying
the requirements of Section 2.2(d) to any Qualified Substitute Mortgage Loan,
references in such Section to the related Closing Date shall be deemed to be
references to the applicable date of substitution of such Qualified Substitute
Mortgage Loan. The Breaching Seller shall deposit in the Account the Monthly
Payment due on each Qualified Substitute Mortgage Loan in the month following
the date of such substitution (with the interest portion thereof adjusted to
the
applicable Net Rate), and the Monthly Payment due with respect to such Qualified
Substitute Mortgage Loan in the month of substitution
shall be retained by the Breaching Seller. For the month of substitution,
distributions to the Purchaser shall include the Monthly Payment due on such
Deleted Mortgage Loan in the month of substitution, and the Breaching Seller
shall thereafter be entitled to retain all amounts subsequently received by
the
Breaching Seller in respect of such Deleted Mortgage Loan. The Breaching Seller
shall amend the related Mortgage Loan Schedule to reflect the removal of
such Deleted Mortgage Loan from the terms of this Agreement and the substitution
of the Qualified Substitute Mortgage Loan(s) and shall give written notice
to
the Purchaser that such substitution has taken place, which notice shall have
attached thereto a copy of such amended Mortgage Loan Schedule in hard copy
or
“read-only” electronic format (as reasonably acceptable to such Breaching Seller
and the Purchaser). Upon such substitution, each such Qualified Substitute
Mortgage Loan shall be subject to the terms of this Agreement in all respects,
and the Breaching Seller shall make and shall be deemed to have made, with
respect to such Qualified Substitute Mortgage Loan(s), as of the date of
substitution, the representations and warranties set forth in Sections 3.1
and
3.2 (and, for purposes of applying such representations and warranties to each
such Qualified Substitute Mortgage Loan, references in such Sections to the
related Closing Date shall be deemed to be references to such date of
substitution of such Qualified Substitute Mortgage Loan).
(d) The
Purchaser shall immediately take all steps necessary to effect the reconveyance
of any repurchased Mortgage Loan or Deleted Mortgage Loan, including all
documentation with respect thereto, to the Breaching Seller. The Breaching
Seller shall pay all costs and expenses incurred in connection with the
repurchase of any Mortgage Loan and the substitution for any Deleted Mortgage
Loan. If, in accordance with Section 3.3(b), a Breaching Seller repurchases
any MERS Loan or substitutes a Qualified Substitute Mortgage Loan for any MERS
Loan, the Servicer shall be authorized to (i) cause the MERS® System to reflect
such repurchase or substitution, as the case may be, or (ii) cause MERS to
remove the repurchased or replaced Mortgage Loan from registration on the MERS®
System and execute and deliver an Assignment of Mortgage to reflect the transfer
of such Mortgage Loan to the Breaching Seller or its designee. The Breaching
Seller shall bear any and all fees of MERS relating to the actions authorized
under this Section 3.3(d).
26
(e) For
any
month in which a Breaching Seller substitutes one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, such Breaching Seller
shall determine the amount, if any, by which the aggregate outstanding principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Unpaid Principal Balance of all such
Deleted Mortgage Loans (after application of scheduled principal payments due
in
the month of substitution). The amount of such shortfall shall be distributed
by
the Breaching Seller on the Monthly Remittance Date following the date of the
substitution pursuant to Section 3.1 of the Servicing Agreement. Pursuant
to Section 2.4 of the Servicing Agreement, the Breaching Seller shall deposit
from its own funds (and without any right of reimbursement therefor) into the
Account an amount equal to the amount of such shortfall.
(f) It
is
understood and agreed that the obligations of a Breaching Seller set forth
in
this Section 3.3 constitute the sole remedies available to the Purchaser
respecting a breach of the representations and warranties by such Breaching
Seller set forth in Section 3.1 and Section 3.2.
(g) Any
cause
of action against a Breaching Seller relating to or arising out of the breach
of
any representation and warranty made by such Breaching Seller in Sections 3.1
and 3.2 shall accrue as to any Mortgage Loan only upon (i) discovery of
such breach by the Purchaser or notice thereof by such Breaching Seller to
the
Purchaser, (ii) failure by such Breaching Seller to cure such breach or
repurchase or substitute a Qualified Substitute Mortgage Loan(s) for such
Mortgage Loan as specified above and (iii) demand upon such Breaching
Seller by the Purchaser for all amounts payable in respect of such Mortgage
Loan.
(h) In
addition to the repurchase obligations set forth above in this Section 3.3,
each Seller shall also be required to repurchase, in the manner provided in
Section 3.3(b) but without any right of such Seller to cure, any Mortgage
Loan sold by such Seller hereunder that is paid in full on or prior to the
related Cut-off Date. Any such Mortgage Loan shall be repurchased by such Seller
at the Repurchase Price.
(i) (A)
In
addition to the cure, repurchase or substitution obligation set forth above
in
this Section 3.3, each Seller shall indemnify the Purchaser and hold it harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and other costs and expenses
resulting from the defense of any claim against the Purchaser by a third party
resulting from a breach of the representations and warranties made by such
Seller in this Article 3; provided, however, that in no event shall such Seller
have any liability for any indirect, special or consequential damages, losses,
costs or expenses incurred by Purchaser.
27
(B)
No
applicable Seller shall be liable for any costs and expenses pursuant to this
Section 3.3(i) unless the Purchaser provides written notice to the Seller that
describes the nature of such claim within a reasonable time after service of
a
summons or other first legal process upon the Purchaser; provided, however,
that
the Purchaser’s failure to notify such Seller pursuant to this paragraph shall
not relieve such Seller from any liability that such Seller may have to the
Purchaser otherwise than on account of this indemnity.
(C)
Each
applicable Seller shall be entitled to participate at its own expense in the
defense, or, if such Seller so elects, to assume the defense of any suit against
the Purchaser by a third party resulting from a breach of the representations
and warranties made by such Seller in this Article 3. If such Seller elects
to
assume the defense of a suit against the Purchaser, such defense shall be
conducted by counsel chosen by such Seller. In the event such Seller elects
to
assume the defense of any such suit and retain such counsel, the Purchaser
may
retain additional counsel but shall bear the fees and expenses of such counsel
unless (x) such Seller and the Purchaser have mutually agreed to the
retention of such counsel or (y) the named parties to such suit (including
any impleaded parties) include both such Seller and the Purchaser and
representation of both such Seller and the Purchaser by the same counsel would
be inappropriate due to actual or potential differing interests between them.
It
is understood that such Seller shall not, in connection with any proceeding
or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one counsel (separate from its own counsel) for the
Purchaser.
(D)
No
applicable Seller shall be required to indemnify any person for any settlement
of any claim effected without such Seller’s consent, which consent shall not be
unreasonably withheld. Such Seller shall not, without the prior written consent
of the Purchaser, which consent shall not be unreasonably withheld, effect
any
settlement of any pending or threatened proceeding to which the Purchaser is
a
party and indemnity is sought hereunder by the Purchaser unless such settlement
includes an unconditional release of the Purchaser from all liability on claims
that are the subject matter of such proceeding.
ARTICLE
4.
COVENANTS
Section
4.1. Cooperation
Each
of
the Sellers and the Purchaser shall cooperate fully with each other and their
respective counsel and other representatives and advisors in connection with
the
steps required to be taken as part of their respective obligations under this
Agreement.
28
Section
4.2. Representations,
Warranties, Covenants and Indemnities
Each
representation, warranty, covenant and indemnity made by a Seller in this
Agreement as of each Closing Date shall survive the execution of this Agreement
and the expiration or termination of this Agreement.
Section
4.3. Delivery
of Documents
On
the
dates specified herein, each party shall deliver to the appropriate persons
specified herein all documents and instruments provided for
hereunder.
Section
4.4. Consents
and Approvals
Each
Seller shall obtain, at its sole cost and expense, prior to each Closing Date,
all consents and approvals required by law or pursuant to contract to consummate
the transactions contemplated hereby. All such consents shall be obtained
without any cost or expense to the Purchaser and shall be obtained without
any
modification in the terms of any of the agreements relating to the Mortgage
Loans or the imposition of any provisions or conditions on the
Purchaser.
Section
4.5. Confidentiality
(a) Each
party understands that certain information that has been furnished and shall
be
furnished in connection with the transactions contemplated under this Agreement
is confidential and proprietary, and each party agrees that, with respect to
such information that is marked or identified as confidential or proprietary,
or
required by applicable law (including, without limitation, the
Xxxxx-Xxxxx-Xxxxxx Act and the regulations promulgated thereunder) to be kept
confidential, such party shall maintain the confidentiality of such information
and shall not, without the written consent of the party furnishing such
information, disclose it to third parties or use it except in connection with
the transactions contemplated by this Agreement, as permitted by applicable
law
or as permitted in Section 4.5(b) below. The parties agree that the following
items, except as provided in Section 4.5(b) below, shall be deemed confidential
for purposes of this Section 4.5: (a) each completed Term Sheet and (b)
each Commitment Letter. The parties agree that the following items shall not
be
deemed confidential for purposes of this Section 4.5, unless otherwise
required by applicable law: (i) this Agreement (except as provided above),
(ii)
each Mortgage Loan Schedule, (iii) the underwriting guidelines of each Seller,
(iv) information generally known in the industry concerning a party, (v)
information disclosed to the receiving party by a third party and (vi)
information that is required to be disclosed by law, or regulatory or judicial
process.
(b) Notwithstanding
any other provision of this Agreement (including the confidentiality provision
in Section 4.5(a)), each Seller, the Purchaser and the Servicer (and each
employee, representative or other agent of any of the foregoing) may disclose
to
any and all persons, without limitation of any kind, the “tax treatment” and
“tax structure” of all transactions covered by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to
any
of the foregoing parties relating to such tax treatment and tax structure.
For
this purpose, “tax treatment” means U.S. federal income tax treatment, and “tax
structure” is limited to any facts that may be relevant to that
treatment.
29
Section
4.6. Servicing
Each
of
Washington Mutual Bank and Washington Mutual Bank fsb, for purposes of the
servicing of all Mortgage Loans sold by it hereunder, hereby appoints Washington
Mutual Bank, FA as its agent and subservicer for purposes of acting as Servicer
and servicing such Mortgage Loans on behalf of the Purchaser pursuant
to
the
Servicing Agreement. Each
of
the Sellers shall cause
the
Servicing Agreement
to be
executed by the Servicer on or before the Initial Closing Date.
ARTICLE
5.
CONDITIONS
TO PURCHASE
The
obligations of the Purchaser to purchase any Mortgage Loans on any Closing
Date
are subject to the satisfaction, as applicable, prior to or on the Initial
Closing Date and on such Closing Date (or on such other date as expressly
provided for herein) of the following conditions, any of which may be waived
in
writing by Purchaser:
Section
5.1. Effective
Date and Closing Date Documents
On
the
Effective Date, the Purchaser shall have received the Effective Date Documents
duly executed by all signatories thereto. At each subsequent Closing Date,
the
Purchaser and the applicable Sellers each shall furnish to the other a fully
executed counterpart of the Term Sheet.
Section
5.2. Correctness
of Representations and
Warranties
All
of
the representations and warranties of the applicable Seller or Sellers under
this Agreement shall be true and correct as of such Closing Date (except as
otherwise expressly provided for herein), and no event shall have occurred
which, with notice or the passage of time, would constitute a default under
this
Agreement.
Section
5.3. Compliance
With Conditions
All
other
terms and conditions of this Agreement to be performed by the applicable Seller
or Sellers on or prior to such Closing Date (or such other date as expressly
provided for herein) shall have been duly complied with and performed in all
respects.
30
ARTICLE
6.
PASS-THROUGH
AND WHOLE LOAN TRANSFERS
Section
6.1. Pass-Through
Transfers or Whole-Loan
Transfers
(a) Upon
15
days’ prior written notice of intent to the applicable Seller(s) and the
Servicer, the Purchaser may, at its sole option, effect one or more Whole Loan
Transfers or Pass-Through Transfers with respect to some or all of the Mortgage
Loans in a Loan Pool purchased on any Closing Date, retaining the Servicer
as
the servicer or subservicer if a Master Servicer is employed as provided in
Section 6.2; provided, however, that neither the Purchaser nor any of its
permitted assignees may effect a Whole Loan Transfer or a Pass-Through Transfer
with respect to Mortgage Loans in any Loan Pool if as a result: (i) more than
three investors (other than the Purchaser) would own Mortgage Loans in such
Loan
Pool at any one time (unless otherwise stated in the related Commitment Letter),
(ii) any single investor (other than the Purchaser) would own Mortgage Loans
from such Loan Pool having an aggregate Unpaid Principal Balance immediately
after such Whole Loan Transfer or Pass-Through Transfer of less than $5,000,000,
(iii) the applicable Seller(s) and the Servicer are not provided with initial
drafts of all documents for which such Sellers and Servicer are requested to
become a party in connection with such Whole Loan Transfer or Pass-Through
Transfer at least 10 days prior to the related settlement date (the
“Subsequent
Transfer Settlement Date”),
(iv)
a final list of the Mortgage Loans subject to such Whole Loan Transfer or
Pass-Through Transfer is not provided to the Servicer at least 2 Business Days
prior to the related Subsequent Transfer Settlement Date, (v) any Mortgage
Loan
is subject to more than one Whole Loan Transfer or Pass-Through Transfer in
any
given Due Period, or (vi) the related Subsequent Transfer Settlement Date occurs
on or prior to the related Servicing Cut-off Date.
(b) Purchaser
shall reimburse each Seller for all reasonable out-of-pocket expenses, including
attorneys’ fees, incurred by such Seller in connection with each Whole Loan
Transfer or Pass-Through Transfer.
(c) In
connection with each Whole Loan Transfer or Pass-Through Transfer permitted
under this Section 6.1, each of the Sellers, as applicable,
shall:
(i) provide
the Purchaser with information and appropriate verification of information
in
its possession or control as may reasonably be necessary in order to effect
such
Whole Loan Transfer or Pass-Through Transfer (and, to the extent any such
information is in the possession or control of any third party, use commercially
reasonable efforts to cause such third party to provide such information);
and
(ii) cooperate
with all reasonable requests and due diligence procedures not otherwise
addressed herein.
(d) With
respect to any Whole Loan Transfer or Pass-Through Transfer permitted under
this
Section 6.1 in which a prospectus, prospectus supplement or other
disclosure document (a “Disclosure
Document”)
is
prepared in connection therewith, and in which a substantial portion of the
mortgage loans in the related transaction consist of Mortgage Loans, each of
the
Sellers, as applicable, shall:
31
(i) provide
for inclusion as part of such Disclosure Document (A) the regulatory status
of
such Seller and its affiliates, (B) the origination and underwriting criteria
related to the applicable Mortgage Loans sold by such Seller, (C) delinquency
and foreclosure information of the type typically provided by such Seller in
connection with mortgage loans originated by such Seller and securitized by
third parties and (D) updated information with respect to the Mortgage Loans
as
of the related Whole Loan Transfer or Pass-Through Transfer (the information
referred to in this sentence, in the form provided to Purchaser, being “Seller’s
Information”); and
(ii) execute
and deliver an Indemnification Agreement in substantially the form attached
hereto as Exhibit C.
(e) With
respect to any Pass-Through Transfer permitted under this Section 6.1 in
which all or substantially all of the mortgage loans in the related transaction
consist of Mortgage Loans, each of the applicable Sellers shall:
(i) execute
and deliver a pooling and servicing agreement containing terms and conditions
that are consistent with the terms and conditions set forth herein and in the
Servicing Agreement and that are customary for public, rated transactions for
the issuance of pass-through certificates backed by mortgage loans similar
to
the Mortgage Loans included in such Pass-Through Transfer, provided, that (A)
any servicing reporting requirements must be consistent with the standard
practices of Washington Mutual Bank, FA and (B) each of the parties to such
pooling and servicing agreement negotiates in good faith any terms or conditions
in such pooling and servicing agreement not specifically referenced or provided
for under this Agreement or the Servicing Agreement;
(ii) provide
Purchaser with opinions of counsel as to such Seller’s corporate authority and
the enforceability of the pooling and servicing agreement against such Seller,
audit letters addressing the delinquency and foreclosure statistics of
Washington Mutual Bank, FA and certificates from public officials, each as
such
Seller shall reasonably determine to be necessary to effect such Pass-Through
Transfer; and
(iii) upon
the
reasonable request of the Purchaser, execute and deliver a reconstituted sale
agreement pursuant to which such Seller shall make the representations and
warranties set forth on Exhibit D
with
respect to the applicable Mortgage Loans, effective as of the date of such
reconstituted sale agreement, provided that (A) the related Mortgage Loans
have
been transferred by the Purchaser to a third party within six months of the
related Closing Date, (B) the representations and warranties made in such
reconstituted sale agreement shall supercede and replace all representations
and
warranties made in Section 3.1 hereof with respect to such Mortgage Loans
and (C) in no event shall any Seller be obligated to make any representation
or
warranty regarding any Mortgage Loan that is untrue.
32
(f) With
respect to any Whole Loan Transfer or Pass-Through Transfer in which a
Disclosure Document is prepared in connection therewith, the Purchaser
shall:
(i) provide
each Seller with all drafts of the Seller’s Information when produced and revise
the Seller’s Information in accordance with such Seller’s comments to correct
any information therein at the Purchaser’s cost; and
(ii) (A)
indemnify and hold harmless each of the Sellers against any losses, claims,
damages or liabilities to which such Seller may become subject, under the
Securities Act of 1933, as amended, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) (x) arise out
of
or are based upon any untrue statement of any material fact contained in such
Disclosure Document (other than an untrue statement of material fact contained
in the Seller’s Information), or (y) arise out of or are based upon the omission
to state in such Disclosure Document a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (unless the material
fact omitted would constitute Seller’s Information) and (B) reimburse each
Seller for any legal or other expenses reasonably incurred by such Seller in
connection with investigating or defending any such loss, claim, damage,
liability or action.
Section
6.2. Designation
of a Master Servicer
Notwithstanding
anything to the contrary contained in this Agreement, but subject to the terms
of the Servicing Agreement, the Purchaser shall have the right, in its sole
discretion, upon 30 days’ prior written notice to the Sellers, to appoint and
designate a master servicer (the “Master
Servicer”),
as
master servicer of any Mortgage Loans subject to a Whole Loan Transfer or
Pass-Through Transfer permitted under Section 6.1. Upon such appointment,
the Sellers shall correspond and communicate solely with the Master Servicer,
as
if the Master Servicer were the “Purchaser” hereunder. Furthermore, the Master
Servicer shall have all rights as designee of the Purchaser to enforce the
representations and warranties, and all other covenants and conditions set
forth
in this Agreement, and the Sellers shall follow and shall be entitled to rely
on
the instructions of the Master Servicer under this Agreement as if such
instructions were the instructions of the Purchaser. The Master Servicer shall
have the right to give any waivers or consents required or allowed under this
Agreement on behalf of the Purchaser, and the Sellers shall have the right
to
rely on all such waivers and consents. The Master Servicer shall be empowered
to
enter into and execute and deliver any amendments or modifications to this
Agreement as the Purchaser’s designee hereunder, and such amendments or
modifications shall be binding upon the Purchaser as if the Purchaser had
executed and delivered the same.
33
ARTICLE
7.
MISCELLANEOUS
PROVISIONS
Section
7.1. Amendment
This
Agreement may be amended from time to time by the Sellers and the Purchaser
solely by written agreement signed by the Sellers and the
Purchaser.
Section
7.2. Recordation
of Agreement
(a) To
the
extent necessary under applicable law to protect the interests of the Purchaser,
this Agreement or a memorandum thereof is subject to recordation in all
appropriate public offices for real property records in all the counties and
other comparable jurisdictions in which any or all of the Mortgaged Properties
are situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Sellers at the Purchaser’s expense upon
direction of the Purchaser.
(b) Each
Seller agrees to execute or cause to be executed such documents and take or
cause to be taken such actions as may be necessary to effect the intent of
this
Agreement, including without limitation the execution and delivery of
instruments of further assurance and the execution and delivery of such other
documents, and the taking of such other actions as may be reasonably requested
by the Purchaser.
Section
7.3. Governing
Law
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws without giving effect
to conflict of laws principles other than Section 5-1401 of the New York
General Obligations Law.
Section
7.4. General
Interpretive Principles
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(i) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(ii) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
34
(iii) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs, and other subdivisions of this
Agreement;
(iv) a
reference to a subsection without further reference to a Section is a
reference to such subsection as contained in the same Section in which
the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(v) the
words
“herein,” “hereof,” “hereunder,” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(vi) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
Section
7.5. Reproduction
of Documents
This
Agreement and all documents relating hereto, including (i) consents,
waivers, and modifications which may hereafter be executed, (ii) the
Effective Date Documents, all Commitment Letters, Term Sheets and Mortgage
Loan
Schedules and (iii) financial statements, certificates, and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, microcard, miniature photographic, or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not
such
reproduction was made by a party in the regular course of business, and that
any
enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section
7.6. Notices
All
demands, notices, consents, waivers and other communications hereunder shall
be
in writing and shall be deemed to have been duly given upon receipt if
personally delivered, sent by facsimile, mailed by registered mail, postage
prepaid or delivered by a nationally recognized overnight courier, to
(i)
in
the case of the Sellers:
Washington
Mutual Bank, XX
Xxxxxxxxxx
Mutual Bank fsb
Washington
Mutual Bank
0000
Xxxxx Xxxxxx, XXX0000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention:
General Counsel
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
35
(ii)
in
the case of the Servicer:
Washington
Mutual Bank, FA
00000
Xxxxxxx Xx. (Mail Stop N070205)
Xxxxxxxxxx,
XX 00000
Attention:
Vice President of Investor Reporting
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
or
such
other address as may hereafter be furnished to the Purchaser in writing by
a
Seller or the Servicer, and
(iii)
in
the case of the Purchaser:
Xxxxxxx
Xxxxx Mortgage Company
00
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxx Xxxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With
a
copies to:
Legal
Department
Xxxxxxx
Xxxxx Mortgage Company
00
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
and
Xxxxxxx
Sachs Mortgage Company
000
Xxxxxx Xxxxxx Xxxxx, Xxxxx 000 Xxxxx
Xx.
Xxxxxxxxxx, XX 00000
Attention:
Xxxxxx Xxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
or
such
other address as may hereafter be furnished to each of the Sellers and the
Servicer in writing by the Purchaser.
Notwithstanding
the foregoing, any demand, notice, consent, waiver or communication may be
given
by any other means if the parties hereto agree to such alternative means in
writing.
36
Section
7.7. Severability
of Provisions
If
any
one or more of the covenants, agreements, provisions, or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Agreement and shall in
no
way affect the validity or enforceability of the other covenants, agreements,
provisions, or terms of this Agreement or the rights of the parties hereunder.
If the invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate in good faith to
develop a structure the economic effect of which is as nearly as possible the
same as the economic effect of this Agreement without regard to such
invalidity.
Section
7.8. Exhibits
The
exhibits to this Agreement and each of the Commitment Letters are hereby
incorporated and made a part hereof and are an integral part of this
Agreement.
Section
7.9. Counterparts;
Successors and
Assigns
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. This Agreement shall inure to the benefit of and be
binding upon the Sellers and the Purchaser. Notwithstanding the foregoing,
(a)
none of the Sellers shall assign its rights and obligations under this Agreement
without the prior written consent of the Purchaser, which consent shall not
be
unreasonably withheld or delayed and (b) the Purchaser may not assign its rights
and obligations under this Agreement except (i) as provided in Article 6, or
(ii) with the prior written consent of the applicable Seller or Sellers, which
consent shall not be unreasonably withheld or delayed (in which case all
references to the Purchaser herein shall be deemed to include such assignee
or
designee).
Section
7.10. Effect
of
Headings
The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.
Section
7.11. Other
Agreements Superseded; Entire
Agreement
This
Agreement supersedes all prior agreements and understandings (other than any
Commitment Letter delivered prior to the date hereof) relating to the subject
matter hereof. This Agreement, together with all Commitment Letters and Term
Sheets delivered or entered into pursuant hereto constitute the entire agreement
of the parties with respect to the subject matter hereof.
If any
provision of the Term Sheet conflicts with any provision of the Agreement,
the
Term Sheet shall control. If any provision of this Agreement conflicts with
any
provision of any Commitment Letter, the provisions of this Agreement shall
control.
37
Section
7.12. Survival
The
representations, warranties, indemnities, covenants and agreements of the
parties provided in this Agreement and the parties’ obligations hereunder shall
survive the execution and delivery and the termination or expiration of this
Agreement.
Section
7.13. Intention
of the
Parties
It
is the
intention of the parties that the Purchaser is purchasing, and each Seller
is
selling Mortgage Loans and not a debt instrument of such Seller or other
security. Accordingly, the parties hereto each intend to treat each of the
transactions hereunder for federal income tax purposes as a sale by each Seller,
as applicable, and a purchase by the Purchaser, of Mortgage Loans. The Purchaser
shall have the right to review the Mortgage Loans and the related Credit Files
to determine the characteristics of the Mortgage Loans which shall affect the
federal income tax consequences of owning the Mortgage Loans, and the applicable
Seller or Sellers shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
Section
7.14. Nonsolicitation
Each
Seller covenants and agrees that it shall not take any action to solicit the
refinancing of any Mortgage Loan following the date hereof or provide
information to any other entity to solicit the refinancing of any Mortgage
Loan;
provided that, the foregoing shall not preclude such Seller or any of its
affiliates from (a) engaging in general solicitations to its customer base,
including by mass mailing or as part of monthly or periodic statements mailed
to
its borrowers or to holders of deposit or other accounts, (b) engaging in
solicitations to the general public, including without limitation by mass
mailing, newspaper, radio, television or other media which are not specifically
directed toward the Mortgagors, (c) engaging in solicitations of optional
insurance or other bank products (not including mortgage loans) (d) refinancing
the Mortgage Loan of any Mortgagor who, without solicitation, contacts a Seller
to request the refinancing of the related Mortgage Loan, or (e) engaging in
any
action to solicit the refinancing of any Mortgage Loan to the extent such action
would be permitted under the Xxxxxx Mae Selling Guide or the Xxxxxx Xxx
Servicing Guide.
Section
7.15. Costs
Except
as
otherwise provided in Section 2.2(b), each Seller shall pay all costs, fees
and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans sold by such Seller under this Agreement for Seller’s accountants,
attorneys and other service providers, including any broker, investment banker,
agent or other Person hired by the Seller that may be entitled to any commission
or compensation in connection with the sale of the Mortgage Loans.
38
Section
7.16. Obligations
of the
Sellers
The
obligations and liability of each of the Sellers under this Agreement are
several, and no Seller shall be responsible for the obligations of any other
Seller under this Agreement. Each representation, warranty, indemnity and
covenant made by one Seller under the Agreement is made by, or on behalf of,
and
with respect to, that Seller only and not any other Seller.
Section
7.17. Attorneys’
Fees
If
any
party retains an attorney to enforce any of the provisions of this Agreement,
the prevailing party shall be entitled to reasonable attorneys’ fees from the
non-prevailing party (or parties), including, without limitation, fees incurred
in arbitration and in trial and appellate courts, fees incurred without suit,
and all arbitration, court and accounting costs.
[signatures
follow]
39
TO
WITNESS THIS,
the
Sellers and the Purchaser have caused their names to be signed to this Mortgage
Loan Purchase and Sale Agreement by their duly authorized respective officers
as
of the day and year first above written.
|
WASHINGTON
MUTUAL BANK, FA
a
federally chartered savings association
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
|
WASHINGTON
MUTUAL BANK fsb
a
federal savings bank
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
|
WASHINGTON
MUTUAL BANK
a
Washington state chartered stock savings bank
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
40
|
XXXXXXX
SACHS MORTGAGE COMPANY
a
New York limited partnership
|
||
| By: |
Xxxxxxx
Xxxxx Real Estate Funding Corp.,
General Partner |
|
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
41
| STATE OF WASHINGTON | ) |
| ) ss. | |
| COUNTY OF KING | ) |
This
instrument was acknowledged before me on ______________________, 200_, by
_____________________ as _________________________ of Washington Mutual Bank,
FA.
|
__________________________________
[Print Name]_________________________
NOTARY PUBLIC in and for the State of Washington, residing at ____________________ My commission expires _____________________ |
| STATE OF WASHINGTON | ) |
| ) ss. | |
| COUNTY OF KING | ) |
This
instrument was acknowledged before me on ______________________, 200_, by
_____________________ as _________________________ of Washington Mutual Bank
fsb.
|
__________________________________
[Print Name]_________________________
NOTARY PUBLIC in and for the State of Washington, residing at ____________________ My commission expires _____________________ |
| STATE OF WASHINGTON | ) |
| ) ss. | |
| COUNTY OF KING | ) |
This
instrument was acknowledged before me on ______________________, 200_, by
_____________________ as _________________________ of Washington Mutual
Bank.
|
__________________________________
[Print Name]_________________________
NOTARY PUBLIC in and for the State of Washington, residing at ____________________ My commission expires _____________________ |
| STATE OF | ) |
| ) ss. | |
| COUNTY OF | ) |
This
instrument was acknowledged before me on ______________________, 200_, by
_____________________ as _________________________ of
_______________.
|
__________________________________
[Print Name]_________________________
NOTARY PUBLIC in and for the State of __________, residing at ____________________ My commission expires _____________________ |
EXHIBIT A-1
CONTENTS
OF COLLATERAL FILE
With
respect to each Mortgage Loan, unless otherwise agreed by the applicable Seller
and the Purchaser, the Collateral File shall include each of the following
items:
A. With
respect to each Mortgage Loan (other than a Cooperative Loan):
| 1. |
(i)
The original Mortgage Note, endorsed (on the Mortgage Note or an
allonge
attached thereto) “Pay to the order of _______________________, without
recourse,” (or as otherwise specified in the related Commitment Letter),
and signed by facsimile signature in the name of such Seller by an
authorized officer, with all intervening endorsements showing a complete,
valid and proper chain of title from the originator of such Mortgage
Loan
to such Seller; or
|
(ii)
to
the extent permitted in Section 2.2(a)(i)(A)(2) of the Agreement or the
applicable Commitment Letter or Term Sheet, a lost note affidavit, providing
indemnification to the holder thereof for any losses incurred due to the fact
that the original Mortgage Note is missing, together with a copy of the Mortgage
Note.
| 2. |
The
original Mortgage, with evidence of recording thereon (and in the
case of
a MOM Loan, with evidence of the MIN), or if such Mortgage has been
lost
or if such public recording office retains the original recorded
Mortgage,
a photocopy of such Mortgage certified by such public recording office
to
be a true and complete copy of the original recorded
Mortgage.
|
| 3. |
Unless
such Mortgage Loan is a MERS Loan, the original Assignment of Mortgage,
from the Seller signed by original signature of an authorized officer,
in
blank (or as otherwise specified in the related Commitment Letter),
which
assignment shall be in form and substance acceptable for recording
(except
for the insertion of the name of the assignee and recording
information).
|
| 4. |
Unless
such Mortgage Loan is a MOM Loan, originals of all intervening Assignments
of Mortgage, with evidence of recording thereon, showing a complete
chain
of title from the originator to the Seller (or in the case of a MERS
Loan
other than a MOM Loan showing a complete chain of title from the
originator to MERS), or if any such original intervening Assignment
of
Mortgage is permanently retained by the applicable recording office,
or if
such original Assignment of Mortgage has been lost, a photocopy of
each
such original, certified by the applicable public recording office
to be a
true and complete copy of the
original.
|
A-1-1
| 5. |
Originals
of all assumption and modification agreements, if any, unless such
originals are unavailable (in which event such Seller shall deliver
to the
Custodian a photocopy of each such original, certified by the Seller
to be
a true and complete copy of the
original).
|
B. With
respect to each Cooperative Loan, as applicable, copies of (1) the proprietary
lease; (2) the security agreement; (3) the assignment of the proprietary lease,
with all intervening assignments showing a complete chain of title and an
assignment thereof by the applicable Seller; (4) the original stock certificate
evidencing the ownership of the Cooperative Apartment, endorsed or accompanied
by a stock power relating to such stock certificate executed in blank; (5)
a
recognition agreement in form approved by the applicable Seller’s underwriting
guidelines, in substantially the same form as the standard “AZTECH” form; (6)
copies of the financing statement filed by the applicable Seller as secured
party and, if applicable, a filed UCC-3 assignment of the subject security
interest showing a complete chain of title, together with an executed UCC-3
Assignment of such security interest by the applicable Seller in a form
sufficient for filing; and (7) such other documents as are necessary for the
perfection of a lien against the related Coop Ownership Interests under
applicable law.
X-0-0
XXXXXXX X-0
CONTENTS
OF CREDIT FILE
With
respect to each Mortgage Loan, unless otherwise agreed by the applicable Seller
and the Purchaser, the Credit File shall include each of the following
items:
| 1. |
Copy
of survey of the Mortgaged Property, if
available.
|
| 2. |
Copy
of each instrument necessary to complete identification of any exception
set forth in the exception schedule in the title policy (i.e., map
or
plat, restrictions, easements, sewer agreements, home association
declarations, etc.).
|
| 3. |
Evidence
of a hazard insurance policy and, if required by law, a flood insurance
policy, with extended coverage of the hazard insurance policy. (Note:
Evidence shall be maintained by the applicable Seller in electronic
form.
The applicable Seller shall produce a paper copy of such evidence
upon
request by the Purchaser.)
|
| 4. |
Mortgage
Loan closing statement (Form HUD-1) and any other truth-in-lending
or real
estate settlement procedure forms required by
law.
|
| 5. |
Residential
loan application.
|
| 6. |
Verification
of employment and income (if required pursuant to the Seller’s
underwriting criteria).
|
| 7. |
Verification
of acceptable evidence of source and amount of down payment (to the
extent
required under the Seller’s underwriting
guidelines).
|
| 8. |
Credit
report on the Mortgagor.
|
| 9. |
Residential
appraisal report.
|
| 10. |
Photograph
of the property.
|
| 11. |
Executed
disclosure statement.
|
| 12. |
Tax
receipts, insurance premium receipts, ledger sheets, payment records,
insurance claim files and correspondence, correspondence, current
and
historical computerized data files, underwriting standards used for
origination, and all other papers and records developed or originated
by
the applicable Seller or others required to document the Mortgage
Loan or
to service the Mortgage Loan.
|
A-2-1
| 13. |
A
certified copy or an imaged copy on CD ROM of the policy of title
insurance, including any endorsements
thereto.
|
| 14. |
A
certified copy or an imaged copy on CD ROM of the executed Power
of
Attorney, if any.
|
| 15. |
A
certified copy or an imaged copy on CD ROM of the original Primary
Mortgage Insurance Policy, if any.
|
A-2-2
EXHIBIT B
TERM
SHEET
(Washington
Mutual—__________)
This
Term
Sheet
(the
“Term Sheet”) is dated _____, by ____________________ [INSERT
one or
more of the following parties: WASHINGTON MUTUAL BANK, FA, a savings association
organized under the laws of the United States, WASHINGTON MUTUAL BANK fsb,
a
savings bank organized under the laws of the United States and WASHINGTON MUTUAL
BANK, a Washington state chartered stock savings bank],
as
sellers (each, a “Seller” and, collectively, the “Sellers”) and Xxxxxxx
Xxxxx Mortgage Company, a New York limited partnership
(the
“Purchaser”).
This
Term
Sheet is made pursuant to the terms and conditions of the Mortgage Loan Purchase
and Sale Agreement (the “Agreement”), dated as of December 1, 2003, among
Sellers and the Purchaser, the provisions of which are incorporated here, as
such terms may be modified or supplemented here. All capitalized terms shall
have the meanings ascribed to them in the Agreement, unless otherwise defined
here.
The
Purchaser hereby purchases from Sellers and each Seller hereby sells to the
Purchaser, severally and not jointly, all of Seller’s right, title and interest
in and to the Mortgage Loans described on the Mortgage Loan Schedule attached
hereto as Schedule I,
in
accordance with the terms of the Agreement, as such terms may be supplemented
or
modified by this Term Sheet. From this date forward, Washington Mutual Bank,
FA,
shall service the Mortgage Loans for the benefit of the Purchaser and all
subsequent transferees of the Mortgage Loans in accordance with the terms of
the
Servicing Agreement, dated as of December 1, 2003, between Washington Mutual
Bank, FA, as servicer, and Purchaser.
1.
DEFINITIONS
For
purposes of the Mortgage Loans to be sold pursuant to this Term Sheet, the
following terms shall have the following meanings:
| Aggregate Principal Balance (as of the Cut-Off Date): |
_______________________________
|
|
| Closing Date: | _______________________________ | |
| Custodian: | _______________________________ | |
| Cut-off Date: | _______________________________ | |
| Initial Weighted
Average Mortgage Loan Net Rate: |
_______________________________ | |
| Mortgage Loan Type: | _______________________________ | |
| Purchase Price Percentage: | _______________________________ | |
| Servicing Fee Rate: | _______________________________ |
B-1
2.
Additional
Closing Conditions:
a.
The
Purchaser or any of its permitted assignees shall not effect a Whole Loan
Transfer or a Pass-Through Transfer unless the following conditions are met:
(i)
the maximum number of investors (other than the Purchaser) that own the Mortgage
Loans at any one time is three, (ii) no single investor (other than the
Purchaser) owns Mortgage Loans having an aggregate Unpaid Principal Balance
immediately after such Whole Loan Transfer or Pass-Through Transfer of less
than
$5,000,000, (iii) the applicable Seller(s) and the Servicer are provided with
initial drafts of all documents for which such Sellers and Servicer are
requested to become a party in connection with such Whole Loan Transfer or
Pass-Through Transfer at least 10 days prior to the Subsequent Transfer
Settlement Date, (iv) a final list of the Mortgage Loans subject to such Whole
Loan Transfer or Pass-Through Transfer is provided to the Servicer at least
2
Business Days prior to the related Subsequent Transfer Settlement Date, (v)
no
Mortgage Loan is subject to more than one Whole Loan Transfer or Pass-Through
Transfer in any given Due Period and (vi) the Subsequent Transfer Settlement
Date occurs after the related Servicing Cut-off Date.
b.
The
aggregate Unpaid Principal Balance of Mortgage Loans in the Loan Pool as to
which lost note affidavits shall be accepted by the Purchaser shall not exceed
___________ percent (__%) of the aggregate Unpaid Principal Balance of all
Mortgage Loans in the Loan Pool.
c.
In
addition to the foregoing and to the conditions specified in the Agreement,
the
obligation of each of the Sellers and the Purchaser is subject to the
fulfillment, on or prior to the relevant Closing Date, of the following
additional conditions:
[None].
3.
Additional
Loan Documents:
a.
In
addition to the contents of the Collateral File specified in the Agreement,
the
following documents shall be delivered with respect to the Mortgage Loans:
[None].
B-2
4.
[Additional]
[Modification of] Representations and Warranties:
a.
In
addition to the representations and warranties set forth in the Agreement,
as of
the date hereof, the applicable Seller makes the following additional
representations and warranties with respect to each of the Mortgage Loans to
be
sold by such Seller on the Closing Date:
(i) No
Mortgage Loan originated on or after October 1, 2002 will impose a prepayment
premium for a term in excess of three years after its origination. No Mortgage
Loan originated before October 1, 2002 will impose a prepayment premium for
a
term in excess of five years after its origination.
[Other].
b.
[Notwithstanding anything to the contrary set forth in the Agreement, with
respect to each Mortgage Loan to be sold on the Closing Date or with respect
to
each of the Sellers, the representations and warranties set forth in Section
3.1
and Section 3.2 of the Agreement shall be modified to read as
follows:
[No
change].
c.
Except
as modified here, Sections 3.1 and 3.2 of the Agreement remain in full force
and
effect as of the date of this Term Sheet.
5.
Tax Treatment and Tax Structure
Notwithstanding
any other provision of this Term Sheet or the Agreement (including any
confidentiality provision) or the terms of any confidentiality provisions in
any
other agreements between the parties relevant to the Mortgage Loans, each
Seller, the Purchaser and the Servicer (and each employee, representative or
other agent of any of the foregoing) may disclose to any and all persons,
without limitation of any kind, (i) the “tax treatment” and “tax structure” of
all transactions covered by this Term Sheet, the Agreement or any other
agreements between the parties relevant to the Mortgage Loans and (ii) all
materials of any kind (including opinions or other tax analyses) that are
provided to any of the foregoing parties relating to such tax treatment and
tax
structure. For this purpose, “tax treatment” means U.S. federal income tax
treatment, and “tax structure” is limited to any facts that may be relevant to
that treatment.
[signatures
follow]
B-3
TO
WITNESS THIS,
the
parties have caused their names to be signed by their respective duly authorized
officers as of the date first written above.
|
WASHINGTON
MUTUAL BANK, FA
a
federally chartered savings association
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
|
WASHINGTON
MUTUAL BANK fsb
a
federal savings bank
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
|
WASHINGTON
MUTUAL BANK
a
Washington state chartered stock savings bank
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
B-4
|
XXXXXXX
XXXXX MORTGAGE COMPANY
a
New York limited partnership
|
||
| By: |
Xxxxxxx
Sachs Real Estate Funding Corp.,
General Partner |
|
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
B-5
SCHEDULE
I TO TERM SHEET
MORTGAGE
LOAN SCHEDULE *
*
To be
attached as diskette in “read-only” format.
i
EXHIBIT
C
FORM
OF INDEMNIFICATION AGREEMENT
[Date]
[Depositor
Name]
[Depositor
Address]
[Depositor
Address]
Re: [Name
of
Securities]
Ladies
and Gentlemen:
The
following terms shall have the meanings indicated:
“Act”
shall mean The Securities Act of 1933, as amended.
“Claims”
shall mean losses, third-party claims, damages, joint or several liabilities
or
expenses (including the reasonable cost of investigating and defending against
any third-party claims including related counsel fees, except as otherwise
provided herein); for avoidance of doubt, including those resulting in amounts
payable by an Indemnified Party to any third party, including affiliates of
such
Indemnified Party.
“Controlling
Person” shall mean each person, if any, who controls a party to this letter
agreement within the meaning of Section 15 of the Act.
“Indemnified
Party” shall mean a party to this letter agreement (in its own right and on
behalf of its related Controlling Persons and its or such Controlling Persons’
present and former officers, directors, employees and assignees) entitled to
an
indemnification under the terms of this letter agreement.
“Indemnifying
Party” shall mean a party to this letter agreement obligated to indemnify an
Indemnified Party under the terms of this letter agreement.
“Prospectus
Supplement” shall mean the prospectus supplement dated on or about ____________,
200_ under the Act related to the securities described in the subject line
of
this letter agreement.
“Seller”
shall mean, as the context requires, any of Washington Mutual Bank, FA,
Washington Mutual Bank fsb and/or Washington Mutual Bank.
“Seller
Information” shall mean the information contained on Exhibit A attached
hereto.
C-1
Capitalized
terms not otherwise defined herein have the meanings ascribed to such terms
in
the Pooling and Servicing Agreement, dated as of ____________, 200_ (the
“Pooling and Servicing Agreement”), among ______________, as depositor,
________________, as trustee, ____________________, as a seller, and
________________, as a seller and servicer.
Each
of
the Sellers, severally and not jointly, represents and warrants that the Seller
Information related to such Seller does not (1) contain any untrue statement
of
a material fact or (2) omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. In the event of a breach of the foregoing representation and
warranty, each Seller agrees to indemnify and hold harmless each addressee
of
this letter agreement, each of its related Controlling Persons and each of
their
respective present and former officers, directors, employees and assignees
against any Claim that may be based upon the Act, or any other statute or at
common law, on the ground or alleged ground that the Prospectus Supplement,
to
the limited extent of the Seller Information related to such Seller contained
therein, (1) contains an untrue statement of a material fact, or (2) omits
to
state any material fact necessary to make the statements therein, in light
of
the circumstances under which they were made, not misleading.
Each
addressee of this letter agreement represents and warrants that the Prospectus
Supplement, exclusive of the Seller Information, does not (1) contain any untrue
statement of a material fact or (2) omit to state any material fact necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading. In the event of a breach of the foregoing representation
and warranty, each addressee of this letter agreement agrees to indemnify and
hold harmless each of the Sellers, each of its respective Controlling Persons
and each of their respective present and former officers, directors, employees
and assignees, against any Claim that may be based upon the Act, or any other
statute or at common law, on the ground or alleged ground that the statements
made in the Prospectus Supplement (exclusive of the Seller Information) (1)
contain any untrue statement of a material fact or (2) omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
With
respect to each claim for indemnification made hereunder, the Indemnified Party
shall notify the Indemnifying Party in writing, giving notice of the nature
of
the claim, within a reasonable time after service of a summons or other first
legal process that shall have been served upon such Indemnified Party, but
failure to notify the Indemnifying Party of any such claim shall not relieve
the
Indemnifying Party from any liability which it may have to the Indemnified
Party
(i) on account of the indemnity contained in this letter agreement, except
to
the extent that the Indemnifying Party has been materially prejudiced by such
failure, or (ii) otherwise than on account of the indemnity contained in this
letter agreement.
The
Indemnifying Party will be entitled to participate at its own expense in the
defense or, if the Indemnifying Party so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Indemnifying Party elects
to assume the defense, such defense shall be conducted by counsel reasonably
satisfactory to the Indemnified Party. In the event the Indemnifying Party
elects to assume the defense of any such suit and retain such counsel, the
Indemnified Party or persons, defendant or defendants in the suit, may retain
additional counsel but shall bear the fees and expenses of such counsel unless:
(1) the Indemnifying Party shall have agreed to the retention of such counsel
at
the expense of the Indemnifying Party; or (2) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnifying
Party
and the Indemnified Party, and the Indemnified Party reasonably determines
that
representation of both by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one counsel (separate from its own counsel) for the Indemnified
Party.
C-2
The
Indemnified Party shall not be liable to indemnify any person for any settlement
of any claim effected without the Indemnified Party’s consent, which consent
shall not be unreasonably withheld. The Indemnifying Party shall not, without
the prior written consent of an Indemnified Party, which consent will not be
unreasonably withheld, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnified Party is or could have been
a
party and indemnity is or could have been sought hereunder by such Indemnified
Party.
If
the
indemnification provided for in this letter is insufficient or unavailable
to an
Indemnified Party in respect of any losses, claims, damages, liabilities or
judgments referred to herein, then the Indemnifying Party, in lieu of
indemnifying the Indemnified Party, shall contribute to the amount paid or
payable by the Indemnified Party as a result of such losses, claims, damages,
liabilities and expenses in such proportion as is appropriate equally to reflect
(1) the relative fault and benefits of (a) the Indemnifying Party on the one
hand and (b) the Indemnified Party on the other hand, as well as (2) any other
relevant equitable considerations.
The
Controlling Person of any Indemnified Party and present and former officers,
directors, employees and assignees of an Indemnified Party or such Controlling
Person shall be an intended third-party beneficiary of this letter agreement;
provided, however, that any Controlling Person, present or former officer,
director, employee and/or assignee shall appoint its related Indemnified Party
as its exclusive agent for, on behalf of, and in the name of such person, to
exercise any and all rights of such person under this letter agreement, without
prejudice to the right of any Controlling Party, present or former officer,
director, employee or assignee to retain additional counsel at its own expense,
as provided in this letter agreement. In no event, however, will an Indemnifying
Party be required to bear the expense of such additional counsel on the grounds
that representation of both the Indemnified Party and its related Controlling
Person, present or former officer, director, employee or assignee by the same
counsel would be inappropriate due to actual or potential differing interests
between them.
This
letter agreement shall be governed by and construed in accordance with the
laws
of the State of New York (including Section 5-1401 of the New York General
Obligations Law) and the obligations, rights and remedies of the parties shall
be determined in accordance with such laws without giving effect to conflict
of
laws principles other than Section 5-1401 of the New York General Obligations
Law.
C-3
Please
signify your acceptance of this letter agreement by signing below and returning
to the undersigned. This letter agreement shall be effective as of the date
first stated above upon delivery of written acceptance by all parties hereto.
|
Very
truly yours,
WASHINGTON MUTUAL BANK, FA a
federally chartered savings association
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
|
WASHINGTON
MUTUAL BANK fsb
a
federal savings bank
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
|
WASHINGTON
MUTUAL BANK
a
Washington state chartered stock savings bank
|
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
|
AGREED
AND ACCEPTED
[PURCHASER] a _____________________ |
||
| By: | ||
| Name: |
______________________________ |
|
| Title: | ______________________________ | |
C-4
Exhibit
A
WASHINGTON
MUTUAL BANK, XX
Xxxxxxxxxx
Mutual Bank, FA (“WMBFA”), is a federally chartered savings association. WMBFA’s
principal executive offices are located at 1201 Xxxxx Xxxxxx, Xxxxxxx, XX 00000,
xxlephone (000) 000-0000. The primary mortgage loan servicing office of WMBFA
is
located at 19850 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000. Xxs telephone
number is (000) 000-0000. WMBFA is subject to regulation and examination by
the
Office of Thrift Supervision, which is its primary regulator. Its deposit
accounts are insured by the FDIC, primarily through the Savings Association
Insurance Fund. As a result, the FDIC also has some authority to regulate
WMBFA.
WASHINGTON
MUTUAL BANK fsb
Washington
Mutual Bank fsb (“WMBfsb”) is a federally chartered savings bank. WMBfsb’s
principal executive offices are located at 1201 Xxxxx Xxxxxx, Xxxxxxx, XX 00000,
xxlephone (000) 000-0000. WMBfsb is subject to regulation and examination by
the
Office of Thrift Supervision, which is its primary regulator. Its deposit
accounts are insured by the FDIC through the Savings Association Insurance
Fund.
As a result, the FDIC also has some authority to regulate WMBfsb.
WASHINGTON
MUTUAL BANK
Washington
Mutual Bank (“WMB”) is a savings bank chartered under the laws of the State of
Washington. WMB’s principal executive offices are located at 1201 Xxxxx Xxxxxx,
Xxxxxxx, XX 00000, xxlephone (000) 000-0000. WMB is subject to regulation and
supervision by the Director of Financial Institutions of the State of
Washington. As a state savings bank, WMB is also subject to examination and
regulation by the FDIC.
C-5
NONACCRUAL
LOAN STATISTICS
[to
be
attached]
C-6
ORIGINATION
AND UNDERWRITING CRITERIA
[to
be
attached]
C-7
MORTGAGE
LOAN SCHEDULE
[to
be
attached as diskette in “read-only” format]
C-8
EXHIBIT D
REPRESENTATIONS
AND WARRANTIES
Each
Company hereby, severally and not jointly, represents and warrants to and
covenants to and agrees with the Assignor and the Assignee that, as to each
Mortgage Loan sold by such Company to the Assignor, as of the date
hereof:
1.1 The
information set forth in the Mortgage Loan Schedule attached hereto as
Exhibit
A
is true
and correct in all material respects.
1.2 The
related Mortgage is a valid and enforceable (subject to Section 1.12) first
lien
on the related Mortgaged Property, subject only to (a) liens for current real
property taxes and special assessments; (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record as
of
the date of recording such Mortgage, such exceptions appearing of record being
acceptable to mortgage lending institutions generally or specifically reflected
in the appraisal obtained in connection with the origination of the Mortgage
Loan; (c) exceptions set forth in the title insurance policy relating to such
Mortgage, such exceptions being acceptable to mortgage lending institutions
generally; and (d) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security intended
to
be provided by the Mortgage.
1.3 All
Monthly Payments due on such Mortgage Loan have been made and such Mortgage
Loan
has not been delinquent (i.e., was more than 30 days past due) more than once
in
the preceding 12 months and any such delinquency lasted for no more than 30
days.
1.4 There
is
no offset, defense or counterclaim to the related Mortgage Note, including
the
obligation of the Mortgagor to pay the unpaid principal or interest on such
Mortgage Note.
1.5 The
related Mortgaged Property is free of damage and in good repair, ordinary wear
and tear excepted.
1.6 Such
Mortgage Loan at the time it was made complied with all applicable state and
federal laws, including, without limitation, usury, equal credit opportunity,
disclosure and recording laws.
1.7 Such
Mortgage Loan was originated by a savings association, savings bank, credit
union, insurance company, or similar institution which is supervised and
examined by a federal or state authority, or a mortgagee approved by
HUD.
1.8 Such
Mortgage Loan is covered by an ALTA form of mortgagee title insurance policy
or
other form of policy of insurance which has been issued by, and is the valid
and
binding obligation of, a title insurer which, as of the origination date of
such
Mortgage Loan, was qualified to do business in the state in which the related
Mortgaged Property is located. Such policy insures the originator of the
Mortgage Loan, its successors and assigns as to the first priority lien of
the
Mortgage in the original principal amount of the Mortgage Loan subject to the
exceptions set forth in such policy. Such policy is in full force and effect
and
will inure to the benefit of the Assignee upon the consummation of the
transactions contemplated by this Agreement and no claims have been made under
such policy, and the applicable Company, has not done, by act or omission,
anything that would impair the coverage of such policy.
D-1
1.9 If
such
Mortgage Loan had a Loan-to-Value Ratio in excess of 80% at the time of
origination, such Mortgage Loan was covered by a Primary Mortgage Insurance
Policy that remains in full force and effect.
1.10 The
related Mortgage (exclusive of any riders thereto) was documented by appropriate
Xxxxxx Xxx/Xxxxxxx Mac mortgage instruments in effect at the time of
origination, or other instruments approved by the applicable
Company.
1.11 The
related Mortgaged Property securing the Mortgage is improved with a one- to
four-family dwelling unit, including units in a duplex, triplex, fourplex,
condominium project, townhouse, a planned unit development or a de minimis
planned unit development.
1.12 The
related Mortgage and the related Mortgage Note are the legal, valid and binding
obligations of the maker thereof and are enforceable in accordance with their
respective terms, except only as such enforcement may be limited by laws
affecting the enforcement of creditors’ rights generally and principles of
equity.
1.13 Prior
to
origination or refinancing, an appraisal of the related Mortgaged Property
was
made by an appraiser who met the requirements of the applicable
Company.
1.14 Such
Mortgage Loan has been underwritten substantially in accordance with the
underwriting guidelines of the applicable Company.
1.15 The
applicable Company used no adverse selection procedures in selecting such
Mortgage Loan from among the outstanding mortgage loans in such Company’s
portfolio on the date of transfer to the Assignor and as to which the
representations and warranties set forth herein could be made.
1.16 Immediately
upon the transfer contemplated by the Purchase Agreement, the Assignor had
good
title to, and was the sole legal owner of, such Mortgage Loan, free and clear
of
any encumbrance or lien.
1.17 There
is
no late assessment for delinquent taxes outstanding against the related
Mortgaged Property.
D-2
