EXHIBIT 99.1
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RWT HOLDINGS, INC.
Purchaser
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
Seller
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of April 1, 1998
Conventional Fixed and Adjustable Rate Mortgage Loans
MLCCFlow Delivery Program
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TABLE OF CONTENTS
Page
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Section 1 Definitions................................................................................... 1
Section 2 Purchase Of Mortgage Loans.................................................................... 10
Section 3 Delivery Requirements......................................................................... 11
Section 4 Examination Of Mortgage Files................................................................. 12
Section 5 Representations, Warranties And Agreements Of Seller.......................................... 12
Section 6. Representations, Warranties And Agreements Of The Purchaser................................... 19
Section 7. Servicing Obligations Of The Seller........................................................... 21
Section 8. Intention Of The Parties...................................................................... 21
Section 9. Costs......................................................................................... 21
Section 10. Further Agreements Of The Seller.............................................................. 21
Section 11. Mandatory Delivery............................................................................ 21
Section 12. Termination................................................................................... 22
Section 13. Severability Clause........................................................................... 22
Section 14. Waivers....................................................................................... 22
Section 15. Survival...................................................................................... 22
Section 16. Successor And Assigns; Assignment Of Purchase Agreement....................................... 22
Section 17. Notices....................................................................................... 22
Section 18. Counterparts.................................................................................. 22
Section 19. Entire Agreement.............................................................................. 22
Section 20. Governing Law And Amendments.................................................................. 23
Section 21. Exhibits...................................................................................... 23
Section 22. General Interpretive Principles............................................................... 23
Section 23. Reproduction Of Documents..................................................................... 23
EXHIBITS
EXHIBIT 1 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 2 FORM OF MASTER SERVICING AGREEMENT
EXHIBIT 3 FORM OF CUSTODY AGREEMENT
EXHIBIT 4 UNDERWRITING GUIDE OF THE SELLER
EXHIBIT 5 FORM OF CERTIFICATE OF THE SELLER
EXHIBIT 6 [RESERVED.]
EXHIBIT 7 [RESERVED.]
EXHIBIT 8 [RESERVED.]
EXHIBIT 9 [RESERVED.]
EXHIBIT 10 FORM OF WARRANTY ▇▇▇▇ OF SALE
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
This MASTER MORTGAGE LOAN PURCHASE AGREEMENT (the "Agreement"), dated
as of April 1, 1998, by and between RWT Holdings, Inc., having an office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (the "Purchaser") and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Seller").
PRELIMINARY STATEMENT
The Seller desires to sell, from time to time, to the Purchaser, and
the Purchaser desires to purchase, from time to time, from the Seller, certain
conventional, fixed- and adjustable-rate, residential first mortgage loans (the
"Mortgage Loans") as described herein, and which shall be delivered in pools of
whole mortgage loans on various dates as provided herein (each a "Closing Date")
on a servicing-retained basis. The Purchaser desires the Seller to service and
administer, and the Seller is willing to service and administer, each Mortgage
Loan for the Purchaser, its successors and assigns from and after the respective
Closing Date pursuant to a Master Servicing Agreement, dated as of March 7, 1997
between the Seller and the Purchaser in the form attached as Exhibit 2 hereto.
Following its purchase of the Mortgage Loans from the Seller, the Purchaser may
desire to sell some or all of the Mortgage Loans to one or more purchasers, and
the Seller is willing to continue to service and administer the Mortgage Loans
pursuant to such Master Servicing Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller agree
as follows:
Section 1. Definitions. For purposes of this Agreement, the following
capitalized terms shall have the respective meanings set forth below. Other
capitalized terms used in this Agreement and not defined herein shall have the
respective meanings set forth in the form of Master Servicing Agreement attached
hereto as Exhibit 2.
"Additional Collateral": (i) With respect to any Mortgage
100(sm) Loan, the marketable securities subject to a security interest pursuant
to the related Mortgage 100(sm) Pledge Agreement, or (ii) with respect to any
ParentPower(R) Mortgage Loan, the related ParentPower(R) Agreement.
"Additional Collateral Mortgage Loan": Each Mortgage Loan that
is either a Mortgage 100(sm) Loan or ParentPower(R) Mortgage Loan as to which
the Additional Collateral is still required to be provided.
"Adjustable Rate Mortgage Loan": A Mortgage Loan that provides
for the adjustment of the Mortgage Interest Rate payable with respect thereto in
accordance with the terms of the related Mortgage Note.
"Affiliate": With respect to any specified Person, any other
Person controlling, controlled by or under common control with such specified
Person.
"Agreement": This Master Mortgage Loan Purchase Agreement.
"Appraised Value": With respect to any Mortgage Loan, the
value of the related Mortgaged Property based upon the lesser of (i) the
appraisal made for the originator at the time of origination of the Mortgage
Loan, and (ii) if applicable, the sales price of the Mortgaged Property at such
time of origination.
"Assignment": An assignment of the Mortgage, notice of
transfer or equivalent instrument, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
or transfer of the Mortgage Loan, which assignment, notice of transfer or
equivalent instrument may be in the form of one
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or more blanket assignments covering Mortgages securing Mortgaged Properties
located in the same county, if permitted by applicable law and acceptable for
recording by the applicable recording office.
"Assumed Principal Balance": With respect to any Mortgage Loan
as of any date of determination (i) the outstanding principal balance as of the
Cut-off Date, after application of principal payments due on or before such date
whether or not received, minus (ii) all amounts previously distributed to the
Purchaser with respect to such Mortgage Loan representing (a) payments or other
recoveries of principal, or (b) advances of principal made pursuant to Section
5.03 of the Master Servicing Agreement.
"Balloon Mortgage Loan": Any Mortgage Loan for which the
related Monthly Payments, other than the Monthly Payment due on the maturity
date thereof, are computed on the basis of a period to full amortization ending
on a date that is later than such maturity date.
"Business Day": Any day other than (i) a Saturday or Sunday,
or (ii) a day on which banking or savings associations in the State of Florida
are authorized or obligated by law or executive order to be closed.
"Certificate of the Seller": A certificate signed (i) by the
Chairman of the Board or the Vice Chairman of the Board or the President or a
Vice President and (ii) by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Seller, with the resolution
of the Board of Directors of the Seller, the certificate of incorporation of the
Seller and the by-laws of the Seller attached thereto, substantially in the form
attached hereto as Exhibit 5.
"Closing Date": For each Transaction, the date on which the
Seller actually sells to the Purchaser, and the Purchaser actually purchases
from the Seller, the Mortgage Loans listed on the Final Mortgage Loan Schedule
attached to the related Warranty ▇▇▇▇ of Sale.
"Closing Documents": (i) With respect to the Initial Closing
Date, the following documents:
(A) three counterparts of this Agreement;
(B) three counterparts of the Master Servicing Agreement;
(C) three counterparts of the Custodial Letter Agreement;
(D) the Certificate of the Seller, dated as of the Initial Closing
Date;
(E) the Custodial Account Certification, dated the Initial Closing
Date;
(F) the Escrow Account Certification, dated the Initial Closing
Date;
(G) ten counterparts of a power of attorney in the form of Exhibit
A to the Master Servicing Agreement; and
(H) three counterparts of the Pledged Asset Mortgage Servicing
Agreement
(ii) with respect to the Initial Closing Date and each subsequent Closing Date,
the following documents:
(A) the Final Mortgage Loan Schedule for the related Transaction;
(B) the Trust Receipt for the related Transaction, dated the
Closing Date, with only such exceptions noted on Schedule B
thereto as shall be acceptable to the Purchaser;
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(C) the Warranty ▇▇▇▇ of Sale with respect to the Mortgage Loans
for the related Transaction, dated the Closing Date;
(D) Assignment of the Seller's interest under the Surety Bond with
respect to all Additional Collateral Mortgage Loans sold on
such Closing Date; and
(I) Certificate of the Surety Bond Issuer confirming the insurance
of the Additional Collateral Mortgage Loans sold on such
Closing Date pursuant to the provisions of the Surety Bond.
"Converted Mortgage Loan": A Convertible Mortgage Loan with
respect to which the related Mortgagor has exercised its option (i) to convert
the related Mortgage Note from a Mortgage Note with an adjustable interest rate
to a Mortgage Note with a fixed interest rate or (ii) to change the Index of the
related Mortgage Note as may be provided thereunder.
"Convertible Mortgage Loan": An Adjustable Rate Mortgage Loan
with a Mortgage Note that contains provisions permitting the Mortgagor
thereunder, at its option, (i) to convert such Mortgage Note from a Mortgage
Note with an adjustable interest rate to a Mortgage Note with a fixed interest
rate or (ii) to change the Index of such Mortgage Note.
"Correspondent Lending Program": Program whereby a
Correspondent Lender processes and closes a Mortgage Loan in its own name and
funds the Mortgage Loan from its own funds. All Mortgage Loans are underwritten
by personnel of MLCC, or in certain cases, the Correspondent Lender, in
accordance with MLCC's standard underwriting guidelines. MLCC or its agent
conducts a post-closing review on each Mortgage Loan prior to its purchase from
the Correspondent Lender."
"Correspondent Lender": A mortgage banking related entity
which originates Mortgage Loans in its own name, using its own funds, which
Mortgage Loans are purchased by MLCC under its Correspondent Lending Program.
"Correspondent Trailing Premium": With respect to a
Correspondent Mortgage Loan, the fee, if any, paid to a Correspondent Lender by
MLCC as a portion of the purchase price for a Correspondent Mortgage Loan, which
fee ranges from 0.125% per annum to 0.75% per annum of the annualized principal
balance of the applicable Correspondent Mortgage Loan. MLCC is responsible for
the payment of the Correspondent Trailing Premium, if any, and, to the extent
due, the Correspondent Trailing Premium is paid by MLCC on a monthly basis out
of the Monthly Payment it receives from the applicable Mortgagor. MLCC pays any
such fee to the Correspondent Lender as long as the applicable Mortgage Loan
remains outstanding and the Mortgagor is current in the remittance of his or her
Monthly Payment to MLCC.
"Correspondent Mortgage Loan": A Mortgage Loan originated by a
Correspondent Lender.
"Custodial Account": The separate trust account or accounts
created and maintained pursuant to Section 4.04 of the Master Servicing
Agreement.
"Custody Agreement": That certain Custody Agreement dated as
of April 1, 1998, by and, among the RWT Holdings, Inc. as "Seller", ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Capital, Inc. as "Purchaser" and Bankers Trust Company of
California, N.A. as "Custodian" for the retention of each Mortgage Note,
Mortgage, Assignment and certain other portions of each Mortgage File attached
hereto as Exhibit 3 and including that certain letter agreement dated as of
April 1, 1998,by an among the "Seller", "Purchaser" and "Custodian",
substantially in the form attached to the Custody Agreement ("Custodial Letter
Agreement").
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"Custodian": The custodian under the Custody Agreement, or its
successor.
"Cut-off Date": With respect to each Mortgage Loan, the first
day of the month in which the related Closing Date occurs.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Due Date": The day of the month on which each Monthly Payment
is due on a Mortgage Loan, exclusive of any days of grace.
"Equity Refinanced Mortgage Loan": A Refinanced Mortgage Loan
in which the Mortgagor used less than the entire amount of the proceeds (net of
any closing costs, including discount and origination fees and prepaid items) to
refinance an existing mortgage loan and any junior lien that existed on the
related Mortgaged Property for at least one year prior to origination of the
Refinanced Mortgage Loan.
"Final Mortgage Loan Schedule": The list of Mortgage Loans for
a Transaction, which list shall set forth the following information with respect
to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property, including
city, state and zip code;
(iv) the Mortgage Interest Rate at origination;
(v) for each Adjustable Rate Mortgage Loan, the first
Interest Rate Adjustment Date and the first Payment
Adjustment Date;
(vi) for each Adjustable Rate Mortgage Loan, the Gross
Margin;
(vii) for each Adjustable Rate Mortgage Loan, the Lifetime
Rate Cap;
(viii) for each Adjustable Rate Mortgage Loan, the Periodic
Rate Cap;
(ix) the original term to maturity;
(x) the original principal balance;
(xi) the first payment date;
(xii) the maturity date;
(xiii) the Monthly Payment in effect as of the related Cut-off
Date;
(xiv) the principal balance as of the related Cut-off Date,
after giving effect to all payments of principal due on
or before such date, whether or not received;
(xv) the Loan-to-Value Ratio as of the date of origination;
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(xvi) a code indicating whether the Mortgaged Property is
occupied by owner;
(xvii) a code indicating the type of residential dwelling;
(xviii) a code indicating whether the Mortgage Loan is a
Refinanced Mortgage Loan and, if so, whether it is an
Equity Refinanced Mortgage Loan;
(xix) a code indicating whether the Mortgage Loan is covered
by a Primary Insurance Policy;
(xx) a code indicating whether the Mortgage Loan is a Limited
Documentation Mortgage Loan;
(xxi) a code indicating whether the Mortgage Loan is an
Additional Collateral Mortgage Loan;
(xxii) for each Adjustable Rate Mortgage Loan, a code
indicating the type of Index;
(xxiii) a code indicating whether the Mortgage Loan is a Balloon
Mortgage Loan; and
(xxiv) The Correspondent Trailing Premium applicable, if any,
to such Mortgage Loan.
(xxv) the Servicing Fee Rate applicable to such Mortgage
Loan, and if such Mortgage Loan is an Adjustable Rate
Mortgage Loan whose first Interest Rate Adjustment
has not occurred, the Servicing Fee Rate (if
different) prior to the first Interest Rate
Adjustment Date.
Such schedule shall also set forth the weighted average of the amounts set forth
in (iv) and (xi) above and the total of the amounts described under (xiii) above
for all of the Mortgage Loans. Such list may be in the form of more than one
list, collectively setting forth all of the information required.
"Fixed Rate Mortgage Loan": A Mortgage Loan that provides for
a fixed Mortgage Interest Rate over the term of the related Mortgage Note.
"FHLMC": The Federal Home Loan Mortgage Corporation or any
successor organization.
"FNMA": The Federal National Mortgage Association or any
successor organization.
"Gross Margin": With respect to each Adjustable Rate Mortgage
Loan, the fixed number of basis points set forth in the Final Mortgage Loan
Schedule that is added to the Index on each Interest Rate Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the Mortgage
Interest Rate for such Mortgage Loan, subject to any applicable Periodic Rate
Cap and Lifetime Rate Cap.
"Index": With respect to each Adjustable Rate Mortgage Loan
and each Interest Rate Adjustment Date, the index used to determine the Mortgage
Interest Rate on such Adjustable Rate Mortgage Loan, as specified in the related
Mortgage Note, which index may be (i) the average of the London Interbank
Offered Rates for one- or six-month U.S. dollar deposits, as published in the
"Money Rates" table of The Wall Street Journal or elsewhere (as specified in the
related Mortgage Note) on the date or dates specified in such Mortgage Note for
the determination of such rate (ii) the weekly average of the closing market bid
yields on actively traded U.S. Treasury securities adjusted to a constant
maturity of one year, (iii) the weekly average or the monthly average of weekly
average auction rates on U.S. Treasury bills with a maturity of six months, as
published by the Board of Governors of the Federal Reserve System in Federal
Reserve Statistical Release H.15. (519), (iv) the weekly average of the closing
market bid yields on U.S. Treasury securities adjusted to a constant maturity of
one (1) year, as published by the Board of Governors of the Federal Reserve
System in Federal Reserve Statistical Release H.15. (519), as available the
number of days prior to the Interest Rate Adjustment Date set forth in the
related Mortgage Note, (v) the weekly average of the closing market bid
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yields on U.S. Treasury securities adjusted to a constant maturity of five (5)
years, as published by the Board of Governors of the Federal Reserve System in
Federal Reserve Statistical Release H.15. (519), as available the number of days
prior to the Interest Rate Adjustment Date set forth in the related Mortgage
Note, (vi) the prime rate specified in the related Mortgage Note, as published
in the "Money Rates" table of The Wall Street Journal, or elsewhere (as
specified in such Mortgage Note) and available the number of days prior to the
Interest Rate Adjustment Date set forth in the related Mortgage Note, (vii) the
monthly weighted average cost of funds of members of the Federal home Loan Bank
of San Francisco, (viii) such other standard for determining the change in the
interest rate as may be set forth in the related Mortgage Note, as such rate may
be available the number of days prior to the Interest Rate Adjustment Date set
forth in the related Mortgage Note, or (ix) if such index is not so published or
is otherwise unavailable, such comparable alternative index selected by the
Company under the Master Servicing Agreement in accordance with the terms of the
Mortgage Notes and in consultation with the Purchaser.
"Initial Closing Date": The first Closing Date to occur.
"Interest Rate Adjustment Date": With respect to each
Adjustable Rate Mortgage Loan, the date on which the Mortgage Interest Rate is
adjusted in accordance with the terms of the related Mortgage Note.
"Lifetime Rate Cap": With respect to each Adjustable Rate
Mortgage Loan, the maximum Mortgage Interest Rate that may be borne thereby, as
set forth in the related Mortgage Note.
"Limited Documentation Mortgage Loan": A Mortgage Loan that
was originated pursuant to a "limited documentation" or "easy qualifier"
underwriting program.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage
Loan, as of any date on which a determination thereof is made, the ratio on such
date of the outstanding principal balance of such Mortgage Loan to the Appraised
Value of the related Mortgaged Property.
"Master Servicing Agreement": The Master Servicing Agreement,
dated as of March 7, 1997, between the Seller and the Purchaser, attached hereto
as Exhibit 2.
"MLCC": ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation and its successors in
interest.
"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 on every Due Date.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on real property securing the Mortgage Note.
"Mortgage 100(sm) Loan": A Mortgage Loan having at the time of
origination a Loan-to-Value Ratio generally in excess of MLCC's maximum
acceptable Loan-to-Value Ratio for such Mortgage Loan, which Mortgage Loan is
secured by additional collateral in the form of a security interest in
marketable securities having a market value, as of the date of such loan's
origination, of in most cases at least equal to the Original Additional
Collateral Requirement.
"Mortgage 100(sm) Pledge Agreement": With respect to each
Mortgage 100(sm) Loan, the Mortgage 100(sm) Pledge Agreement for Securities
Account between the Mortgagor under such Mortgage 100(sm) Loan and MLCC,
pursuant to which such Mortgagor granted a security interest in various
investment securities.
"Mortgage File": The mortgage documents, including but not
limited to all paper, computer generated and microfiche records, pertaining to a
particular Mortgage Loan which are specified in Exhibit 1 hereto and any
additional documents required to be added to the Mortgage File pursuant to the
Program Documents.
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"Mortgage Interest Rate": The annual rate at which interest
accrues on any Mortgage Loan, net of any premium on any related Primary
Insurance Policy, and with respect to any Adjustable Rate Mortgage Loan, as such
annual rate may be adjusted on any Interest Rate Adjustment Date and subject to
the limitations on such interest rate imposed by the Periodic Rate Cap and the
Lifetime Rate Cap.
"Mortgage Loan": An individual Mortgage Loan which is the
subject of this Agreement. Each Mortgage Loan set forth on the Mortgage Loan
Schedule attached to a Warranty ▇▇▇▇ of Sale initially will be subject to this
Agreement, commencing on the respective Closing Date for the related
Transaction.
"Mortgage Loan Documents": With respect to each Mortgage Loan,
the documents specified in Section 3(b) of this Agreement, which documents the
Seller shall deliver to the Custodian pursuant thereto.
"Mortgage Loan Payments": With respect to each Mortgage Loan,
(i) all scheduled principal due after the related Cut-off Date, (ii) all other
recoveries of principal collected after the related Cut-off Date, other than any
scheduled payments of principal due on or before the related Cut-off Date and
collected by the Seller after the related Cut-off Date, and (iii) all payments
of interest on the Mortgage Loans net of interest at the Servicing Fee Rate
minus that portion of any such payment that is allocable to the period prior to
the related Cut-off Date; provided, however, that payments of scheduled
principal and interest prepaid for a due date beyond the related Cut-off Date
shall not be applied to the principal balance as of the related Cut-off Date and
such prepaid amounts (minus interest at the Servicing Fee Rate) shall constitute
a part of the Mortgage Loan Payments, which prepaid amounts the Seller shall
deposit into the Custodial Account established for the benefit of the Purchaser
for subsequent remittance by the Seller to the Purchaser pursuant to the Master
Servicing Agreement.
"Mortgage Note": The note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
"Mortgaged Property": The underlying real property securing
repayment of a Mortgage Note, consisting of a fee simple or leasehold interest
in a single parcel of real property improved by a residential dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Original Additional Collateral Requirement": With respect to
any Additional Collateral Mortgage Loan, 30 percent (or, in the case of an
Additional Collateral Mortgage Loan with an original principal balance of
$1,000,000 or less and a Loan-to-Value Ratio less than 100%, such lower percent
specified by the Master Servicer in originating such Additional Collateral
Mortgage Loan) of the original principal balance of such Mortgage Loan.
"ParentPower(R) Agreement:" With respect to each
ParentPower(R) Mortgage Loan, a ParentPower(R) Guaranty and Security Agreement
for Securities Account or a ParentPower(R) Guaranty Agreement for Real Estate.
"ParentPower(R) Guaranty Agreement for Real Estate:" With
respect to a ParentPower(R) Mortgage Loan, an agreement between MLCC and a
guarantor on behalf of the Mortgagor under such ParentPower(R) Mortgage Loan
pursuant to which such guarantor guarantees the payment of certain losses under
such ParentPower(R) Mortgage Loan, authorizes MLCC to draw on a home equity
credit line to fund such guaranty and has secured such guaranty with a lien on
residential real estate of the guarantor. The required amount of the collateral
supporting such guaranty is at least equal to the Original Additional Collateral
Requirement for such ParentPower(R) Mortgage Loan. For purposes of this
definition, the ParentPower(R) Guaranty Agreement For Real Estate shall not
include the rights of the mortgagee under the Equity Access(R) Security
Instrument referred to therein, which rights have been retained by MLCC.
"ParentPower(R) Guaranty and Security Agreement for Securities
Account": With respect to a ParentPower(R) Mortgage Loan, an agreement between
MLCC and a guarantor on behalf of the Mortgagor under such ParentPower(R)
Mortgage Loan pursuant to which such guarantor guarantees the payment of certain
losses under such
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ParentPower(R) Mortgage Loan and has granted a security interest to MLCC in
certain marketable securities to collateralize such guaranty. The required
amount of such collateral is at least equal to the Original Additional
Collateral Requirement for such ParentPower(R) Mortgage Loan.
"ParentPower(R) Mortgage Loan": A Mortgage Loan having at the
time of origination a Loan-to-Value Ratio generally in excess of MLCC's maximum
acceptable Loan-to-Value Ratio for such Mortgage Loan, which Mortgage Loan is
supported by a ParentPower(R) Agreement.
"Payment Adjustment Date": With respect to each Adjustable
Rate Mortgage Loan, the first Payment Adjustment Date, as set forth in the
Mortgage Loan Schedule and in the related Mortgage Note, and each anniversary
thereof, on which the amount of the Monthly Payment on an Adjustable Rate
Mortgage Loan may adjust.
"Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage Loan as to which the related Mortgage Loan Schedule indicates the
existence of a Periodic Rate Cap, the provision of the related Mortgage Note
that provides for a maximum amount by which the Mortgage Interest Rate may
increase (or, if so indicated on such Mortgage Loan Schedule, decrease) on an
Interest Rate Adjustment Date above the Mortgage Interest Rate immediately prior
to such Interest Rate Adjustment Date.
"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.
"Pledged Asset Mortgage Servicing Agreement": That certain
Pledged Asset Mortgage Servicing Agreement dated as of March 27, 1997 by and
between Seller and Purchaser and regarding the servicing of the Additional
Collateral Mortgage Loans by Seller as the "Servicer" therein.
"Preliminary Mortgage Loan Schedule": The initial list of
Mortgage Loans for a proposed Transaction, which list shall set forth at least
the information with respect to each Mortgage Loan described in items (i), (ii),
(iv), (ix), (xii), (xiii), (xiv), (xvi), (xx), (xxi), (xxii) and (xxiii) of the
definition of "Final Mortgage Loan Schedule".
"Primary Insurance Policy": With respect to each Mortgage
Loan, the policy of primary mortgage insurance, if any, in effect as indicated
on the Mortgage Loan Schedule, or any replacement policy therefor obtained by
the Seller pursuant to the Master Servicing Agreement.
"Program Documents": With respect to each Transaction, the
related Purchase Price and Terms Letter, the related Warranty ▇▇▇▇ of Sale, the
Master Servicing Agreement, the Custody Agreement, this Agreement and each other
document or instrument executed or delivered by the Seller in connection with
any of the foregoing.
"Purchase Price": With respect to each Mortgage Loan listed on
the Final Mortgage Loan Schedule, the price paid on the related Closing Date by
the Purchaser to the Seller in exchange for the Mortgage Loan, which amount
shall equal the sum of (i) the Purchase Price Percentage multiplied by the
unpaid principal balance of the Mortgage Loan as of the Cut-off Date, after
application of scheduled payments of principal due on or before the Cut-off Date
whether or not collected, and (ii) accrued interest on the unpaid principal
balance of the Mortgage Loan at the interest rate on the Mortgage Loan net of
the applicable Servicing Fee Rate, from the Cut-off Date to the day prior to the
Closing Date, inclusive.
"Purchase Price and Terms Letter": With respect to each
Transaction, the letter agreement or agreements setting forth the general terms
and conditions of the Transaction to be consummated as provided herein, with a
copy of the Preliminary Mortgage Loan Schedule attached thereto identifying the
Mortgage Loans to be purchased on the respective Closing Date, by and between
the Seller and the Purchaser. The Purchase Price and Terms Letter shall set
forth, among other matters, (i) the approximate dollar amount of Mortgage Loans
for the related Transaction, (ii) the
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Cut-off Date, (iii) the Scheduled Closing Date, (iv) the Purchase Price
Percentage, (v) the Servicing Fee Rate, and (vi) the characteristics, including
the characteristics set forth in the Warranty ▇▇▇▇ of Sale, for the Mortgage
Loans, both individually and in the aggregate. All of the individual Purchase
Price and Terms Letters shall collectively be referred to as the "Purchase Price
and Terms Letter".
"Purchase Price Percentage": With respect to each Mortgage
Loan, the percentage of par set forth in the related Purchase Price and Terms
Letter (subject to adjustment as provided therein) at which the Purchaser will
purchase the Mortgage Loan from the Seller on the Closing Date.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall to be deposited into
the Custodial Account by the Seller in the month of substitution pursuant to
Section 4.04(vii)), (ii) have a Mortgage Interest Rate not less than, and not
more than 1% greater than the 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, and (iv) comply with
each representation and warranty set forth in Section 5(b) of the Master
Mortgage Loan Purchase Agreement.
"Refinanced Mortgage Loan": A Mortgage Loan that was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which (net of any closing costs, including
discount and origination fees and prepaid items) were used in whole or part to
satisfy an existing mortgage.
"Scheduled Closing Date": For each Transaction, the date set
forth on the Purchase Price and Terms Letter as the date on which the Seller and
the Purchaser anticipate that the Seller will sell to the Purchaser, and the
Purchaser will purchase from the Seller, the Mortgage Loans listed on the
related Final Mortgage Loan Schedule, or such other date or dates as are
mutually agreed upon by the parties.
"Servicing Fee": With respect to any Mortgage Loan and any
Remittance Date, and subject to Section 6.03, a fee equal to the sum of (i) the
Servicing Fee Rate multiplied by the unpaid principal balance of the related
Mortgage Loan; plus (ii) the Correspondent Trailing Premium, if any.
"Servicing Fee Rate": With respect to each Mortgage Loan, the
rate per annum set forth in the related Warranty ▇▇▇▇ of Sale as the "Servicing
Fee Rate".
"Subsequent Purchaser": Any Person that acquires an interest
in a Mortgage Loan from the Purchaser.
"Surety Bond": The limited purpose Surety Bond, dated February
28, 1996, issued by the Surety Bond Issuer in favor of the Seller.
"Surety Bond Issuer": AMBAC Indemnity Corporation or any
successor thereto.
"Transaction": The sale by the Seller to the Purchaser, and
the purchase by the Purchaser from the Seller, of one or more Mortgage Loans on
a Closing Date, as evidenced by the execution and delivery by the Seller to RWT
Holdings, Inc., as the initial Purchaser, of the Warranty ▇▇▇▇ of Sale.
"Trust Receipt": For each Transaction, the Trust Receipt,
executed by the Custodian with respect to the Mortgage Loans for such
Transaction, substantially in the form of Exhibit One to the Custody Agreement.
9
"Underwriting Guide": The Underwriting Guide of the Seller
attached hereto as Exhibit 4, as revised from time to time.
"Warranty ▇▇▇▇ of Sale": The warranty ▇▇▇▇ of sale executed
and delivered by the Seller to the Purchaser on a Closing Date, evidencing the
sale of the related Mortgage Loans by the Seller to the Purchaser and setting
forth certain representations and warranties of the Seller with respect thereto,
in the form attached hereto as Exhibit 10.
Section 2. Purchase of Mortgage Loans.
(a) Sale and Conveyance of Mortgage Loans. From time to time the Seller
may offer to sell to the Purchaser, and the Purchaser elect to purchase from the
Seller, Mortgage Loans in one or more Transactions pursuant to the terms and
conditions of the Program Documents. The agreement of the Seller to sell to the
Purchaser, and of the Purchaser to purchase from the Seller, Mortgage Loans on a
particular Closing Date shall be evidenced by the execution of a Purchase Price
and Terms Letter. The obligation of the Purchaser to purchase any Mortgage Loan
from the Seller on any particular Closing Date shall be subject to the
satisfaction of the conditions precedent to the Purchaser's obligation to
purchase set forth in Section 2(b). The sale of each Mortgage Loan shall be
reflected in the Seller's balance sheet and other financial statements as a sale
of assets by the Seller.
(b) Conditions of Closing. On each respective Closing Date (i) the
Seller will sell, transfer, assign, set over and convey to the Purchaser,
without recourse, all of the right, title and interest of the Seller in and to
the Mortgage Loans included in such Transaction, including all Mortgage Loan
Payments, and (ii) the Purchaser shall pay to the Seller, by wire transfer of
immediately available funds to the account of the Seller, the Purchase Price for
each Mortgage Loan included in such Transaction, subject to the satisfaction of
the following conditions precedent to the Purchaser's obligation to purchase the
Mortgage Loans:
(A) all of the representations and warranties of the Seller under
the Program Documents shall be true and correct as of the
Closing Date, and no event shall have occurred that, with
notice or the passage of time, would constitute a default
under any Program Document, including an Event of Default
under the Master Servicing Agreement;
(B) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, the Closing
Documents, in such forms as are agreed upon and as are
acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the
respective terms thereof;
(C) the Seller shall have delivered and released to the Purchaser
or the Custodian all documents required under the Program
Documents; and
(D) the Seller shall have complied with all other terms and
conditions of this Agreement.
(c) Record Title and Possession of Mortgage Files. From and after the
sale of each Mortgage Loan, the contents of the related Mortgage File and all
rights, benefits, proceeds and obligations arising therefrom or in connection
therewith, are vested in the Purchaser. All rights arising out of each Mortgage
Loan including, but not limited to, all funds received on or in connection with
such Mortgage Loans and all records or documents with respect to such Mortgage
Loan prepared by or which come into the possession of the Seller shall be
received and held by the Seller in trust for the benefit of the Purchaser as the
owner of the Mortgage Loan. Any portion of the Mortgage File held by the Seller
for servicing purposes shall be appropriately marked to clearly reflect the
ownership of the Mortgage Loan by the Purchaser and the Seller shall promptly
release the portion of the Mortgage File to the Purchaser, when the Seller's
servicing needs no longer necessitate retaining such documents.
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Section 3. Delivery Requirements.
(a) Mortgage Loan Schedules. Prior to the date on which the Seller and
the Purchaser execute a Purchase Price and Terms Letter, the Seller shall
provide the Purchaser with the respective Preliminary Mortgage Loan Schedule.
Not less than one (1) Business Day prior to the related Closing Date, the Seller
either (i) shall deliver the Final Mortgage Loan Schedule to the Purchaser or
(ii) shall deliver to the Purchaser all information with respect to the Mortgage
Loans to be sold to the Purchaser on such Closing Date that is necessary to
enable the Purchaser to prepare the Final Mortgage Loan Schedule, which
information shall be delivered on a computer diskette, on a machine-readable
tape or in such other format as the Purchaser may reasonably specify.
(b) Delivery of Mortgage Loan Documents. Not less than three (3)
Business days prior to the related Closing Date, the Seller shall, with respect
to each Mortgage Loan, deliver to the Custodian the following documents:
(i) The original Mortgage Note endorsed, "Pay to the order
of ___________, without recourse" and signed in the name of the Seller
by an authorized officer. The Mortgage Note shall include all
intervening endorsements showing a complete chain of title from the
originator to the Seller.
(ii) The original recorded Mortgage, with evidence of
recording thereon, or, if the original Mortgage has not yet been
returned from the recording office, a copy of the original Mortgage
certified by the Seller to be a true copy of the original of the
Mortgage which has been delivered for recording in the appropriate
recording office of the jurisdiction in which the Mortgaged Property is
located.
(iii) The original Assignment of each Mortgage, executed in
blank.
(iv) The original policy of title insurance (or a
preliminary title report if the original title insurance policy has not
been received from the title insurance company).
(v) Originals of any intervening assignments of the
Mortgage, with evidence of recording thereon or, if the original
intervening assignment has not yet been returned from the recording
office, a copy of such assignment certified by the Seller to be a true
copy of the original of the assignment which has been delivered for
recording in the appropriate recording office of the jurisdiction in
which the Mortgaged Property is located.
(vi) The original Primary Insurance Policy, if any.
(vii) Originals of all assumption and modification
agreements, if any.
(viii) An original assignment in the form of Exhibit __
attached hereto, of the related Mortgage 100(sm) Pledge Agreement or
Parent Power(R) Agreement, as the case may be, with respect to each
Mortgage Loan that is an Additional Collateral Mortgage Loan, together
with a copy of the related Mortgage 100(sm) Pledge Agreement or Parent
Power(R) Agreement, as the case may be.
(ix) With respect to each Additional collateral Mortgage
Loan, a copy of the UCC-1 and an original form UCC-3, if applicable,
together with a copy of the applicable notice of assignment to and
acknowledgment by ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
in substantially the same form as Exhibit __ attached hereto.
(x) An original assignment, in the form of Exhibit A to
the Pledged Asset Mortgage Servicing Agreement, of the related Equity
Access(R) mortgage made in connection with a Parent Power(R)
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Mortgage Loan supported by a Parent Power(R) Guaranty Agreement for
Real Estate, together with a copy of the related Equity Access(R)
mortgage.
If (a) the original Mortgage was not delivered pursuant to clause (ii)
above, (b) any intervening assignment was not delivered pursuant to clause (v)
above or (c) the original title insurance policy was not delivered pursuant to
clause (iv) above, the Seller shall use best reasonable efforts to promptly
secure the delivery of such originals and shall cause such originals to be
delivered to the Purchaser or the Custodian promptly upon receipt thereof. If
any such document is not so delivered to the Purchaser or the Custodian within
two hundred seventy (270) days following the Closing Date, the related Mortgage
Loan shall, upon the request of the Purchaser, be repurchased or substituted for
by the Seller at the price and in the manner specified in Section 5(c).
If the Purchaser finds any document or documents constituting a part of
a Mortgage File to be defective in any material respect, the Purchaser shall
promptly so notify the Seller. The Seller shall have a period of ninety (90)
days within which to correct or cure any such defect. The Seller hereby
covenants and agrees that, if any material defect cannot be corrected or cured,
the Seller will, not later than the expiration of the applicable cure period
described above, repurchase or substitute for the related Mortgage Loan at the
price and in the manner set forth in Section 5(c).
No Assignment of Mortgage shall be recorded for so long as MLCC is the
Company under the Master Servicing Agreement.
Section 4. Examination of Mortgage Files. Prior to the respective
Closing Date, the Seller, (a) shall deliver to the Custodian in escrow, for
examination, the Mortgage File pertaining to each Mortgage Loan or (b) shall
make the Mortgage File pertaining to each Mortgage Loan available to the
Purchaser for examination at the offices of the Seller, the Custodian or such
other location as the Seller and the Purchaser shall mutually designate. Such
examination may be made by the Purchaser of the related Mortgage Loan at any
time before the related Closing Date and may be made by the Purchaser or any
prospective Subsequent Purchaser of such Mortgage Loan at any time after such
Closing Date. If the Purchaser makes such examination prior to the Closing Date
and identifies any Mortgage Loan that does not conform to the terms of the
related Purchase Price and Terms Letter, such Mortgage Loan shall be deleted
from the Final Mortgage Loan Schedule and may be replaced by a substitute
Mortgage Loan that conforms to the terms of the Purchase Price and Terms Letter
and that is reasonably acceptable to the Purchaser. The Purchaser may, at its
option and without notice to Seller, purchase all or part of the Mortgage Loans
for a Transaction without conducting any partial or complete examination. The
failure or omission by the Purchaser or any Subsequent Purchaser of the Mortgage
Loans to conduct any partial or complete examination of the Mortgage Files shall
not affect the Purchaser's rights to demand repurchase or other relief as
provided under any Program Document.
Section 5. Representations, Warranties and Agreements of Seller.
(a) The Seller represents and warrants to the Purchaser that as of
the date hereof and as of each respective Closing Date (or as of such other date
or dates as may be expressly set forth below):
(i) The Seller is duly incorporated, validly existing and
in good standing as a corporation under the laws of the State of
Delaware. The Seller has full power and authority corporate and
otherwise) to own its properties and conduct its business as presently
conducted by it, and to enter into and perform its obligations under
the Program Documents, and to sell each Mortgage Loan, and holds all
licenses necessary to carry on its business as now being conducted and
is licensed in, qualified to transact business in and is in good
standing under the laws of each state in which any Mortgaged Property
is located if the laws of such state require licensing or qualification
in order to conduct business of the type conducted by the Seller, and
in any event the Seller was and is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of each
Mortgage Loan.
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(ii) This Agreement, the Master Servicing Agreement and
the Custodial Letter Agreement each has been duly authorized, executed
and delivered by the Seller, and each, assuming the due authorization,
execution and delivery thereof by the Purchaser and the enforceability
thereof against the Purchaser, constitutes the legal, valid and binding
agreement of the Seller, enforceable against the Seller in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, liquidation, moratorium, reorganization or
other similar laws affecting the rights of creditors generally or by
general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
(iii) As of the respective Closing Date, the Purchase Price
and Terms Letter has been duly authorized, executed and delivered by
the Seller, and the Purchase Price and Terms Letter, assuming the due
authorization, execution and delivery thereof by the Purchaser and the
enforceability thereof against the Purchaser, constitutes the legal,
valid and binding agreement of the Seller, enforceable against the
Seller in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, liquidation,
moratorium, reorganization or other similar laws affecting the rights
of creditors generally or by general principles of equity, regardless
of whether enforcement is sought in a proceeding in equity or at law.
(iv) As of the respective Closing Date, the Warranty ▇▇▇▇
of Sale has been duly authorized, executed and delivered by the Seller,
and the Warranty ▇▇▇▇ of Sale constitutes the legal, valid and binding
agreement of the Seller, enforceable against the Seller in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, liquidation, moratorium, reorganization or
other similar laws affecting the rights of creditors generally or by
general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law.
(v) The representations and warranties made by the Seller
under the Master Servicing Agreement and the Warranty ▇▇▇▇ of Sale are
true and correct in all material respects on the respective Closing
Date.
(vi) Neither the delivery of the Mortgage Loans to the
Purchaser, nor the sale of the Mortgage Loans to the Purchaser, nor the
execution or delivery of the Program Documents, nor the consummation of
any of the Transactions herein or therein contemplated, nor the
fulfillment of the terms hereof or thereof, will result in the breach
of any term or provision of the certificate of incorporation or by-laws
of the Seller, or conflict with, result in a material breach or
violation or an acceleration of or constitute a default under any
material term of any indenture or other agreement or instrument to
which the Seller is a party or by which the Seller is bound, or any
statute, order or regulation applicable to the Seller of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Seller.
(vii) There are no actions, proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller
that, in the Seller's judgment, if determined adversely to the Seller,
would prevent the consummation of any of the Transactions or would
materially and adversely affect the interests of the Purchaser in any
of the Mortgage Loans, the validity or enforceability of any of the
Program Documents or the ability of the Seller to fulfill the terms of
any of the Program Documents.
(viii) The Mortgage Loans were originated by the Seller or
by a savings association, a savings bank, a commercial bank or similar
banking institution that is supervised and examined by a Federal or
state banking authority, a mortgagee approved by the Secretary of the
Department of Housing and Urban Development pursuant to Section 203 and
211 of the National Housing Act or a FNMA- or FHLMC-approved seller.
(b) The Seller hereby represents and warrants to the Purchaser, as
to each Mortgage Loan as of each respective Closing Date or such other date as
may be specified below, that:
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(i) The information set forth in the Mortgage Loan
Schedule is true and correct in all material respects;
(ii) As of the related Closing Date, the Mortgage Loan is
not delinquent in payment more than 29 days and the Mortgage Loan has
not been dishonored; the Mortgage Loan has never been delinquent in
payment for more than 59 days and has not more than once during the
twelve months preceding the Cut-Off Date been delinquent in payment for
more than 30 days; there are no material defaults under the terms of
the Mortgage Loan; the Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party other
than the owner of the Mortgaged Property subject to the Mortgage,
directly or indirectly, for the payment of any amount required by the
Mortgage Loan;
(iii) To the best of the Seller's knowledge, there are no
delinquent taxes or other outstanding charges affecting the related
Mortgaged Property which would permit a taxing authority to initiate
foreclosure proceedings against the Mortgaged Property;
(iv) The terms of the Mortgage Note and the Mortgage have
not been impaired, waived, altered or modified in any respect, except
by written instruments contained in the Mortgage File, the substance of
which waiver, alteration or modification is reflected on the Mortgage
Loan Schedule. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement which assumption
agreement is part of the Mortgage File and the terms of which are
reflected in the Mortgage Loan Schedule;
(v) The Mortgagor has not asserted that the Mortgage Note
and the Mortgage are subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the Mortgage Note and the Mortgage, or
the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of
usury and to the best of the Seller's knowledge, no such right of
rescission, set-off, counterclaim or defense has been asserted by any
Person other than the obligor with respect thereto;
(vi) Pursuant to the terms of the Mortgage, all buildings
or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the
Mortgaged Property is located. If required by the Flood Disaster
Protection Act of 1973, as amended, the Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration. All individual
insurance policies contain a standard mortgagee clause naming the
Seller and its successors and assigns as mortgagee, and all premiums
thereon have been paid. The Mortgage obligates the Mortgagor thereunder
to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such
Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor
has been given an opportunity to choose the carrier of the required
hazard insurance, provided the policy is not a "master" or "blanket"
hazard insurance policy covering a condominium or any hazard insurance
policy covering the common facilities of a planned unit development. To
the best of the Seller's knowledge the hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and
effect, and will be in full force and effect and insure to the benefit
of the Purchaser upon the consummation of the transactions contemplated
by this Agreement. The Seller has not engaged in, and has no knowledge
of the Mortgagor's having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either
including, without limitation, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or
entity, and no such unlawful items have been received, retained or
realized by the Seller.
14
(vii) At the time of origination of such Mortgage Loan and
thereafter, 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 or disclosure laws required to be complied with by the
Seller as the originator of the Mortgage Loan and applicable to the
Mortgage Loan have been complied with in all material respects;
(viii) The Mortgage has not been satisfied as of the Closing
Date, canceled or subordinated, in whole, or rescinded, and the
Mortgaged Property has not been released from the lien of the Mortgage,
in whole or in part (except for a release that does not materially
impair the security of the Mortgage Loan or a release the effect of
which is reflected in the Loan-to-Value Ratio for the Mortgage Loan as
set forth in the Mortgage Loan Schedule), nor to the best of the
Seller's knowledge has any instrument been executed that would effect
any such release, cancellation, subordination or rescission;
(ix) Ownership of the Mortgaged Property is held in fee
simple (except for Mortgage Loans as to which the related land is held
in a leasehold which extends at least five years beyond the maturity
date of the Mortgage Loan). Except as permitted by the fourth sentence
of this paragraph (ix), the Mortgage is a valid, subsisting and
enforceable first lien on the Mortgaged Property, including all
buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems
affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing
the Mortgage Note's original principal balance. The Mortgage and the
Mortgage Note do not contain any evidence on their face of any security
interest or other interest or right thereto. Such lien is free and
clear of all adverse claims, liens and encumbrances having priority
over the first lien of the Mortgage subject only to (1) the lien of
non-delinquent current real property taxes and assessments not yet due
and payable, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording which are acceptable to mortgage lending institutions
generally, or which are specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and
either (A) which are referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan, or (B) which do
not in the aggregate adversely affect the appraised value of the
Mortgaged Property as set forth in such appraisal, and (3) other
matters to which like properties are commonly subject which do not in
the aggregate materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security
agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates
a valid, subsisting and enforceable first lien and first priority
security interest on the property described therein;
(x) The Mortgage Note is not subject to a third party's
security interest or other rights or interest therein;
(xi) The Mortgage Note and the Mortgage and any other
agreement executed and delivered by a Mortgagor in connection with a
Mortgage Loan are genuine, and each is the legal, valid and binding
obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other
such related agreement had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and any
such agreement, and the Mortgage Note, the Mortgage and any other such
related agreement have been duly and properly executed by other such
related parties. No fraud, error, omission, misrepresentation, or
negligence with respect to a Mortgage Loan has taken place on the part
of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. The Mortgage Loan has been closed and
the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied
with. All costs, fees and expenses incurred in
15
making or closing the Mortgage Loan and the recording of the Mortgage
were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage.
(xii) Immediately prior to the transfer and assignment to
the Purchaser, the Mortgage Note and the Mortgage were not subject to
an assignment or pledge, and the Seller had good title to and was the
sole owner thereof and had full right to transfer and sell the Mortgage
Loan free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest, including, to the best knowledge of the
Seller, any lien, claim or other interest arising by operation of law;
(xiii) The Mortgage Loan is covered by either (i) an
attorney's opinion of title and abstract of title, the form and
substance of which is acceptable to prudent mortgage lending
institutions making mortgage loans in the area wherein the Mortgaged
Property is located or (ii) an ALTA lender's title insurance policy or
other generally acceptable form of policy or insurance acceptable to
FNMA or FHLMC and each such title insurance policy is issued by a title
insurer acceptable to FNMA or FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the
Seller, its successors and assigns, as to the first priority lien of
the Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exception contained in clauses (1), (2) and (3) of
paragraph (ix) of this Section 5, and in the case of adjustable rate
Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment to the Mortgage Interest Rate and
Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender's title
insurance policy insures against encroachments by or upon the Mortgaged
Property. The Seller, its successor and assigns, are the sole
insurereds of such lender's title insurance policy, and such lender's
title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and to the best of Seller's
knowledge no prior holder of the related Mortgage, including the
Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy, including without
limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by
the Seller.
(xiv) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related 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 a default,
breach, violation or event permitting acceleration, except for any
Mortgage Loan payment which is not late by more than 30 days, and the
Seller has not waived any default, breach, violation or event
permitting acceleration;
(xv) As of the date of origination or purchase or the
Mortgage Loans by the Seller there were no mechanics' or similar liens
or claims which had been filed for work, labor or material (and, to the
best of the Seller's knowledge, no rights are outstanding that under
law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(xvi) All improvements subject to the Mortgage lay wholly
within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium
unit) and no improvements on adjoining properties encroach upon the
Mortgaged Property except those which are insured against by the title
insurance policy referred to in paragraph (xiii) above and all
improvements on the property comply with all applicable zoning and
subdivision laws and ordinances;
(xvii) Each Mortgage Loan (except for the Mortgage Loans
referred to in the next sentence) was originated by the Seller, and at
the time of each such origination the Seller was a mortgagee approved
by the
16
Secretary of Housing and Urban Development (the "Secretary") pursuant
to Sections 203 and 211 of the National Housing Act. Each Mortgage Loan
was underwritten in accordance with the Underwriting Guide as in effect
at the time of origination, except to the extent the Seller believed at
such time that a variance from such Underwriting Guide was warranted by
compensating factors with respect to such Mortgage Loan. The Mortgage
contains the usual and customary provision of the Seller at the time of
origination for the acceleration of the payment of the unpaid principal
balance of the Mortgage Loan if the related Mortgaged Property is sold
without the prior consent of the mortgagee thereunder;
(xviii) The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado, or other
casualty which damage is not fully insured against by a current and
active insurance policy (or at least insured up to the outstanding
principal balance of the Mortgage Loan) and, to the best of Seller's
knowledge is in good repair. There have not been any condemnation
proceedings with respect to the Mortgaged Property and there are no
pending proceedings.
(xix) The related Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including,
(1) in the case of a Mortgage designated as a deed of trust, by
trustee's sale or judicial foreclosure, and (2) otherwise by judicial
foreclosure. The Seller has no knowledge of any homestead or other
exemption available to the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;
(xx) If the Mortgage constitutes a deed of trust, a
trustee, duly qualified if required under applicable law to act as
such, has been properly designated and currently so serves and is named
in the Mortgage, and no fees or expenses are or will become payable to
the trustee under the deed of trust, except in connection with a
trustee's sale or attempted sale after default by the Mortgagor;
(xxi) The Mortgage File contains an appraisal of the
related Mortgage Property signed prior to the approval of the Mortgage
Loan application by a qualified appraiser, duly appointed by the
Seller, 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 the
Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of FNMA or FHLMC and any applicable requirement of Title
XI of the Federal Institutions Reform, Recovery, and Enforcement Act of
1989 and the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated;
(xxii) No Mortgage Loan contains "subsidized buydown" or
"graduated payment" features; and
(xxiii) The Mortgaged Property is a single-family (one- to
four-unit) dwelling residence erected thereon, or an individual
condominium unit in a condominium, a cooperative, or an individual unit
in a planned unit development or in a de minimis planned unit
development. No such residence is a mobile home or a manufactured
dwelling which is not permanently attached to the land.
(xxiv) 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 and disclosure laws applicable to the Mortgage Loan have
been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations,
and the Seller shall maintain in its possession, available for the
Purchaser's inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements; The Mortgagor has
received all disclosure materials required by Section 226 19(b) of the
Federal Reserve Board's Regulation Z and otherwise required by
applicable law with respect to the making of adjustable rate mortgage
loans.
17
(xxv) There are no circumstances or conditions with respect
to the Mortgage, the Mortgaged Property, the Mortgage File, or, to the
best of Seller's knowledge, the Mortgagor or the Mortgagor's credit
standing that can reasonably be expected to cause private institutional
investors to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage to become delinquent, or adversely affect the value
or marketability of the Mortgage Loan.
(c) It is understood and agreed that the representations and
warranties set forth in these Sections 5 (a) and 5 (b) shall survive the sale
and delivery of the Mortgage Loans to the Purchaser and shall inure to the
benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment or the examination of any
Mortgage File. It is further understood and agreed that with respect to the
representations and warranties contained in Section 5 which were made to the
best of Seller's knowledge after reasonable inquiry and investigation, if it is
discovered by the Seller or the Purchaser that the substance of such
representation or warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, the Purchaser shall be
entitled to all the remedies to which it would be entitled for breach of
representation or warranty, including, without limitation, the repurchase
requirements contained herein, notwithstanding Seller's lack of knowledge with
respect to the inaccuracy at the time the representation or warranty was made.
Upon discovery by either Seller or the Purchaser of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the interest of the Purchaser in one or more of Mortgage Loans, the party
discovering such breach shall give prompt written notice to the other.
Seller shall have ninety (90) days from the earlier of either discovery
by or notice to the Seller of any breach of a representation or warranty which
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans or the interest of the Purchaser therein, to cure such breach in all
material respects and, if such breach cannot be cured the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan or Mortgage Loans at the
Repurchase Price as defined in the next sentence The Repurchase Price is defined
as an amount equal to (i) the greater of (a) the unpaid principal balance of
such Mortgage Loan or (b) during the first three years after the Closing Date,
the product of (x) the Purchase Price Percentage as updated to reflect the
current maturity for such Mortgage Loan set forth in the related Purchase Price
and Terms Letter, and (y) the unpaid principal balance of such Mortgage Loan,
plus (ii) interest on such unpaid principal balance of such Mortgage Loan at the
Mortgage Loan Remittance Rate from the last date through which interest has been
paid and distributed to the Purchaser to the date of repurchase, plus (iii) any
unreimbursed Servicing Advances with respect to such Mortgage Loan, less (iv)
amounts received or advanced in respect of such repurchased Mortgage Loan which
are being held in the Custodial Account for distribution in the month of
repurchase. The rights of Purchaser under this paragraph shall inure only to
Purchaser and not to Purchaser's successors or assigns. Any such repurchase
shall be accomplished by deposit in the Custodial Account of the amount of the
repurchase price, after deducting therefrom any amounts received in respect of
such repurchased Mortgage Loan and being held in the Custodial Account for
future distribution in accordance with the Master Servicing Agreement.
If the Seller is required to repurchase any Mortgage Loan pursuant to
the preceding paragraph on or prior to the one hundred and twentieth (120th) day
following the related Closing Date, the Seller may, at its option, substitute a
Qualified Substitute Mortgage Loan for such deficient Mortgage Loan within such
one hundred and twenty day (120) period, in lieu of repurchasing such deficient
Mortgage Loan. As to any Deleted Mortgage Loan for which the Seller substitutes
a Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser for such Qualified Substitute
Mortgage Loan or Loans the Mortgage Note, the Mortgage, the Assignment and such
other documents and agreements as are required by Section 3(b), with the
Mortgage Note endorsed as required by Section 3(b). No substitution will be made
in any calendar month after the Determination Date for such month. The Seller
shall deposit in the Custodial Account the Monthly Payment less the Servicing
Fee due on such Qualified Substitute Mortgage Loan or Loans in the month
following the date of such substitution. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Seller. For the month of substitution, distribution to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received by the
18
Seller in respect of such Deleted Mortgage Loan. The Seller shall give written
notice to the Purchaser that such substitution has taken place and shall amend
the 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. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement in all
respects, and the Seller shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Sections 5(a) and 5(b)
hereof. The Purchaser shall promptly effect the reconveyance of such Deleted
Mortgage Loan to the Seller.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate outstanding 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
Seller in the month of substitution pursuant to Section 5.01 of the Master
Servicing Agreement. Accordingly, on the date of such substitution, the Seller
will deposit from its own funds into the Custodial Account an amount equal to
the amount of such shortfall in accordance with the Master Servicing Agreement.
In addition to such cure, repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and hold it harmless against any loss,
damages, penalties, fines, forfeitures, legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the Seller's
representations and warranties contained in Sections 5(a) or (b) hereof. It is
understood and agreed that the obligations of the Seller set forth in this
Section 5(c) to cure a breach, or to repurchase or substitute a defective
Mortgage Loan and to indemnify the Purchaser as provided in this Section 5(c),
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
(d) With respect to each Converted Mortgage Loan for which a fixed
rate conversion has occurred, the Seller shall repurchase such Mortgage Loan on
or before the first day of the month immediately following the date of such
conversion at a price equal to (i) the Assumed Principal Balance of the Mortgage
Loan plus (ii) accrued interest on such Assumed Principal Balance at the
Mortgage Loan Remittance Rate from the date to which interest has last been paid
and distributed to the Purchaser to the date of repurchase. Any such repurchase
shall be accomplished by deposit into the Custodial Account of the amount set
forth in the preceding sentence.
With respect to each Converted Mortgage Loan for which an Index
conversion has occurred, the Seller shall substitute a loan that meets the
definition of a Qualified Substitute Mortgage Loan in all respects (except for
provision (iii) of such definition) within a period of ninety (90) days
following the date of such conversion.
(e) Seller hereby agrees that it will not take any action to
solicit the prepayment of any Mortgage Loan sold to Purchaser under the terms of
this Agreement. The preceding statement shall not preclude Seller from engaging
in general advertising or from servicing the refinance needs of a Mortgagor who,
without solicitation in violation of this Section 5(e), contacts Seller in
connection with the refinance of such Mortgagor's Mortgage Loan.
(f) If the related Mortgagor is 30 days or more delinquent with
respect to the Mortgage Loan's first Monthly Payment and remains so for 60 days
either (i) from origination of said Mortgage Loan, or (ii) after the Closing
Date, the Seller shall, at the Purchaser's option, repurchase such Mortgage Loan
from the Purchaser in accordance with Section 5 hereof.
Section 6. Representations, Warranties and Agreements of the
Purchaser.
(a) The Purchaser, without conceding that any Mortgage Loans are
securities, hereby makes the following representations, warranties and
agreements, which shall have been deemed to have been made as of the respective
Closing Date:
19
(i) The Purchaser is acquiring the Mortgage
Loans for its own account only and not for any other Person.
(ii) The Purchaser considers itself a
substantial, sophisticated institutional investor having such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Mortgage Loans.
(iii) The Purchaser has been furnished with all
information regarding the Mortgage Loans which it has requested.
(iv) Neither the Purchaser nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise
disposed of any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security from, or
otherwise approached or negotiated with respect to any Mortgage Loan,
any interest in any Mortgage Loan or any other similar security with,
any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action
that would constitute a distribution of the Mortgage Loans under the
Securities Act of 1933, as amended (the "Securities Act"), or that
would render the disposition of any Mortgage Loan a violation of
Section 5 of the Securities Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize
any person to act, in such manner with respect to the Mortgage Loans.
(b) The Purchaser represents and warrants to the Seller that as of
the date hereof, as of the date of each respective Purchase Price and Terms
Letter and as of each respective Closing Date (or as of such other date or dates
as may be expressly set forth below):
(i) The Purchaser is duly organized, validly
existing and in good standing as a corporation under the laws of the
Maryland. The Purchaser has full power and authority (corporate and
otherwise) to enter into and perform its obligations under the Program
Documents.
(ii) This Agreement, the Master Servicing
Agreement and the Custodial Letter Agreement each has been duly
authorized, executed and delivered by the Purchaser, and each
constitutes the legal, valid and binding agreement of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
(iii) As of the date the respective Purchase Price
and Terms Letter and as of the respective Closing Date, the Purchase
Price and Terms Letter has been duly authorized, executed and delivered
by the Purchaser, and the Purchase Price and Terms Letter constitutes
the legal, valid and binding agreement of the Purchaser, enforceable
against the Purchaser in accordance with its terms.
(iv) Neither the delivery of the Purchase Price
to the Seller, nor the purchase of the Mortgage Loans by the Purchaser,
nor the execution or delivery of the Program Documents, nor the
consummation of any of the Transactions herein or therein contemplated,
nor the fulfillment of the terms hereof or thereof, will result in the
breach of any term or provision of the charter or by-laws of the
Purchaser, or conflict with, result in a breach, violation or
acceleration of or constitute a default under a material term of any
indenture or other agreement or instrument to which the Purchaser is a
party or by which the Purchaser is bound, or any statute, order or
regulation of any court, regulatory body, administrative agency,
governmental body or arbitrator.
(v) There are no actions, proceedings or
investigations pending or, to the Purchaser's knowledge, threatened
against the Purchaser that, either in any one instance or in the
aggregate, could draw into
20
question the validity of any of the Program Documents or prevent the
consummation of any of the Transactions.
(vi) No consent, approval, authorization or order
of any court, regulatory body, administrative agency, governmental body
or arbitrator is required for the execution or delivery by the
Purchaser of any of the Program Documents, the performance by the
Purchaser of its obligations hereunder or the consummation by the
Purchaser of any of the Transactions.
(vii) The Purchaser has not dealt with any broker,
investment banker, agent or other Person, except the Seller, who may be
entitled to any commission or compensation in connection with the
purchase of the Mortgage Loans.
Section 7. Servicing Obligations of the Seller. From and after
each Closing Date, the Seller will service and administer each Mortgage Loan
purchased on such Closing Date pursuant to the terms of the Master Servicing
Agreement for the benefit of the Purchaser, as the initial "Purchaser" thereof,
and such Mortgage Loan will be deemed to be added to the "Mortgage Loan
Schedule" under the Master Servicing Agreement.
Section 8. Intention of the Parties. With respect to each
Transaction, it is the intention of the parties that the Purchaser is
purchasing, and the Seller is selling, interests in the Mortgage Loans and not a
debt instrument of the Seller or any other security. Accordingly, the parties
each intend to treat each Transaction for federal income tax purposes as a sale
by the Seller, and a purchase by the Purchaser, of the related Mortgage Loans.
Section 9. Costs. The Seller shall pay any commissions due its
salesmen and the legal fees and expenses of its attorneys and those expenses
incurred in connection with the transfer and delivery of the Mortgage Loans,
including without limitation recording fees, fees for title policy endorsements
and continuations. The fees and expenses of the Custodian and the Purchaser's
brokers' and attorney's fees, shall be paid by the Purchaser.
Section 10. Further Agreements of the Seller. The Seller and the
Purchaser each agree to execute and deliver to the other such reasonable and
appropriate additional documents, instruments or agreements, and to take such
actions, as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Section 11. Mandatory Delivery. The sale and delivery on the
related Closing Date of the Mortgage Loans described on the related Final
Mortgage Loan Schedule is mandatory from and after the date of the execution of
the related Purchase Price and Terms Letter, it being specifically understood
and agreed that each Mortgage Loan is unique and identifiable on the date of
such Purchase Price and Terms Letter and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred by
the Purchaser (including damages to prospective Subsequent Purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more substitute Mortgage Loans delivered
pursuant to Section 4 or (iii) one or more Mortgage Loans otherwise acceptable
to the Purchaser on or before the related Closing Date. All rights and remedies
of the Purchaser under this Agreement are distinct from, and cumulative with,
any other rights or remedies under this Agreement or afforded by law or equity
and all such rights and remedies may be exercised concurrently, independently or
successively.
21
Section 12. Termination. Either the Seller or the Purchaser may
terminate this Agreement as to future Transactions upon notice to the other
party, but no such termination shall affect any Transaction previously
consummated or the rights and obligations of the Seller and the Purchaser with
respect thereto under the Program Documents.
Section 13. Severability Clause. Any part, provision,
representation or warranty of this Agreement that is prohibited or that is held
to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement that
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law that prohibits
or renders void or unenforceable any provision hereof. 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 nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
Section 14. Waivers. No term or provision of this Agreement may
be waived or modified unless such waiver or modification is in writing and
signed by the party against whom such waiver or modification is sought to be
enforced.
Section 15. Survival. The Seller agrees that the representations,
warranties and agreements made by the Seller herein and in any certificate or
other instrument delivered pursuant hereto shall be deemed to be relied upon by
the Purchaser, notwithstanding any investigation heretofore or hereafter made by
the Purchaser or on the Purchaser's behalf.
Section 16. Successor and Assigns; Assignment of Purchase
Agreement. This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective successors and
assigns of the Seller and the Purchaser. This Agreement cannot be assigned,
pledged or hypothecated by the Purchaser or the Seller to a third party without
the consent of the other party to this Agreement.
Section 17. Notices. Any notices or other communications
permitted or required hereunder shall be in writing and shall be deemed
conclusively to have been duly given if personally delivered, sent by overnight
courier, or mailed by registered mail, postage prepaid, and return receipt
requested, or transmitted by telex or telegraph and confirmed by a similar
mailed writing, or otherwise if received, if to the Purchaser, addressed to the
Purchaser at RWT Holdings, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or to such other address as the Purchaser
may designate in writing to the Seller, and if to the Seller, addressed to the
Seller at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: General Counsel, with a copy to the Senior Vice President, Secondary
Markets, at the same address, or to such other address as the Seller may have
designated in writing to the Purchaser.
Section 18. Counterparts. This Agreement may be executed in
several counterparts, each of which shall constitute an original, but all of
which together shall constitute one instrument notwithstanding that all parties
are not signatories to the same counterparts.
Section 19. Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the parties with respect to the matters
and transactions contemplated by this Agreement and supersedes any prior
agreement and understandings with respect to those matters and transactions;
provided, however, that this Agreement
22
shall not be deemed to supersede any other Program Document or any agreement,
instrument or other document executed in connection therewith.
Section 20. Governing Law and Amendments. This Agreement is to be
governed by, and construed in accordance with, the laws of the State of Florida.
Neither this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought.
Section 21. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
Section 22. 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;
(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 23. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, 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 24. Correspondent Lending Program. Under the
Correspondent Lending Program, Seller may, from time to time, agree to pay a
Correspondent Lender a Correspondent Trailing Premium ("CTP") 0.125% to 0.75% of
the annualized principal balance of the applicable Mortgage Loan, less an
administrative fee. The CTP is paid by Seller on a monthly basis out of the
Monthly Payment received from the applicable Mortgagor. Seller is obligated to
pay such fee to the Correspondent Lender as long as the applicable Mortgage Loan
remains outstanding and the Mortgagor's Monthly Payment are current.
23
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION and RWT HOLDINGS,
INC. have caused this Master Mortgage Loan Purchase Agreement to be executed by
their respective officers thereunto duly authorized as of the 1st day of April,
1998.
RWT HOLDINGS, INC.
By:________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
By:________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
24
EXHIBIT 1
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items:
1. The documents specified in Section 3(b) of the Agreement.
2. Copy of survey of the Mortgaged Property, if any.
3. 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, homes
association declarations, etc.
4. Original hazard insurance policy and, if required by law, flood
insurance policy, with extended coverage of the hazard insurance
policy.
5. Mortgage Loan closing statement.
6. Mortgage Loan application.
7. Verification of employment and income.
8. Verification of acceptable evidence of source and amount of
downpayment.
9. Credit report on the Mortgagor.
10. Appraisal report.
11. Photograph of the Mortgaged Property.
12. Executed disclosure statement.
13. 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 Seller or others, required to document the Mortgage
Loan or to service the Mortgage Loan.
EXHIBIT 2
FORM OF MASTER SERVICING AGREEMENT
[INTENTIONALLY OMITTED]
EXHIBIT 3
FORM OF CUSTODIAL AGREEMENT
[INTENTIONALLY OMITTED]
EXHIBIT 4
UNDERWRITING GUIDE OF THE SELLER
[INTENTIONALLY OMITTED]
EXHIBIT 5
FORM OF CERTIFICATE OF THE SELLER
I, _______________________, hereby certify that I am the duly
elected ________________ of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, a corporation
organized under the laws of the State of Delaware (the "Seller") and further as
follows:
1. Attached hereto as Exhibit A is a true and correct
copy of the certificate of incorporation of the Seller which is in full
force and effect on the date hereof. There has been no amendments or
modifications to the certificate of incorporation since
_______________. Attached hereto as Exhibit B is a true and correct
copy of the by-laws of the Seller which are in full force and effect on
the date hereof. There have been no amendments or modifications of the
by-laws since ______________. No event has occurred since _____________
that has affected the good standing of the Seller under the laws of the
State of Delaware.
2. Each Person who, as an officer or representative of
the Seller, signed (a) the Master Mortgage Loan Purchase Agreement,
dated as of April 1, 1998 between RWT Holdings, Inc. ( the "Purchaser")
and the Seller (the "Master Mortgage Loan Purchase Agreement"), (b) the
Master Servicing Agreement, MLCC Flow Delivery Program, dated as of
April 1, 1998, between the Seller and the Purchaser (the "Master
Servicing Agreement"), (c) the Custodial Letter Agreement, dated as of
April 1, 1998 , by and among the RWT Holdings, Inc. as "Seller",
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital as the "Purchaser" and Bankers Trust
Company of California, N.A. as "Custodian", and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation as "Servicer" (the "Custodial Letter Agreement"), (d) any
Warranty ▇▇▇▇ of Sale executed by the Seller (a "Warranty ▇▇▇▇ of
Sale"; the Master Mortgage Loan Purchase Agreement, the Master
Servicing Agreement, the Custody Agreement and each Warranty ▇▇▇▇ of
Sale, collectively, the "Agreements"), (e) any of the Assignments (as
defined in the Master Mortgage Loan Purchase Agreement) or (f) any
other document delivered prior hereto or on the date hereof in
connection with the purchase described in the Agreements, was, at the
respective times of such signing and delivery, and is now duly elected
or appointed, qualified and acting as such officer or representative,
and the signatures of such persons appearing on such documents are
their genuine signatures.
3. The sale of the Mortgage Loans and the transactions
contemplated by the Agreements are in the ordinary course of the
Seller's business.
-2-
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Seller as of the 1st day of April , 1998.
[Seal] __________________________________________
I, ___________________, the Secretary of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation (the "Seller"), hereby certify that __________________ is the duly
elected, qualified and acting Vice President of the Seller and that the
signature appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto assigned my name as of the
27th day of March, 1997.
__________________________________
EXHIBIT 6
[Reserved.]
[Intentionally Omitted]
EXHIBIT 7
[Reserved.]
[Intentionally Omitted]
EXHIBIT 8
[Reserved.]
[Intentionally Omitted]
EXHIBIT 9
[Reserved.]
[Intentionally Omitted]
EXHIBIT 10
FORM OF WARRANTY ▇▇▇▇ OF SALE
On this ____ day of ___________, 19___, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Corporation (the "Seller") does hereby sell, transfer, assign, set over and
convey to RWT Holdings, Inc. (the "Purchaser"), without recourse, all of the
right, title and interest of the Seller in and to each Mortgage Loan set forth
on the Mortgage Loan Schedule attached hereto as Schedule I, including all
interest and principal received by the Seller on or with respect to each such
Mortgage Loan after the Cut-off Date (other than payments of principal and
interest due on such Mortgage Loan on or before the Cut-off Date), any related
Mortgage 100sm Pledge Agreement or ParentPower(R) Agreement and the related
Mortgage Files. Each Mortgage Loan set forth on the attached Mortgage Loan
Schedule shall be subject to the Master Servicing Agreement, dated as of March
7, 1997, between the Seller and the Purchaser (the "Master Servicing Agreement")
from the date hereof, and the Seller hereafter shall service and administer each
such Mortgage Loan pursuant thereto for the Purchaser as the "Owner" thereunder.
In addition to the other representations and warranties set forth in
the Master Servicing Agreement with respect to the Mortgage Loans set forth on
the attached Mortgage Loan Schedule, the Seller hereby further represents to the
Purchaser that, with respect to each of such Mortgage Loans as of the Closing
Date:
(i) If such Mortgage Loan is an Adjustable Rate Mortgage Loan, on
each Interest Rate Adjustment Date, the Mortgage Interest Rate
will be adjusted to equal the sum of the Index, plus the
applicable Gross Margin, rounded [up] to the nearest ______%.
The Mortgage Interest Rate adjusts every _____ (___) months
over the term of the Mortgage Loan, and the first Interest
Rate Adjustment Date is _____ (___) months after the date of
origination of the Mortgage Loan.
(ii) [The related Mortgage Note requires a Monthly Payment that is
sufficient [(a) during the period prior to the first
Adjustment Date,] to fully amortize the original principal
balance over the original term thereof and to pay interest at
the related Mortgage Interest Rate [and (b) during the
succeeding period following each Payment Adjustment Date, to
fully amortize the outstanding principal balance as of the
first day of such period over the then remaining term of such
Mortgage Note and to pay interest at the related Mortgage
Interest Rate].] [The Monthly Payment is adjusted semiannually
on the relevant Payment Adjustment Date so that the Monthly
Payment is sufficient, during the first ten years of the term
of the Mortgage Loan, to pay only the interest due thereon
and, thereafter, to fully amortize, without balloon payments,
the original principal balance over its remaining term to
stated maturity and to pay interest at the related Mortgage
Interest Rate in effect on such Payment Adjustment Date]. No
Mortgage Loan provides for negative amortization.
(iii) Each Mortgage Loan is directly secured by a first lien on a
single parcel of real property improved by a one- to
four-family dwelling.
All capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Master Servicing Agreement.
This Warranty ▇▇▇▇ of Sale shall be governed by, and construed in accordance
with, the laws of the State of New York.
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________