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RWT HOLDINGS, INC.
Purchaser
MERRILL LYNCH 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
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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
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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 BILL OF SALE
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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 591
Redwood Highway, Suite 3140, Mill Valley California, 94941 (the
"Purchaser") and
Merrill Lynch Credit Corporation, having an office at 4802 Deer
Lake Drive East,
Jacksonville, Florida 32246-6484 (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 Bill 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 Bill 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", Merrill
Lynch 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": Merrill Lynch 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 Bill 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
Bill 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 Bill 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 Bill 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 Bill
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.
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"Underwriting Guide": The Underwriting Guide of the Seller
attached hereto as Exhibit 4, as revised from time to time.
"Warranty Bill of Sale": The warranty bill 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
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