Exhibit 99.2
MORGAN STANLEY CAPITAL I INC.
as Purchaser
and
MORGAN STANLEY MORTGAGE CAPITAL INC.
as Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of January 1, 2006
Fixed-Rate, Adjustable-Rate, and Hybrid Adjustable-Rate Mortgage
Loans
Morgan Stanley Mortgage Loan Trust 2006-1AR,
Mortgage Pass-Through Certificates, Series 2006-1AR
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Table of Contents
Page
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ARTICLE I.
DEFINITIONS
Section 1.01.
Definitions............................................................1
ARTICLE II. SALE OF
MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale and Assignment of Mortgage
Loans..................................2
Section 2.02. Recognition of
Trustee.................................................2
Section 2.03. Obligations of Seller Upon
Sale........................................2
Section 2.04. Payment of Purchase Price for the Mortgage
Loans.......................4
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Seller Representations and Warranties Relating to
the
Mortgage
Loans.........................................................4
Section 3.02. Seller Representations and
Warranties.................................11
ARTICLE IV. SELLER'S
COVENANTS
Section 4.01. Covenants of the
Seller...............................................13
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE SELLER INFORMATION
Section 5.01.
Indemnification.......................................................13
ARTICLE VI.
TERMINATION
Section 6.01.
Termination...........................................................16
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01.
Amendment.............................................................16
Section 7.02. Governing
Law.........................................................17
Section 7.03.
Notices...............................................................17
Section 7.04. Severability of
Provisions............................................17
Section 7.05.
Counterparts..........................................................17
Section 7.06. Further
Agreements....................................................17
Section 7.07. Intention of the
Parties..............................................18
Section 7.08. Successors and Assigns: Assignment of Purchase
Agreement..............18
Section 7.09.
Survival..............................................................18
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Schedule I - Mortgage Loan Schedule I-1
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MORTGAGE LOAN PURCHASE AGREEMENT, dated as of January 1, 2006
(the
"Agreement"), between MORGAN STANLEY MORTGAGE CAPITAL INC. (the
"Seller" or
"MSMCI") and MORGAN STANLEY CAPITAL I INC. (the "Purchaser").
WITNESSETH:
WHEREAS, the Seller is the owner of either the notes or other
evidence of indebtedness (the "Mortgage Notes") or other evidence
of ownership
so indicated on Schedule I hereto referred to below, and the other
documents
or instruments constituting the Mortgage File (collectively, the
"Mortgage
Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages
(the
"Mortgages") on the properties (the "Mortgaged Properties")
securing such
Mortgage Loans, including rights to (a) any property acquired by
foreclosure
or deed in lieu of foreclosure or otherwise and (b) the proceeds of
any
insurance policies covering the Mortgage Loans or the Mortgaged
Properties or
the obligors on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the
Mortgage
Loans to the Purchaser and the Purchaser purchase the Mortgage
Loans from the
Seller pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing
Agreement
dated as of January 1, 2006 (the "Pooling and Servicing Agreement")
among the
Purchaser, as depositor, Wells Fargo Bank, National Association, as
master
servicer and securities administrator, and LaSalle Bank, National
Association,
as trustee (the "Trustee"), the Purchaser will convey the Mortgage
Loans to
Morgan Stanley Mortgage Loan Trust 2006-1AR (the "Trust").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01.
Definitions. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the
Pooling and
Servicing Agreement.
"Seller Information": The information set forth in the
Prospectus
Supplement or the Free Writing Prospectus under the caption:
"Description of
the Mortgage Loans--Loan Purchasing Guidelines and Underwriting
Standards",
"--Loan Purchasing Guidelines--Morgan Stanley Mortgage Capital
Inc."
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ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale and Assignment of Mortgage Loans.
(a) On and of the date hereof, MSMCI hereby sells, assigns and
transfers to the Depositor all of its right, title and interest in
the
Mortgage Loans and all rights and obligations related thereto as
provided
under the Agreement to the extent relating to the Mortgage Loans,
the
Depositor hereby accepts such assignment from MSMCI (the "First
Assignment and
Assumption"), and the Seller hereby acknowledges the First
Assignment and
Assumption.
(b) On and of the date hereof, immediately after giving effect
to
the First Assignment and Assumption, the Depositor hereby sells,
assigns and
transfers to the Trustee, on behalf of the Trust, all of its right,
title and
interest in the Mortgage Loans and all rights and obligations
related thereto,
and the Trustee, on behalf of the Trust, hereby accepts such
assignment from
the Depositor (the "Second Assignment and Assumption"), and the
Seller hereby
acknowledges the Second Assignment and Assumption.
(c) On and as of the date hereof, MSMCI represents and warrants
to
the Depositor and the Trustee that MSMCI has not taken any action
that would
serve to impair or encumber the respective ownership interests of
the
Depositor and the Trustee in the Mortgage Loans since the date of
MSMCI's
acquisition of the Mortgage Loans.
Section 2.02.
Recognition of Trustee
(a) From and after the date hereof, both MSMCI and the
Depositor
shall note the transfer of the Mortgage Loans to the Trustee, in
their
respective books and records and shall recognize the Trustee, on
behalf of the
Trust, as of the date hereof, as the owner of the Mortgage Loans,
and Servicer
shall service the Mortgage Loans for the benefit of the Trust
pursuant to the
Agreement, the terms of which are incorporated herein by reference.
It is the
intention of the Servicer, the Depositor, the Trustee and MSMCI
that this
Assignment shall be binding upon and inure to the benefit of the
Depositor,
the Trustee and MSMCI and their respective successors and
assigns.
(b) Without in any way limiting the foregoing, the parties
confirm
that this Assignment includes the rights relating to amendments or
waivers
under the Agreement. Accordingly, the right of MSMCI to consent to
any
amendment of the Agreement and its rights concerning waivers as set
forth in
Section 12.02 of the Agreement shall be exercisable, to the extent
any such
amendment or waiver affects the Mortgage Loans or any of the rights
under the
Agreement with respect thereto (other than the servicing of the
Mortgage
Loans, which shall be enforced by the Master Servicer) by the
Trustee as
assignee of MSMCI.
Section 2.03. Obligations of Seller Upon Sale. (a) In connection
with any
transfer pursuant to Section 2.01 hereof, the Seller further
agrees, at its
own expense, on or prior to the Closing Date, (x) to indicate in
its books and
records that the Mortgage Loans have been sold to the Purchaser
pursuant to
this Agreement and (y) to deliver to the Purchaser and the Trustee
a
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computer file containing a true and complete list of all such
Mortgage Loans
specifying for each such Mortgage Loan, as of the Cut-off Date, its
account
number and Cut-off Date Principal Balance. Such file, which forms a
part of
Schedule A to the Pooling and Servicing Agreement, shall also be
marked as
Schedule I to this Agreement and is hereby incorporated into and
made a part
of this Agreement.
In connection with such transfer and assignment of the Mortgage
Loans, the Seller shall, on behalf of the Purchaser, deliver to and
deposit
with, the Custodian, as the agent of the Trustee, the documents or
instruments
set forth in Section 2.01(a) of the Pooling and Servicing Agreement
with
respect to each Mortgage Loan so transferred and assigned.
If any of the documents referred to above has as of the Closing
Date
been submitted for recording but either (x) has not been returned
from the
applicable public recording office or (y) has been lost or such
public
recording office has retained the original of such document, the
obligations
of the Seller to deliver such documents shall be deemed to be
satisfied upon
(1) delivery to the Custodian no later than the Closing Date, of a
copy of
each such document certified by the Seller in the case of (x) above
or the
applicable public recording office in the case of (y) above to be a
true and
complete copy of the original that was submitted for recording and
(2) if such
copy is certified by the Seller, delivery to the Custodian,
promptly upon
receipt thereof of either the original or a copy of such document
certified by
the applicable public recording office to be a true and complete
copy of the
original. If the original lender's title insurance policy on a
Mortgage Loan
was not delivered as required by this Section 2.01, the Seller
shall deliver
or cause to be delivered to the Custodian, a written commitment or
interim
binder or preliminary report of title issued by the title insurance
or escrow
company, with the original to be delivered to the Custodian,
promptly upon
receipt thereof. The Seller shall deliver or cause to be delivered
to the
Custodian promptly upon receipt thereof any other original
documents
constituting a part of a Mortgage File received with respect to any
Mortgage
Loan, including, but not limited to, any original documents
evidencing an
assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File,
the Seller
shall have 90 days to cure such defect or deliver such missing
document to the
Trustee. If the Seller does not cure such defect or deliver such
missing
document within such time period, the Seller shall either
repurchase or
substitute for such Mortgage Loan in accordance with Section 2.05
of the
Pooling and Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right,
title
and interest to the Mortgage Loans and other property, now existing
and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be
a
sale by the Seller to the Purchaser of all the Seller's right,
title and
interest in and to the Mortgage Loans and other property described
above. In
the event the transaction set forth herein is deemed not to be a
sale, the
Seller hereby grants to the Purchaser a security interest in all of
the
Seller's right, title and interest in, to and under the Mortgage
Loans and
other property described above, whether now existing or hereafter
created, to
secure all of the Seller's obligations hereunder; and this
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Agreement shall constitute a security agreement under applicable
law. The
Seller and the Purchaser shall, to the extent consistent with this
Agreement,
take such actions as may be necessary to ensure that, if this
Agreement were
deemed to create a security interest in the Mortgage Loans, such
security
interest would be deemed to be a perfected security interest of
first priority
under applicable law and will be maintained as such throughout the
term of the
Pooling and Servicing Agreement.
Section 2.04. Payment of Purchase Price for the Mortgage Loans.
In
consideration of the sale of the Mortgage Loans from the Seller to
the
Purchaser on the Closing Date, the Purchaser agrees to pay to the
Seller on
the Closing Date by transfer of immediately available funds, as
directed by
the Seller, an amount equal to $[o] in respect of the Mortgage
Loans (the
"Purchase Price").
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Seller
Representations and Warranties Relating to the
Mortgage Loans. The Seller hereby represents and warrants to the
Purchaser,
with respect to the Mortgage Loans, that as of the Closing Date or
as of such
date specifically provided herein:
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct in all material respects as of the
Cut-off Date.
(b) Seller is the sole owner and holder of the Mortgage Loans
free
and clear of any liens, pledges, except for the pledge of the
Mortgage note by
Seller with a warehouse lender disclosed to Purchaser, charges or
security
interest of any nature, and has full right and authority to sell
and assign
the same.
(c) With respect to each Mortgage Loan that is not a Co-op Loan,
the
Mortgage is a valid, existing and enforceable first (or, if
indicated by
Seller, second) lien on the Mortgaged Property, including all
improvements on
the Mortgaged Property subject only to (i) the lien of current real
property
taxes and assessments not yet due and payable, (ii) covenants,
conditions and
restrictions, rights of way, easements and other matters of the
public record
as of the date of recording being acceptable to Mortgage lending
institutions
generally and specifically referred to in the owner's title
insurance policy
delivered to the originator of the Mortgage loan and which do not
adversely
affect the appraised value of the Mortgaged Property (or underlying
Mortgaged
Property (or underlying Mortgaged Property, in the case of a Co-op
Loan),
(iii) other matters to which like properties are commonly subject
which do not
materially interfere with the benefits of the security intended to
be provided
by the Mortgage or the use, enjoyment, value or marketability of
the related
Mortgaged Property (or underlying Mortgaged Property, in the case
of a Co-op
Loan). Any security agreement, chattel Mortgage or equivalent
document related
to and delivered in connection with the Mortgage loan establishes
and creates
a valid, existing and enforceable first (or, if indicated by
Seller, second)
lien and first (or if indicated by Seller, second) priority
security interest
on the property described therein and the Seller has the full right
to sell
and assign the same to Purchaser. With respect to each Co-op Loan,
the related
Mortgage is a valid, subsisting and enforceable first priority
security
interest on the related
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cooperative shares securing the Mortgage note, subject only to (i)
liens of
the related residential cooperative housing corporation for unpaid
assessments
representing the borrower's pro rata share of the related
residential
cooperative housing corporation's payment for its blanket Mortgage,
current
and future real property taxes, insurance premiums, maintenance
fees and other
assessments to which like collateral is commonly subject and (ii)
other
matters to which like collateral is commonly subject to which do
not
materially interfere with the benefits of the security interest
intended to be
provided by the related security agreement.
(d) The Mortgage Loan is not in default and all monthly payments
due
prior to the transaction have been timely paid and all taxes,
assessments and
insurance premiums, water, sewer and municipal charges, leasehold
payments or
ground rents relating to the property secured by the Mortgage Loan
have been
paid. Seller has not advanced funds or induced or solicited any
advances or
funds by a party other than a borrower directly or indirectly, for
the payment
of any amounts required by the Mortgage loans.
(e) With respect to escrow deposits and escrow payments, all
such
payments are in the possession of Seller and there exist no
deficiencies in
connection therewith for which customary arrangements for repayment
thereof
have not been made.
(f) The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect from the date
of
origination, except by a written instrument which has been
recorded, if
necessary to protect the interest of Purchaser, and which has been
delivered
to Purchaser or to such other person as Purchaser shall designate
in writing.
The substance of any such waiver, alteration or modification has
been approved
by the issuer of any related private mortgage insurance policy and
the title
insurer, if any, to the extent required by the policy. No borrower
has been
released, in whole or in part, except in connection with an
assumption
agreement, approved by the issuer of any related private mortgage
insurance
policy and the title insurer, to the extent required by the policy,
and which
assumption agreement is part of the mortgage file delivered to
Purchaser or to
such other person as Purchaser shall designate in writing.
(g) The Mortgage Loan is not subject to any right of
rescission,
set-off, counter claim or defense and is not unenforceable under
any terms.
The Mortgage note, the Mortgage and any other agreement executed
and delivered
by a borrower or guarantor, if applicable, are genuine, legal,
valid, binding
and enforceable obligations of the maker thereof. All parties to
the Mortgage
note and any other agreement executed and delivered by a borrower
or
guarantor, if applicable, had legal capacity to execute such
documents and all
such documents have, in fact, been properly executed by such
parties.
(h) The Mortgage Loan has not been satisfied, cancelled,
subordinated or rescinded, in whole or in part (other than as to
principal
prepayments in full which may have been received prior to the
transaction
date), and the Mortgaged Property has not been released from the
lien of the
Mortgage, in whole or in part, nor has any instrument been executed
that would
effect any such satisfaction, cancellation, subordination,
rescission or
release.
(i) The Mortgaged Property (or underlying Mortgaged Property, in
the
case of a Co-op Loan) and all improvements thereon are insured
against loss by
fire and other such
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hazards as are customary in the area where the Mortgaged Property
(or
underlying Mortgaged Property, in the case of a Co-op Loan) is
located. Such
coverage shall contain fire and hazard insurance policy with
extended coverage
as called for under the Seller's guide. Such insurance policy and
any other
insurance policy related to the Mortgage Loan or the Mortgaged
Property (or
underlying Mortgaged Property, in the case of a Co-op Loan)
contains a
standard Mortgagee clause naming Seller and its successors and
assigns as
Mortgagee and loss payee. Each Mortgage obligates the borrower
there under to
maintain such insurance at their costs and expense and allows the
Mortgagee to
obtain and maintain such insurance at borrower's costs and expense,
and to
seek reimbursement from the borrower should there be any failure by
the
borrower to maintain such policy. If any flood insurance is
required by
applicable law or pursuant to the Mortgage Loan documents or any
other
applicable requirement, then it has been obtained and in full force
and
effect. Any statements made by the borrower or the Seller in
applications for
such policies were true, complete and correct at the time the
application was
made and there are no events that have occurred since that policy
was issued
that would affect the stated coverage of the policy.
(j) Any and all requirements of any federal, state or local law
which include, but are not limited to usury, truth-in-lending, real
estate
settlement procedures, disclosure laws, consumer credit protection
and equal
credit opportunity have been complied with.
(k) The proceeds of the Mortgage Loan have been fully disbursed
and
there is no requirement or anticipation of future advances there
under (other
than any escrow holdbacks retained pursuant to the terms of a
related
construction loan). All costs, fees and expenses incurred in
making, closing
or recording the Mortgage Loan have been paid.
(l) Seller is the sole owner and holder of the Mortgage Loan
free
and clear of any liens, pledges, except for the pledge of the
Mortgage Note by
Seller with a warehouse lender disclosed to Purchaser, charges or
security
interest of any nature, and has full right and authority to sell
and assign
the same pursuant to this Agreement.
(m) Each Mortgage Loan is covered by an ALTA lender's title
insurance policy or other generally acceptable form of policy or
insurance
acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable
to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction
where the Mortgaged Property is located, insuring (subject to the
exceptions
contained in paragraph (c) above) the Seller, its successors and
assigns, as
to the first priority lien of the Mortgage in the original
principal amount of
the Mortgage Loan. Where required by applicable state law or
regulation, the
Mortgagor has been given the opportunity to choose the carrier of
the required
mortgage title insurance. The Seller, its successors and assigns,
are the sole
insureds of such lender's title insurance policy, such title
insurance policy
has been duly and validly endorsed to the Purchaser or the
assignment to the
Purchaser of the Seller's interest therein does not require the
consent of or
notification to the insurer and such lender's title insurance
policy is in
full force and effect and will be in full 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 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.
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(n) There is no default, breach, violation, anticipated breach
or
event of acceleration existing under the Mortgage or the related
Mortgage Note
and no existing or known 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 of acceleration under such
Mortgage or the
related Mortgage Note.
(o) At settlement of the Mortgage Loan, and, to the Seller's
knowledge as of the transaction date, there were no mechanic's
liens or claims
for work, labor or material affecting the Mortgaged Property (or
the related
residential dwelling unit at the underlying mortgaged property, in
the case of
a Co-op Loan) which are or may be a lien prior to the lien of such
Mortgage
except those which are insured against by the title insurance
policy.
(p) All improvements subject to the Mortgage which were
considered
in determining the appraised value of the Mortgaged Property lie
wholly within
the boundaries and building restriction lines of the Mortgaged
Property (and
wholly within the project with respect to a condominium unit)
except for de
minimis encroachments permitted by the Fannie Mae Guide and which
have been
noted on the appraisal or the title policy affirmatively insures
against loss
or damage by reason of any violation, variation or encroachment or
adverse
circumstance which is either disclosed or would have been disclosed
by an
accurate survey, 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 clause (m) above or are acceptable
under
Fannie Mae or Freddie Mac guidelines and all improvements on the
property
comply with all applicable zoning and subdivision laws and
ordinances.
(q) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with all the terms, conditions and
requirements of
Seller's standards in effect at the time of origination of such
Mortgage Loan.
The Mortgage Notes and Mortgages (exclusive of any riders) are on
forms
generally acceptable to Fannie Mae or Freddie Mac.
(r) The Mortgaged Property is not subject to any material damage
by
waste, fire, earthquake, windstorm, flood or other casualty. At
origination of
the Mortgage Loan there was, and there currently is, no proceeding
pending for
the total or partial condemnation of the Mortgaged Property. To the
best of
the Seller's knowledge, there have not been any condemnation
proceedings with
respect to the Mortgaged Property and to the best of the Seller's
knowledge
there are no such proceedings scheduled to commence at a future
date.
(s) The Mortgage and related Mortgage Note contain customary
and
e
