<PAGE>
Exhibit 99.1
EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
between
MERRILL LYNCH MORTGAGE LENDING, INC.
as Seller
and
MERRILL LYNCH MORTGAGE INVESTORS, INC.
as Purchaser
relating to the
Mortgage Loans originated by Ownit Mortgage Solutions, Inc.
and included in
Merrill Lynch Mortgage Investors Trust, Series 2007-HE2
Dated as of
March 1, 2007
<PAGE>
<TABLE>
<S>
<C>
Section 1.
Definitions.................................................
1
Section 2. Purchase
and Sale of the Mortgage Loans and Related Rights.. 5
Section 3. Mortgage
Loan Schedule...................................... 5
Section 4. Mortgage
Loan Transfer...................................... 5
Section 5. Examination
of Mortgage Files............................... 7
Section 6. Sale
Treatment..............................................
9
Section 7.
Representations and Warranties of Seller Concerning the
Mortgage Loans..............................................
10
Section 8.
Representations and Warranties Concerning the Seller........
21
Section 9.
Representations and Warranties Concerning the Purchaser.....
22
Section 10. Conditions to
Closing....................................... 23
Section 11.
Notices.....................................................
25
Section 12. Transfer of Mortgage
Loans.................................. 25
Section 13. Representations, Warranties and Agreements to
Survive
Delivery....................................................
25
Section 14. Mandatory Delivery; Grant of Security
Interest.............. 26
Section 15.
Severability................................................
26
Section 16.
Counterparts................................................
26
Section 17.
Amendment...................................................
27
Section 18. GOVERNING
LAW............................................... 27
Section 19. Further
Assurances.......................................... 27
Section 20. Successors and
Assigns...................................... 27
Section 21. The
Seller..................................................
27
Section 22. Entire
Agreement............................................ 27
Section 23. No
Partnership..............................................
28
EXHIBIT 1
MORTGAGE LOAN SCHEDULE INFORMATION..........................
E-1-1
EXHIBIT 2
CONTENTS OF EACH MORTGAGE FILE..............................
E-2-1
EXHIBIT 3
[RESERVED]..................................................
E-3-1
SCHEDULE A MORTGAGE
LOAN SCHEDULE...................................... A-1
SCHEDULE B
[RESERVED]..................................................
B-1
</TABLE>
i
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of March 1, 2007
(the
"Agreement"), by and between MERRILL LYNCH MORTGAGE LENDING, INC.,
a Delaware
corporation having an office at 250 Vesey Street, 4 World Financial
Center, New
York, New York 10080 (the "Seller"), and MERRILL LYNCH MORTGAGE
INVESTORS, INC.,
a Delaware corporation having an office at 250 Vesey Street, 4
World Financial
Center, New York, New York 10080 (the "Purchaser").
Upon
the terms and subject to the conditions of this Agreement, the
Seller
agrees to sell, and the Purchaser agrees to purchase, certain first
and second
lien, fixed-and adjustable-rate mortgage loans secured by one- to
four-family
residences originated by Ownit Mortgage Solutions. Inc.
(collectively, the
"Mortgage Loans") as described herein. The Purchaser intends to
deposit the
Mortgage Loans into a trust fund (the "Trust Fund" or the "Issuing
Entity") and
create the Merrill Lynch Mortgage Investors Trust, Mortgage Loan
Asset-Backed
Certificates, Series 2007-HE2 (the "Certificates"), under a pooling
and
servicing agreement, to be dated as of March 1, 2007 (the "Pooling
and Servicing
Agreement"), by and among the Purchaser, as depositor, LaSalle
Bank, National
Association, as master servicer and securities administrator (the
"Master
Servicer" and "Securities Administrator"), Citibank, N.A., as
trustee (the
"Trustee"), Wilshire Credit Corporation, Litton Loan Servicing LP
and Option One
Mortgage Corporation (collectively, the "Servicers" and each, a
"Servicer").
The
Purchaser has filed with the Securities and Exchange Commission
(the
"Commission") a registration statement on Form S-3 (Number
333-140436) relating
to its Mortgage Asset-Backed Certificates and the offering of
certain series
thereof (including certain classes of the Certificates) from time
to time in
accordance with Rule 415 under the Securities Act of 1933, as
amended, and the
rules and regulations of the Commission promulgated thereunder (the
"Securities
Act"). Such registration statement, when it became effective under
the
Securities Act, and the prospectus relating to the public offering
of certain
classes of the Certificates by the Purchaser (the "Public
Offering"), as from
time to time each is amended or supplemented pursuant to the
Securities Act or
otherwise, are referred to herein as the "Registration Statement"
and the
"Prospectus," respectively. The "Prospectus Supplement" shall mean
that
supplement, dated March 29, 2007 to the Prospectus, dated March 22,
2007,
relating to certain classes of the Certificates. With respect to
the Public
Offering of certain classes of the Certificates, the Purchaser and
Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
have entered into a
terms agreement dated as of March 28, 2007 to an underwriting
agreement dated
February 28, 2003, between the Purchaser and Merrill Lynch
(together, the
"Underwriting Agreement").
Now,
therefore, in consideration of the premises and the mutual
agreements
set forth herein, the parties hereto agree as follows:
Section 1. Definitions.
Certain terms are defined herein. Capitalized terms used herein but
not
defined herein shall have the meanings specified in the Pooling and
Servicing
Agreement. The following other terms are defined as follows:
<PAGE>
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for
the
adjustment of the Mortgage Rate payable in respect thereto.
Adjustment Date: With respect to each Adjustable Rate Mortgage
Loan, the
date set forth in the related Mortgage Note on which the Mortgage
Rate on such
Adjustable Rate Mortgage Loan is adjusted in accordance with the
terms of the
related Mortgage Note.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i)
the value thereof as determined by an appraisal made for the
originator of the
Mortgage Loan at the time of origination of the Mortgage Loan
either by a
Qualified Appraiser or pursuant to the Automated Valuation Model as
set forth in
the Originator's Underwriting Guidelines, and (ii) the purchase
price paid for
the related Mortgaged Property by the Mortgagor with the proceeds
of the
Mortgage Loan, provided, however, in the case of a Refinanced
Mortgage Loan,
such value of the Mortgaged Property is based solely upon the value
determined
by an appraisal made for the originator of such Refinanced Mortgage
Loan at the
time of origination of such Refinanced Mortgage Loan either by a
Qualified
Appraiser or pursuant to the Automated Valuation Model as set forth
in the
Originator's Underwriting Guidelines.
Automated Valuation Model: A statistical mood or algorithm that
estimates
the market value of the subject property as of a particular
date.
Balloon Loan: A Mortgage Loan identified on the Mortgage Loan
Schedule as a
balloon mortgage loan.
Buydown Mortgage Loan: A Mortgage Loan in which buydown funds are
used to
pay a portion of the interest payable on the Mortgage Loan for a
specified
period of time.
Certificates: Shall mean the Class A-1 Certificates, the Class
A-2A
Certificates, the Class A-2B Certificates, the Class A-2C
Certificates, the
Class A-2D Certificates, the Class R Certificates, the Class M-1
Certificates,
Class M-2 Certificates, the Class M-3 Certificates, the Class M-4
Certificates,
the Class M-5 Certificates, the Class M-6 Certificates, the Class
B-1
Certificates, the Class B-2 Certificates, and the Class B-3
Certificates issued
pursuant to the Pooling and Servicing Agreement.
Closing Date: March 30, 2007.
Cut-off Date Balance: $873,747,130.52.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by a
Replacement Mortgage Loan.
Due
Date: With respect to each Mortgage Loan, the first day in each
month.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments,
water charges, sewer rents, primary insurance policy premiums, fire
and hazard
insurance premiums and other payments required to be escrowed by
the Mortgagor
with the Mortgagee pursuant to the terms of any Mortgage Note or
Mortgage.
-2-
<PAGE>
FHLMC: The Federal Home Loan Mortgage Corporation or any successor
thereto.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which
the
Mortgage Rate set forth in the Mortgage Note is fixed for the term
of such
Mortgage Loan.
Flood Zone Service Contract: A transferable contract maintained for
the
Mortgaged Property with a nationally recognized flood zone service
provider for
the purpose of obtaining the current flood zone status relating to
such
Mortgaged Property.
FNMA: Fannie Mae or any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the
index
identified on the Mortgage Loan Schedule and set forth in the
related Mortgage
Note for the purpose of calculating the interest rate thereon.
Merrill Lynch: Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
MERS
Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS
System: The system of recording transfers of mortgages
electronically
maintained by MERS.
MIN:
The Mortgage Identification Number for any MERS Loan.
MOM
Loan: Any Loan as to which MERS is acting as mortgagee, solely
as
nominee for the originator of such Loan and its successors and
assigns
Monthly Payment: With respect to any Mortgage Loan, the scheduled
combined
payment of principal and interest payable by a Mortgagor under the
related
Mortgage Note on each Due Date.
Moody's: Moody's Investors Service, Inc., or its successors in
interest.
Mortgage: The mortgage or deed of trust creating a first lien on
an
interest in real property securing a Mortgage Note.
Mortgage File: The items set out on Exhibit 2 hereto pertaining to
a
particular Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans to be
annexed hereto
as Schedule A on the Closing Date setting forth the information
contained on
Exhibit 1 hereto.
Mortgage Note: The original executed note or other evidence of the
Mortgage
Loan indebtedness of a Mortgagor.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
as
stated therein.
-3-
<PAGE>
Mortgaged Property: The Mortgagor's real property securing
repayment of a
related Mortgage Note, consisting of a fee simple interest or
leasehold interest
in a single parcel of real property improved by a Residential
Dwelling.
Mortgagor: The obligor(s) on a Mortgage Note.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for
the Seller or the Purchaser, reasonably acceptable to the
Trustee.
Origination Date: The date on which a Mortgage Loan funded as set
out on
the Mortgage Loan Schedule.
Originator: Ownit Mortgage Solutions, Inc.
Originator's Underwriting Guidelines: The underwriting guidelines
in effect
as of the applicable Origination Date, used by the Originator in
originating
and/or acquiring Mortgage Loans, including the restrictions
applicable thereto,
as amended from time to time, and which have been provided or made
available to
the Purchaser.
Person: Any legal person, including any individual,
corporation,
partnership, joint venture, association, joint stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Prepayment Charge: With respect to any Mortgage Loan, the premiums,
fees,
or charges, if any, due in connection with a full or partial
prepayment of such
Mortgage Loan in accordance with the terms thereof.
Purchase Price: With respect to any Mortgage Loan required to be
purchased
by the Seller pursuant to the applicable provisions of this
Agreement, an amount
equal to the sum of (i) 100% of the principal remaining unpaid on
sum of (i)
100% of the unpaid principal balance of the Mortgage Loan as of the
date of such
purchase together with any unreimbursed Servicing Advances, (ii)
accrued
interest thereon at the applicable Mortgage Rate from (a) the date
through which
interest was last paid by the Mortgagor to (b) the Due Date in the
month in
which the Purchase Price is to be distributed to Certificateholders
and (iii)
any unreimbursed costs, penalties and/or damages incurred by the
Issuing Entity
in connection with any violation relating to such Mortgage Loan of
any predatory
or abusive lending law.
Qualified Appraiser: A state licensed or certified appraiser,
duly
appointed by the Originator, 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 such appraiser and the appraisal made by such appraiser
both satisfy
the requirements of Title XI of FIRREA and the regulations
promulgated
thereunder with respect to appraisals (as in effect on the date the
appraisal
was made).
Rating Agencies: S&P and Moody's, each a "Rating Agency."
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were not
used to purchase the related Mortgaged Property.
-4-
<PAGE>
Repurchase Agreement: Master Repurchase Agreement, dated as of
September
15, 2005, as amended, among Ownit Mortgage Solutions, Inc., as
seller, and
Merrill Lynch Mortgage Capital Inc., as buyer.
Residential Dwelling: Any one of the following: (i) a detached
one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family
dwelling unit in a condominium project which meets the eligibility
requirements
of the Originator's Underwriting Guidelines, or (iv) a detached
one-family
dwelling in a planned unit development, none of which is a
cooperative, mobile
or manufactured home.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or
its successors in interest.
Securities Act: The Securities Act of 1933, as amended.
Tax
Service Contract: A transferable contract maintained for the
Mortgaged
Property with a tax service provider for the purpose of obtaining
current
information from local taxing authorities relating to such
Mortgaged Property.
Section 2. Purchase and Sale of the Mortgage Loans and Related
Rights.
(a) Upon satisfaction of the conditions set forth in Section 10
hereof, the Seller agrees to sell, and the Purchaser agrees to
purchase Mortgage
Loans having an aggregate Cut-off Date Balance of
$873,747,130.52.
(b) The closing for the purchase and sale of the Mortgage Loans
and
the closing for the issuance of the Certificates will take place on
the Closing
Date at the office of the Purchaser's counsel in New York, New York
or such
other place as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in Section
10
hereof, on the Closing Date, in consideration of the purchase of
the Mortgage
Loans, the Purchaser shall (i) pay to the Seller an amount equal to
the net sale
proceeds of the Certificates plus accrued interest in immediately
available
funds by wire transfer to such account or accounts as shall be
designated by the
Seller.
Section 3. Mortgage Loan Schedule.
The
Seller agrees to provide to the Purchaser as of the Closing Date
a
listing of the Mortgage Loans (the "Mortgage Loan Schedule")
setting forth the
information listed on Exhibit 1 to this Agreement with respect to
each of the
Mortgage Loans being sold by the Seller. The Mortgage Loan Schedule
shall be
delivered to the Purchaser on the Closing Date, shall be attached
to this
Agreement on the Closing Date by the parties hereto and shall be in
form and
substance mutually agreed to by the Seller and the Purchaser.
Section 4. Mortgage Loan Transfer.
The
Purchaser will be entitled to all scheduled payments of principal
and
interest on the Mortgage Loans due after the Cut-off Date
(regardless of when
actually collected) and all
-5-
<PAGE>
payments thereof other than scheduled principal and interest
received after the
Cut-off Date. The Seller will be entitled to all scheduled payments
of principal
and interest on the Mortgage Loans due on or before the Cut-off
Date (including
payments collected after the Cut-off Date) and all payments thereof
other than
scheduled principal and interest on the Mortgage Loans received on
or before the
Cut-off Date. Such principal amounts and any interest thereon
belonging to the
Seller as described above will not be included in the aggregate
outstanding
principal balance of the Mortgage Loans as of the Cut-off Date as
set forth on
the Mortgage Loan Schedule.
Pursuant to the Pooling and Servicing Agreement, the Purchaser will
assign
on the Closing Date all of its right, title and interest in and to
the Mortgage
Loans to the Trustee for the benefit of the Certificateholders. In
connection
with the transfer and assignment of the Mortgage Loans, the Seller
has delivered
or will deliver or cause to be delivered to the Trustee (or the
applicable
Custodian on its behalf) by the Closing Date the following
documents or
instruments with respect to each Mortgage Loan (the "Mortgage Loan
Documents":
(A)
The original Mortgage Note endorsed in blank or, "Pay to the order
of
Citibank, N.A., as trustee for the Merrill Lynch Mortgage Investors
Trust,
Mortgage Loan Asset-Backed Certificates, Series 2007-HE2, without
recourse"
together with all riders thereto. The Mortgage Note shall include
all
intervening endorsements showing a complete chain of the title from
the
originator of the Mortgage Loan to [____________________].
(B)
Except as provided below and for each Mortgage Loan that is not a
MERS
Loan, the original recorded Mortgage together with all riders
thereto, 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
together
with all riders thereto certified to be a true copy of the original
of the
Mortgage that has been delivered for recording in the appropriate
recording
office of the jurisdiction in which the Mortgaged Property is
located and in the
case of each MERS Loan, the original Mortgage together with all
riders thereto,
noting the presence of the MIN of the Loan and either language
indicating that
the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not a
MOM Loan at
origination, the original Mortgage and the assignment thereof to
MERS, with
evidence of recording indicated thereon, or a copy of the Mortgage
certified by
the public recording office in which such Mortgage has been
recorded.
(C)
In the case of each Mortgage Loan that is not a MERS Loan, the
original
Assignment of each Mortgage in blank or, to "Citibank, N.A., as
trustee for the
Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed
Certificates,
Series 2007-HE2."
(D)
The original or a certified copy of the policy of title insurance
(or a
preliminary title report, commitment or binder if the original
title insurance
policy has not been received from the title insurance company).
(E)
Originals of any intervening assignments of the Mortgage, with
evidence
of recording thereon (if necessary to show the complete chain of
title from the
originator of the Mortgage Loan to the mortgagee of record as of
the Closing
Date) or, if the original intervening assignment has not yet been
returned from
the recording office, a copy of such assignment certified to be a
true copy of
the original of the assignment which has been sent for recording in
the
appropriate jurisdiction in which the Mortgaged Property is
located.
-6-
<PAGE>
(F)
Originals of all assumption and modification agreements, if
any.
(G)
If in connection with any Mortgage Loan, the Purchaser cannot
deliver
the Mortgage, Assignments of Mortgage or assumption, consolidation
or
modification, as the case may be, with evidence of recording
thereon, if
applicable, concurrently with the execution and delivery of this
Agreement
solely because of a delay caused by the public recording office
where such
Mortgage, Assignments of Mortgage or assumption, consolidation or
modification,
as the case may be, has been delivered for recordation, the
Purchaser shall
deliver or cause to be delivered to the Trustee or a Custodian
written notice
stating that such Mortgage or assumption, consolidation or
modification, as the
case may be, has been delivered to the appropriate public recording
office for
recordation. Thereafter, the Purchaser shall deliver or cause to be
delivered to
the Trustee or a Custodian such Mortgage, Assignments of Mortgage
or assumption,
consolidation or modification, as the case may be, with evidence of
recording
indicated thereon, if applicable, upon receipt thereof from the
public recording
office. To the extent any required endorsement is not contained on
a Mortgage
Note or an Assignment of Mortgage, the Purchaser shall make or
cause to be made
such endorsement.
The
Seller and the Purchaser acknowledge hereunder that all of the
Mortgage
Loans and the related servicing will ultimately be assigned to
Citibank, N.A.,
as Trustee for the Certificateholders, on the date hereof.
Section 5. Examination of Mortgage Files.
(a) On or before the Closing Date, the Seller will have made
the
Mortgage Files available to the Purchaser or its agent for
examination which may
be at the offices of the Trustee (or the applicable Custodian on
its behalf) or
the Seller. The fact that the Purchaser or its agent has conducted
or has failed
to conduct any partial or complete examination of the Mortgage
Files shall not
affect the Purchaser's rights to demand cure, repurchase,
substitution or other
relief as provided in this Agreement. In furtherance of the
foregoing, the
Seller shall make the Mortgage Files available to the Purchaser or
its agent
from time to time so as to permit the Purchaser to confirm the
Seller's
compliance with the delivery and recordation requirements of this
Agreement and
the Pooling and Servicing Agreement. In addition, upon request of
the Purchaser,
the Seller agrees to provide to the Purchaser, Merrill Lynch and to
any
investors or prospective investors in the Certificates information
regarding the
Mortgage Loans and their servicing, to make the Mortgage Files
available to the
Purchaser, Merrill Lynch and to such investors or prospective
investors (which
may be at the offices of the Seller and/or the Seller's custodian)
and to make
available personnel knowledgeable about the Mortgage Loans for
discussions with
the Purchaser, Merrill Lynch and such investors or prospective
investors, upon
reasonable request during regular business hours, sufficient to
permit the
Purchaser, Merrill Lynch and such investors or potential investors
to conduct
such due diligence as any such party reasonably believes is
appropriate.
(b) Except as set forth in the exception report delivered
contemporaneously herewith (the "Exception Report"), the Trustee
(or the
applicable Custodian on its behalf) acknowledges receipt of the
Mortgage Note
for each Mortgage Loan and delivery of a Mortgage File (but does
not acknowledge
receipt of all documents required to be included in such Mortgage
File) with
respect to each Mortgage Loan and declares that it holds and will
hold
-7-
<PAGE>
such documents and any other documents constituting a part of the
Mortgage Files
delivered to it in trust for the use and benefit of all present and
future
Certificateholders. The Purchaser will cause the Seller to
repurchase any
Mortgage Loan to which a material exception was taken in the
Exception Report
unless such exception is cured to the satisfaction of the Purchaser
and the
Trustee within 45 Business Days of the Closing Date.
(c) The Trustee (or the applicable Custodian on its behalf)
agrees,
for the benefit of the Purchaser and the Certificateholders to
review each
Mortgage File delivered to it within sixty (60) days after the
Closing Date. The
Trustee or the applicable Custodian on its behalf will ascertain
and to certify,
within seventy (70) days of the Closing Date, to the Purchaser and
the Servicer
that all documents required by Section 4 (A)-(B), (C) (if
applicable), and
(D)-(E), and the documents if actually received by it, under
Section 4 (F), have
been executed and received, and that such documents relate to the
Mortgage Loans
that have been conveyed to it. It is herein acknowledged that, in
conducting
such review, neither the Trustee nor any Custodian shall be under
any duty or
obligation to inspect, review or examine any such documents,
instruments,
certificates or other papers to determine that they are genuine,
enforceable or
appropriate for the represented purpose, that they have actually
been recorded
or that they are other than what they purport to be on their face.
If the
Trustee (or the applicable Custodian on its behalf) finds any
document or
documents constituting a part of a Mortgage File to be missing or
defective
(that is, mutilated, damaged, defaced or unexecuted) in any
material respect,
the Trustee (or the applicable Custodian on its behalf) shall
promptly (and in
any event within no more than five Business Days) after such
finding so notify
the Servicer, the Seller and the Purchaser. In addition, the
Trustee (or the
applicable Custodian on its behalf) shall also notify the Servicer,
the Seller
and the Purchaser if the original Mortgage with evidence of
recording thereon
with respect to a Mortgage Loan is not received within seventy (70)
days of the
Closing Date; if it has not been received because of a delay caused
by the
public recording office where such Mortgage has been delivered for
recordation,
the Purchaser shall deliver or cause to be delivered to the Trustee
and its
Custodian written notice stating that such Mortgage has been
delivered to the
appropriate public recording office for recordation and thereafter
the Purchaser
shall deliver or cause to be delivered such Mortgage with evidence
of recording
thereon upon receipt thereof from the public recording office. The
Trustee (or
the applicable Custodian on its behalf) shall request that the
Seller correct or
cure such omission, defect or other irregularity, or substitute a
Mortgage Loan
pursuant to the provisions of Section 5(c), within ninety (90) days
from the
date the Seller was notified of such omission or defect and, if the
Seller does
not correct or cure such omission or defect within such period,
that the Seller
purchase such Mortgage Loan from the Issuing Entity within ninety
(90) days from
the date the Trustee (or the applicable Custodian on its behalf)
notified the
Seller of such omission, defect or other irregularity at the
Purchase Price of
such Mortgage Loan.
The
Purchase Price for any Mortgage Loan purchased pursuant to this
Section
5(c) shall be paid to the Servicer and deposited by the Servicer in
the
Collection Account promptly upon receipt, and upon receipt by the
Trustee of
written notification of such deposit signed by a Servicing Officer
or receipt of
such deposit by the Securities Administrator, of which the Trustee
is given
notice, the Trustee (or the applicable Custodian on its behalf),
upon receipt of
a Request for Release and certification of the Servicer of such
required
deposit, shall promptly release to the Seller the related Mortgage
File and the
Trustee shall execute and deliver such instruments of transfer or
assignment,
without recourse, as shall be requested by the Seller and necessary
to vest
-8-
<PAGE>
in the Seller or its designee, as the case may be, any Mortgage
Loan released
pursuant hereto, and neither the Trustee nor the applicable
Custodian shall have
any further responsibility with regard to such Mortgage Loan. It is
understood
and agreed that the obligation of the Seller to purchase, cure or
substitute any
Mortgage Loan as to which a material defect in or omission of a
constituent
document exists shall constitute the sole remedy respecting such
defect or
omission available to the Purchaser and the Trustee on behalf
of
Certificateholders.
Neither the Trustee nor the applicable Custodian shall be under any
duty or
obligation to inspect, review and examine such documents,
instruments,
certificates or other papers to determine that they are genuine,
enforceable,
recordable, duly authorized, sufficient, legal, valid or
appropriate to the
represented purpose, or that they have actually been recorded, or
that they are
other than what they purport to be on their face. The Trustee (or
the applicable
Custodian on its behalf) shall keep confidential the name of each
Mortgagor
except as required for the performance of this Agreement and the
Trustee (or the
applicable Custodian on its behalf) shall not solicit any such
Mortgagor for the
purpose of refinancing the related Mortgage Loan; notwithstanding
anything
herein to the contrary, the foregoing shall not be construed to
prohibit (i)
disclosure of any and all information that is or becomes publicly
known, or
information obtained by the Trustee (or the applicable Custodian on
its behalf)
from sources other than the other parties hereto, (ii) disclosure
of any and all
information (A) if required to do so by any applicable law, rule or
regulation,
(B) to any government agency or regulatory body having or claiming
authority to
regulate or oversee any aspects of the business of the Trustee (or
the
applicable Custodian on its behalf) or that of any Affiliate, (C)
pursuant to
any subpoena, civil investigation demand or similar demand or
request of any
court, regulatory authority, arbitrator or arbitration to which the
Trustee (or
the applicable Custodian on its behalf) or any Affiliate or an
officer,
director, employer or shareholder thereof is a party or (D) to any
Affiliate,
independent or internal auditor, agent, employee or attorney of the
Trustee (or
the applicable Custodian on its behalf) having a need to know the
same, provided
that the Trustee advises such recipient of the confidential nature
of the
information being disclosed, or (iii) any other disclosure
authorized by the
Purchaser.
Within seventy (70) days of the Closing Date, the Trustee (or
the
applicable Custodian on its behalf) shall deliver to the Purchaser
and the
Servicer the Initial Certification, substantially in the form of
Exhibit D to
the Pooling and Servicing Agreement, evidencing the completeness of
the Mortgage
Files, with any exceptions noted thereto.
Section 6. Sale Treatment.
(a) [Reserved.]
(b) It is the express intent of the parties hereto that the
conveyance
of the Mortgage Loans by the Seller to the Purchaser, as
contemplated by this
Agreement be, and be treated as, a sale. It is, further, not the
intention of
the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the
Seller to the Purchaser to secure a debt or other obligation of the
Seller.
However, in the event that, notwithstanding the intent of the
parties, the
Mortgage Loans are held by a court of competent jurisdiction to
continue to be
property of the Seller, then (i) this Agreement shall also be
deemed to be a
security agreement within the meaning of Articles 8 and 9 of the
applicable
Uniform Commercial Code; (ii) the transfer of the
-9-
<PAGE>
Mortgage Loans provided for herein shall be deemed to be a grant by
the Seller
to the Purchaser of a security interest in all of the Seller's
right, title and
interest in and to the Mortgage Loans and all amounts payable to
the holders of
the Mortgage Loans in accordance with the terms thereof and all
proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash,
instruments,
securities or other property, to the extent the Purchaser would
otherwise be
entitled to own such Mortgage Loans and proceeds pursuant to
Section 4 hereof,
including all amounts, other than investment earnings, from time to
time held or
invested in any accounts created pursuant to the Pooling and
Servicing
Agreement, whether in the form of cash, instruments, securities or
other
property; (iii) the possession by the Purchaser or the Trustee of
Mortgage Notes
and such other items of property as constitute instruments, money,
negotiable
documents or chattel paper shall be deemed to be "possession by the
secured
party" for purposes of perfecting the security interest pursuant to
Section
9-305 (or comparable provision) of the applicable Uniform
Commercial Code; and
(iv) notifications to persons holding such property, and
acknowledgments,
receipts or confirmations from persons holding such property, shall
be deemed
notifications to, or acknowledgments, receipts or confirmations
from, financial
intermediaries, bailees or agents (as applicable) of the Purchaser
for the
purpose of perfecting such security interest under applicable law.
Any
assignment of the interest of the Purchaser pursuant to any
provision hereof or
pursuant to the Pooling and Servicing Agreement shall also be
deemed to be an
assignment of any security interest created hereby. The Seller and
the Purchaser
shall, to the extent consistent with this Agreement, take such
actions as may be
reasonably 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 7. Representations and Warranties of Seller Concerning the
Mortgage
Loans.
(a)
The Seller hereby represents and warrants to the Purchaser as of
the
Closing Date or such other date as may be specified below with
respect to each
Mortgage Loan being sold by it:
(1) There are no defaults in complying with the terms of the
Mortgage
as they relate to the holder thereof, and all taxes, governmental
assessments,
insurance premiums, water, sewer and municipal charges, leasehold
payments or
ground rents or other outstanding charges affecting the Mortgaged
Property which
previously became due and owing have been paid, or escrow funds
have been
established in an amount sufficient to pay for every such escrowed
item which
remains unpaid and which has been assessed but is not yet due and
payable. There
exist no deficiencies with respect to escrow deposits and payments,
if escrows
are required, for which customary arrangements for repayment
thereof have not
been made, and other than in connection with a modification or
work-out
agreement contained in the Mortgage File, no escrow deficits or
payments of
other charges or payments have been capitalized under the Mortgage
or the
applicable Mortgage Note;
(2) The Seller has not, and to the Seller's knowledge, neither
the
related Servicer nor any prior holder of any Mortgage Loan has
waived, altered
or modified the Mortgage or Mortgage Note (except that a Mortgage
Loan may have
been modified by a written instrument (a copy of which is in the
Mortgage File
and the terms of which are reflected on the
-10-
<PAGE>
Mortgage Loan Schedule) which has been recorded or is in the
process of being
recorded, if necessary to protect the validity and first priority
lien of the
owner of such Mortgage Loan; the substance of any such waiver,
alteration or
modification has been approved by the issuer of any title insurance
policy, to
the extent required by the related policies); satisfied, canceled,
rescinded or
subordinated such Mortgage in whole or in part; released the
applicable
Mortgaged Property in whole or in part from the lien of such
Mortgage; or
executed any instrument of cancellation, rescission or satisfaction
with respect
thereto. No instrument of release or waiver has been executed in
connection with
any Mortgage Loan, and no Mortgagor has been released, in whole or
in part from
its obligations in connection with a Mortgage Loan;
(3) The Mortgage Note and the Mortgage are not subject to any
valid
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 (subject to bankruptcy, insolvency, moratorium,
reorganization and
similar laws or by equitable principles affecting the
enforceability of the
rights of creditors, including those respecting the availability of
specific
performance), in whole or in part, and to the Seller's knowledge no
such right
of rescission, set-off, counterclaim or defense has been asserted
with respect
thereto;
(4) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer in accordance with Originator's
Underwriting
Guidelines against loss by fire, hazards of extended coverage and
such other
hazards as are customary in the area where the Mortgaged Property
is located.
All such insurance policies contain a standard mortgagee clause
naming the
Originator, its successors and assigns as mortgagee and all
premiums thereon
have been paid or escrowed funds have been established in an amount
sufficient
to pay the premium. If the Mortgaged Property is in an area
identified on a
Flood Hazard Map or Flood Insurance Rate Map issued by the Federal
Emergency
Management Agency as having special flood hazards (and such flood
insurance has
been made available) a flood insurance policy meeting the
requirements of the
current guidelines of the Federal Insurance Administration is in
effect which
policy conforms to the Originator's Underwriting Guidelines. The
Mortgage
obligates the Mortgagor thereunder to maintain all such insurance
at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do
so,
authorizes the holder of the Mortgage to maintain such insurance at
Mortgagor's
cost and expense and to seek reimbursement therefor from the
Mortgagor;
(5) Any and all requirements of any applicable federal, state or
local
law including, without limitation, laws governing prepayment
penalties, usury,
truth in lending, real estate settlement procedures, consumer
credit protection,
equal credit opportunity, fair housing and disclosure laws
applicable to the
origination (as such laws existed as of the date of origination)
and servicing
of mortgage loans of a type similar to the Mortgage Loans have been
complied
with and the consummation of the transactions contemplated hereby
will not
involve the violation of any such applicable laws;
(6) The Mortgage has not been satisfied, cancelled, subordinated
or
rescinded, in whole or in part, and the Mortgaged Property has not
been released
from the lien of the Mortgage, in whole or in part, nor has any
instrument been
executed that would effect any such satisfaction, cancellation,
subordination,
rescission or release;
-11-
<PAGE>
(7) The related Mortgage is properly recorded and is a valid,
existing
and enforceable first lien and first priority security interest
with respect to
each Mortgage Loan on the Mortgaged Property, including all
improvements on the
Mortgaged Property subject only to (a) the lien of
