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<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
Dated as of
December 1, 2006
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Section 1.
Definitions............................................... 1
Section 2. Purchase and Sale of the Mortgage Loans and Related
Rights................................................. 4
Section 3. Mortgage Loan
Schedule.................................... 5
Section 4. Mortgage Loan
Transfer.................................... 5
Section 5. Examination of Mortgage
Files............................. 6
Section 6. Sale
Treatment............................................ 9
Section 7. Representations and Warranties of Seller Concerning
the
Mortgage Loans......................................... 9
Section 8. Representations and Warranties Concerning the
Seller...... 20
Section 9. Representations and Warranties Concerning the
Purchaser... 21
Section 10. Conditions to
Closing..................................... 22
Section 11. Fees and
Expenses......................................... 24
Section 12. Accountants'
Letters...................................... 25
Section 13.
Indemnification........................................... 25
Section 14.
Notices................................................... 27
Section 15. Transfer of Mortgage
Loans................................ 27
Section 16.
Termination............................................... 27
Section 17. Representations, Warranties and Agreements to
Survive
Delivery............................................... 28
Section 18. Mandatory Delivery; Grant of Security
Interest............ 28
Section 19.
Severability.............................................. 29
Section 20.
Counterparts.............................................. 29
Section 21.
Amendment................................................. 29
Section 22. GOVERNING
LAW............................................. 29
Section 23. Further
Assurances........................................ 29
Section 24. Successors and
Assigns.................................... 29
Section 25. The
Seller................................................ 30
Section 26. Entire
Agreement.......................................... 30
Section 27. No
Partnership............................................ 30
EXHIBIT 1 MORTGAGE LOAN SCHEDULE
INFORMATION........................ E-1-1
EXHIBIT 2 SELLER'S
INFORMATION...................................... E-2-1
EXHIBIT 3 PURCHASER'S
INFORMATION................................... E-3-1
EXHIBIT 4 CONTENTS OF EACH MORTGAGE
FILE............................ E-4-1
EXHIBIT 5 APPENDIX E -- Standard & Poor's Predatory Lending
Categories............................................. E-5-1
Schedule A MORTGAGE LOAN
SCHEDULE.................................... A-1
Schedule B REQUIRED RATINGS FOR EACH CLASS OF
CERTIFICATES........... B-1
</TABLE>
i
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 1, 2006
(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
lien,
fixed-and adjustable-rate mortgage loans secured by one- to
four-family
residences, townhouses, individual condominiums, co-op units and
units in
planned unit developments (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 Mortgage
Asset-Backed
Certificates, Series 2006-FF1 (the "Certificates"), under a pooling
and
servicing agreement, to be dated as of December 1, 2006 (the
"Pooling and
Servicing Agreement"), by and among the Purchaser, as depositor,
LaSalle Bank,
National Association, as trustee (the "Trustee") and National City
Home Loan
Services, Inc. (the "Servicer").
The Purchaser has filed with the Securities and Exchange Commission
(the
"Commission") a registration statement on Form S-3 (Number
333-130545) 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 December 21, 2006 to the Prospectus, dated
September 8, 2006,
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 December 20, 2006 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>
Accepted Servicing Practices: With respect to any Mortgage Loan,
the
Servicer's normal mortgage servicing practices (including
collection procedures)
which, as of a particular date, will conform to the mortgage
servicing practices
of prudent mortgage lending institutions that service for their own
account
mortgage loans of the same type as the Mortgage Loans in the
jurisdiction where
the related Mortgaged Property is located.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for
the
adjustment of the Mortgage Interest 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
Interest 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 Value 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.
Closing Date: December 27, 2006.
Cut-off Date Balance: $2,375,911,775.
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.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which
the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for
the term of
such Mortgage Loan.
FNMA: Fannie Mae or any successor thereto.
Freddie Mac: The Federal Home Loan Mortgage Corporation or any
successor
thereto.
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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.
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 4 hereto pertaining to
a
particular Mortgage Loan.
Mortgage Interest Rate: The annual rate of interest borne by a
Mortgage
Note as stated therein.
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.
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.
Offered 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 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.
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.
Originator: First Franklin Financial Corporation, a Delaware
corporation.
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<PAGE>
Originator's Underwriting Guidelines: The underwriting guidelines
in effect
as of the applicable Origination Date, used by the Originator or
National City
Bank's First Franklin Division 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
such Mortgage
Loan as of the date of purchase (including if a foreclosure has
already
occurred, the principal balance of the related Mortgage Loan at the
time the
Mortgaged Property was acquired), (ii) accrued and unpaid interest
thereon at
the Mortgage Interest Rate through and including the last day of
the month of
purchase and (iii) any costs and damages incurred by the Issuing
Entity in
connection with any violation by 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."
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.
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
$2,375,911,775.
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<PAGE>
(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 Offered Certificates plus accrued interest in
immediately
available funds by wire transfer to such account or accounts as
shall be
designated by the Seller and (ii) deliver to the Seller the Class P
and Class C
Certificates.
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 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 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
LaSalle Bank National Association, as trustee for the Merrill Lynch
Mortgage
Investors Trust, Mortgage Loan Asset-Backed Certificates, Series
2006-FF1,
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
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<PAGE>
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 "LaSalle Bank National
Association,
as trustee for the Merrill Lynch Mortgage Investors Trust, Mortgage
Loan
Asset-Backed Certificates, Series 2006-FF1."
(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.
(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 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
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
LaSalle Bank,
National Association, as Trustee for the Certificateholders, on the
date hereof.
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<PAGE>
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 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
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 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 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 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, the Trustee shall not 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
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 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 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
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<PAGE>
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 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 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
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 Trustee, the Trustee, 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 in the
Seller or its
designee, as the case may be, any Mortgage Loan released pursuant
hereto, and
the Trustee shall have no 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.
The Trustee shall be under no 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 shall keep confidential the name of each
Mortgagor
except as required for the performance of this Agreement and the
Trustee 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 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
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 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 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.
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<PAGE>
Within seventy (70) days of the Closing Date, the Trustee shall
deliver to
the Purchaser and the Servicer the Trustee's 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 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.
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:
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(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
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 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
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<PAGE>
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 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;
(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 current real
property taxes
and assessments not yet due and payable, (b) covenants, conditions
and
restrictions, rights of way, easements and other matters of the
public record as
of the Origination Date being acceptable to mortgage lending
institutions
generally and referred to in the lender's title insurance policy
delivered to
the Originator and which do not adversely affect the Appraised
Value of the
Mortgaged Property and (c) 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. 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
lien and first priority security interest with respect to each
Mortgage Loan and
the Seller has full right to sell and assign the same to the
Purchaser. The
Mortgaged Property was not, as of the date of origination of the
Mortgage Loan,
subject to a mortgage, deed of trust, deed to secure debt or other
security
instrument creating a lien subordinate to the lien of the Mortgage,
except as
otherwise set forth in the Mortgage Loan Schedule;
(8) Each Mortgage Note and the related Mortgage are genuine and
each
is the legal, valid and binding obligations of the maker thereof,
enforceable in
accordance with their terms subject to bankruptcy, insolvency,
moratorium,
receivership, conservatorship, reorganization and similar laws on
or hereafter
in effect of general application affecting creditors' rights
generally and
subject to the application of the general principles of equity,
including those
respecting the availability of specific performance (regardless of
whether such
enforcement is considered in a proceeding in equity or at law);
(9) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have
been duly and
properly executed by such parties. The Mortgagor is a natural
person, the
identity of such natural person was verified to the extent
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<PAGE>
required by the Originator's Underwriting Guidelines and, to the
Seller's
knowledge, such Mortgagor is not in violation of any laws regarding
identity
theft;
(10) All Persons that have had any interest in the Mortgage
Loan,
whether as originator, mortgagee, assignee, pledgee (other than
with respect to
a Federal Home Loan Bank pledgee) or otherwise, are (or, during the
period in
which they held and disposed of such interest, were): (A) organized
under the
laws of such state, or (B) qualified to do business in such state,
or (C)
federal savings and loan associations, national banks or national
bank operating
subsidiaries or (D) not doing business in such state so as to
require
qualification or licensing, or (E) not otherwise required to be
licensed in such
state under laws applicable to such Person. All parties which have
had any
interest in the Mortgage Loan (other than with respect to a Federal
Home Loan
Bank pledgee) were in compliance with any and all "doing business"
and licensing
requirements of the laws of the state wherein the Mortgaged
Property is located
applicable to such Person or were not required under the laws
applicable to such
Person to be licensed in such state;
(11) The Mortgage Loan is covered by an ALTA lender's title
insurance
policy (which, in the case of an Adjustable Rate Mortgage Loan has
an adjustable
rate mortgage endorsement in the form of ALTA 6.0 or 6.1) or
equivalent form of
policy of insurance acceptable to lenders who originate or
originated mortgage
loans similar to the Mortgage Loans as of the related Origination
Date of the
Mortgage Loan and issued by a title insurer acceptable to prudent
mortgage
lenders and qualified to do business in the jurisdiction where the
Mortgaged
Property is located, insuring (subject to the exceptions contained
above in
10(a) and (b) the Seller or the Originator and their successors and
assigns as
to the first priority lien of the Mortgage in the original
principal amount of
the Mortgage Loan and, with respect to any Adjustable Rate Mortgage
Loan,
against any loss by reason of the invalidity or unenforceability of
the lien
resulting from the provisions of the Mortgage providing for
adjustment in the
Mortgage Interest Rate and Monthly Payment. The Seller or the
Originator is the
sole insured of such lender's title insurance policy, 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;
(12) There is no default, breach, violation or event of
acceleration
existing under the Mortgage or the Mortgage Note (except for
necessary escrows
established as a result of forced placement in accordance with
Accepted
Servicing Practices and modifications permitted by Accepted
Servicing Practices)
and no event which, with the passage of time or with notice and the
expiration
of any grace or cure period, would constitute a default, breach,
violation or
event of acceleration, and no such default, breach, violation or
event of
acceleration has been waived;
(13) To the Seller's knowledge, there are no mechanics' liens
or
similar liens or claims for work, labor or material affecting any
Mortgaged
Property which have been filed (and no rights are outstanding that
under law
could give rise to such liens), which are or may be a lien prior
to, or equal
with, the lien of such Mortgage, except those which are insured
against by the
title insurance policy with respect to the Mortgage Loan;
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<PAGE>
(14) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within
the
boundaries and building restriction lines of the Mortgaged
Property, and to the
Seller's knowledge, no improvements on adjoining properties
encroach upon the
Mortgaged Property;
(15) The Mortgage Loan bears interest at the Mortgage Interest
Rate.
With respect to each Mortgage Loan other than a Mortgage Loan with
an interest
only payment period, the Mortgage Note is payable on the first day
of each month
in Monthly Payments, which, (A) in the case of a Fixed Rate
Mortgage Loan, are
sufficient to fully amortize the original principal balance over
the original
term thereof and to pay interest at the related Mortgage Interest
Rate, (B) in
the case of an Adjustable Rate Mortgage Loan, are changed on each
Adjustment
Date, and in any case, are sufficient to fully amortize the
original principal
balance over the original term thereof and to pay interest at the
related
Mortgage Interest Rate and (C) in the case of a Balloon Loan, are
based on a
twenty (20) or thirty (30) year amortization schedule, as set forth
in the
related Mortgage Note, and a final monthly payment substantially
greater than
the preceding monthly payment which is sufficient to amortize the
remaining
principal balance of the Balloon Loan and to pay interest at the
related
Mortgage Interest Rate. The Index for each Adjustable Rate Mortgage
Loan is as
defined in the related Mortgage Loan Schedule;
(16) The origination practices used by the Originator and the
collection practices used by the Servicer with respect to each
Mortgage Note and
Mortgage have been in all respects legal, proper, prudent and
customary in the
mortgage origination and servicing industry for mortgage loans
similar to the
Mortgage Loans. The Mortgage Loan has been serviced by the Servicer
and any
predecessor servicer in accordance with the terms of the Mortgage
Note.;
(17) The Mortgaged Property is free of damage and waste and there
is
no proceeding pending or to the Seller's knowledge, threatened for
the total or
partial condemnation thereof nor is such a proceeding currently
occurring;
(18) The Mortgage and related Mortgage Note contain customary
and
enforceable provisions such as to render the rights and remedies of
the holder
thereof adequate for the realization against the Mortgaged Property
of the
benefits of the security provided thereby, including, (a) in the
case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b)
otherwise by
judicial foreclosure. The Mortgaged Property is not subject to any
bankruptcy
proceeding (or with respect to each Mortgage Loan for which the
proceeds were
used to pay off a bankruptcy of the borrower, the related Mortgaged
Property is
no longer subject to any bankruptcy proceeding) or foreclosure
proceeding, nor
are any such proceedings pending and the Mortgagor has not filed
for protection
under applicable bankruptcy laws;
(19) The Mortgage Loan was underwritten in accordance with the
Originator's Underwriting Guidelines; and the Mortgage Note and
Mortgage
(exclusive of any riders or addenda) are on forms acceptable to
FNMA or FHLMC
and the riders and addenda are on forms customary for use in the
secondary
market with respect to mortgage loans similar to the Mortgage
Loans;
(20) The related Mortgage File contains an appraisal of the
Mortgaged
Property signed by a Qualified Appraiser or evidence of an
Appraised Value. Any
written appraisal
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<PAGE>
performed by a Qualified Appraiser is in a form permitted by the
Originator's
Underwriting Guidelines;
(21) In the event the Mortgage constitutes a deed of trust, a
trustee,
duly qualified under applicable law to serve as such, has been
properly
designated and currently so serves and is named in the Mortgage,
and no fees or
expenses are or will become payable by the Purchaser to the trustee
under the
deed of trust, except in connection with a trustee's sale after
default by the
Mortgagor;
(22) No Mortgage Loan contains provisions pursuant to which
Monthly
Payments are (a) paid or partially paid with funds deposited in any
separate
account established by the Seller, the Servicer, the Mortgagor, or
anyone on
behalf of the Mortgagor, (b) paid by any source other than the
Mortgagor or (c)
contains any other similar provisions which may constitute a
"buydown"
provision. The Mortgage Loan is not a graduated payment mortgage
loan and the
Mortgage Loan does not have a shared appreciation or other
contingent interest
feature;
(23) To the Seller's knowledge, there are no circumstances or
condition with respect to the Mortgage, the Mortgaged Property, the
Mortgagor or
the Mortgagor's credit standing that can r
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