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EXECUTION COPY
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MERRILL LYNCH MORTGAGE LENDING INC.,
SELLER
and
MERRILL LYNCH MORTGAGE INVESTORS, INC.,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT
Dated as of September 1, 2006
Specialty Underwriting and Residential Finance Trust
(Mortgage Loan Asset-Backed Certificates, Series 2006-AB3)
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TABLE OF CONTENTS
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Page
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ARTICLE I CONVEYANCE OF MORTGAGE
LOANS................................... 2
Section 1.01.
Sale of Mortgage Loans..................................
2
Section 1.02.
Delivery of Documents...................................
2
Section 1.03.
Review of Documentation.................................
3
Section 1.04.
Representations and Warranties Regarding the Seller.....
3
Section 1.05.
Grant Clause............................................
10
Section 1.06.
Assignment by Depositor.................................
10
ARTICLE II MISCELLANEOUS
PROVISIONS...................................... 10
Section 2.01.
Binding Nature of Agreement; Assignment.................
10
Section 2.02.
Entire Agreement........................................
10
Section 2.03.
Amendment...............................................
10
Section 2.04.
Governing Law...........................................
11
Section 2.05.
Severability of Provisions..............................
11
Section 2.06.
Indulgences; No Waivers.................................
11
Section 2.07.
Headings Not to Affect Interpretation...................
11
Section 2.08.
Benefits of Agreement...................................
11
Section 2.09.
Counterparts............................................
11
SCHEDULE
SCHEDULE A Mortgage Loan Schedule
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This
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT, dated as of September
1,
2006 (the "Agreement"), is executed by and between Merrill Lynch
Mortgage
Lending Inc. (the "Seller") and Merrill Lynch Mortgage Investors,
Inc. (the
"Depositor").
All
capitalized terms not defined herein shall have the same
meanings
assigned to such terms in that certain Pooling and Servicing
Agreement (the
"Pooling Agreement"), dated as of September 1, 2006, among the
Depositor, U.S.
Bank National Association, as trustee (the "Trustee"), and Wilshire
Credit
Corporation, as servicer (the "Servicer").
WITNESSETH:
WHEREAS, the Seller has acquired or originated certain mortgage
loans
identified on the Mortgage Loan Schedule attached hereto as
Schedule A (the
"Mortgage Loans");
WHEREAS, the Seller desires to sell, without recourse, all of its
rights,
title and interest in the Mortgage Loans to the Depositor; and
WHEREAS, the Seller and the Depositor acknowledge and agree that
the
Depositor will assign all of its rights and delegate all of its
obligations
hereunder to the Trustee, and that each reference herein to the
Depositor is
intended, unless otherwise specified, to mean the Depositor or the
Trustee, as
assignee, whichever is the owner of the Mortgage Loans from time to
time.
NOW,
THEREFORE, in consideration of the mutual agreements herein set
forth,
and for other good and valuable consideration, the receipt and
adequacy of which
are hereby acknowledged, the Seller and the Depositor agree as
follows:
ARTICLE I
CONVEYANCE OF MORTGAGE LOANS
Section 1.01. Sale of Mortgage Loans. Concurrently with the
execution and
delivery of this Agreement, the Seller does hereby transfer,
assign, set over,
deposit with and otherwise convey to the Depositor, without
recourse, subject to
Sections 1.03 and 1.04, all the right, title and interest of the
Seller in and
to the Mortgage Loans identified on Schedule A hereto, having an
aggregate
principal balance as of the Cut-off Date of approximately
$330,318,338. Such
conveyance includes, without limitation, the right to all
distributions of
principal and interest received on or with respect to the Mortgage
Loans on or
after September 1, 2006 other than payments of principal and
interest due on or
before such date, and all such payments due after such date but
received prior
to such date and intended by the related Mortgagors to be applied
after such
date, together with all of the Seller's right, title and interest
in and to each
related account and all amounts from time to time credited to and
the proceeds
of such account, any REO Property and the proceeds thereof, the
Seller's rights
under any Insurance Policies related to the Mortgage Loans, and the
Seller's
security interest in any collateral pledged to secure the Mortgage
Loans,
including the Mortgaged Properties.
Concurrently with the execution hereof, the Depositor tenders the
purchase
price for the Mortgage Loans.
Section 1.02. Delivery of Documents. In connection with such
transfer and
assignment of the Mortgage Loans hereunder, the Seller does hereby
deliver, or
cause to be delivered, to the Depositor (or
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its designee) the following documents or instruments with respect
to each
Mortgage Loan (each a "Mortgage File") so transferred and assigned;
provided
that for Mortgage Loans (if any) that have been prepaid in full
after the
Cut-off Date and prior to the Closing Date, the Seller, in lieu of
delivering
the related Mortgage Files, herewith delivers to the Depositor an
Officer's
Certificate which shall include a statement to the effect that all
amounts
received in connection with such prepayment that are required to be
deposited in
the account maintained by the Servicer for such purpose have been
so deposited.
(a)
The Original Mortgage Note endorsed, "Pay to the order of U.S.
Bank
National Association, as trustee - SURF 2006-AB3, 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 to the
Seller.
(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 by the Seller to be 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, to "U.S. Bank National Association, as
trustee -
SURF 2006-AB3."
(d)
The original 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 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.
Section 1.03. Review of Documentation. The Depositor, by execution
and
delivery hereof, acknowledges receipt of the Mortgage Files
pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule, subject to
review thereof
by the trustee, U.S. Bank National Association (the "Trustee") for
the Mortgage
Loans for the Depositor. The Trustee is required to review, within
60 days
following the Closing Date, each applicable Mortgage File. If in
the course of
such review 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 Seller shall be
obligated to cure
such defect or to repurchase the related Mortgage Loan from the
Depositor (or,
at the direction of and on behalf of the Depositor, from the Trust
Fund), or to
substitute a Replacement Mortgage Loan therefor, in each case to
the same extent
and in the same manner as the Depositor is obligated to the Trustee
and the
Trust Fund under the Pooling Agreement.
Section 1.04. Representations and Warranties Regarding the
Seller.
(a)
The Seller hereby represents and warrants to the Depositor that as
of
the
date hereof that:
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(i) The Seller is a Delaware corporation duly organized,
validly
existing and in good standing under the laws governing its creation
and
existence and has full corporate power and authority to own its
property,
to
carry on its business as presently conducted, and to enter into
and
perform its obligations under this Agreement;
(ii) The execution and delivery by the Seller of this Agreement
have
been
duly authorized by all necessary corporate action on the part of
the
Seller; neither the execution and delivery of this Agreement, nor
the
consummation of the transactions herein contemplated, nor
compliance with
the
provisions hereof, will conflict with or result in a breach of,
or
constitute a default under, any of the provisions of any law,
governmental
rule, regulation, judgment, decree or order binding on the Seller
or its
properties or the federal stock charter or bylaws of the
Seller;
(iii) The execution, delivery and performance by the Seller of
this
Agreement and the consummation of the transactions contemplated
hereby do
not
require the consent or approval of, the giving of notice to,
the
registration with, or the taking of any other action in respect of,
any
state, federal or other governmental authority or agency, except
such as
has
been obtained, given, effected or taken prior to the date
hereof;
(iv) This Agreement has been duly executed and delivered by the
Seller
and,
assuming due authorization, execution and delivery by the
Depositor,
constitutes a valid and binding obligation of the Seller
enforceable
against it in accordance with its terms except as such
enforceability may
be
subject to (A) applicable bankruptcy and insolvency laws and
other
similar laws affecting the enforcement of the rights of creditors
generally
and
(B) general principles of equity regardless of whether such
enforcement
is
considered in a proceeding in equity or at law;
(v) There are no actions, suits or proceedings pending or, to
the
knowledge of the Seller, threatened or likely to be asserted
against or
affecting the Seller, before or by any court, administrative
agency,
arbitrator or governmental body (A) with respect to any of the
transactions
contemplated by this Agreement or (B) with respect to any other
matter
which in the judgment of the Seller will be determined adversely to
the
Seller and will if determined adversely to the Seller materially
and
adversely affect it or its business, assets, operations or
condition,
financial or otherwise, or adversely affect its ability to perform
its
obligations under this Agreement; and
(vi) The Seller (A) currently operates or actively participates in
an
on-going and active program or business to make periodic purchases
of
mortgage loans from originators or other sellers, with a portion of
the
proceeds generated by such program or business being used to
purchase
mortgages made to borrowers who are: low-income families (families
with
incomes of 80% or less of area median income) living in low-income
areas (a
census tract or block numbering area in which the median income
does not
exceed 80% of the area median income) and/or very low-income
families
(families with incomes of 60% or less of area median income), and
(B) agree
that
Freddie Mac for a period of two (2) years following the date of
this
Agreement may contact the Seller to confirm that it continues to
operate or
actively participate in the mortgage program or business and to
obtain
other nonproprietary information about the Seller's activities that
may
assist Freddie Mac in completing its regulatory reporting
requirements. The
Seller must make reasonable efforts to provide such information to
Freddie
Mac.
(b)
The Seller hereby represents and warrants to the Depositor the
following with respect to the Mortgage Loans as of the Closing
Date. To the
extent that any fact,
condition or event with respect to a Mortgage Loan
constitutes a breach of a representation or warranty of Seller
under
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this
Agreement, the only right or remedy of the Depositor shall be
the
right to enforce the obligations of the Seller under any
applicable
representation or warranty made by it.
(i) The information set forth with respect to the Mortgage Loans
on
the
Mortgage Loan Schedule provides a true, complete, and accurate
and
there are no material omissions of material facts.
(ii) Each Mortgage is a valid and enforceable lien on the
Mortgaged
Property, subject only to (a) the lien of non-delinquent real
property
taxes and assessments not yet due and payable, (b) covenants,
conditions
and
restrictions, rights of way, easements and other matters of
public
record as of the date of recording of such Mortgage, such
exceptions
appearing of record being acceptable to mortgage lending
institutions
generally, specifically referred to in the lender's title insurance
policy
referred to in (x) below or referred to or otherwise considered in
the
appraisal made in connection with the origination of the related
Mortgage
Loan, and (c) other matters to which like properties are commonly
subject
that
do not materially interfere with the benefits of the security
intended
to
be provided by such Mortgage.
(iii) Immediately prior to the assignment of the Mortgage Loans to
the
Depositor, the Seller was the sole legal and beneficial owner of
each
Mortgage Loan and had full right to transfer and sell the Mortgage
Loan
free
and clear of any encumbrance, equity. lien, pledge, charge, claim
or
security interest.
(iv) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(v) There is no valid set-offs or defense to any Mortgage Note
or
Mortgage.
(vi) There are no mechanic's or similar liens or claims that have
been
filed for work, labor or material and there are not outstanding
rights that
under law, could give rise to such lien, which would affect the
Mortgaged
Property as a lien senior to or equal to the lien of the Mortgage
Loan.
(vii) Each Mortgaged Property is, (i) undamaged by any toxic
materials
or
other environmental hazards on, in or potentially affecting
such
Mortgage Property; and (ii) free and clear of damage and waste and
there is
no
proceeding pending for the total or partial condemnation.
(viii) Each Mortgage Loan is in compliance with local, state or
federal law or regulation designated to protect the health and
safety of
the
occupants of the Mortgaged Property.
(ix) As of the Closing Date, the Mortgage Loan has not been
modified
in
any material respect including as to prepayment charges (except
that a
Mortgage Loan may have been modified by a written instrument that
has been
recorded or submitted for recordation, if necessary, to protect
the
interests of the Certificate Holders).
(x) With respect to each first lien Mortgage Loan that is covered
by a
lender's policy of title insurance, each such policy is
enforceable, and
each
such policy was issued by a title insurer qualified to do business
in
the
jurisdiction where the related Mortgaged Property is located
and
accep
