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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 22, 1998
(Date of earliest event reported)
MERRILL LYNCH MORTGAGE INVESTORS, INC. (as depositor under a Trust Agreement,
dated as of June 1, 1998, and pursuant to which an Indenture was entered into,
providing for, inter alia, the issuance of PacificAmerica Home-Equity Loan
Asset-Backed Notes, Series 1998-2F, Class A-F)
Merrill Lynch Mortgage Investors, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-39127 33-3416059
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(State or Other Juris- (Commission (I.R.S. Employer
diction of Incorporation) File Number) Identification No.)
250 Vesey Street World Financial Center,
North Tower-10th Floor,
New York, New York 10281
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code:(212) 449-1000
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Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable
(b) Not applicable
(c) Exhibits:
8.1 Opinion of Thacher Proffitt & Wood
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
MERRILL LYNCH MORTGAGE
INVESTORS, INC.
By: /s/ Peter Cerwin
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Name: Peter Cerwin
Title: Vice President
Dated: July 7, 1998
EXHIBIT 8.1
March 25, 1998
Merrill Lynch, Pierce, Financial Security Assurance
Fenner & Smith Incorporated 350 Park Avenue
250 Vesey Street New York, New York 10022
World Financial Center, N. Tower
New York, New York 10281
PacificAmerica Money Center, Inc. Moody's Investors Service, Inc.
21031 Ventura Boulevard 99 Church Street
Woodland Hills, California New York, New York 10007
91364-2210
Bankers Trust Company Standard & Poor's Ratings Services
of California, N.A. 26 Broadway
3 Park Plaza, 16th Floor New York, New York 10004-1064
Irvine, California 92614
Merrill Lynch Mortgage Investors, Inc.
Wilmington Trust Company 250 Vesey Street
1100 North Market Street World Financial Center, N. Tower
Wilmington, Delaware 19890 New York, New York 10281
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- -------------------- Opinion: Closing/Tax Opinion
PacificAmerica Home Equity Loan Asset-Backed
Notes and Certificates, Series 1998-2F, Class A-F
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Ladies and Gentlemen:
We have acted as counsel to Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Underwriter") and Merrill Lynch Mortgage Investors,
Inc. ("MLMI") in connection with (i) the sale by PacificAmerica Money Center,
Inc. (in such capacity, the "Seller") to MLMI of certain variable rate home
equity loans (the "Home Equity Loans") under the Home Equity Loan Purchase
Agreement, dated as of March 22, 1998 (the "Purchase Agreement"), among the
Seller, PacificAmerica Home Equity Loan Trust Series 1998-2F, a Delaware
business trust (the "Issuer" or the "Trust"), Bankers Trust Company of
California, N.A. as indenture trustee (the "Indenture Trustee") and MLMI, (ii)
the sale of the Home Equity Loans by MLMI to the Issuer pursuant to the Amended
and Restated Trust Agreement, dated as of March 1, 1998 (the "Trust Agreement"),
<PAGE>
between MLMI and Wilmington Trust Company as owner trustee (the "Owner Trustee")
and (iii) the Indemnification and Contribution Agreement (the "Contribution
Agreement"), dated as of March 22, 1998, among the Underwriter, MLMI and the
Seller.
In exchange for the Home Equity Loans, the Issuer will issue the
Pacific America Home Equity Loan Asset-Backed Notes, Series 1998-2F, Class A-F
(the "Notes") and the Pacific America Home Equity Loan Asset-Backed
Certificates, Series 1998-2F (the "Certificates"). The Notes will be issued
under the Indenture, dated as of March 1, 1998 (the "Indenture"), between the
Issuer and the Indenture Trustee, and will be secured by the Home Equity Loans
and other assets pledged to the Indenture Trustee thereunder. The Issuer will
enter into the Insurance Agreement, dated March 25, 1998 (the "Insurance
Agreement"), among Financial Security Assurance, Inc. as insurer (the "Note
Insurer"), the Seller, MLMI, the Indenture Trustee and the Issuer pursuant to
which the Note Insurance Policy will be issued in favor of the Indenture Trustee
for the benefit of the holders of the Notes. In connection with the Note
Insurance Policy, the Note Insurer will enter into the Indemnification
Agreement, dated as of March 25, 1998 (the "Indemnification Agreement"), among
the Seller, the Underwriter and the Note Insurer.
The Depositor will sell the Notes to the Underwriter pursuant to the
Underwriting Agreement, dated March 22, 1998 (the "Underwriting Agreement"),
between MLMI and the Underwriter. The Certificates will be issued and delivered
to the Seller. The Home Equity Loans will be serviced pursuant to the Servicing
Agreement, dated as of March 1, 1998 (the "Servicing Agreement"), among the
Indenture Trustee, the Issuer, PacificAmerica Money Center, Inc.(in such
capacity, the "Master Servicer"). The Master Servicer will initially delegate
its servicing obligations to Advanta Mortgage Corp. USA pursuant to the
Sub-Servicing Agreement, dated as of March 1, 1998 (the "Sub-Servicing
Agreement"), between the Master Servicer and Advanta Mortgage Corp. USA.
The documents evidencing the Home Equity Loans will be held by the
Indenture Trustee. On the Closing Date, a portion of the proceeds of the sale of
the Notes equal to the Original Pre- Funded Amount will be deposited in the
Pre-Funding Account and a portion of the proceeds of the sale of the Notes equal
to the Interest Coverage Amount will be deposited into the Interest Coverage
Account, which accounts will be created under the Indenture and held by the
Indenture Trustee, as security for the Noteholders, in segregated trust accounts
established in the name of the Indenture Trustee. Moneys on deposit in the
Pre-Funding Account will be used to fund the acquisition by the Issuer of
certain additional home equity mortgage loans (the "Subsequent Mortgage Loans")
from the Seller and, to the extent not so used, will be distributed to holders
of the Notes. The Purchase Agreement, the Trust Agreement, the Indenture, the
Insurance Agreement, the Servicing Agreement, the Sub-Servicing Agreement, the
Contribution Agreement, the Indemnification Agreement and the Underwriting
Agreement are collectively referred to herein as the "Agreements". Capitalized
terms not defined herein have the meanings assigned to them in the Agreements.
This opinion is rendered pursuant to Section 5(d) of the Underwriting Agreement.
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In connection with rendering this opinion letter, we have examined the
Agreements, the Notes and such other documents as we have deemed necessary. As
to matters of fact, we have examined and relied upon representations, warranties
and covenants of the parties contained therein and, where we have deemed
appropriate, representations or certifications of officers of parties thereto.
In rendering this opinion letter, except for the matters that are specifically
addressed in the opinions expressed below, we have assumed (i) the authenticity
of all documents submitted to us as originals and the conformity to the
originals of all documents submitted to us as copies, (ii) the necessary entity
formation and continuing existence in the jurisdiction of formation, and the
necessary licensing and qualification in all jurisdictions, of all parties to
all documents, (iii) the necessary authorization, execution, delivery and
enforceability of all documents, and the necessary entity power with respect
thereto, (iv) the conformity of the Home Equity Loans and the related documents
to the requirements of the Agreements and (v) that there is not and will not be
any other agreement that modifies or supplements the agreements expressed in the
documents to which this opinion letter relates and that renders any of the
opinions expressed below inconsistent with such documents as so modified or
supplemented.
Our opinions set forth below are subject to the qualification that
enforceability of each of the respective obligations of the parties under any
agreement is subject to (i) general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law, (ii) the
effect of certain laws, regulations and judicial or other decisions upon the
availability and enforceability of certain covenants, remedies and other
provisions, including the remedies of specific performance and self-help and
provisions imposing penalties and forfeitures and waiving objections to venue
and forum, (iii) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the rights of creditors and (iv)
public policy considerations underlying the securities laws, to the extent that
such public policy considerations limit the enforceability of the provisions of
any agreement which purport or are construed to provide indemnification with
respect to securities law violations. However, the non-enforceability of any
such provisions will not, taken as a whole, materially interfere with the
practical realization of the benefits of the rights and remedies included in any
such agreement, except for the considerations referred to in foregoing clause
(iv) and the consequences of any judicial, administrative, procedural or other
delay which may be imposed by, relate to or arise from applicable laws,
equitable principles and interpretations thereof. Wherever we indicate that our
opinion with respect to the existence or absence of facts is based on our
knowledge, our opinion is based solely on the current actual knowledge of the
attorneys in this firm who are involved in the representation of parties to the
transactions described herein. In that regard we have conducted no special or
independent investigation of factual matters in connection with this opinion
letter.
In rendering the opinion in paragraph 10 below, we have assumed that
(i) each such Mortgage Note is endorsed in the name of the Indenture Trustee or
its nominee which has been delivered to the Indenture Trustee pursuant to and in
accordance with the Indenture, (ii) the Indenture Trustee is not and will not be
directly or indirectly controlled by MLMI or the Trust or any of their
respective affiliates, (iii) the Indenture Trustee does not have any knowledge
of any adverse claim with respect to the Home Equity Loans, (iv) the Indenture
Trustee has taken and
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will maintain possession of the Home Equity Loans in the State of California,
(v) the necessary filings will be made to maintain the effectiveness of the
Financing Statements, which will include the filing of continuation statements
within six (6) months prior to the expiration of the initial effective period of
each Financing Statement and within six (6) months prior to the expiration of
each subsequent effective period, and will also include such other filings as
may be occasioned by any change of name of MLMI or the Trust, any change of
location of the executive office or principal place of business of the MLMI or
the Trust and any transfer of any interest in the Home Equity Loans, (vi) the
Trust has or will have rights in the Home Equity Loans, sufficient for the grant
of the security interest and (vii) the principal places of business and chief
executive offices of MLMI and the Trust are located either at 250 Vesey Street,
World Financial Center, New York, New York 10048 or in the State of Delaware.
In rendering the opinion in paragraph 10 below, we also note that (A)
the security interest of the Indenture Trustee in proceeds of the Home Equity
Loans is limited to the extent that such security interest will be perfected in
proceeds of the Home Equity Loans only if possession thereof is obtained or
other appropriate action is taken with respect to such proceeds in accordance
with the provisions of applicable law in order to perfect the security interest
and (B) the perfection of the security interest of the Indenture Trustee in any
Home Equity Loan may be governed by laws other than those of the States of
Delaware, New York and California to the extent that any Mortgage Note
constituting or evidencing any such Home Equity Loan becomes located in a
jurisdiction other than the State of California or to the extent that the
principal place of business or chief executive office of MLMI or the Trust
becomes located in a jurisdiction other than the States of New York or Delaware.
In rendering this opinion letter, we do not express any opinion
concerning any law other than the federal law of the United States, the law of
the State of New York and the corporate law of the State of Delaware. We do not
express any opinion with respect to the securities laws of any jurisdiction or
any other matter not specifically addressed in the opinions expressed below.
Based upon and subject to the foregoing, it is our opinion that:
i. Both MLMI and the Underwriter have been duly
organized and are validly existing and in
good standing under the laws of the state of
Delaware and each is duly qualified to
transact business, and is in good standing,
in each jurisdiction within the United
States in which such qualification is
required to carry out the transactions
contemplated by the Agreements.
ii. The Registration Statement has become
effective under the Securities Act of 1933,
as amended (the "1933 Act"), and, to our
knowledge, no stop order suspending the
effectiveness of the Registration Statement
has been issued and not withdrawn, and no
proceedings for that purpose have been
instituted or threatened
<PAGE>
under 1933 Act Section 8(d).
iii. The Registration Statement at the Effective
Date, and the Prospectus as of the date of
the Prospectus Supplement, other than any
financial or statistical information,
Computational Materials or ABS Term Sheets
contained or incorporated by reference
therein, complied as to form in all material
respects with the requirements of the 1933
Act and the applicable rules and regulations
thereunder.
iv. The statements made in the Prospectus under
the heading "Description of the Securities,"
insofar as such statements purport to
summarize certain provisions of the
Agreements and the Notes, provide a fair
summary of such provisions. The statements
made in the Basic Prospectus and the
Prospectus Supplement, as the case may be,
under the headings "Federal Income Tax
Consequences", "Legal Investment", "Certain
Legal Aspects of Mortgage Loans,--
Alternative Mortgage Instruments" and "ERISA
Considerations", to the extent that they
constitute matters of State of New York or
federal law or legal conclusions with
respect thereto, while not purporting to
discuss all possible consequences of
investment in the Notes, are correct in all
material respects with respect to those
consequences or matters that are discussed
therein.
v. To our knowledge, there are no material
contracts, indentures or other documents
(not including Computational Materials or
ABS Term Sheets) of a character required to
be described or referred to in either the
Registration Statement or the Prospectus or
to be filed as exhibits to the Registration
Statement other than those described or
referred to therein or filed or incorporated
by reference as exhibits thereto.
vi. The Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended.
vii. Neither MLMI nor the Trust is an "investment
company" or a company "controlled" by an
"investment company" within the meaning of
the Investment Company Act of 1940, as
amended.
viii. Assuming the due execution, delivery and
performance by PacificAmerica Money Center,
Inc., as seller or master servicer, of the
Agreements, the consummation of the
transactions contemplated by the Agreements
to which it is a party to does not and will
not violate any applicable State of New York
law and regulation and is
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enforceable under the laws of the State of
New York against PacificAmerica Money
Center, Inc. in accordance with its terms.
ix. The Notes, assuming the authentication
thereof in accordance with the Indenture and
the delivery to and payment therefor by the
Underwriter in accordance with the
Underwriting Agreement, are legal, valid and
binding obligations of the Trust,
enforceable against the Trust in accordance
with their terms and entitled to the
benefits of the Indenture under the laws of
the State of New York.
x. The Agreements and the filing of the
Financing Statements in the Filing Offices
create for the benefit of the Indenture
Trustee, as secured party on behalf of the
Noteholders, a valid, perfected security
interest in each Home Equity Loan and the
proceeds thereof, which security interest is
prior to all other security interests.
xi. The execution, delivery and performance by
the Underwriter and MLMI and the
consummation of the transactions
contemplated by the Agreements to which
either the Underwriter or MLMI is a party do
not and will not violate any applicable
State of New York law and regulation and is
enforceable under the laws of the State of
New York against the Underwriter and MLMI in
accordance with its terms.
xii. Assuming compliance with the provisions of
the Agreements, for federal income tax
purposes, the Issuer will not be classified
as an association taxable as a corporation,
a publicly traded partnership taxable as a
corporation or a taxable mortgage pool, and
the Notes will be characterized as
indebtedness.
13. The Trust is a "business trust" as that term is used in
Section 101(9)(v) of Title 11 of the United States Code.
14. Each of the Underwriter and MLMI is a corporation in good
standing under the laws of the State of Delaware and each has
the corporate power and authority to enter into and perform
its obligations under each of the Agreements.
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This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity is entitled to rely hereon. Copies of this
opinion letter may not be made available, and this opinion letter may not be
quoted or referred to in any other document made available, to any other person
or entity, except to any rating agency or accountant or attorney for any person
or entity entitled hereunder to rely hereon or to whom or which this opinion
letter may be disclosed as provided herein, or as otherwise required by law.
Very truly yours,
THACHER PROFFITT & WOOD
By
