MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (this "Agreement"), is
dated and effective as of November 1, 2001, between NCB Capital Corporation, a
Delaware corporation ("NCBCC"), as seller (in such capacity, together with its
successors and permitted assigns hereunder, the "Seller"), and Credit Suisse
First Boston Mortgage Securities Corp., a Delaware corporation ("CSFB Mortgage
Securities"), as purchaser (in such capacity, together with its successors and
permitted assigns hereunder, the "Purchaser").
RECITALS
NCBCC desires to sell, assign, transfer, set over and
otherwise convey to CSFB Mortgage Securities, without recourse, and CSFB
Mortgage Securities desires to purchase, subject to the terms and conditions set
forth herein, the multifamily and commercial mortgage loans (collectively, the
"Mortgage Loans") identified on the schedule annexed hereto as Exhibit A, as
such schedule may be amended from time to time pursuant to the terms hereof.
CSFB Mortgage Securities intends to create a trust (the
"Trust"), the primary assets of which will be a segregated pool of multifamily
and commercial mortgage loans that includes the Mortgage Loans. Beneficial
ownership of the assets of the Trust (such assets collectively, the "Trust
Fund") will be evidenced by a series of mortgage pass-through certificates (the
"Certificates"). Certain classes of the Certificates will be rated by Standard &
Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc., and
Xxxxx'x Investors Service, Inc. (together, the "Rating Agencies"). The Trust
will be created and the Certificates will be issued pursuant to a pooling and
servicing Agreement dated as of November 12, 2001 (the "Pooling and Servicing
Agreement"), among CSFB Mortgage Securities as depositor, KeyCorp Real Estate
Capital Markets, Inc. d/b/a Key Commercial Mortgage, as master servicer and
special servicer of non-residential cooperative mortgage loans, National
Consumer Cooperative Bank, as master servicer and special servicer of
residential cooperative mortgage loans, and Xxxxx Fargo Bank Minnesota, N.A., as
trustee. Capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement as
in full force and effect on the Closing Date (as defined in Section 1 hereof).
It is anticipated that CSFB Mortgage Securities will transfer the Mortgage Loans
to the Trust contemporaneously with its purchase of the Mortgage Loans
hereunder.
CSFB Mortgage Securities intends to sell certain classes of
the Certificates (collectively, the "Publicly Offered Certificates") to Credit
Suisse First Boston Corporation ("CSFB Corporation") and the other underwriters
named in the Underwriting Agreement (as defined below) (collectively in such
capacity, the "Underwriters"), pursuant to an underwriting agreement dated as of
November 1, 2001 (the "Underwriting Agreement), between CSFB Mortgage Securities
and CSFB Corporation as representative of the Underwriters, and CSFB Mortgage
Securities intends to sell certain classes of the remaining Certificates (the
"Privately Offered Certificates") to CSFB Corporation, pursuant to a certificate
purchase agreement dated as of the date hereof (the "Certificate Purchase
Agreement"), between CSFB Mortgage Securities and the CSFB Corporation. The
Publicly Offered are more fully described in a prospectus dated October 22, 2001
(the "Basic Prospectus"), and the supplement to the Basic Prospectus dated
November 1, 2001 (the "Prospectus Supplement" and, together with the Basic
Prospectus, the "Prospectus"), as each may be amended or supplemented at any
time hereafter. The Privately Offered Certificates are more fully described in a
confidential offering circular dated
November 1, 2001 (the "Confidential Offering Circular"), as it may be amended or
supplemented at any time hereafter.
NCBCC will indemnify CSFB Mortgage Securities, CSFB
Corporation, the other Underwriters and certain related parties with respect to
the disclosure regarding the Mortgage Loans contained in the Prospectus, the
Confidential Offering Circular and certain other disclosure documents and
offering materials relating to the Certificates, pursuant to an indemnification
agreement dated as of November 1, 2001 (the "Indemnification Agreement"), among
NCBCC, CSFB Mortgage Securities and CSFB Corporation, both as a representative
of the Underwriters and as initial purchaser of the Privately Offered
Certificates.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties agree as follows:
SECTION 1. Agreement to Purchase. The Seller agrees to sell,
assign, transfer, set over and otherwise convey to the Purchaser, without
recourse, and the Purchaser agrees to purchase from the Seller, subject to the
terms and conditions set forth herein, the Mortgage Loans. The purchase and sale
of the Mortgage Loans shall take place on November 13, 2001 or such other date
as shall be mutually acceptable to the parties hereto (the "Closing Date"). As
of the close of business on the respective Due Dates for the Mortgage Loans in
November 2001 (individually and collectively, the "Cut-off Date"), the Mortgage
Loans will have an aggregate principal balance, after application of all
payments of principal due on the Mortgage Loans on or before the Cut-off Date,
whether or not received, of $70,540,169, subject to a variance of plus or minus
5%. The consideration for the Mortgage Loans shall be cash in the amount of
109.2% of such aggregate principal balance of the Mortgage Loans, together with
accrued interest on the Mortgage Loans at their respective Net Mortgage Rates
from and including November 1, 2001 to but not including the Closing Date, which
cash amount the Purchaser shall pay to the Seller on the Closing Date by wire
transfer in immediately available funds or by such other method as shall be
mutually acceptable to the parties hereto.
SECTION 2. Conveyance of the Mortgage Loans.
(a) Effective as of the Closing Date, subject only to receipt
of the consideration referred to in Section 1 hereof, the Seller does hereby
sell, assign, transfer, set over and otherwise convey to the Purchaser, without
recourse, all of the right, title and interest of the Seller in and to the
Mortgage Loans, including all interest and principal received on or with respect
to the Mortgage Loans after the Cut-off Date (other than scheduled payments of
interest and principal due on or before the Cut-off Date), together with all of
the right, title and interest of the Seller in and to the proceeds of any
related title, hazard or other insurance policies and any escrow, reserve or
other comparable accounts related to the Mortgage Loans.
(b) The Purchaser shall be entitled to receive all scheduled
payments of principal and interest due on the Mortgage Loans after the Cut-off
Date, and all other recoveries of principal and interest collected thereon after
the Cut-off Date (other than scheduled payments of principal and interest due on
the Mortgage Loans on or before the Cut-off Date and collected after the Cut-off
Date, which shall belong to the Seller).
(c) On or before the Closing Date, the Seller shall, at its
expense, deliver to and deposit with, or cause to be delivered to and deposited
with, the Purchaser or its designee the Mortgage
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File and any Additional Collateral (other than reserve funds and escrow
payments) with respect to each Mortgage Loan. In addition, with respect to each
Mortgage Loan, as to which any Additional Collateral is in the form of a Letter
of Credit as of the Closing Date, the Seller shall cause to be prepared,
executed and delivered to the issuer of each such Letter of Credit such notices,
assignments and acknowledgments as are required under such Letter of Credit to
assign, without recourse, to the Trustee the Seller's rights as the beneficiary
thereof and drawing party thereunder. The designated recipient of the items
described in the second preceding sentence, and the designated beneficiary under
each Letter of Credit referred to in the preceding sentence, shall be the
Trustee.
If the Seller cannot deliver on the Closing Date any original
or certified recorded document or original policy of title insurance which is to
be delivered as part of the related Mortgage File for any Mortgage Loan solely
because the Seller is delayed in making such delivery by reason of the fact that
such original or certified recorded document has not been returned by the
appropriate recording office or such original policy of title insurance has not
yet been issued, then the Seller shall deliver such documents to the Purchaser
or its designee, promptly upon the Seller's receipt thereof.
In addition, the Seller shall, at its expense, deliver to and
deposit with, or cause to be delivered to and deposited with, the Purchaser or
its designee, on or before the Closing Date, the following items (except to the
extent that any of the following items are to be retained by a subservicer that
will continue to act on behalf of the Purchaser or its designee): (i) originals
or copies of all financial statements, appraisals, environmental/engineering
reports, leases, rent rolls (or, in the case of any Mortgage Loans secured by
residential cooperative properties, maintenance schedules), third-party
underwriting reports, insurance policies, legal opinions, tenant estoppels and
any other documents that the Purchaser or its servicing agent reasonably deems
necessary to service the subject Mortgage Loan in the possession or under the
control of the Seller that relate to the Mortgage Loans and, to the extent they
are not required to be a part of a Mortgage File for any Mortgage Loan,
originals or copies of all documents, certificates and opinions in the
possession or under the control of the Seller that were delivered by or on
behalf of the related Borrowers in connection with the origination of the
Mortgage Loans (provided that the Seller shall not be required to deliver
documents or materials prepared by the Seller or its affiliates solely for
internal uses); and (ii) all unapplied reserve funds and escrow payments in the
possession or under the control of the Seller that relate to the Mortgage Loans.
The designated recipient of the items described in clauses (i) and (ii) of the
preceding sentence shall be the applicable Master Servicer.
Notwithstanding the foregoing, if the Seller is unable to
deliver any Letter of Credit constituting Additional Collateral for any Mortgage
Loan then the Seller may, in lieu thereof, deliver on behalf of the related
Borrower, to be used for the same purposes as such missing Letter of Credit
either: (i) a substitute letter of credit substantially comparable to, but in
all cases in the same amount and with the same draw conditions and renewal
rights as, that Letter of Credit and issued by an obligor that meets any
criteria in the related Mortgage Loan Documents applicable to the issuer of that
Letter of Credit; or (ii) a cash reserve in an amount equal to the amount of
that Letter of Credit. For purposes of the delivery requirements of this Section
2(c), any such substitute letter of credit shall be deemed to be Additional
Collateral of the type covered by the first paragraph of this Section 2(c) and
any such cash reserve shall be deemed to be reserve funds of the type covered by
the third paragraph of this Section 2(c).
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In connection with the foregoing paragraphs of this Section
2(c), the Seller is a designated recipient, or shall otherwise be the
beneficiary, of all certifications relating to the Mortgage Loans made and/or
delivered by the Trustee pursuant to Section 2.02(a) and Section 2.02(b) of the
Pooling and Servicing Agreement. To the extent that those certifications and/or
the related exception reports reflect Document Defects with respect to the
Mortgage Loans, those certifications and/or the related exception reports shall
constitute notice to the Seller for purposes of Section 5 upon receipt thereof
by the Seller.
(d) The Seller shall be responsible for all reasonable fees
and out-of-pocket costs and expenses associated with recording and/or filing any
and all assignments and other instruments of transfer with respect to the
Mortgage Loans that are required to be recorded or filed, as the case may be,
under the Pooling and Servicing Agreement; provided that the Seller shall not be
responsible for actually recording or filing any such assignments or other
instruments of transfer. If the Seller receives written notice that any such
assignment or other instrument of transfer is lost or returned unrecorded or
unfiled, as the case may be, because of a defect therein, the Seller shall
prepare or cause the preparation of a substitute therefor or cure such defect,
as the case may be; provided that the cost of such preparation shall be borne by
the Purchaser if the loss or return is caused by the Purchaser's negligence. The
Seller shall provide the Purchaser or its designee with a power of attorney to
enable it or them to record any loan documents that the Purchaser has been
unable to record. Unless the Purchaser notifies the Seller in writing to the
contrary, the designated recipients of the power of attorney referred to in the
preceding sentence shall be the Trustee.
(e) The Seller shall, under generally accepted accounting
principles ("GAAP"), report its transfer of the Mortgage Loans to the Purchaser,
as provided herein, as a sale of the Mortgage Loans to the Purchaser in exchange
for the consideration specified in Section 1 hereof. In connection with the
foregoing, the Seller shall cause all of its financial and accounting records to
reflect such transfer as a sale (as opposed to a secured loan). Regardless of
its treatment of the transfer of the Mortgage Loans to the Purchaser under GAAP,
the Seller shall at all times following the Closing Date cause all of its
records and financial statements and any relevant consolidated financial
statements of any direct or indirect parent to clearly reflect that the Mortgage
Loans have been transferred to the Purchaser and are no longer available to
satisfy claims of the Seller's creditors.
(f) After the Seller's transfer of the Mortgage Loans to the
Purchaser, as provided herein, the Seller shall not take any action inconsistent
with the Purchaser's ownership of the Mortgage Loans. Except for actions that
are the express responsibility of another party hereunder or under the Pooling
and Servicing Agreement, and further except for actions that the Seller is
expressly permitted to complete subsequent to the Closing Date, the Seller
shall, on or before the Closing Date, take all actions required under applicable
law to effectuate the transfer of the Mortgage Loans by the Seller to the
Purchaser.
(g) The Mortgage Loan Schedule, as it may be amended from time
to time, shall conform to the requirements set forth in the Pooling and
Servicing Agreement. The Seller shall, within 15 days of its discovery or
receipt of notice of any error on the Mortgage Loan Schedule, amend such
Mortgage Loan Schedule and deliver to the Purchaser or the Trustee, as the case
may be, an amended Mortgage Loan Schedule.
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SECTION 3. Examination of Mortgage Loan Files and Due
Diligence Review. The Seller shall reasonably cooperate with any examination of
the Mortgage Files for, and any other documents and records relating to, the
Mortgage Loans, that may be undertaken by or on behalf of the Purchaser. The
fact that the Purchaser has conducted or has failed to conduct any partial or
complete examination of any of the Mortgage Files for, and/or any of such other
documents and records relating to, the Mortgage Loans, shall not affect the
Purchaser's right to pursue any remedy available in equity or at law for a
breach of the Seller's representations and warranties made pursuant to Section 4
(subject, however, to Section 5(d)).
SECTION 4. Representations, Warranties and Covenants of the
Seller and the Purchaser.
(a) The Seller hereby makes, as of the Closing Date, to and
for the benefit of the Purchaser, each of the representations and warranties set
forth in Exhibit B-1. The Purchaser hereby makes, as of the Closing Date, to and
for the benefit of the Seller, each of the representations and warranties set
forth in Exhibit B-2.
(b) The Seller hereby makes, as of the Closing Date (or as of
such other date specifically provided in the particular representation or
warranty), to and for the benefit of the Purchaser, with respect to each
Mortgage Loan, each of the representations and warranties set forth in Exhibit
C.
(i) The Seller hereby represents and warrants, as of the
Closing Date, to and for the benefit of CSFB Mortgage Securities only,
that the Seller has not dealt with any broker, investment banker, agent
or other person (other than the CSFB Mortgage Securities, CSFB
Corporation and the other Underwriters) who may be entitled to any
commission or compensation in connection with the sale to the Purchaser
of the Mortgage Loans.
(c) The Seller hereby agrees that it shall be deemed to make,
as of the date of substitution, to and for the benefit of the Purchaser, with
respect to any replacement mortgage loan (a "Replacement Mortgage Loan") that is
substituted for a Defective Mortgage Loan (as defined in Section 5(a) hereof),
pursuant to Section 5(a) of this Agreement, each of the representations and
warranties set forth in Exhibit C (references therein to "Closing Date" being
deemed to be references to the "date of substitution", references therein to
"Cut-off Date" being deemed to be references to the "most recent Due Date for
the subject Replacement Mortgage Loan on or before the date of substitution" and
references to "November 2001" and "October 2001" being deemed to be references
to the "month of substitution" and the "month preceding the month of
substitution", respectively). From and after the date of substitution, each
Replacement Mortgage Loan, if any, shall be deemed to constitute a "Mortgage
Loan" hereunder for all purposes.
(d) It is understood and agreed that the representations and
warranties set forth in this Section 4 shall survive delivery of the respective
Mortgage Files to the Purchaser or its designee and shall inure to the benefit
of the Purchaser for so long as any of the Mortgage Loans remains outstanding,
notwithstanding any restrictive or qualified endorsement or assignment.
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SECTION 5. Notice of Breach; Cure, Repurchase and
Substitution.
(a) The Purchaser or its designee shall provide the Seller with written notice
of any Material Breach or Material Document Defect with respect to any Mortgage
Loan. Within 90 days (or in the case of a Material Document Defect that consists
of the failure to deliver a Specially Designated Mortgage Loan Document, 15
days) of the earlier of discovery or receipt of written notice by the Seller
that there has been a Material Breach or Material Document Defect with respect
to any Mortgage Loan (such 90-day (or, if applicable, 15-day) period, the
"Initial Resolution Period"), the Seller shall, subject to Section 5(b) and
Section 5(c) below, (i) correct or cure such Material Breach or Material
Document Defect, as the case may be, in all material respects or (ii) repurchase
the Mortgage Loan affected by such Material Breach or Material Document Defect,
as the case may be (such Mortgage Loan, a "Defective Mortgage Loan"), at the
related Purchase Price, with payment to be made in accordance with the
reasonable directions of the Purchaser; provided that if the Seller shall have
delivered to the Purchaser a certification executed on behalf of the Seller by
an officer thereof stating (i) that such Material Breach or Material Document
Defect, as the case may be, does not relate to whether the Defective Mortgage
Loan is or, as of the Closing Date (or, in the case of a Replacement Mortgage
Loan, as of the related date of substitution), was a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code (a "Qualified Mortgage"), (ii)
that such Material Breach or Material Document Defect, as the case may be, is
capable of being cured but not within the applicable Initial Resolution Period,
(iii) that the Seller has commenced and is diligently proceeding with the cure
of such Material Breach or Material Document Defect, as the case may be, within
the applicable Initial Resolution Period, (iv) what actions the Seller is
pursuing in connection with the cure thereof and (v) that the Seller anticipates
that such Material Breach or Material Document Defect, as the case may be, will
be cured within an additional period not to exceed the applicable Resolution
Extension Period (as defined below), then the Seller shall have an additional
period equal to the applicable Resolution Extension Period to complete such cure
or, failing such, to repurchase the Defective Mortgage Loan; and provided,
further, that, if the Seller's obligation to repurchase any Defective Mortgage
Loan as a result of a Material Breach or Material Document Defect arises within
the three-month period commencing on the Closing Date (or within the two-year
period commencing on the Closing Date if the Defective Mortgage Loan is a
"defective obligation" within the meaning of Section 860G(a)(4)(B)(ii) of the
Code and Treasury regulation section 1.860G-2(f)), and if the Defective Mortgage
Loan is still subject to the Pooling and Servicing Agreement, the Seller may, at
its option, subject to the terms, conditions and limitations set forth in the
Pooling and Servicing Agreement, in lieu of repurchasing such Defective Mortgage
Loan (but, in any event, no later than such repurchase would have to have been
completed), (i) replace such Defective Mortgage Loan with one or more substitute
mortgage loans that individually and collectively satisfy the requirements of
the definition of "Qualifying Substitute Mortgage Loan" set forth in the Pooling
and Servicing Agreement, and (ii) pay any corresponding Substitution Shortfall
Amount, such substitution and payment to be effected in accordance with the
terms of the Pooling and Servicing Agreement. Any such repurchase or replacement
of a Defective Mortgage Loan shall be on a whole loan, servicing released basis.
The Seller shall have no obligation to monitor the Mortgage Loans regarding the
existence of a Material Breach or Material Document Defect, but if the Seller
discovers a Material Breach or Material Document Defect with respect to a any
Mortgage Loan, it will notify the Purchaser.
"Resolution Extension Period" shall mean:
(i) for purposes of remediating a Material Breach with respect
to any Mortgage Loan, 90 days;
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(ii) for purposes of remediating a Material Document Defect
with respect to any Mortgage Loan that is and remains a Performing
Mortgage Loan throughout the applicable Initial Resolution Period, the
period commencing at the end of the applicable Initial Resolution
Period and ending on, and including, the earlier of (A) the 90th day
following the end of such Initial Resolution Period and (B) the 45th
day following the Seller's receipt of written notice from the Purchaser
or its designee of the occurrence of any Servicing Transfer Event with
respect to such Mortgage Loan subsequent to the end of such Initial
Resolution Period;
(iii) for purposes of remediating a Material Document Defect
with respect to any Mortgage Loan that is a Performing Mortgage Loan as
of the commencement of the applicable Initial Resolution Period, but as
to which a Servicing Transfer Event occurs during such Initial
Resolution Period, the period commencing at the end of the applicable
Initial Resolution Period and ending on, and including, the 90th day
following the earlier of (A) the end of such Initial Resolution Period
and (B) the Seller's receipt of written notice from the Purchaser or
its servicing agent of the occurrence of such Servicing Transfer Event;
and
(iv) for purposes of remediating a Material Document Defect
with respect to any Mortgage Loan that is a Specially Serviced Mortgage
Loan as of the commencement of the applicable Initial Resolution
Period, zero (-0-) days, provided that, if the Seller did not receive
written notice from the Purchaser or its servicing agent of the
relevant Servicing Transfer Event as of the commencement of the
applicable Initial Resolution Period, then such Servicing Transfer
Event will be deemed to have occurred during such Initial Resolution
Period and clause (iii) of this definition will be deemed to apply;
provided that, except as otherwise set forth in the following two provisos,
there shall be no Resolution Extension Period in respect of a Material Document
Defect involving a Specially Designated Mortgage Loan Document; and provided,
further, that if a Material Document Defect exists with respect to any Mortgage
Loan, if such Mortgage Loan is then subject to the Pooling and Servicing
Agreement, and if the Seller escrows with the applicable Master Servicer, prior
to the end of the Initial Resolution Period and any Resolution Extension Period
otherwise applicable to the remediation of such Material Document Defect without
regard to this proviso, cash in the amount of the then Purchase Price for such
Mortgage Loan and subsequently delivers to the applicable Master Servicer, on a
monthly basis, such additional cash as may be necessary to maintain a total
escrow equal to the Purchase Price for such Mortgage Loan as such price may
increase over time (the total amount of cash delivered to the applicable Master
Servicer with respect to any Mortgage Loan as contemplated by this proviso or
the immediately following proviso, the "Purchase Price Security Deposit"), then
the Resolution Extension Period applicable to the remediation of such Material
Document Defect shall be extended until the earliest of (i) the second
anniversary of the Closing Date, (ii) the date on which such Mortgage Loan is no
longer outstanding and part of the Trust Fund and (iii) if such Mortgage Loan
becomes a Specially Serviced Mortgage Loan under the Pooling and Servicing
Agreement, the date, if any, on which the applicable Special Servicer determines
in its reasonable, good faith judgment that such Material Document Defect will
materially interfere with or delay the realization against the related Mortgaged
Property or materially increase the cost thereof; and provided, further, that if
the Material Document Defect referred to in the preceding proviso consists of a
failure to deliver a Specially Designated Mortgage Loan Document, and if the
Seller delivers to the applicable Master Servicer a Purchase Price Security
Deposit equal to 25% of the outstanding principal balance of the subject
Mortgage Loan, then
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the Resolution Extension Period applicable to the remediation of such Material
Document Defect shall be extended to the 15th day following the end of the
applicable Initial Resolution Period.
The Purchaser or its designee shall establish, and maintain
any Purchase Price Security Deposit delivered to it with respect to any Mortgage
Loan in, one or more accounts (individually and collectively, the "Purchase
Price Security Deposit Account") and shall be entitled to make withdrawals from
such account(s) for the following purposes: (i) to cover any costs and expenses
resulting from the applicable Material Document Defect; (ii) upon any discounted
payoff or other liquidation of such Mortgage Loan, to cover any Realized Loss
related thereto; and (iii) if the Seller so directs, or if the balance on
deposit in the Purchase Price Security Deposit Account declines, and for 45 days
remains, below the Purchase Price for such Mortgage Loan (except where a
Purchase Price Security Deposit equal to 25% of the outstanding principal
balance of the subject Mortgage Loan is permitted to be delivered in order to
obtain a 15-day Resolution Extension Period with respect to the failure to
deliver a Specially Designated Mortgage Loan Document), or if such Material
Document is not remedied on or before the second anniversary of the Closing
Date, or if such Mortgage Loan becomes a Specially Serviced Mortgage Loan under
the Pooling and Servicing Agreement and the applicable Special Servicer
determines in its reasonable, good faith judgment that such Material Document
Defect will materially interfere with or delay the realization against the
related Mortgaged Property or materially increase the cost thereof, to apply the
Purchase Price Security Deposit to a full or partial, as applicable, payment of
the Purchase Price for such Mortgage Loan (with the Seller to pay any remaining
balance of such Purchase Price). The Seller may obtain a release of the Purchase
Price Security Deposit for any Mortgage Loan (net of any amounts payable
therefrom as contemplated by the prior sentence) upon such Mortgage Loan's being
paid in full or otherwise satisfied, liquidated or removed from the Trust Fund
or upon the subject Material Document Defect's being remedied in all material
respects and all associated fees and expenses being paid in full. The Seller may
direct the Purchaser or its designee to invest or cause the investment of the
funds deposited in any Purchase Price Security Deposit Account in one or more
Permitted Investments that bear interest or are sold at a discount and that
mature, unless payable on demand, no later than the Business Day prior to the
next Master Servicer Remittance Date. The Purchaser or its designee shall act
upon the written instructions of the Seller with respect to the investment of
funds in any Purchase Price Security Deposit Account in such Permitted
Investments, provided that in the absence of appropriate written instructions
from the Seller, the Purchaser shall have no obligation to invest or direct the
investment of funds in such Purchase Price Security Deposit Account. All income
and gain realized from the investment of funds deposited in any Purchase Price
Security Deposit Account shall be for the benefit of the Seller and shall be
withdrawn by the Purchaser or its designee and remitted to the Seller on each
Master Servicer Remittance Date (net of any losses incurred and any deposits
required to be made by the Seller as contemplated by the second proviso to the
prior paragraph), and the Seller shall remit to the Purchaser from the Seller's
own funds for deposit into such Purchase Price Security Deposit Account the
amount of any realized losses (net of realized gains) in respect of such
Permitted Investments immediately upon realization of such net losses and
receipt of written notice thereof from the Purchaser; provided that the Seller
shall not be required to make any such deposit for any realized loss which is
incurred solely as a result of the insolvency of the federal or state depository
institution or trust company that holds such Purchase Price Security Deposit
Account. Neither the Purchaser nor any of its designees shall have any
responsibility or liability with respect to the investment directions of the
Seller, the investment of funds in any Purchase Price Security Deposit Account
in Permitted Investments or any losses resulting therefrom.
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If one or more (but not all) of the Mortgage Loans
constituting a Cross-Collateralized Group are to be repurchased or replaced by
the Seller as contemplated by this Section 5(a), then, prior to the subject
repurchase or substitution, the Purchaser or its designee shall use its best
efforts, subject to the terms of such Mortgage Loans, to prepare and, to the
extent necessary and appropriate, have executed by the related Borrower and
record, such documentation as may be necessary to terminate the
cross-collateralization between the Mortgage Loans in such Cross-Collateralized
Group that are to be repurchased or replaced, on the one hand, and the remaining
Mortgage Loans therein, on the other hand, such that those two groups of
Mortgage Loans are each secured only by the Mortgaged Properties identified in
the Mortgage Loan Schedule as directly corresponding thereto (as to each such
group, the "Primary Real Property Collateral"); provided that, if the affected
Cross-Collateralized Group is then subject to the Pooling and Servicing
Agreement, then no such termination shall be affected unless and until the
Trustee and the applicable Master Servicer shall have received from the Seller
(i) an Opinion of Counsel from independent counsel to the effect that such
termination will not cause an Adverse REMIC Event to occur with respect to any
REMIC Pool or an Adverse Grantor Trust Event with respect to either Grantor
Trust Pool and (ii) written confirmation from each Rating Agency that such
termination will not cause an Adverse Rating Event to occur with respect to any
Class of Rated Certificates; and provided, further, that the Seller may, at its
option, purchase the entire subject Cross-Collateralized Group in lieu of
terminating the cross-collateralization. All costs and expenses incurred by the
Purchaser and its servicing agents pursuant to this paragraph shall be included
in the calculation of Purchase Price for the Mortgage Loan(s) to be repurchased
or replaced.
If the cross-collateralization of any Cross-Collateralized
Group of Mortgage Loans cannot be terminated as contemplated by the prior
paragraph for any reason (including, but not limited to, the Seller's failure to
satisfy any of the conditions set forth in the proviso to the first sentence of
the prior paragraph), if the Seller has not elected to purchase the entire
affected Cross-Collateralized Group, and if such Cross-Collateralized Group is
then subject to the Pooling and Servicing Agreement, then, to the extent that
the Seller is required to repurchase or replace any Mortgage Loan in that
Cross-Collateralized Group in the manner prescribed above while the Trust
continues to hold any other Mortgage Loan in that Cross-Collateralized Group,
the Trustee, on behalf of the Trust, and the Seller each hereby agrees to
forbear from enforcing any remedies against the other's Primary Real Property
Collateral but may exercise remedies against the Primary Real Property
Collateral securing the Mortgage Loans in that Cross-Collateralized Group held
by it; provided that the Trustee and the applicable Master Servicer shall have
received from the Seller an Opinion of Counsel from independent counsel to the
effect that (i) the exercise of remedies by the Seller, on the one hand, or the
Trust, on the other hand, with respect to the Primary Real Property Collateral
securing the respective Mortgage Loan(s) in such Cross-Collateralized Group held
by such party would not materially and adversely affect the rights of the other
such party to proceed against the Primary Real Property Collateral for the
respective Mortgage Loan(s) in such Cross-Collateralized Group held by such
other party and (ii) the foregoing arrangement would not result in an Adverse
REMIC Event with respect to any REMIC Pool or an Adverse Grantor Trust Event
with respect to any Grantor Trust Pool. Any reserve or other cash collateral or
letters of credit securing the subject Cross-Collateralized Group shall be
allocated between the Mortgage Loans therein held by the Seller, on the one
hand, and the Trust, on the other hand, in accordance with the related Mortgage
Loan documents, or otherwise on a pro rata basis based upon the outstanding
principal balances of their respective Mortgage Loans in such
Cross-Collateralized Group. All other terms of the Mortgage Loans in such
Cross-Collateralized Group shall remain in full force and effect, without any
modification thereof. The Borrowers under the respective Cross-Collateralized
Groups of Mortgage Loans are intended third-party beneficiaries of the provision
set forth in this
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paragraph. The provisions of this paragraph may not be modified with respect to
any Mortgage Loan in a Cross-Collateralized Group without the related Borrower's
consent.
If the cross-collateralization of any Cross-Collateralized
Group of Mortgage Loans cannot be terminated as contemplated by the second
preceding paragraph for any reason (including, but not limited to, the Seller's
failure to satisfy any of the conditions set forth in the proviso to the first
sentence of the second preceding paragraph) and the forbearance arrangement in
respect of such Cross-Collateralized Group cannot be effected as contemplated by
the preceding paragraph for any reason (including, but not limited to, the
Seller's failure to satisfy any of the conditions set forth in the proviso to
the first sentence of the prior paragraph) then the entire Cross-Collateralized
Group shall be repurchased or replaced if the subject Material Breach or
Material Document Defect, as the case may be, is not remedied in all material
respects by the end of the applicable Initial Resolution Period and any
applicable Resolution Extension Period.
Whenever one or more mortgage loans are substituted by the
Seller for a Defective Mortgage Loan as contemplated by this Section 5(a), the
Seller shall (i) deliver the related Mortgage File for each such substitute
mortgage loan to the Purchaser or its designee (which designee, unless otherwise
stated, is the Trustee), (ii) certify that such substitute mortgage loan
satisfies or such substitute mortgage loans satisfy, as the case may be, all of
the requirements of the definition of "Qualifying Substitute Mortgage Loan" set
forth in the Pooling and Servicing Agreement and (iii) send such certification
to the Purchaser or its designee. No mortgage loan may be substituted for a
Defective Mortgage Loan as contemplated by this Section 5(a) if the Defective
Mortgage Loan to be replaced was itself a Replacement Mortgage Loan, in which
case, absent cure of the relevant Material Breach or Material Document Defect,
the Defective Mortgage Loan will be required to be repurchased as contemplated
hereby. Monthly Payments due with respect to each Replacement Mortgage Loan (if
any) after the related date of substitution, and Monthly Payments due with
respect to each Defective Mortgage Loan (if any) after the Cut-off Date (or, in
the case of a Replacement Mortgage Loan, after the date on which it is added to
the Trust Fund) and on or prior to the related date of repurchase or
replacement, shall belong to the Purchaser. Monthly Payments due with respect to
each Replacement Mortgage Loan (if any) on or prior to the related date of
substitution, and Monthly Payments due with respect to each Defective Mortgage
Loan (if any) after the related date of repurchase or replacement, shall belong
to the Seller.
If any Defective Mortgage Loan is to be repurchased or
replaced as contemplated by this Section 5(a), the Seller shall amend the
Mortgage Loan Schedule to reflect the removal of the Defective Mortgage Loan
and, if applicable, the substitution of the related Replacement Mortgage Loan(s)
and shall forward such amended schedule to the Purchaser.
(b) It shall be a condition to any repurchase or replacement
of a Defective Mortgage Loan by the Seller pursuant to Section 5(a) that the
Purchaser (which shall include the Trustee) shall have executed and delivered
such instruments of transfer or assignment then presented to it by the Seller,
in each case without recourse, as shall be necessary to vest in the Seller the
legal and beneficial ownership of such Defective Mortgage Loan (including any
property acquired in respect thereof or proceeds of any insurance policy with
respect thereto), to the extent that such ownership interest was transferred to
the Purchaser hereunder.
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(c) If, on or after May 13, 2003, the Seller receives notice
of a Material Document Defect with respect to any Mortgage Loan, which Material
Document Defect constitutes a Recording Omission, and if such Mortgage Loan is
still subject to the Pooling and Servicing Agreement, then the Seller, with the
consent of the Controlling Class Representative, which consent may be granted or
withheld in its sole discretion, in lieu of repurchasing or replacing such
Mortgage Loan (as and to the extent contemplated by Section 5(a) above), but in
no event later than such repurchase would have to have been completed, establish
a Recording Omission Credit or a Recording Omission Reserve with the applicable
Master Servicer. In furtherance of the preceding sentence, the Purchaser or its
designee shall establish one or more accounts (individually and collectively,
the "Special Reserve Account"), each of which shall be an Eligible Account, and
the Purchaser or its designee shall deposit any Recording Omission Reserve into
the Special Reserve Account within one Business Day of receipt. The Seller may
direct the Purchaser or its designee to invest or cause the investment of the
funds deposited in the Special Reserve Account in one or more Permitted
Investments that bear interest or are sold at a discount and that mature, unless
payable on demand, no later than the Business Day prior to the next Master
Servicer Remittance Date. The Purchaser or its designee shall act upon the
written instructions of the Seller with respect to the investment of funds in
the Special Reserve Account in such Permitted Investments, provided that in the
absence of appropriate written instructions from the Seller, the Purchaser shall
have no obligation to invest or direct the investment of funds in such Special
Reserve Account. All income and gain realized from the investment of funds
deposited in such Special Reserve Account shall be for the benefit of the Seller
and shall be withdrawn by the Purchaser or its designee and remitted to the
Seller on each Master Servicer Remittance Date (net of any losses incurred), and
the Seller shall remit to the Purchaser from the Seller's own funds for deposit
into such Special Reserve Account the amount of any realized losses (net of
realized gains) in respect of such Permitted Investments immediately upon
realization of such net losses and receipt of written notice thereof from the
Purchaser; provided that the Seller shall not be required to make any such
deposit for any realized loss which is incurred solely as a result of the
insolvency of the federal or state depository institution or trust company that
holds such Special Reserve Account. Neither the Purchaser nor any of its
designees shall have any responsibility or liability with respect to the
investment directions of the Seller, the investment of funds in the Special
Reserve Account in Permitted Investments or any losses resulting therefrom. A
Recording Omission Credit shall (i) entitle the Purchaser or its designee to
draw upon the Recording Omission Credit on behalf of the Purchaser upon
presentation of only a sight draft or other written demand for payment, (ii)
permit multiple draws by the Purchaser or its designee, and (iii) be issued by
such issuer and containing such other terms as the Purchaser or its designee may
reasonably require to make such Recording Omission Credit reasonably equivalent
security to a Recording Omission Reserve in the same amount. Once a Recording
Omission Reserve or Recording Omission Credit is established with respect to any
Mortgage Loan, the Purchaser or its designee shall, from time to time, withdraw
funds from the related Special Reserve Account or draw upon the related
Recording Omission Credit, as the case may be, and apply the proceeds thereof to
pay the losses or expenses directly incurred by the Purchaser or its designee as
a result of a Recording Omission. The Recording Omission Reserve or Recording
Omission Credit or any unused balance thereof with respect to any Mortgage Loan
will be released to the Seller by the Purchaser upon the earlier of the Seller's
cure of all Recording Omissions with respect to such Mortgage Loan (provided
that the Purchaser has been reimbursed with respect to all losses and expenses
relating to Recording Omissions with respect to such Mortgage Loan) and such
Mortgage Loan's no longer being a part of the Trust Fund under the Pooling and
Servicing Agreement.
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(d) It is understood and agreed that the obligations of the
Seller set forth in this Section 5 to cure a Material Breach or a Material
Document Defect, repurchase or replace the related Defective Mortgage Loan(s) or
establish a Recording Omission Credit or a Recording Omission Reserve with
respect to the related Defective Mortgage Loan(s), constitute the sole remedies
available to the Purchaser, the Certificateholders or the Trustee on behalf of
the Certificateholders with respect to a Breach or Document Defect in respect of
any Mortgage Loan.
(e) If the Seller disputes that a Material Document Defect or
Material Breach exists with respect to a Mortgage Loan or otherwise refuses (i)
to effect a correction or cure of such Material Document Defect or Material
Breach, (ii) to repurchase the affected Mortgage Loan from the Purchaser or its
assignee or (iii) to replace such Mortgage Loan with a Qualifying Substitute
Mortgage Loan, each in accordance with the foregoing provisions of this Section
5, then (provided that (i) the Mortgage Loan is then subject to the Pooling and
Servicing Agreement, (ii) the applicable Initial Resolution Period and any
applicable Resolution Extension Period has expired and (iii) the Mortgage Loan
is then in default and is then a Specially Serviced Mortgage Loan) the
applicable Special Servicer may, subject to the Servicing Standard, modify,
work-out or foreclose, sell or otherwise liquidate (or permit the liquidation
of) the Mortgage Loan pursuant to the terms of the Pooling and Servicing
Agreement, while pursuing the repurchase claim, and such action shall not be a
defense to the repurchase claim or alter the applicable Purchase Price.
If any REO Property in respect of any Mortgage Loan is subject
to the Pooling and Servicing Agreement, then the Seller shall be notified
promptly and in writing by the applicable Special Servicer of any offer that it
receives to purchase such REO Property. Upon the receipt of such notice by the
Seller, the Seller shall then have the right to repurchase such REO Property
from the Trust at a purchase price equal to the amount of such offer. The Seller
shall have three (3) Business Days to purchase such REO Property from the date
that it was notified of such offer. The applicable Special Servicer shall be
obligated to provide the Seller with any appraisal or other third-party reports
relating to such REO Property within its possession to enable the related
Mortgage Loan Seller to evaluate such REO Property. Any sale of a Mortgage Loan,
or foreclosure upon such Mortgage Loan and sale of any related REO Property, to
a Person other than the Seller shall be (i) without recourse of any kind (either
expressed or implied) by such Person against the Seller and (ii) without
representation or warranty of any kind (either expressed or implied) by the
Seller to or for the benefit of such Person.
The fact that a Material Document Defect or Material Breach is
not discovered until after foreclosure (but in all instances prior to the sale
of the subject Mortgage Loan or REO Property) shall not prejudice any claim of
the Trust against the Seller for repurchase of the subject Mortgage Loan or REO
Property. The provisions of this Section 5 regarding remedies against the Seller
for a Material Breach or Material Document Defect with respect to any Mortgage
Loan shall also apply to the related REO Property.
If the Seller fails to correct or cure the Material Document
Defect or Material Breach or purchase the subject REO Property, then the
provisions above regarding notice of offers related to such REO Property and the
Seller's right to purchase such REO Property shall apply. If a court of
competent jurisdiction issues a final order that the Seller is or was obligated
to repurchase the related Mortgage Loan or REO Property or the Seller otherwise
accepts liability, then, after the expiration of any applicable appeal period,
but in no event later than the termination of the Trust pursuant to the Pooling
and Servicing Agreement, the Seller will be obligated to pay to the Trust the
amount, if any, by which
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the applicable Purchase Price exceeds any Liquidation Proceeds received upon
such liquidation (including those arising from any sale to the Seller); provided
that the prevailing party in such action shall be entitled to recover all costs,
fees and expenses (including reasonable attorneys' fees) related thereto.
SECTION 6. Closing. The closing of the sale of the Mortgage
Loans (the "Closing") shall be held at the offices of Sidley Xxxxxx Xxxxx &
Xxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., New York City
time, on the Closing Date.
The Closing shall be subject to each of the following
conditions:
(i) all of the representations and warranties of the Seller
made pursuant to Section 4 of this Agreement shall be true and correct
in all material respects as of the Closing Date;
(ii) all documents specified in Section 7 of this Agreement
(the "Closing Documents"), in such forms as are agreed upon and
reasonably acceptable to the Purchaser and, in the case of the Pooling
and Servicing Agreement (insofar as such Agreement affects to
obligations of the Seller hereunder), to the Seller, shall be duly
executed and delivered by all signatories as required pursuant to the
respective terms thereof;
(iii) the Seller shall have delivered and released to the
Purchaser or its designee, all documents, funds and other assets
required to be delivered thereto pursuant to Section 2 of this
Agreement;
(iv) the result of any examination of the Mortgage Files for,
and any other documents and records relating to, the Mortgage Loans
performed by or on behalf of the Purchaser pursuant to Section 3 hereof
shall be satisfactory to the Purchaser in its reasonable determination;
(v) all other terms and conditions of this Agreement required
to be complied with on or before the Closing Date shall have been
complied with in all material respects, and the Seller shall have the
ability to comply with all terms and conditions and perform all duties
and obligations required to be complied with or performed after the
Closing Date;
(vi) the Seller shall have received the consideration for the
Mortgage Loans, as contemplated by Section 1;
(vii) the Seller shall have paid all fees and expenses payable
by it to the Purchaser or otherwise pursuant to this Agreement; and
(viii) neither the Underwriting Agreement nor the Certificate
Purchase Agreement shall have been terminated in accordance with its
terms.
Both parties agree to use their commercially reasonable best
efforts to perform their respective obligations hereunder in a manner that will
enable the Purchaser to purchase the Mortgage Loans on the Closing Date.
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SECTION 7. Closing Documents. The Closing Documents shall
consist of the following:
(i) this Agreement, duly executed by the Purchaser and the
Seller;
(ii) each of the Pooling and Servicing Agreement and the
Indemnification Agreement, duly executed by the respective parties
thereto;
(iii) an Officer's Certificate substantially in the form of
Exhibit D-1A hereto, executed by the Secretary or an assistant
secretary of the Seller, in his or her individual capacity, and dated
the Closing Date, and upon which CSFB Mortgage Securities, CSFB
Corporation, the other Underwriters and the Rating Agencies
(collectively, for purposes of this Section 7, the "Interested
Parties") may rely, attaching thereto as exhibits (A) the resolutions
of the board of directors of the Seller authorizing the Seller's
entering into the transactions contemplated by this Agreement, and (B)
the organizational documents of the Seller;
(iv) a certificate of good standing with respect to the Seller
issued by the Secretary of State of the State of Delaware, not earlier
than 30 days prior to the Closing Date, and upon which the Interested
Parties may rely;
(v) a Certificate of the Seller substantially in the form of
Exhibit D-1B hereto, executed by an executive officer of the Seller on
the Seller's behalf and dated the Closing Date, and upon which the
Interested Parties may rely;
(vi) written opinions of Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP, special counsel for the Seller, dated the Closing Date and
addressed to the Interested Parties and the respective parties to the
Pooling and Servicing Agreement, which opinions shall be substantially
in the form of Exhibit D-2A and Exhibit D-2B, respectively, hereto;
(vii) a letter from Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP, special counsel for the Seller, dated the Closing Date and
addressed to CSFB Mortgage Securities, CSFB Corporation and the other
Underwriters, which letter shall be substantially in the form of
Exhibit D-2C hereto;
(viii) one or more comfort letters from Xxxxxx Xxxxxxxx LLP,
certified public accountants, dated the date of any preliminary
Prospectus Supplement and of the Prospectus Supplement, respectively,
and addressed to, and in form and substance acceptable to, CSFB
Mortgage Securities, CSFB Corporation, the other Underwriters and their
respective counsel, stating in effect that, using the assumptions and
methodology used by CSFB Mortgage Securities, all of which shall be
described in such letters, they have recalculated such numbers and
percentages relating to the Mortgage Loans set forth in any preliminary
Prospectus Supplement and the Prospectus Supplement, compared the
results of their calculations to the corresponding items in any
preliminary Prospectus Supplement and the Prospectus Supplement,
respectively, and found each such number and percentage set forth in
any preliminary Prospectus Supplement and the Prospectus Supplement,
respectively, to be in agreement with the results of such calculations
(the Purchaser acknowledges receipt and satisfactory review of such
letters); and
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(ix) such further certificates, opinions and documents as the
Purchaser may reasonably request prior to the Closing Date or any
Rating Agency may require and in a form reasonably acceptable to the
Purchaser and the Seller.
SECTION 8. Costs. Whether or not this Agreement is terminated,
the costs and expenses incurred in connection with the transactions herein
contemplated shall be allocated as follows: (i) all out-of-pocket and/or
internally allocated costs and expenses incurred by the Seller in connection
with the transactions herein contemplated, including, without limitation, the
fees and disbursements of its counsel, together with all other due diligence and
accounting costs and expenses incurred by the Seller or an affiliate and
relating to the Mortgage Loans, shall be borne by the Seller; and (ii) all other
costs and expenses incurred in connection with the transactions herein
contemplated including, without limitation, any and all underwriting and
placement fees shall be borne by CSFB Mortgage Securities, Column Financial,
Inc. and KeyBank National Association, in such proportions as they shall
mutually agree.
SECTION 9. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed, by registered mail, postage prepaid, by
overnight mail or courier service, or transmitted by facsimile and confirmed by
similar mailed writing, if to the Purchaser, addressed to the Purchaser at 00
Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxx,
or such other address as may be designated by the Purchaser to the Seller in
writing, or, if to the Seller, addressed to the Seller at 0000 Xxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxx Xxxxxxxx, or such other address as may
be designated by the Seller to the Purchaser in writing.
SECTION 10. Miscellaneous. Neither this Agreement nor any term
or provision hereof may be changed, waived, discharged or terminated except by a
writing signed by a duly authorized officer of the party against whom
enforcement of such change, waiver, discharge or termination is sought to be
enforced. This Agreement may be executed in any number of counterparts, each of
which shall for all purposes be deemed to be an original and all of which shall
together constitute but one and the same instrument. This Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns, and no other person will have any right or obligation
hereunder. Notwithstanding any contrary provision of this Agreement or the
Pooling and Servicing Agreement, the Purchaser shall not consent to any
amendment of the Pooling and Servicing Agreement which will increase the
obligations of, or otherwise adversely affect, the Seller, without the consent
of the Seller.
SECTION 11. Characterization. The parties hereto agree that it
is their express intent that the conveyance contemplated by this Agreement be,
and be treated for all purposes as, a sale by the Seller of all the Seller's
right, title and interest in and to the Mortgage Loans. The parties hereto
further agree that it is not their intention that such conveyance be a pledge of
the Mortgage Loans by the Seller 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 to continue to be property of the Seller, then: (a)
this Agreement shall be deemed to be a security agreement under applicable law;
(b) the transfer of the Mortgage Loans provided for herein shall be deemed to be
a grant by the Seller to the Purchaser of a first priority security interest in
all of the Seller's right, title and interest in and to the Mortgage Loans and
all amounts payable to the holder(s) of the Mortgage Loans in accordance with
the terms thereof (other than scheduled payments of interest and principal due
on or before the Cut-off Date) and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities
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or other property; (c) the assignment by CSFB Mortgage Securities to the Trustee
of its interests in the Mortgage Loans as contemplated by Section 16 hereof
shall be deemed to be an assignment of any security interest created hereunder;
(d) the possession by the Purchaser of the related 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 under applicable law; and (e)
notifications to, and acknowledgments, receipts or confirmations from, persons
or entities holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, bailees or agents (as
applicable) of the Purchaser for the purpose of perfecting such security
interest under applicable law. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions, including, without
limitation, the filing of UCC financing statements, as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement and the Pooling and Servicing Agreement.
SECTION 12. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, incorporated herein by reference or contained in the
certificates of officers of the Seller delivered pursuant hereto, shall remain
operative and in full force and effect and shall survive delivery of the
Mortgage Loans by the Seller to the Purchaser, notwithstanding any restrictive
or qualified endorsement or assignment in respect of any Mortgage Loan.
SECTION 13. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement that is prohibited or is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation, warranty or covenant of this
Agreement that is prohibited or is held to be void or unenforceable in any
particular jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable law,
the parties hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof.
SECTION 14. GOVERNING LAW; CONSENT TO JURISDICTION. THIS
AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, APPLICABLE TO AGREEMENTS NEGOTIATED, MADE AND TO BE PERFORMED
ENTIRELY IN SAID STATE. TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW,
THE SELLER AND THE PURCHASER EACH HEREBY IRREVOCABLY (I) SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE AND FEDERAL COURTS SITTING IN NEW YORK CITY
WITH RESPECT TO MATTERS ARISING OUT OF OR RELATING TO THIS AGREEMENT; (II)
AGREES THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURTS; (III) WAIVES, TO THE
FULLEST POSSIBLE EXTENT, THE DEFENSE OF AN INCONVENIENT FORUM; AND (IV) AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.
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SECTION 15. Further Assurances. The Seller and the Purchaser
agree to execute and deliver such instruments and take such further actions as
the other party may, from time to time, reasonably request in order to
effectuate the purposes and to carry out the terms of this Agreement.
SECTION 16. Successors and Assigns. The rights and obligations
of the Seller under this Agreement shall not be assigned by the Seller without
the prior written consent of the Purchaser, except that any person into which
the Seller may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Seller is a party, or any
person succeeding to all or substantially all of the business of the Seller,
shall be the successor to the Seller hereunder. In connection with its transfer
of the Mortgage Loans to the Trust as contemplated by the recitals hereto, CSFB
Mortgage Securities is expressly authorized to assign its rights and obligations
under this Agreement, in whole or in part, to the Trustee for the benefit of the
registered holders and beneficial owners of the Certificates. To the extent of
any such assignment, the Trustee, for the benefit of the registered holders and
beneficial owners of the Certificates, shall be the Purchaser hereunder. In
connection with the transfer of any Mortgage Loan by the Trust as contemplated
by the terms of the Pooling and Servicing Agreement, the Trustee, for the
benefit of the registered holders and beneficial owners of the Certificates, is
expressly authorized to assign its rights and obligations under this Agreement,
in whole or in part, to the transferee of such Mortgage Loan. To the extent of
any such assignment, such transferee shall be the Purchaser hereunder (but
solely with respect to such Mortgage Loan that was transferred to it). Subject
to the foregoing, this Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser, and their respective successors and
permitted assigns.
SECTION 17. Information. The Seller shall provide the
Purchaser with such information about the Seller, the Mortgage Loans and the
Seller's underwriting and servicing procedures as is (i) customary in commercial
mortgage loan securitization transactions, (ii) required by a Rating Agency or a
governmental agency or body or (iii) reasonably requested by the Purchaser for
use in a public or private disclosure document.
SECTION 18. Entire Agreement. Except as otherwise expressly
contemplated hereby, this Agreement constitutes the entire agreement and
understanding of the parties with respect to the matters addressed herein, and
this Agreement supersedes any prior agreements and/or understandings, written or
oral, with respect to such matters.
* * *
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused
this Agreement to be duly executed by their respective officers as of the day
and year first above written.
NCB CAPITAL CORPORATION
By:
------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.
By:
------------------------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2001-CKN5
Zip Mortgage
# Property Name Address City State Code Originator
- ------------- ------- ---- ----- ---- ----------
31 000 Xxxx 00xx Xxxxxx 000 Xxxx 00xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
00 Xxxxxx Xxxxx Xxxxx, Inc. 00 Xxxxxx Xxxxx Xxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation
68 000 Xxxx 00xx Xxxxxx 000 Xxxx 00xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Apartment Corporation Corporation
69 Long Beach Owners Corporation 000 Xxxxx Xxxx Xxxx Xxxxx XX 00000 NCB Capital
Corporation
75 000 Xxxx Xxx Xxxxxx 000 Xxxx Xxx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
77 000 Xxxx 00xx Xxxxxx Owners, 000 Xxxx 00xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Inc. Corporation
83 Forest Hills Chateau 00-00 Xxxxxxxx Xxxxxx Xxxxxx XX 00000 NCB Capital
Corporation Corporation
00 0000-0000 Ocean Apartments, 0000-0000 Xxxxx Xxxxxx Xxxxxxxx XX 00000 NCB Capital
Inc. Corporation
98 Larchmont Gables Apartment 1440-1456 Xxxxxx Xxxx Xxxx Xxxxxxxxx XX 00000 NCB Capital
Corporation Corporation
100 0000 Xxxx 00xx Xxxxxx 0000 Xxxx 00xx Xxxxxx Xxxxxxxx XX 00000 NCB Capital
Corporation Corporation
104 00 Xxxxx Xxxxx Xxxx Owners 00 Xxxxx Xxxxx Xxxx Xxxxxxx XX 00000 NCB Capital
Corporation Corporation
107 00 Xxxxx Xxxxxx Owners 00 Xxxxx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
000 Xxxxxx Xxxxxxx 00-00 Xxxxxx Xxxx Xxxxxxxx XX 00000 NCB Capital
Corporation
109 000 Xxxx 000xx Xxxxxx 000 Xxxx 000xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Housing Corporation Corporation
113 155 Tenants Corporation 000 Xxxx 00xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation
117 Lafayette Owners Corporation 00-00 Xxxxxxxxxxx Xxxxxxxxx Xxxxxx Xxxxx XX 00000 NCB Capital
Corporation
122 000 Xxxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx Xxxxx Xxxxxx XX 00000 NCB Capital
Corporation Corporation
123 000 Xxxx 00xx Xxxxxx Housing 000-000 Xxxx 00 Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
126 000 Xxxx Xxx Xxxxxx 000 Xxxx Xxx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
000 Xxxxxx Xxxx Owners 00-00 Xxxx Xxxxxx Xxxxxxxx XX 00000 NCB Capital
Corporation Corporation
000 00-00 & 68-09 Booth Owners 67-87 and 00-00 Xxxxx Xxxxxx Xxxxxx Xxxxx XX 00000 NCB Capital
Corporation Corporation
133 000 Xxxx Xxxxxxx Xxxxxxx 000 Xxxx Xxxxxxx Xxxxxxx Xxxxx Xxxxx XX 00000 NCB Capital
Owners Corporation Corporation
134 Tudor Arms Apartments Inc. 000 Xxxx Xxxxxxxxxx Xxxxxxx Xxxxxxxxx XX 00000 NCB Capital
Corporation
000 Xxxxx Xxxxxxxxxx Xxxxxxxxxxx 00-00 Xxxxx Xxxxxx Xxxx Xxxx XX 00000 NCB Capital
Corporation
141 000 Xxxx 000xx Xxxxxx Owners 000 Xxxx 000xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
142 101 West 80th Owners 000 Xxxx 00xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
A-1
148 00-00 000xx Xxxxxx Owners 00-00 000xx Xxxxxx Xxxxxx Xxxxx XX 00000 NCB Capital
Corporation Corporation
156 184 Columbia Heights Inc. 000 Xxxxxxxx Xxxxxxx Xxxxxxxx XX 00000 NCB Capital
Corporation
157 000 Xxxx 00xx Xxxxxx Tenants 000 Xxxx 00xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporaton Corporation
158 Yorkville 87 Housing 000 Xxxx 00xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
000 00-000 Suffolk Realty 00-000 Xxxxxxx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
167 000 Xxxx 0xx Xxxxxx Owners 000 Xxxx 0xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
000 Xxxxx Xxxxxxxx Xxxxxxx, Ltd. 000 Xxxxx Xxxxxxxx Xxxxxxx XX 00000 NCB Capital
Corporation
000 Xxxxxxxxxxxx Associates, Inc. 00 Xxxxxx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation
172 000 Xxxx 00xx Xxxxxx Owners 000 Xxxx 00xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
000 000-000 Owners Corporation 000-000 Xxxxxxxx Xxxxx Xxxxxxxx XX 00000 NCB Capital
Corporation
174 186 East 2nd Owners 000 Xxxx 0xx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation Corporation
182 Xxxxx Xxxx Cooperative, Inc. 000-000 Xxxx Xxxxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation
184 Xxxxxxxx Studios Corporation 00 Xxxxxxxx Xxxxxx Xxx Xxxx XX 00000 NCB Capital
Corporation
185 Heights Owners Corporation 000 Xxxxx Xxxxxx Xxxxxxxx XX 00000 NCB Capital
Corporation
193 Three Twenty-Five 000 Xxxxxxx Xxxx Xxxx Xxx Xxxx XX 00000 NCB Capital
Cooperative, Inc. Corporation
A-2
Initial Orig Rem
Cut-off Interest Orig Rem Term to Term to
Mortgage Fee/ Original Balance Only Amort. Amort. Maturity Maturity Interest
# Loan Seller Leasehold Balance (2) Term Term Term (3) (3) Rate
- ----------- --------- -------- ------- -------- ------ ------ -------- -------- --------
31 NCB Capital Fee $10,000,000 $10,000,000 120 IO IO 120 117 6.9000%
Corporation
64 NCB Capital Fee $4,000,000 $4,000,000 120 IO IO 120 115 7.2200%
Corporation
68 NCB Capital Fee $3,750,000 $3,738,192 0 360 356 120 116 7.2500%
Corporation
69 NCB Capital Fee $3,700,000 $3,696,814 0 360 359 120 119 6.7500%
Corporation
75 NCB Capital Fee $3,300,000 $3,294,540 0 360 358 120 118 6.7800%
Corporation
77 NCB Capital Fee $3,300,000 $3,290,156 0 360 356 120 116 7.0000%
Corporation
83 NCB Capital Fee $3,000,000 $2,993,099 0 360 357 120 117 6.9600%
Corporation
87 NCB Capital Fee $2,900,000 $2,892,817 0 480 473 120 113 6.9400%
Corporation
98 NCB Capital Fee $2,300,000 $2,296,237 0 480 475 120 115 7.1100%
Corporation
100 NCB Capital Fee $2,200,000 $2,197,475 0 480 476 120 116 7.1900%
Corporation
104 NCB Capital Fee $2,050,000 $2,048,083 0 480 477 120 117 7.1100%
Corporation
107 NCB Capital Fee $2,000,000 $2,000,000 120 IO IO 120 118 6.9000%
Corporation
108 NCB Capital Fee $2,000,000 $1,996,486 0 480 475 120 115 7.3300%
Corporation
109 NCB Capital Fee $2,000,000 $1,993,446 0 480 469 120 109 7.9800%
Corporation
113 NCB Capital Fee $1,850,000 $1,843,291 0 300 297 120 117 7.1700%
Corporation
117 NCB Capital Fee $1,700,000 $1,697,430 0 480 476 120 116 7.0600%
Corporation
122 NCB Capital Fee $1,600,000 $1,595,590 0 360 356 120 116 7.3400%
Corporation
123 NCB Capital Fee $1,600,000 $1,594,831 0 360 356 120 116 7.1200%
Corporation
126 NCB Capital Fee $1,500,000 $1,500,000 120 IO IO 120 119 6.9000%
Corporation
127 NCB Capital Fee $1,500,000 $1,497,771 0 360 358 120 118 7.5100%
Corporation
129 NCB Capital Fee $1,300,000 $1,298,505 0 480 477 120 117 7.0000%
Corporation
133 NCB Capital Fee $1,150,000 $1,144,350 0 360 354 120 114 7.0800%
Corporation
134 NCB Capital Fee $1,148,000 $1,140,131 0 300 294 120 114 7.2100%
Corporation
137 NCB Capital Fee $1,100,000 $1,098,199 0 360 358 120 118 6.8300%
Corporation
141 NCB Capital Fee $1,025,000 $1,016,957 0 360 349 120 109 7.8600%
Corporation
A-1
142 NCB Capital Fee $1,000,000 $999,310 0 480 478 120 118 7.3600%
Corporation
148 NCB Capital Fee $900,000 $898,547 0 360 358 120 118 6.9000%
Corporation
156 NCB Capital Fee $800,000 $799,679 0 720 715 120 115 7.2700%
Corporation
157 NCB Capital Fee $800,000 $797,646 0 360 356 120 116 7.0600%
Corporation
158 NCB Capital Fee $765,000 $764,402 0 480 478 120 118 6.9200%
Corporation
161 NCB Capital Fee $715,000 $711,818 0 300 296 120 116 7.2400%
Corporation
167 NCB Capital Fee $600,000 $596,754 0 360 353 120 113 7.3900%
Corporation
168 NCB Capital Fee $570,000 $568,198 0 360 356 120 116 7.2300%
Corporation
170 NCB Capital Fee $500,000 $498,785 0 360 357 120 117 7.0900%
Corporation
172 NCB Capital Fee $495,000 $491,952 0 300 295 120 115 7.0900%
Corporation
173 NCB Capital Fee $400,000 $398,713 0 360 356 120 116 7.1400%
Corporation
174 NCB Capital Fee $400,000 $398,523 0 480 464 120 104 8.9300%
Corporation
182 NCB Capital Fee $240,000 $237,502 0 360 344 120 104 8.4100%
Corporation
184 NCB Capital Fee $220,000 $209,804 0 180 164 180 164 8.5800%
Corporation
185 NCB Capital Fee $216,000 $207,157 0 180 166 180 166 8.3800%
Corporation
193 NCB Capital Fee $100,000 $96,976 0 180 170 180 170 7.8200%
Corporation
A-2
Interest Servicing
Calculation First and
(30/360/ Monthly Payment Defeasance Trustee
# Actual/360) Payment Date ARD (4) Defeasance Provision Fees
- ------------ ------- ------- ------- ---------- ---------- ----------
31 Actual/360 58,299 09/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
64 30/360 24,067 07/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
68 30/360 25,582 08/01/2001 N/A No N/A 0.1025%
69 30/360 23,998 11/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
75 Actual/360 21,677 10/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
77 Actual/360 22,171 08/01/2001 N/A No N/A 0.1025%
83 Actual/360 20,073 09/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
87 Actual/360 18,098 05/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
98 Actual/360 14,643 07/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
100 Actual/360 14,137 08/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
104 Actual/360 13,051 09/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
107 30/360 11,500 10/01/2001 N/A No N/A 0.1025%
108 30/360 12,911 07/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
109 30/360 13,876 01/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
113 30/360 13,277 09/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
117 30/360 10,639 08/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
122 Actual/360 11,124 08/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
123 30/360 10,774 08/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
126 30/360 8,625 11/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
127 30/360 10,498 10/01/2001 N/A No N/A 0.1025%
129 30/360 8,079 09/01/2001 N/A Yes Lock/47_Def/69_0%/4 0.1025%
133 30/360 7,713 06/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
134 Actual/360 8,342 06/01/2001 N/A No N/A 0.1025%
137 Actual/360 7,263 10/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
141 30/360 7,421 01/01/2001 N/A Yes Lock/47_Def/69_0%/4 0.1025%
142 30/360 6,477 10/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
148 Actual/360 5,985 10/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
156 30/360 4,910 07/01/2001 N/A Yes Lock/49_Def/67_0%/4 0.1025%
157 Actual/360 5,408 08/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
158 30/360 4,710 10/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
161 Actual/360 5,210 08/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
167 30/360 4,150 05/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
168 30/360 3,881 08/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
170 30/360 3,357 09/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
172 30/360 3,527 07/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
173 30/360 2,699 08/01/2001 N/A Yes Lock/48_Def/68_0%/4 0.1025%
174 30/360 3,064 08/01/2000 N/A Yes Lock/48_Def/68_0%/4 0.1025%
182 30/360 1,830 08/01/2000 N/A Yes Lock/47_Def/69_0%/4 0.1025%
184 30/360 2,177 08/01/2000 N/A Yes Lock/48_Def/128_0%/4 0.1025%
185 30/360 2,112 10/01/2000 N/A Yes Lock/47_Def/129_0%/4 0.1025%
193 30/360 945 02/01/2001 N/A Yes Lock/47_Def/129_0%/4 0.1025%
X-0
XXXXXXX X-0
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SELLER
The Seller hereby represents and warrants that, as of the Closing Date:
1. The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
2. The execution and delivery by the Seller of, and the performance by
the Seller under, this Agreement, the execution (including, without limitation,
by facsimile or machine signature) and delivery of any and all documents
contemplated by this Agreement, including, without limitation, endorsements of
Mortgage Notes, and the consummation by the Seller of the transactions herein
contemplated, will not: (a) violate the Seller's organizational documents; or
(b) constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
indenture, agreement or other instrument to which the Seller is a party or by
which it is bound or which is applicable to it or any of its assets, which
default or breach, in the Seller's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Seller to perform
its obligations under this Agreement or the financial condition of the Seller.
3. The Seller has full power and authority to enter into and perform
under this Agreement, has duly authorized the execution, delivery and
performance of this Agreement, and has duly executed and delivered this
Agreement.
4. The Seller has the full right, power and authority to sell, assign,
transfer, set over and convey the Mortgage Loans (and, in the event that the
related transaction is deemed to constitute a loan secured by all or part of the
Mortgage Loans, to pledge the Mortgage Loans) in accordance with, and under the
conditions set forth in, this Agreement.
5. Assuming due authorization, execution and delivery hereof by the
Purchaser, this Agreement constitutes a valid, legal and binding obligation of
the Seller, enforceable against the Seller in accordance with the terms hereof,
subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally, and (b)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
6. The Seller is not in violation of, and its execution and delivery of
this Agreement and its performance under and compliance with the terms hereof
will not constitute a violation of, any law, any order or decree of any court or
arbiter, or any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Seller's good
faith and reasonable judgment, is likely to affect materially and adversely
either the ability of the Seller to perform its obligations under this Agreement
or the financial condition of the Seller.
7. There are no actions, suits or proceedings pending or, to the best
of the Seller's knowledge, threatened against the Seller which, if determined
adversely to the Seller, would prohibit the Seller from entering into this
Agreement or, in the Seller's good faith and reasonable judgment, would
B-1-1
be likely to affect materially and adversely either the ability of the Seller to
perform its obligations hereunder or the financial condition of the Seller.
8. No consent, approval, authorization or order of, or filing or
registration with, any state or federal court or governmental agency or body is
required for the consummation by the Seller of the transactions contemplated
herein, except for those consents, approvals, authorizations and orders that
previously have been obtained and those filings and registrations that
previously have been completed, and except for those filings and recordings of
Mortgage Loan documents and assignments thereof that are contemplated by the
Pooling and Servicing Agreement to be completed after the Closing Date.
9. The transfer of the Mortgage Loans to the Purchaser as contemplated
herein is not subject to any bulk transfer or similar law in effect in any
applicable jurisdiction.
10. The Mortgage Loans do not constitute all or substantially all of
the assets of the Seller.
11. The Seller is not transferring the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud its present or future creditors.
12. The Seller will be solvent at all relevant times prior to, and will
not be rendered insolvent by, its transfer of the Mortgage Loans to the
Purchaser, as contemplated herein.
13. After giving effect to its transfer of the Mortgage Loans to the
Purchaser, as provided herein, the value of the Seller's assets, either taken at
their present fair saleable value or at fair valuation, will exceed the amount
of the Seller's debts and obligations, including contingent and unliquidated
debts and obligations of the Seller, and the Seller will not be left with
unreasonably small assets or capital with which to engage in and conduct its
business.
14. The Seller does not intend to, and does not believe that it will,
incur debts or obligations beyond its ability to pay such debts and obligations
as they mature.
15. No proceedings looking toward liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
16. In connection with its transfer of the Mortgage Loans to the
Purchaser as contemplated herein, the Seller is receiving new value and
consideration constituting at least reasonably equivalent value and fair
consideration.
B-1-2
EXHIBIT B-2
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE PURCHASER
The Purchaser hereby represents and warrants that, as of the Closing
Date:
1. The Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
2. The execution and delivery by the Purchaser of, and the performance
by the Purchaser under, this Agreement, and the consummation by the Purchaser of
transactions herein contemplated, will not: (a) violate the Purchaser's
organizational documents; or (b) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or result
in the breach of, any indenture, agreement or other instrument to which the
Purchaser is a party or by which it is bound or which is applicable to it or any
of its assets, which default or breach, in the Purchaser's good faith and
reasonable judgment, is likely to affect materially and adversely either the
ability of the Purchaser to perform its obligations under this Agreement or the
financial condition of the Purchaser.
3. The Purchaser has full power and authority to enter into and perform
under this Agreement, has duly authorized the execution, delivery and
performance of this Agreement, and has duly executed and delivered this
Agreement.
4. Assuming due authorization, execution and delivery hereof by the
Seller, this Agreement constitutes a valid, legal and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with the terms
hereof, subject to (a) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and (b) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
5. The Purchaser is not in violation of, and its execution and delivery
of this Agreement and its performance under and compliance with the terms hereof
will not constitute a violation of, any law, any order or decree of any court or
arbiter, or any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Purchaser's good
faith and reasonable judgment, is likely to affect materially and adversely
either the ability of the Purchaser to perform its obligations under this
Agreement or the financial condition of the Purchaser.
6. There are no actions, suits or proceedings pending or, to the best
of the Purchaser's knowledge, threatened against the Purchaser which, if
determined adversely to the Purchaser, would prohibit the Purchaser from
entering into this Agreement or, in the Purchaser's good faith and reasonable
judgment, would be likely to affect materially and adversely either the ability
of the Purchaser to perform its obligations hereunder or the financial condition
of the Purchaser.
7. No consent, approval, authorization or order of, or filing or
registration with, any state or federal court or governmental agency or body is
required for the consummation by the Purchaser of the transactions contemplated
herein, except for those consents, approvals, authorizations and orders that
previously have been obtained and those filings and registrations that
previously have been
B-2-1
completed, and except for those filings of Mortgage Loan documents and
assignments thereof that are contemplated by the Pooling and Servicing Agreement
to be completed after the Closing Date.
B-2-2
EXHIBIT C
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE MORTGAGE LOANS
For purposes of these representations and warranties, the
phrases "to the knowledge of the Seller" or "to the Seller's knowledge" shall
mean, except where otherwise expressly set forth below, the actual state of
knowledge of the Seller or any servicer acting on its behalf regarding the
matters referred to, in each case: (i) after the Seller's having conducted such
inquiry and due diligence into such matters as would be customarily performed by
prudent institutional commercial or multifamily, as applicable, mortgage
lenders, and in all events as required by the Seller's underwriting standards,
at the time of the Seller's origination or acquisition of the particular
Mortgage Loan; and (ii) subsequent to such origination, utilizing the servicing
and monitoring practices customarily utilized by prudent commercial mortgage
loan servicers with respect to securitizable commercial or multifamily, as
applicable, mortgage loans. Also for purposes of these representations and
warranties, the phrases "to the actual knowledge of the Seller" or "to the
Seller's actual knowledge" shall mean, except where otherwise expressly set
forth below, the actual state of knowledge of the Seller or any servicer acting
on its behalf without any express or implied obligation to make inquiry. All
information contained in documents which are part of or required to be part of a
Mortgage File shall be deemed to be within the knowledge and the actual
knowledge of the Seller. Wherever there is a reference to receipt by, or
possession of, the Seller of any information or documents, or to any action
taken by the Seller or not taken by the Seller or its agents or employees, such
reference shall include the receipt or possession of such information or
documents by, or the taking of such action or the not taking such action by,
either of the Seller or any servicer acting on its behalf.
The Seller hereby represents and warrants with respect to the
Mortgage Loans that, as of the date hereinbelow specified or, if no such date is
specified, as of the Closing Date, and subject to Section 18 of this Agreement:
1. Mortgage Loan Schedule. The information set forth in the
Mortgage Loan Schedule with respect to the Mortgage Loans is true, complete (in
accordance with the requirements of this Agreement and the Pooling and Servicing
Agreement) and correct in all material respects as of the date of this Agreement
and as of the respective Due Dates for the Mortgage Loans in November 2001.
2. Ownership of Mortgage Loans. Immediately prior to the
transfer of the Mortgage Loans to the Purchaser, the Seller had good title to,
and was the sole owner of, each Mortgage Loan. The Seller has full right, power
and authority to sell, transfer and assign each Mortgage Loan to, or at the
direction of, the Purchaser free and clear of any and all pledges, liens,
charges, security interests, participation interests and/or other interests and
encumbrances (except for certain servicing rights described on Schedule C-42
hereto or otherwise contemplated by this Agreement or the Pooling and Servicing
Agreement). Subject to the completion of the names and addresses of the
assignees and endorsees and any missing recording information in all instruments
of transfer or assignment and endorsements and the completion of all recording
and filing contemplated hereby and by the Pooling and Servicing Agreement, the
Seller will have validly and effectively conveyed to the Purchaser all legal and
beneficial interest in and to each Mortgage Loan free and clear of any pledge,
lien, charge, security interest or other encumbrance (except for certain
servicing rights described on Schedule C-42 hereto or otherwise contemplated by
this Agreement or the Pooling and Servicing Agreement). The sale of the
C-1
Mortgage Loans to the Purchaser or its designee does not require the Seller to
obtain any governmental or regulatory approval or consent that has not been
obtained. Each Mortgage Note is, or shall be as of the Closing Date, properly
endorsed to the Purchaser or its designee and each such endorsement is genuine.
3. Payment Record. No scheduled payment of principal and
interest due under any Mortgage Loan on the Due Date in October 2001 and on any
Due Date in the twelve-month period immediately preceding the Due Date for such
Mortgage Loan in October 2001 was 30 days or more delinquent, without giving
effect to any applicable grace period.
4. Lien; Valid Assignment. The Mortgage related to and
delivered in connection with each Mortgage Loan constitutes a valid and, subject
to the exceptions set forth in Paragraph 13 below, enforceable first priority
lien upon the related Mortgaged Property, prior to all other liens and
encumbrances, except for the following (collectively, the "Permitted
Encumbrances"): (a) the lien for current real estate taxes, water charges, sewer
rents and assessments not yet due and payable; (b) covenants, conditions and
restrictions, rights of way, easements and other matters that are of public
record and are referred to in the related lender's title insurance policy (or,
if not yet issued, referred to in a pro forma title policy or title policy
commitment meeting the requirements described in Paragraph 8 below); (c)
exceptions and exclusions specifically referred to in the related lender's title
insurance policy (or, if not yet issued, referred to in a pro forma title policy
or title policy commitment meeting the requirements described in Paragraph 8
below); (d) other matters to which like properties are commonly subject; (e) the
rights of tenants (as tenants only) under leases (including subleases)
pertaining to the related Mortgaged Property; (f) condominium declarations of
record and identified in the related lender's title insurance policy (or, if not
yet issued, identified in a pro forma title policy or title policy commitment
meeting the requirements described in Paragraph 8 below); and (g) if such
Mortgage Loan constitutes a Cross-Collateralized Mortgage Loan, the lien of the
Mortgage for another Mortgage Loan contained in the same Cross-Collateralized
Group. With respect to each Mortgage Loan, such Permitted Encumbrances do not,
individually or in the aggregate, materially interfere with the security
intended to be provided by the related Mortgage, the current principal use of
the related Mortgaged Property or the ability of the related Mortgaged Property
to generate income sufficient to service such Mortgage Loan. If the related
Mortgaged Property is a residential cooperative property, then the related
Mortgage is superior to any lien against the related Mortgaged Property securing
any and all other debts of and to the subject cooperative entity. The related
assignment of the Mortgage for each Mortgage Loan, executed and delivered in
favor of the Trustee, is in recordable form (but for insertion of the name and
address of the assignee and any related recording information which is not yet
available to the Seller) to validly and effectively convey the assignor's
interest therein and constitutes a legal, valid, binding and, subject to the
exceptions set forth in Paragraph 13 below, enforceable assignment of such
Mortgage from the relevant assignor to the Trustee.
5. Assignment of Leases. The Mortgage File contains an
assignment of leases and rents (an "Assignment of Leases"), either as a separate
instrument or incorporated into the related Mortgage, which establishes and
creates a valid, subsisting and, subject to the exceptions set forth in
Paragraph 13 below, enforceable first priority lien on and security interest in,
subject to applicable law, the property, rights and interests of the related
Borrower described therein, except that a license may have been granted to the
related Borrower to exercise certain rights and perform certain obligations of
the lessor under the relevant lease or leases, including, without limitation,
the right to operate the related leased property; and each assignor thereunder
has the full right to assign the same. The related
C-2
assignment of any Assignment of Leases not included in a Mortgage, executed and
delivered in favor of the Trustee is in recordable form (but for insertion of
the name and address of the assignee and any related recording information which
is not yet available to the Seller) to validly and effectively convey the
assignor's interest therein and constitutes a legal, valid, binding and, subject
to the exceptions set forth in Paragraph 13 below, enforceable assignment of
such Assignment of Leases from the relevant assignor to the Trustee.
6. Mortgage Status; Waivers and Modifications. In the case of
each Mortgage Loan, except by a written instrument which has been delivered to
the Purchaser or its designee as a part of the related Mortgage File, (a) the
related Mortgage (including any amendments or supplements thereto included in
the related Mortgage File) has not been impaired, waived, modified, altered,
satisfied, canceled, subordinated or rescinded, (b) neither the related
Mortgaged Property nor any material portion thereof has been released from the
lien of such Mortgage and (c) the related Borrower has not been released from
its obligations under such Mortgage, in whole or in material part. Except as
described on Schedule C-6 hereto, no alterations, waivers, modifications or
assumptions of any kind have been given, made or consented to by or on behalf of
the Seller since [SPECIFY DATE AS OF WHICH MORTGAGE FILES WERE DELIVERED TO
B-PIECE BUYER]. The Seller has not taken any affirmative action that would cause
the representations and warranties of the related Borrower under the Mortgage
Loan not to be true and correct in any material respect.
7. Condition of Property; Condemnation. In the case of each
Mortgage Loan, except as set forth on Schedule C-7A or in an engineering report
prepared in connection with the origination of such Mortgage Loan, the related
Mortgaged Property is, to the Seller's knowledge, in good repair, free and clear
of any damage that would materially and adversely affect its value as security
for such Mortgage Loan (except in any such case where an escrow of funds or
insurance coverage exists sufficient to effect the necessary repairs and
maintenance); provided that, if no engineer or architect physically visited the
related Mortgaged Property in connection with preparing and delivering such
engineering report, then the representation and warranty made in this sentence
shall not be qualified by "to the Seller's knowledge". As of origination of such
Mortgage Loan there was no proceeding pending, and subsequent to such date, the
Seller has not received actual notice of, any proceeding pending for the
condemnation of all or any material portion of the Mortgaged Property securing
any Mortgage Loan. If any of the engineering reports referred to above in this
Paragraph 7 revealed any material damage or material deferred maintenance, then
one of the following is true: (a) the repairs and/or maintenance necessary to
correct such condition have been completed in all material respects; (b) an
escrow of funds is required or a letter of credit was obtained in an amount
reasonably estimated to be sufficient to complete the repairs and/or maintenance
necessary to correct such condition; or (c) the reasonable estimate of the cost
to complete the repairs and/or maintenance necessary to correct such condition
represented no more than 2% of the value of the related Mortgaged Property as
reflected in an appraisal conducted in connection with the origination of the
subject Mortgage Loan. As of the date of the origination of each Mortgage Loan,
except as set forth on Schedule C-7B: (a) all of the material improvements on
the related Mortgaged Property lay wholly within the boundaries and, to the
extent in effect at the time of construction, building restriction lines of such
property, except for encroachments that are insured against by the lender's
title insurance policy referred to in Paragraph 8 below or that do not
materially and adversely affect the value or marketability of such Mortgaged
Property, and (b) no improvements on adjoining properties materially encroached
upon such Mortgaged Property so as to materially and adversely affect the value
or marketability of such Mortgaged Property, except those
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encroachments that are insured against by the lender's title insurance policy
referred to in Paragraph 8 below.
8. Title Insurance. The lien of each Mortgage securing a
Mortgage Loan is insured by an American Land Title Association (or an equivalent
form of) lender's title insurance policy (the "Title Policy") (except that if
such policy is yet to be issued, such insurance may be evidenced by a "marked
up" pro forma policy or title commitment in either case marked as binding and
countersigned by the title company or its authorized agent, either on its face
or by an acknowledged closing instruction or escrow letter) in the original
principal amount of such Mortgage Loan after all advances of principal, insuring
the originator of the related Mortgage Loan, its successors and assigns (as the
sole insured) that the related Mortgage is a valid first priority lien on such
Mortgaged Property, subject only to the Permitted Encumbrances. Such Title
Policy (or, if it has yet to be issued, the coverage to be provided thereby) is
in full force and effect, all premiums thereon have been paid, the Seller has
made no claims thereunder and, to the Seller's actual knowledge, no prior holder
of the related Mortgage has made any claims thereunder and no claims have been
paid thereunder. The Seller has not, and to the Seller's actual knowledge, no
prior holder of the related Mortgage has, done, by act or omission, anything
that would materially impair the coverage under such Title Policy. Immediately
following the transfer and assignment of the related Mortgage Loan to the
Trustee (including endorsement and delivery of the related Mortgage Note to the
Purchaser and recording of the related Assignment of Mortgage in favor of the
Purchaser in the applicable real estate records), such Title Policy (or, if it
has yet to be issued, the coverage to be provided thereby) will inure to the
benefit of the Trustee without the consent of or notice to the insurer. Such
Title Policy contains no exclusion for, or it affirmatively insures (unless the
related Mortgaged Property is located in a jurisdiction where such affirmative
insurance is not available), (a) access to a public road, and (b) that the area
shown on the survey, if any, reviewed or prepared in connection with the
origination of the related Mortgage Loan is the same as the property legally
described in the related Mortgage.
9. No Holdback. The proceeds of each Mortgage Loan have been
fully disbursed (except in those cases where the full amount of the Mortgage
Loan has been disbursed but a portion thereof is being held in escrow or reserve
accounts pending the satisfaction of certain conditions relating to leasing,
repairs or other matters with respect to the related Mortgaged Property), and
there is no obligation for future advances with respect thereto. If the related
Mortgage Loan Documents include any requirements regarding (a) the completion of
any on-site or off-site improvements and (b) the disbursement of any funds
escrowed for such purpose, and if those requirements were to have been complied
with on or before the Closing Date, then such requirements have been complied
with in all material respects or such funds so escrowed have not been released
except to the extent specifically provided by the related Mortgage Loan
Documents.
10. Mortgage Provisions. The Mortgage Note, Mortgage and
Assignment of Leases for each Mortgage Loan, together with applicable state law,
contains customary and, subject to the exceptions set forth in Paragraph 13
below, enforceable provisions for commercial Mortgage Loans such as to render
the rights and remedies of the holder thereof adequate for the practical
realization against the related Mortgaged Property of the principal benefits of
the security intended to be provided thereby.
11. Trustee under Deed of Trust. If the Mortgage for any
Mortgage Loan is a deed of trust, then (a) a trustee, duly qualified under
applicable law to serve as such, has either been properly designated and
currently so serves or may be substituted in accordance with the Mortgage and
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applicable law, and (b) no fees or expenses are payable to such trustee by the
Seller, the Depositor or any transferee thereof except for such fees and
expenses (all of which are the obligation of the related Borrower under the
related Mortgage Loan Documents) as would be payable in connection with a
trustee's sale after default by the related Borrower or in connection with any
full or partial release of the related Mortgaged Property or related security
for such Mortgage Loan.
12. Environmental Conditions. Except in the case of the
Mortgaged Properties identified on Schedule C-12(Ab/LBP) (as to which properties
the only environmental investigation conducted in connection with the
origination of the related Mortgage Loan related to asbestos-containing
materials and lead-based paint) and Schedule C-12(TS) (as to which a transaction
screen meeting the requirements of the American Society for Testing and
Materials (a "Transaction Screen") was performed), (a) an environmental site
assessment meeting the requirements of the American Society for Testing and
Materials and covering all environmental hazards typically assessed for similar
properties including use, type and tenants of the Mortgaged Property
("Environmental Report"), or an update of such an assessment, was performed by a
licensed (to the extent required by applicable state law) environmental
consulting firm with respect to each Mortgaged Property securing a Mortgage Loan
in connection with the origination of such Mortgage Loan and, except with
respect to the Mortgaged Properties identified on Schedule C-12(NU), thereafter
updated such that, except as set forth on Schedule C-12(OLD), such Environmental
Report is dated no earlier than twelve months prior to the Closing Date, (b) a
copy of each such Environmental Report has been delivered to the Purchaser, and
(c) either: (i) no such Environmental Report provides that as of the date of the
report there is a material violation of any applicable environmental laws with
respect to any circumstances or conditions relating to the related Mortgaged
Property; or (ii) if any such Environmental Report does reveal any such
circumstances or conditions with respect to the related Mortgaged Property and
the same have not been subsequently remediated in all material respects, then,
except as described on Schedule C-12(MV), one or more of the following are
true--(A) one or more parties not related to or including the related Borrower
and collectively having financial resources reasonably estimated to be adequate
to cure the subject violation in all material respects, were identified as the
responsible party or parties for such condition or circumstance and such
condition or circumstance does not materially impair the value of the Mortgaged
Property, (B) the related Borrower was required to provide additional security
reasonably estimated to be adequate to cure the subject violation in all
material respects and/or to obtain an operations and maintenance plan, (C) the
related Borrower, or other responsible party, provided a "no further action"
letter or other evidence reasonably acceptable to a reasonably prudent
commercial mortgage lender that applicable federal, state or local governmental
authorities had no current intention of taking any action, and are not requiring
any action, in respect of such condition or circumstance, (D) such conditions or
circumstances were investigated further and based upon such additional
investigation, an environmental consultant recommended no further investigation
or remediation, (E) the expenditure of funds reasonably estimated to be
necessary to effect such remediation is not greater than 2% of the outstanding
principal balance of the related Mortgage Loan, (F) there exists an escrow of
funds reasonably estimated to be sufficient for purposes of effecting such
remediation, (G) the related Mortgaged Property is identified on Schedule
C-12(EI) and insured under a policy of insurance subject to reasonable per
occurrence and aggregate limits and a reasonable deductible, against certain
losses arising from such circumstances and conditions or (H) a party with
financial resources reasonably estimated to be adequate to cure the subject
violation in all material respects provided a guaranty or indemnity to the
related Borrower to cover the costs of any required investigation, testing,
monitoring or remediation. To the Seller's actual knowledge, there are no
significant or material circumstances or conditions with respect to any
Mortgaged Property not revealed in any such Environmental Report,
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where obtained, or in any Borrower questionnaire delivered to the Seller in
connection with the issue of any related environmental insurance policy, if
applicable, that render such Mortgaged Property in material violation of any
applicable environmental laws. The Mortgage Loan Documents for each Mortgage
Loan require the related Borrower to comply in all material respects with all
applicable federal, state and local environmental laws and regulations. The
Seller has not taken any affirmative action which would cause the Mortgaged
Property securing any Mortgage Loan not to be in compliance with all federal,
state and local laws pertaining to environmental hazards. Each Borrower
represents and warrants in the related Mortgage Loan documents generally to the
effect that, except as set forth in certain specified environmental reports and
to the Borrower's knowledge, it has not used, caused or permitted to exist and
will not use, cause or permit to exist on the related Mortgaged Property any
hazardous materials in any manner which violates federal, state or local laws,
ordinances, regulations, orders, directives, or policies governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of hazardous materials. Unless the related Mortgaged
Property is identified on Schedule C-12(EI), the related Borrower (or an
affiliate thereof) has agreed to indemnify, defend and hold the Seller and its
successors and assigns harmless from and against, or otherwise be liable for,
any and all losses resulting from a breach of environmental representations,
warranties or covenants given by the Borrower in connection with such Mortgage
Loan, generally including any and all losses, liabilities, damages, injuries,
penalties, fines, expenses and claims of any kind or nature whatsoever
(including without limitation, attorneys' fees and expenses) paid, incurred or
suffered by or asserted against, any such party resulting from such breach.
13. Loan Document Status. Each Mortgage Note, Mortgage, and
other agreement executed by or on behalf of the related Borrower, or any
guarantor of non-recourse exceptions and environmental liability, with respect
to each Mortgage Loan is the legal, valid and binding obligation of the maker
thereof (subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency or market value
limit deficiency legislation), enforceable in accordance with its terms, except
as such enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, fraudulent transfer and conveyance or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), and except that certain provisions in such loan
documents may be further limited or rendered unenforceable by applicable law,
but (subject to the limitations set forth in the foregoing clauses (i) and (ii))
such limitations will not render such loan documents invalid as a whole or
substantially interfere with the mortgagee's realization of the principal
benefits and/or security provided thereby. There is no right of rescission,
offset, abatement, diminution or valid defense or counterclaim available to the
related Borrower with respect to such Mortgage Note, Mortgage or other
agreements that would deny the mortgagee the principal benefits intended to be
provided thereby. The Seller has no actual knowledge of any such rights,
defenses or counterclaims having been asserted.
14. Insurance. Except in certain cases, where tenants, having
a net worth of at least $50,000,000 or an investment grade credit rating and
obligated to maintain the insurance described in this paragraph, are allowed to
self-insure the related Mortgaged Properties, and except as otherwise set forth
on Schedule C-14(a), all improvements upon each Mortgaged Property securing a
Mortgage Loan are insured under a fire and extended perils insurance policy
included within the classification "All Risk of Physical Loss" insurance (or the
equivalent) policy in an amount at least equal to the lesser of the outstanding
principal balance of such Mortgage Loan and 100% of the insurable replacement
cost of the improvements located on the related Mortgaged Property, and if
applicable, the related hazard insurance
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policy contains appropriate endorsements to avoid the application of
co-insurance and does not permit reduction in insurance proceeds for
depreciation. Except in the case of the Mortgaged Properties identified on
Schedule C-14(b) hereto, each Mortgaged Property securing a Mortgage Loan is the
subject of a business interruption or rent loss insurance policy providing
coverage for at least twelve (12) months (or a specified dollar amount which is
reasonably estimated to cover no less than twelve (12) months of rental income).
If, based solely on a flood zone certification or a survey of the related
Mortgaged Property, any portion of the improvements on a Mortgaged Property
securing any Mortgage Loan was, at the time of the origination of such Mortgage
Loan, in an area identified in the Federal Register by the Flood Emergency
Management Agency as a special flood hazard area (Zone A or Zone V) (an "SFH
Area") and flood insurance was available, then a flood insurance policy meeting
the requirements of the then current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (1) the minimum amount
required, under the terms of coverage, to compensate for any damage or loss on a
replacement basis, (2) the outstanding principal balance of such Mortgage Loan,
and (3) the maximum amount of insurance available under the applicable National
Flood Insurance Administration Program. All such hazard and flood insurance
policies contain a standard mortgagee clause for the benefit of the holder of
the related Mortgage, its successors and assigns, as mortgagee, and are not
terminable (nor may the amount of coverage provided thereunder be reduced)
without ten (10) days' prior written notice to the mortgagee; and no such notice
has been received, including any notice of nonpayment of premiums, that has not
been cured and, to the Seller's actual knowledge, all such insurance is in full
force and effect. Each Mortgaged Property and all improvements thereon are also
covered by comprehensive general liability insurance in such amounts as are
generally required by reasonably prudent commercial lenders for similar
properties and seismic insurance to the extent any Mortgaged Property has a
probable maximum loss of greater than twenty percent (20%) of the replacement
value of the related improvements, calculated using methodology acceptable to a
reasonably prudent commercial mortgage lender with respect to similar properties
in same area or earthquake zone. If the Mortgaged Property for any Mortgage Loan
is located in Florida or within 25 miles of the coast in Texas, Louisiana,
Mississippi, Alabama, Georgia, North Carolina or South Carolina, then such
Mortgaged Property is insured by windstorm insurance in an amount at least equal
to the lesser of (i) the outstanding principal balance of such Mortgage Loan and
(ii) 100% of the insurable replacement cost of the improvements located on the
related Mortgaged Property. If any Mortgaged Property is, to the Seller's
knowledge, a materially non-conforming use or structure under applicable zoning
laws and ordinances, then, in the event of a material casualty or destruction,
one or more of the following is true: (i) such Mortgaged Property may be
restored or repaired to materially the same extent of the use or structure at
the time of such casualty; (ii) such Mortgaged Property is covered by law and
ordinance insurance in an amount customarily required by reasonably prudent
commercial mortgage lenders; or (iii) the amount of hazard insurance currently
in place and required by the related Mortgage Loan Documents would generate
proceeds sufficient to pay off the subject Mortgage Loan. Additionally, for any
Mortgage Loan having a Cut-off Date Principal Balance equal to or greater than
$20,000,000, the insurer for all of the required coverages set forth herein has
a claims paying ability rating from Standard & Poor's, Moody's or Fitch of not
less than A-minus (or the equivalent), or from A.M. Best of not less than "A:V"
(or the equivalent). With respect to each Mortgage Loan, the related Mortgage
Loan Documents require that the related Borrower or a tenant of such Borrower
maintain insurance as described above or permit the Mortgagee to require
insurance as described above. Except under circumstances that would be
reasonably acceptable to a prudent commercial mortgage lender or that would not
otherwise materially and adversely affect the security intended to be provided
by the related Mortgage, the Mortgage Loan Documents for each Mortgage Loan
provide that proceeds paid
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under any such casualty insurance policy will (or, at the lender's option, will)
be applied either to the repair or restoration of the related Mortgaged Property
or to the payment of amounts due under such Mortgage Loan; provided that the
related Mortgage Loan Documents may entitle the related Borrower to any portion
of such proceeds remaining after the repair or restoration of the related
Mortgaged Property or payment of amounts due under the Mortgage Loan; and
provided, further, that, if the related Borrower holds a leasehold interest in
the related Mortgaged Property, the application of such proceeds will be subject
to the terms of the related Ground Lease (as defined in Paragraph 18 below). To
the Seller's actual knowledge, all insurance policies described above are with
an insurance carrier qualified to write insurance in the relevant jurisdiction.
15. Taxes and Assessments. As of the date of origination of
the subject Mortgage Loan or November 11, 2000, whichever is later, there were
no (and, to the Seller's actual knowledge, as of the Closing Date, there are no)
delinquent property taxes or assessments or other outstanding charges affecting
any Mortgaged Property securing a Mortgage Loan that are not otherwise covered
by an escrow of funds sufficient to pay such charge. For purposes of this
representation and warranty, real property taxes and assessments shall not be
considered delinquent until the date on which interest and/or penalties would be
payable thereon.
16. Borrower Bankruptcy. No Mortgaged Property securing a
Mortgage Loan is the subject of, and no Borrower under a Mortgage Loan is a
debtor in, any state or federal bankruptcy, insolvency or similar proceeding.
17. Local Law Compliance. To the Seller's knowledge, based
upon a letter from governmental authorities, a legal opinion, a zoning
consultant's report, an endorsement to the related Title Policy, or a
representation of the related Borrower at the time of origination of the subject
Mortgage Loan, or based on such other due diligence considered reasonable by
prudent commercial mortgage lenders in the lending area where the subject
Mortgaged Property is located, except as described on Schedule C-17, the
improvements located on or forming part of, and the existing use of, each
Mortgaged Property securing a Mortgage Loan are in material compliance with
applicable zoning laws and ordinances or constitute a legal non-conforming use
or structure (or, if any such improvement does not so comply and does not
constitute a legal non-conforming use or structure, such non-compliance and
failure does not materially and adversely affect the value of the related
Mortgaged Property as determined by the appraisal performed in connection with
the origination of such Mortgage Loan).
18. Leasehold Estate Only. If any Mortgage Loan is secured by
the interest of a Borrower as a lessee under a ground lease (together with any
and all written amendments and modifications thereof and any and all estoppels
from or other agreements with the ground lessor, a "Ground Lease"), but not by
the related fee interest in the subject real property (the "Fee Interest"),
then:
(a) Such Ground Lease or a memorandum thereof has been or will
be duly recorded; such Ground Lease permits the interest of the lessee
thereunder to be encumbered by the related Mortgage and does not restrict the
use of the related Mortgaged Property by such lessee, its successors or assigns
in a manner that would materially adversely affect the security provided by the
related Mortgage; and there has been no material change in the terms of such
Ground Lease since its recordation, with the exception of material changes
reflected in written instruments which are a part of the related Mortgage File;
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(b) The related lessee's leasehold interest in the portion of
the related Mortgaged Property covered by such Ground Lease is not subject to
any liens or encumbrances superior to, or of equal priority with, the related
Mortgage, other than Permitted Encumbrances, and such Ground Lease provides that
it shall remain superior to any mortgage or other lien upon the related Fee
Interest;
(c) The Borrower's interest in such Ground Lease is assignable
to, and is thereafter further assignable by, the Purchaser upon notice to, but
without the consent of, the lessor thereunder (or, if such consent is required,
it has been obtained); provided that such Ground Lease has not been terminated
and all defaults, if any, on the part of the related lessee have been cured;
(d) The Seller has not received, as of the Closing Date,
actual notice that such Ground Lease is not in full force and effect or that any
material default has occurred under such Ground Lease, and the lessor under such
Ground Lease has been sent notice of the lien evidenced by the Mortgage in
accordance with the terms of the Ground Lease;
(e) Such Ground Lease requires the lessor thereunder to give
notice of any default by the lessee to the mortgagee under such Mortgage Loan.
Furthermore, such Ground Lease further provides that no notice of termination
given under such Ground Lease is effective against the mortgagee under such
Mortgage Loan unless a copy has been delivered to such mortgagee in the manner
described in such Ground Lease;
(f) The mortgagee under such Mortgage Loan is permitted a
reasonable opportunity (including, where necessary, sufficient time to gain
possession of the interest of the lessee under such Ground Lease) to cure any
default under such Ground Lease, which is curable after the receipt of notice of
any such default, before the lessor thereunder may terminate such Ground Lease;
(g) Such Ground Lease has an original term (or an original
term plus options exercisable by the holder of the related Mortgage) which
extends not less than twenty (20) years beyond the end of the amortization term
of such Mortgage Loan;
(h) Such Ground Lease requires the lessor to enter into a new
lease with a mortgagee upon termination of such Ground Lease as a result of a
rejection of such Ground Lease in a bankruptcy proceeding involving the related
Borrower unless the mortgagee under such Mortgage Loan fails to cure a default
of the lessee under such Ground Lease following notice thereof from the lessor;
(i) Except as described on Schedule C-18(i), under the terms
of such Ground Lease and the related Mortgage Loan Documents, taken together,
any casualty insurance proceeds, other than de minimis amounts for minor
casualties, with respect to the leasehold interest will be applied either: (i)
to the repair or restoration of all or part of the related Mortgaged Property,
with the mortgagee or a trustee appointed by it having the right to hold and
disburse such proceeds as the repair or restoration progresses (except in such
cases where a provision entitling another party to hold and disburse such
proceeds would not be viewed as commercially unreasonable by a prudent
commercial mortgage lender), or (ii) to the payment of the outstanding principal
balance of the Mortgage Loan together with any accrued interest thereon. Under
the terms of such Ground Lease and the related Mortgage Loan Documents, taken
together, any condemnation proceeds or awards in respect of a total or
substantially total taking will be applied first to the payment of the
outstanding principal and interest on the Mortgage Loan (except as otherwise
provided by applicable law) and subject to any rights to require the
improvements to be rebuilt;
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(j) Such Ground Lease does not impose any restrictions on
subletting which would be viewed as commercially unreasonable by a prudent
commercial mortgage lender in the lending area where the related Mortgaged
Property is located at the time of the origination of such Mortgage Loan;
(k) The lessor under such Ground Lease is not permitted to
disturb the possession, interest or quiet enjoyment of the lessee in the
relevant portion of the Mortgaged Property subject to such Ground Lease for any
reason, or in any manner, which would materially adversely affect the security
provided by the related Mortgage; and
(l) Such Ground Lease provides that it may not be amended or
modified without the prior consent of the mortgagee under such Mortgage Loan and
that any such action without such consent is not binding on such mortgagee, its
successors or assigns.
19. Qualified Mortgage. Such Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code and Treasury
regulation section 1.860G-2(a), and the related Mortgaged Property, if acquired
in connection with the default or imminent default of such Mortgage Loan, would
constitute "foreclosure property" within the meaning of Section 860G(a)(8).
20. Advancement of Funds. The Seller has not advanced funds,
or induced, solicited or knowingly received any advance of funds from a party
other than the owner of the related Mortgaged Property (or a tenant at or the
property manager of the related Mortgaged Property), for the payment of any
amount required by such Mortgage Loan, except for interest accruing from the
date of origination of such Mortgage Loan or the date of disbursement of the
Mortgage Loan proceeds, whichever is later, to the date which preceded by 30
days the first due date under the related Mortgage Note.
21. No Equity Interest, Equity Participation or Contingent
Interest. No Mortgage Loan contains any equity participation by the mortgagee
thereunder, is convertible by its terms into an equity ownership interest in the
related Mortgaged Property or the related Borrower, has a shared appreciation
feature, provides for any contingent or additional interest in the form of
participation in the cash flow of the related Mortgaged Property, or, except as
identified on Schedule C-21, provides for interest-only payments without
principal amortization for more than six months or for the negative amortization
of interest, except that, in the case of an ARD Loan, such Mortgage Loan
provides that, during the period commencing on or about the related Anticipated
Repayment Date and continuing until such Mortgage Loan is paid in full, (a)
additional interest shall accrue, may be compounded monthly and shall be payable
only after the outstanding principal of such Mortgage Loan is paid in full, and
(b) a portion of the cash flow generated by such Mortgaged Property will be
applied each month to pay down the principal balance thereof in addition to the
principal portion of the related Monthly Payment. Neither the Seller nor any
affiliate thereof has any obligation to make any capital contribution to the
Borrower under the Mortgage Loan or otherwise.
22. Legal Proceedings. To the Seller's knowledge, as of
origination of the Mortgage Loan, there were no, and to the Seller's actual
knowledge, as of the Closing Date, there are no pending actions, suits,
litigation or other proceedings by or before any court or governmental authority
against or affecting the Borrower (or any guarantor to the extent a reasonably
prudent commercial or multifamily, as applicable, mortgage lender would consider
such guarantor material to the underwriting of such Mortgage Loan) under any
Mortgage Loan or the related Mortgaged Property that, if determined adversely to
such Borrower or Mortgaged Property, would materially and adversely affect the
value of the Mortgaged Property as security for such Mortgage Loan, the
Borrower's ability to pay principal,
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interest or any other amounts due under such Mortgage Loan or the ability of any
such guarantor to meet its obligations.
23. Other Mortgage Liens. Except as otherwise set forth on
Schedule C-23 and except for Mortgage Loans secured by residential cooperative
properties, none of the Mortgage Loans permits the related Mortgaged Property or
any direct controlling equity interest in the related Borrower to be encumbered
by any mortgage lien or, in the case of a direct controlling equity interest in
the related Borrower, a lien to secure any other debt, without the prior written
consent of the holder of the subject Mortgage Loan or the satisfaction of debt
service coverage or similar criteria specified therein. To the Seller's
knowledge, as of origination of the subject Mortgage Loan, and to the Seller's
actual knowledge, as of the Closing Date, except as otherwise set forth on
Schedule C-23, and except for cases involving other Mortgage Loans, no Mortgaged
Property securing the subject Mortgage Loan is encumbered by any other mortgage
liens (other than Permitted Encumbrances) and no direct controlling equity
interest in the related Borrower is encumbered by a lien to secure any other
debt. Except in the case where the related Mortgaged Property is a residential
cooperative property, the related Mortgage Loan Documents require the Borrower
under each Mortgage Loan to pay all reasonable costs and expenses related to any
required consent to an encumbrance, including reasonable legal fees and expenses
and any applicable Rating Agency fees, or would permit the subject mortgagee to
withhold such consent if such costs and expenses are not paid by a party other
than such mortgagee.
24. No Mechanics' Liens. To the Seller's knowledge, as of the
origination of the Mortgage Loan, and, to the Seller's actual knowledge, as of
the Closing Date: (i) each Mortgaged Property securing a Mortgage Loan
(exclusive of any related personal property) is free and clear of any and all
mechanics' and materialmen's liens that are prior or equal to the lien of the
related Mortgage and that are not bonded or escrowed for or covered by title
insurance, and (ii) no rights are outstanding that under law could give rise to
any such lien that would be prior or equal to the lien of the related Mortgage
and that is not bonded or escrowed for or covered by title insurance.
25. Compliance with Usury Laws. Each Mortgage Loan complied
with, or was exempt from, all applicable usury laws in effect at its date of
origination.
26. Licenses and Permits. To the extent required by applicable
law, and except as identified on Schedule C-26, each Mortgage Loan requires the
related Borrower to be qualified to do business, and requires the related
Borrower and the related Mortgaged Property to be in material compliance with
all regulations, licenses, permits, authorizations, restrictive covenants and
zoning and building laws, in each case to the extent required by law or to the
extent that the failure to be so qualified or in compliance would have a
material and adverse effect upon the enforceability of the Mortgage Loan or upon
the practical realization against the related Mortgaged Property of the
principal benefits of the security intended to be provided thereby. To the
Seller's knowledge, as of the date of origination of each Mortgage Loan and
based on any of: (i) a letter from governmental authorities, (ii) a legal
opinion, (iii) an endorsement to the related Title Policy, (iv) a representation
of the related Borrower at the time of origination of such Mortgage Loan, (v) a
zoning report from a zoning consultant, or (vi) other due diligence that the
originator of the Mortgage Loan customarily performs in the origination of
comparable mortgage loans, the related Borrower was in possession of all
material licenses, permits and franchises required by applicable law for the
ownership and operation of the related Mortgaged Property as it was then
operated or such material licenses, permits and franchises have otherwise been
issued.
C-11
27. Cross-Collateralization. No Mortgage Loan is
cross-collateralized with any loan which is outside the Mortgage Pool. With
respect to any group of cross-collateralized Mortgage Loans, the sum of the
amounts of the respective Mortgages recorded on the related Mortgaged Properties
with respect to such Mortgage Loans is at least equal to the total amount of
such Mortgage Loans.
28. Releases of Mortgaged Properties. Except as set forth on
Schedule C-28A, no Mortgage Note or Mortgage requires the mortgagee to release
all or any material portion of the related Mortgaged Property from the lien of
the related Mortgage except upon: (i) payment in full of all amounts due under
the related Mortgage Loan or (ii) delivery of "government securities" within the
meaning of Treas. Reg. Section 1.860G-2(a)(8)(i) in connection with a defeasance
of the related Mortgage Loan; provided that the Mortgage Loans that are
Cross-Collateralized Mortgage Loans, and the other individual Mortgage Loans
secured by multiple parcels, may require the respective mortgagee(s) to grant
releases of material portions of the related Mortgaged Property or the release
of one or more related Mortgaged Properties upon: (i) the satisfaction of
certain legal and underwriting requirements, (ii) the payment of a release price
(in an amount that is, except as otherwise set forth on Schedule C-28B, at least
equal to 125% of the allocated loan amount for the released property or parcel)
and prepayment consideration in connection therewith or (iii) the delivery of
substitute real estate collateral. No release or partial release of any
Mortgaged Property, or any portion thereof, expressly permitted pursuant to the
terms of any Mortgage Note or Mortgage will constitute a significant
modification of the related Mortgage Loan under Treas. Reg. Section
1.860G-2(b)(2).
29. Defeasance. With respect to any Mortgage Loan that
contains a provision for any defeasance of mortgage collateral (a "Defeasance
Loan"), the related Mortgage Note or Mortgage provides that the defeasance
option is not exercisable prior to a date that is at least two (2) years
following the Closing Date and is otherwise in compliance with applicable
statutes, rules and regulations governing REMICs; requires prior written notice
to the holder of the Mortgage Loan of the exercise of the defeasance option and
payment by the Borrower of all related reasonable fees, costs and expenses as
set forth below; if the Borrower would continue to own assets in addition to the
defeasance collateral, requires, or permits the lender to require, the Mortgage
Loan (or the portion thereof being defeased) to be assumed by a single-purpose
entity; and requires counsel to provide a legal opinion that the Trustee has a
perfected security interest in such collateral prior to any other claim or
interest. In addition, each Mortgage Loan that is a Defeasance Loan permits
defeasance only with substitute collateral constituting "government securities"
within the meaning of Treas. Reg. Section 1.860G-2(a)(8)(i) in an amount
sufficient to make all scheduled payments under the Mortgage Note (or the
portion thereof being defeased) when due, and in the case of ARD Loans, assuming
the Anticipated Repayment Date is the Maturity Date. To the Seller's actual
knowledge, defeasance under the Mortgage Loan is only for the purpose of
facilitating the disposition of a Mortgaged Property and not as part of an
arrangement to collateralize a REMIC offering with obligations that are not real
estate mortgages. With respect to each Defeasance Loan, except as set forth on
Schedule C-29, the related Mortgage Loan Documents provide that the related
Borrower shall (a) pay all Rating Agency fees associated with defeasance (if
rating confirmation is a specific condition precedent thereto) and all other
reasonable expenses associated with defeasance, including, but not limited to,
accountant's fees and opinions of counsel, or (b) provide all opinions required
under the related loan documents, including, if applicable, a REMIC opinion and
a perfection opinion and any applicable rating agency letters confirming no
downgrade or qualification of ratings on any classes in the transaction.
Additionally, for any Mortgage Loan having a Cut-off Date Principal Balance
equal to or greater than $19,900,000, the Mortgage Loan or the related documents
require confirmation from the Rating Agency that exercise of the defeasance
option will not cause a
C-12
downgrade or withdrawal of the rating assigned to any securities backed by the
Mortgage Loan and require the Borrower to pay any Rating Agency fees and
expenses.
30. Fixed Rate Loans. Each Mortgage Loan bears interest at a
rate that remains fixed throughout the remaining term of such Mortgage Loan,
except in the case of an ARD Loan after its Anticipated Repayment Date and
except for the imposition of a default rate.
31. Inspection. Except as set forth on Schedule C-31, the
Seller, an affiliate of the Seller, or a correspondent in the conduit funding
program of the Seller, inspected, or caused the inspection of, each Mortgaged
Property securing a Mortgage Loan within twelve (12) months of the Closing Date.
32. No Material Default. To the Seller's knowledge, there
exists no material default, breach, violation or event of acceleration under the
Mortgage Note or Mortgage for any Mortgage Loan; provided, however, that this
representation and warranty does not cover any default, breach, violation or
event of acceleration that specifically pertains to or arises out of the subject
matter otherwise covered by any other representation and warranty made by the
Seller in this Exhibit C.
33. Due-on-Sale. The Mortgage for each Mortgage Loan contains
a "due-on-sale" clause, which provides for the acceleration of the payment of
the unpaid principal balance of such Mortgage Loan if, without the prior written
consent of the holder of such Mortgage, either the related Mortgaged Property,
or any direct controlling equity interest in the related Borrower, is
transferred or sold, other than by reason of: (i) if the related Mortgaged
Property is a residential cooperative property, transfers of stock of the
Borrower in connection with the assignment of a proprietary lease for an
apartment unit in the related Mortgaged Property by a tenant-shareholder of the
Borrower to other persons who by virtue of such transfers become
tenant-shareholders in the Borrower; and (ii) in the case of other types of
Mortgaged Properties, family and estate planning transfers, transfers of less
than a controlling interest in the Borrower, transfers of shares in public
companies, issuance of non-controlling new equity interests, transfers to an
affiliate meeting the requirements of the Mortgage Loan, transfers among
existing members, partners or shareholders in the Borrower, transfers among
affiliated Borrowers with respect to cross-collateralized Mortgaged Loans or
multi-property Mortgage Loans, transfers among co-Borrowers or transfers of a
similar nature to the foregoing meeting the requirements of the Mortgage Loan.
Except in the case where the related Mortgaged Property is a residential
cooperative property, the related Mortgage Loan Documents require the Borrower
under each Mortgage Loan to pay all reasonable fees and expenses associated with
securing the consent or approval of the holder of the related Mortgage for all
actions requiring such consent or approval under the related Mortgage, including
the cost of counsel opinions relating to REMIC or other securitization and tax
issues or require the payment of a specified fee or fees, including a 1%
assumption fee that would be applied to pay such fees and expenses.
34. Single Purpose Entity. Except in cases where the related
Mortgaged Property is a residential cooperative property and, further, except as
otherwise described on Schedule C-34 hereto, each Mortgage Loan with an original
principal balance over $5,000,000.00 requires the related Borrower to be, at
least for so long as the Mortgage Loan is outstanding, and to the Seller's
actual knowledge, the related Borrower is, a Single-Purpose Entity. For this
purpose, "Single-Purpose Entity" means a person, other than an individual, which
is formed or organized solely for the purpose of owning and operating the
related Mortgaged Property or Properties; does not engage in any business
unrelated to such
C-13
Mortgaged Property or Properties and the financing thereof; and whose
organizational documents provide, or which entity represented and covenanted in
the related Mortgage Loan Documents, substantially to the effect that such
Borrower (i) does not and will not have any material assets other than those
related to its interest in such Mortgaged Property or Properties or the
financing thereof; (ii) does not and will not have any indebtedness other than
as permitted by the related Mortgage or other related Mortgage Loan Documents;
(iii) maintains its own books, records and accounts, in each case which are
separate and apart from the books, records and accounts of any other person; and
(iv) holds itself out as being a legal entity, separate and apart from any other
person. In addition, each Mortgage Loan with a Cut-off Date Principal Balance of
$20,000,000 or more, except in cases where the related Mortgaged Property is a
residential cooperative property and, further, except as set forth on Schedule
C-34, the related Borrower's organizational documents provide substantially to
the effect that the Borrower shall: conduct business in its own name; not
guarantee or assume the debts or obligations of any other person; not commingle
its assets or funds with those of any other person; prepare separate tax returns
and financial statements, or if part of a consolidated group, be shown as a
separate member of such group; transact business with affiliates on an arm's
length basis; hold itself out as being a legal entity, separate and apart from
any other person, and such organizational documents further provide
substantially to the effect that: any dissolution and winding up or insolvency
filing for such entity is prohibited or requires the consent of an independent
director or member or the unanimous consent of all partners or members, as
applicable; such documents may not be amended with respect to the Single-Purpose
Entity requirements without the approval of the mortgagee or rating agencies;
the Borrower shall have an outside independent director or member. Except in
cases where the related Mortgaged Property is a residential cooperative
property, the Seller has obtained, with respect to each Mortgage Loan having a
Cut-off Date Principal Balance of $20,000,000 or more, in connection with its
origination or acquisition thereof, a counsel's opinion regarding
non-consolidation of the Borrower in any insolvency proceeding involving any
other party. To the Seller's actual knowledge, each Borrower has fully complied
with the requirements of the related Mortgage Note and Mortgage and the
Borrower's organizational documents regarding Single-Purpose-Entity status. The
organization documents of any Borrower on a Mortgage Loan having a Cut-off Date
Principal Balance of $20,000,000 or more that is a single member limited
liability company, provide that the Borrower shall not dissolve or liquidate
upon the bankruptcy, dissolution, liquidation or death of the sole member. Any
such single member limited liability company Borrower is organized in
jurisdictions that provide for such continued existence, and the Seller has
obtained, in connection with its origination or acquisition of the subject
Mortgage Loan, an opinion of such Borrower's counsel confirming such continued
existence and that the applicable law provides that creditors of the single
member may only attach the assets of the member including the membership
interests in the Borrower but not the assets of the Borrower.
35. Whole Loan. Each Mortgage Loan is a whole loan and not a
participation interest in a mortgage loan.
36. Tax Parcels. Except as described on Schedule C-36 of this
Agreement, each Mortgaged Property constitutes one or more complete separate tax
lots containing no other property, or is subject to an endorsement under the
related Title Policy insuring same, or an application for the creation of
separate tax lots complying in all respects with the applicable laws and
requirements of the applicable governing authority has been made and approved by
the applicable governing authority and such separate tax lots shall be effective
for the next tax year.
C-14
37. ARD Loans. Except as described on Schedule C-37, each
Mortgage Loan which is an ARD Loan commenced amortizing on its initial scheduled
Due Date, and provides that: (i) its Mortgage Rate will increase by at least two
(2) percentage points in connection with the passage of its Anticipated
Repayment Date; (ii) its Anticipated Repayment Date is not less than seven (7)
years following the origination of such Mortgage Loan; (iii) no later than the
related Anticipated Repayment Date, the related Borrower is required (if it has
not previously done so) to enter into a "lockbox agreement" whereby all revenue
from the related Mortgaged Property shall be deposited directly into a
designated account controlled by the Master Servicer; and (iv) any net cash flow
from the related Mortgaged Property that is applied to amortize such Mortgage
Loan following its Anticipated Repayment Date shall, to the extent such net cash
flow is in excess of the scheduled principal and interest payment payable
therefrom, be net of budgeted and discretionary (servicer approved) capital
expenditures.
38. Security Interests. The security agreements, financing
statements or other instruments, if any, related to the Mortgage Loan establish
and create, and a UCC financing statement has been filed and/or recorded in all
places required by applicable law for the perfection of (to the extent that the
filing of such a UCC financing statement can perfect such a security interest),
a valid security interest in the personal property granted under such Mortgage
(and any related security agreement), which in all cases includes elevators and
all Borrower-owned furniture, fixtures and equipment material to the operation
and use of the Mortgaged Property as presently operated, and if such Mortgaged
Property is a hotel operated by the related Borrower, then such personal
property constitutes such portion of the material personal property required to
operate the Borrower's business as the Seller considered appropriate in light of
its underwriting standards; any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid and enforceable lien and security interest
on the property described therein (subject to the exceptions set forth in
Paragraph 13 above), which lien/security interest shall, in the case of (i)
elevators at all Mortgaged Properties having the same and (ii) all
Borrower-owned furniture, fixtures and equipment at Borrower operated hotel
properties, be a first priority lien/security interest except for certain
personal property subject to purchase money security interests and personal
property leases. In the case of any Mortgage Loan secured by a hotel, the
related loan documents contain such provisions as are necessary and UCC
Financing Statements have been filed as necessary, in each case, to perfect a
valid first priority security interest in the related revenues with respect to
such Mortgaged Property. An assignment of each UCC financing statement relating
to the Mortgage Loan has been executed by the Seller in blank which the
Purchaser or Trustee, as applicable, or its designee is authorized to complete
and to file in the filing office in which such financing statement was filed.
Each Mortgage Loan and the related Mortgage (along with any security agreement
and UCC financing statement), together with applicable state law, contain
customary and enforceable provisions such as to render the rights and remedies
of the holders thereof adequate for the practical realization against the
personal property described above, and the principal benefits of the security
intended to be provided thereby.
39. Disclosure to Environmental Insurer and Other Matters. If
the Mortgaged Property securing any Mortgage Loan is covered by a secured
creditor impaired property policy, then the Seller:
(a) has disclosed, or is aware that there has been disclosed,
in the application for such policy or otherwise to the insurer under
such policy the "pollution conditions" (as defined in
C-15
such policy) identified in any environmental reports related to such
Mortgaged Property which are in the Seller's possession or are
otherwise known to the Seller; and
(b) has delivered or caused to be delivered to the insurer
under such policy copies of all environmental reports in the Seller's
possession related to such Mortgaged Property;
in each case to the extent required by such policy or to the extent the failure
to make any such disclosure or deliver any such report would materially and
adversely affect the Purchaser's ability to recover under such policy. If the
Mortgaged Property securing any Mortgage Loan is covered by a secured creditor
impaired property policy, then: (x) all premiums for such insurance have been
paid; (y) such insurance is in full force and effect; and (z) (i) an
environmental report, a property condition report or an engineering report was
prepared that included an assessment for lead based paint ("LBP") (in the case
of a multifamily property built prior to 1978), asbestos containing materials
("ACM") (in the case of any property built prior to 1985) and radon gas ("RG")
(in the case of a multifamily property) at such Mortgaged Property and (ii) if
such report disclosed the existence of a material and adverse LBP, ACM or RG
environmental condition or circumstance affecting such Mortgaged Property, then,
except as otherwise described on Schedule C-39, (A) the related Borrower was
required to remediate such condition or circumstance prior to the closing of the
subject Mortgage Loan, or (B) the related Borrower was required to provide
additional security reasonably estimated to be adequate to cure such condition
or circumstance, or (C) the related Mortgage Loan documents require the related
Borrower to establish an operations and maintenance plan with respect to such
condition or circumstance after the closing of such Mortgage Loan. If the
Mortgage Loan is listed on Schedule C-12(EI) and the environmental insurance for
such Mortgage Loan is not a secured creditor policy but was required to be
obtained by the Borrower, then the holder of the Mortgage Loan is entitled to be
an additional insured under such policy, all premiums have been paid, such
insurance is in full force and effect and, to the Seller's knowledge, the
Borrower has made the disclosures and complied with the requirements of clauses
(a) and (b) of this Paragraph 39.
40. Prepayment Premiums and Yield Maintenance Charges.
Prepayment Premiums and Yield Maintenance Charges payable with respect to each
Mortgage Loan, if any, constitute "customary prepayment penalties" within
meaning of Treas. Reg. Section 1.860G-1(b)(2).
41. Operating Statements. Except for the Mortgage Loans with
an initial principal balance less than $3,000,000, which may only require annual
statements, and except as set forth on Schedule C-41, each Mortgage Loan
requires the Borrower, in some cases only at the request of the holder of the
related Mortgage, to provide the owner or holder of the related Mortgage with at
least quarterly and annual operating statements, rent rolls (if there is more
than one tenant) and related information (except in cases where the related
Mortgaged Property is a residential cooperative property) and annual financial
statements, which annual financial statements with respect to each Mortgage Loan
with an original principal balance greater than $20 million shall be audited (or
prepared and certified) by an independent certified public accountant upon the
request of the holder of the related Mortgage.
42. Servicing Rights. Except as set forth on Schedule C-42 or
as otherwise contemplated in this Agreement or the Pooling and Servicing
Agreement, no Person has been granted or conveyed the right to service any
Mortgage Loan or receive any consideration in connection therewith.
43. Recourse. Each Mortgage Loan (other than a Mortgage Loan
secured by a residential cooperative property) is non-recourse; provided that,
except as described on Schedule C-43
C-16
or for Mortgage Loans with a Cut-off Date Principal Balance of less than
$5,000,000, the Borrower and either a principal of the Borrower or other
individual guarantor, with assets other than any interest in the Borrower, is
liable in the event of (i) fraud or material misrepresentation, (ii)
misapplication or misappropriation of rents, insurance payments, condemnation
awards or tenant security deposits, (iii) violation of applicable environmental
laws or breaches of environmental covenants or (iv) the filing of a voluntary
bankruptcy or insolvency proceeding by the Borrower; and provided, further,
that, with respect to clause (iii) of the preceding proviso, an indemnification
against losses related to such violations or environmental insurance shall
satisfy such requirement. No waiver of liability for such non-recourse
exceptions has been granted to the Borrower or any such guarantor or principal
by the Seller or anyone acting on behalf of the Seller.
44. Assignment of Collateral. There is no material collateral
securing any Mortgage Loan that has not been assigned to the Purchaser.
45. Fee Simple or Leasehold Interests. The interest of the
related Borrower in the Mortgaged Property securing each Mortgage Loan includes
a fee simple and/or leasehold estate or interest in real property and the
improvements thereon.
46. Servicing. The servicing and collection practices used
with respect to each Mortgage Loan in all material respects have met customary
standards utilized by prudent commercial mortgage loan servicers with respect to
whole loans.
47. Originator's Authorization To Do Business. To the extent
required under applicable law, as of the Mortgage Loan's funding date and at all
times when it held such Mortgage Loan, the originator of each Mortgage Loan was
authorized to do business in the jurisdiction in which the related Mortgaged
Property is located, except where the failure to be so authorized does not
adversely affect the enforceability of such Mortgage Loan.
48. No Fraud In Origination. In the origination of the
Mortgage Loan, neither the originator nor any employee or agent of the Seller or
the originator, participated in any fraud or intentional material
misrepresentation with respect to the Borrower, the Mortgaged Property or any
guarantor. To the Seller's actual knowledge, no Borrower is guilty of defrauding
or making an intentional material misrepresentation to the Seller or originator
with respect to the origination of the Mortgage Loan, the Borrower or the
Mortgaged Property.
49. Appraisal. In connection with its origination or
acquisition of each Mortgage Loan, the Seller obtained an appraisal of the
related Mortgaged Property, which appraisal is signed by an appraiser, who, to
the Seller's actual knowledge, had no interest, direct or indirect, in the
Borrower, the Mortgaged Property or in any loan made on the security of the
Mortgaged Property, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan; to the Seller's knowledge, the appraisal and
appraiser both satisfy the requirements of the "Uniform Standards of
Professional Appraisal Practice" as adopted by the Appraisal Standards Board of
the Appraisal Foundation, all as in effect on the date the Mortgage Loan was
originated.
50. Jurisdiction of Organization. Each Borrower under a
Mortgage Loan was organized under the laws of the United States or the laws of a
jurisdiction located within the United States, its territories and possessions.
C-17
51. Borrower Concentration. Except as otherwise specified on
Schedule C-51, no single Borrower or group of affiliated Borrowers is/are the
obligor(s) under any one or more Mortgage Loans with a Cut-off Date Principal
Balance of $50,000,000 or more.
52. Escrows. All escrow deposits (including capital
improvements and environmental remediation reserves) relating to any Mortgage
Loan that were required to be delivered to the lender under the terms of the
related Mortgage Loan Documents, have been received and, to the extent of any
remaining balances of such escrow deposits, are in the possession or under the
control of the Seller or its agents (which shall include the Master Servicer).
All such escrow deposits which are required for the administration and servicing
of such Mortgage Loan are conveyed hereunder to the Purchaser.
53. Access. The Mortgaged Property securing each Mortgage Loan
is located on or adjacent to a public road, or has access to an irrevocable
easement permitting ingress and egress.
X-00
XXXXXXXX X-0
XXXX
X-00
XXXXXXXX C-7A
NONE
C-20
SCHEDULE C-7B
NONE
C-21
SCHEDULE C-12(AB/LBP)
NONE
C-22
SCHEDULE C-12(TS)
Xxxxx Xxxx Cooperative, Inc.
West 82 Tenants Realty Corp.
X-00
XXXXXXXX X-00(XX)
XXXX
X-00
XXXXXXXX C-12(OLD)
200 West 108 Housing Corp.
000 Xxxx 000xx Xxxxxx Owners Corp.
XxXxxxx Family Trust
XxXxxxx Partnership
Foursome Associates, L.L.C.
Greenwich Associates, LLC-4
Xxxxx Xxxx Cooperative, Inc.
Sprain Associates, LLC
Webmac Associates, LLC
C-25
SCHEDULE C-12(MV)
NONE
C-26
SCHEDULE C-12(EI)
NONE
C-27
SCHEDULE C-14(a)
Note Amount Insurance Coverage
----------- ------------------
XxXxxxx Family Trust $1,700,000 $945,000
XxXxxxx Partnership $2,000,000 $1,102,500
Greenwich Associates, LLC-4 $3,000,000 $2,496,000
*The loan documents for the referenced loans permit the lender to require the
borrower to increase the amount of insurance coverage. The lender is currently
requesting that the coverage be increased to an amount equal to the outstanding
principal balance of the loan.
X-00
XXXXXXXX X-00(x)
XXXX
X-00
XXXXXXXX X-00
XXXX
X-00
SCHEDULE C-18(i)
NONE
X-00
XXXXXXXX X-00
XXXX
X-00
XXXXXXXX C-23
200 West 108 Housing Corp.: $550,000 secured subordinate debt with a 12/1/10
maturity date.
67-87 & 68-09 Booth Owners Corp.: $250,000 secured subordinate debt with a
8/1/11 maturity date.
000 Xxxx 000xx Xxxxxx Owners Corp.: $1,060,000 secured subordinate debt with a
12/1/11 maturity date.
Long Beach Owners Corp.: $300,000 secured subordinate debt with a 10/1/11
maturity date.
Ocean Towers Building Corporation: $2,500,000 secured subordinate debt with a
5/1/11 maturity date.
X-00
XXXXXXXX X-00
XXXX
X-00
XXXXXXXX X-00X
XXXX
X-00
XXXXXXXX X-00X
XXXX
X-00
SCHEDULE C-29
NONE
C-37
SCHEDULE C-31
XxXxxxx Family Trust: Inspection Report dated 06/01/98
XxXxxxx Partnership: Inspection Report dated 09/17/99
C-38
SCHEDULE X-00
XXXX
X-00
XXXXXXXX X-00
XXXX
X-00
SCHEDULE C-37
NONE
C-41
SCHEDULE X-00
XXXX
X-00
XXXXXXXX X-00
XXXX
X-00
SCHEDULE X-00
X-00
XXXXXXXX X-00
XXXX
X-00
XXXXXXXX X-00
Xxxxx Xxxxxx
X-00
XXXXXXX X-0X
FORM OF CERTIFICATE OF THE SECRETARY
OR AN ASSISTANT SECRETARY OF THE SELLER
NCB CAPITAL CORPORATION
SECRETARY'S CERTIFICATE
The undersigned does hereby certify that, as of the date
hereof, [s]he is the duly elected and acting secretary of NCB Capital
Corporation (the "Company"), and does hereby further certify as follows:
1. Attached hereto as Exhibit A is a true, correct and
complete copy of the Certificate of Incorporation of the Company, certified by
the Secretary of State of the State of Delaware and as in effect as of the date
hereof.
2. Attached hereto as Exhibit B is a true, correct and
complete copy of the Bylaws of the Company as in effect as of the date hereof.
3. Attached hereto as Exhibit C is a true, correct, and
complete copy of certain resolutions adopted by the Board of Directors of the
Company at a meeting of the Board of Directors. Such resolutions are in full
force and effect and unmodified.
4. Attached hereto as Exhibit D is a true, correct and
complete copy of the Certificate of Good Standing of the Company issued by the
Secretary of State of the State of Delaware on November 1, 2001 and no event
(including, without limitation, any act or omission on the part of the Company)
has occurred since the date thereof which has affected the good standing of the
Company under the laws of the State of Delaware.
5. Each person who, as an officer of the Company, signed that
certain Mortgage Loan Purchase Agreement dated as of November 1, 2001, or any
other document delivered in connection therewith, was duly elected, qualified
and acting as such officer at the respective times of the signing and delivery
thereof and was duly authorized to execute such document on behalf of the
Company, and the signature on each such document is his or her genuine
signature.
IN WITNESS WHEREOF, the undersigned has signed this
Certificate as of November 13, 2001.
-----------------------------
Secretary
D-1A-1
EXHIBIT A
CERTIFICATE OF INCORPORATION
X-0X-0
XXXXXXX X
XXXXXX
X-0X-0
EXHIBIT C
RESOLUTIONS
D-1A-4
EXHIBIT D
GOOD STANDING CERTIFICATE
D-1A-5
RESOLUTION OF THE BOARD OF DIRECTORS
OF
NCB CAPITAL CORPORATION
WHEREAS, this organization is a Delaware corporation which is
seeking to sell approximately 41 mortgage loans to Credit Suisse First Boston
Mortgage Securities Corp. pursuant to a Mortgage Loan Purchase Agreement to be
dated on or about November 13, 2001:
NOW, THEREFORE, BE IT RESOLVED THAT
The persons officially holding the positions of President, Vice
President, Treasurer and Secretary in this organization are hereby
empowered collectively and individually to represent this organization
for the purpose of selling approximately 41 mortgage loans (the "Loan
Sale") to Credit Suisse First Boston Mortgage Securities Corp. pursuant
to the terms and conditions of a Mortgage Loan Purchase Agreement (the
"MLPA") to be dated on or about November 13, 2001 . The officials of
this organization designated above are hereby authorized:
(1) to complete all forms, procedures, and documents which may be
required in connection with the Loan Sale;
(2) to obligate this organization in such amounts, and on such
other terms and conditions as the designated officials believe
are proper under this resolution; and
(3) to exercise such authority of this organization as may be
necessary or convenient to accomplish the purpose of this
resolution.
BE IT FURTHER RESOLVED THAT
all prior acts by the officials of this organization to accomplish the
purposes of these resolutions are hereby approved, and that the
provisions of these resolutions shall remain in full force and effect
until a certified copy of any duly adopted resolution amending or
rescinding these resolutions is adopted.
D-1A-6
CERTIFICATION
The undersigned, as Secretary of this organization, hereby
certifies that the Board of Directors duly adopted the foregoing resolutions at
a meeting held on October 30, 2001 which was properly called, noticed and
convened, with a quorum present, and that these resolutions have not been
amended or rescinded in any way.
------------------------------------
Secretary
Date Signed: November 13, 2001
D-1A-7
EXHIBIT D-1B
FORM OF CERTIFICATE OF THE SELLER
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2001-CKN5
CERTIFICATE OF NCB CAPITAL CORPORATION
In connection with the execution and delivery by NCB Capital
Corporation ("NCBCC") of, and the consummation of the various transactions
contemplated by, that certain Mortgage Loan Purchase Agreement dated as of
November 1, 2001 (the "Mortgage Loan Purchase Agreement"), between Credit Suisse
First Boston Mortgage Securities Corp. ("CSFBMSC"), as purchaser, and NCBCC, as
seller, and that certain Indemnification Agreement dated as of November 1, 2001
(the "Indemnification Agreement" and, together with the Mortgage Loan Purchase
Agreement, the "Agreements"), between NCBCC, CSFBMSC and Credit Suisse First
Boston Corporation, as representative of the Underwriters and as initial
purchaser of the Privately Offered Certificates, the undersigned hereby
certifies that (i) the representations and warranties of NCBCC in the Agreements
are true and correct in all material respects at and as of the date hereof with
the same effect as if made on the date hereof, and (ii) NCBCC has, in all
material respects, complied with all the agreements and satisfied all the
conditions on its part required under the Mortgage Loan Purchase Agreement to be
performed or satisfied at or prior to the date hereof. Capitalized terms used
but not defined herein shall have the respective meanings assigned to them in
the Mortgage Loan Purchase Agreement.
Certified this day of November, 2001.
NCB CAPITAL CORPORATION
By: --------------------------------------
Name:
Title:
D-1B-1
EXHIBIT D-2A
FORM OF OPINION OF XXXXXXXX XXXXXXXXX XXXXXX ARRONSOHN & XXXXXX LLP,
PURSUANT TO SECTION 7(vii)
November 13, 2001
Credit Suisse First Boston Mortgage Xxxxxx Brothers Inc.
Securities Corp. 101 Xxxxxx
00 Xxxxxxx Xxxxxx Xxxxxx Xxxx, Xxx Xxxxxx 00000
Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse First Boston Corporation Xxxxx Fargo Bank Minnesota, N.A.
00 Xxxxxxx Xxxxxx 00000 Xxxxxx Xxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxx, Xxxxxxxx 00000
McDonald Investments, Inc. Xxxxx'x Investors Service, Inc.
000 Xxxxxxxx Xxxxxx 00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Standard and Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Mortgage Loan Purchase Agreement dated as of November
1, 2001, between NCB Capital Corporation, as seller,
and Credit Suisse First Boston Mortgage Securities
Corp., as purchaser (the "Agreement")
Dear Sirs:
We have acted as counsel to NCB Capital Corporation ("NCBCC")
in connection with its execution and delivery of the Agreement. Capitalized
terms not otherwise defined herein shall have the respective meanings ascribed
thereto in the Agreement.
We have examined copies of the following documents:
1. the Agreement;
2. the Articles of Incorporation and By-Laws of
NCBCC;
3. the officer's certificate delivered pursuant to
the Agreement (the "NCBCC Certificate");
4. Mortgage Loan Seller Indemnification Agreement
(the "Indemnification Agreement"), dated as of November 1, 2001 between
NCBCC, Credit Suisse First Boston Mortgage Securities Corp., and Credit
Suisse First Boston Corporation; and
D-2B-1
5. such other documents, records, certificates and
papers as we have deemed necessary and relevant as a basis for this
opinion.
To the extent we have deemed necessary and proper regarding
matters of fact, we have, with your approval, relied upon the certificate of
NCBCC delivered to us in connection with this opinion and on the representations
and warranties of NCBCC contained therein, in the Agreement, in the NCBCC
Certificate and in all other instruments, certificates, and agreements executed
by or on behalf of NCBCC in connection with the subject transaction, and we
have, with your approval, assumed the accuracy of such representations and
warranties set forth, an assumption which we have not independently verified.
The opinions set forth herein are based solely upon the state of the law and
facts existing as of the date hereof.
In rendering the opinions below, we have assumed with your
permission (i) the due, proper, authorized and complete execution and delivery
of all instruments referred to above and to the instruments referred to therein
(collectively, the "Documents") by all parties other than NCBCC, and that the
Documents are valid, binding and enforceable in accordance with their respective
terms against such other parties, (ii) the authenticity of all documents
submitted to us as originals, (iii) the conformity to original documents of all
documents submitted to us as copies, (iv) the authenticity of the original of
each document submitted to us as a copy, (v) that all documents submitted to us
are complete and the signatures thereon (other than with respect to NCBCC) are
genuine, (vi) that there are no other agreements or understandings among the
parties that modify the terms of the Documents or the respective rights or
obligations of the parties to the Documents, (vii) that there has been no mutual
mistake of fact with respect to the Documents or the transactions contemplated
thereunder, and (viii) that you have not received notice of defects, defenses,
claims or other material information which would impact on the below opinions.
Based upon and subject to the foregoing, we are of the opinion
that:
(1) NCBCC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is qualified to transact business in, and is in good standing under
the laws of, the State of New York.
(2) NCBCC has the corporate power and authority to
engage in the transactions contemplated by the Agreement and the
Indemnification Agreement, and all requisite corporate power and
authority to execute and deliver the Agreement and the Indemnification
Agreement and to perform and observe the terms and conditions thereof.
(3) The Agreement and the Indemnification Agreement
and the consummation by NCBCC of the transactions contemplated by the
Agreement and the Indemnification Agreement have been duly authorized
by NCBCC, and the Agreement and the Indemnification Agreement have been
duly executed and delivered by NCBCC.
(4) The Agreement is a legal, valid and binding
agreement enforceable against NCBCC in accordance with its terms. This
opinion regarding the legality, validity, binding effect and
enforceability of the Agreement means that (a) the Agreement
constitutes an effective contract under applicable law and (b) the
Agreement is not invalid in its entirety because of a specific
statutory prohibition or public policy, nor is the Agreement subject in
its entirety to contractual defenses arising out of the terms of the
Agreement. However, this opinion does not
D-2B-2
mean that any particular remedy for which provision is made in the
Agreement will be available upon a material default, or that every
provision of the Agreement will be upheld or enforced in any particular
circumstance by a court, but, subject to the qualifications and
assumptions set forth herein, such unavailability or unenforceability
will not substantially interfere with realization of the practical
benefits and/or security provided thereby. Furthermore, the validity,
binding effect and enforceability of the Agreement may be limited or
otherwise affected by the matters described below.
(5) The Agreement and the Indemnification Agreement
and the consummation by NCBCC of the transactions contemplated by the
Agreement and the Indemnification Agreement do not conflict with or
result in a breach or violation of any material term or provision of,
or constitute a default under, the organizational documents of NCBCC or
any New York or Delaware state or federal statute or federal law or
regulation applicable to NCBCC. To the best of our knowledge, without
independent inquiry, the Agreement and the Indemnification Agreement
and the consummation by NCBCC of the transactions contemplated by the
Agreement and the Indemnification Agreement do not conflict with or
result in a breach or violation of any material term or provision of,
or constitute a default under, any indenture or other agreement or
instrument to which NCBCC is a party or by which it is bound, or any
order of any state or federal court, regulatory body, administrative
agency or governmental body having jurisdiction over NCBCC.
(6) To the best of our knowledge, no consent,
approval, authorization or order of any state or federal court or
governmental agency or body is required for the consummation by NCBCC
of the transactions contemplated by the terms of the Agreement or the
Indemnification Agreement.
(7) To the best of our knowledge, without independent
inquiry, there are no actions, suits, proceedings or investigations
pending or threatened against or affecting NCBCC which, if adversely
determined, individually or in the aggregate, would materially
adversely affect NCBCC's ability to perform its obligations under the
Agreement or the Indemnification Agreement.
Without limiting the qualifications set forth herein, we
express no opinion as to (i) title to the real or personal property described in
and encumbered by the respective Mortgage Loan Documents relating to the
Mortgage Loans, and this opinion in no way relates to such title of the
mortgagors thereunder or to the perfection or priority of the lien attempted to
be granted by the Mortgage Loan Documents or the effect of the due recording of
such Mortgage Loan Documents or the failure to cause such Mortgage Loan
Documents to be recorded, (ii) the perfection or priority of any lien or
security interest, (iii) compliance or non-compliance by NCBCC or any other
person or entity with federal or state securities laws (including, without
limitation, the Securities Act of 1933, the Trust Indenture Act of 1939 and the
Investment Company Act of 1940) or (iv) the classification and treatment of the
Mortgage Loans and any proceeds therefrom for purposes of federal and state
income tax matters.
The opinions expressed above are subject to the following
qualifications in addition to those set forth herein:
D-2B-3
A. the enforceability of the Agreement in accordance
with its terms is subject to applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting creditors'
rights generally;
B. the enforceability of the Agreement in accordance
with its terms is subject to general principles of equity (whether or
not such enforceability is considered in a proceeding in equity or at
law);
C. the enforceability of the Agreement in accordance
with its respective terms may be limited by the effect of standards of
good faith, fair dealing and reasonableness which may be applied by a
court to the exercise of certain rights and remedies;
D. our opinions, as they relate to the enforceability
of rights to indemnify, may be limited by state or federal laws or the
public policy underlying such laws;
E. we express no opinion as to the enforceability of
any provisions in the Agreement purporting to restrict access to legal
or equitable remedies, to establish evidentiary standards, to waive
defenses, to waive or modify service of process requirements under
applicable laws, or to control the determination of venue for any legal
or equitable proceedings that may arise in connection therewith; and
F. we express no opinion as to the validity or
binding effect or the enforceability of any provision in the Agreement
which purports to require payment of interest after default at a rate
in excess of a rate which a court would determine under applicable law
to be commercially reasonable and not a penalty.
We are members of the Bar of the State of New York. The
foregoing opinion is limited to the laws of the State of New York and the
corporate laws of the State of Delaware and, as to matters of federal
jurisprudence, the laws of the United States of America. In rendering our
opinion, we have not considered, and hereby disclaim any opinion as to, the
application or impact of any other laws, cases, decisions, rules or regulations
of any other jurisdiction, court or administrative agency, and the opinions
expressed herein do not encompass any matters related to or implicated by, or
the enforcement of any remedies in, any other country or jurisdiction.
[Remainder of this page intentionally left blank]
D-2B-4
This opinion letter is furnished to you solely for your
benefit and for the benefit of your successors and assigns, and may not be
relied upon by, nor may copies be delivered to, any other person or entity
without our prior written consent. Finally, we do not undertake to advise you of
any changes in the opinions expressed herein resulting from matters that might
hereafter come or be brought to our attention.
Very truly yours,
D-2B-5
EXHIBIT D-2B
FORM OF OPINION OF XXXXXXXX XXXXXXXXX XXXXXX XXXXXXXX & XXXXXX LLP,
PURSUANT TO SECTION 7(viii)
November 13, 2001
Fitch, Inc. McDonald Investments, Inc.
Xxx Xxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxxx, Xxxx 00000
Standard and Poor's Ratings Services Xxxxx Fargo Bank Minnesota, N.A.
00 Xxxxx Xxxxxx 11000 Broken Xxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxx, Xxxxxxxx 00000
Credit Suisse First Boston Mortgage Xxxxxx Brothers Inc.
Securities Corp. 101 Xxxxxx
00 Xxxxxxx Xxxxxx Xxxxxx Xxxx, Xxx Xxxxxx 00000
Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Mortgage Loan Purchase Agreement between
NCB Capital Corporation and Credit Suisse
First Boston Mortgage Securities Corp.
dated as of November 1, 2001
Dear Sirs:
We have acted as counsel to NCB Capital Corporation ("NCBCC"
or the "Bank") with respect to (i) a Mortgage Loan Purchase Agreement (the
"MLPA" or the "Agreement") between NCBCC and Credit Suisse First Boston Mortgage
Securities Corp. ("CSFB" or the "Purchaser"), dated as of November 1, 2001 and
(ii) a Pooling and Servicing Agreement (the "Pooling Agreement") between
National Consumer Cooperative Bank ("NCCB"), CSFB, KeyCorp Real Estate Capital
Markets, Inc., ORIX Real Estate Capital Markets, LLC and Xxxxx Fargo Bank
Minnesota, N.A. dated as of November 12, 2001. NCBCC is a wholly owned
subsidiary of NCCB. Any capitalized terms which are not
D-2C-1
expressly defined herein shall have the meaning ascribed to them in the MLPA or
the Pooling Agreement.
Pursuant to the MLPA, NCBCC has agreed to sell, and CSFB has
agreed to purchase, certain mortgage loans specified therein (the "Mortgage
Loans" or the "NCBCC Loans"). The MLPA provides that upon payment of the
purchase price set forth therein title to the NCBCC Loans shall pass to CSFB.
The consideration payable to NCBCC for the Mortgage Loans consists of (i) cash
and (ii) a portion of the Class A-Y Certificates issued pursuant to the Pooling
Agreement. The Class A-Y Certificates bear interest at a rate, and based upon a
notional amount, as more particularly described in the Pooling Agreement.
Concurrently with the execution of the MLPA and the Pooling
Agreement, CSFB, as depositor, will transfer the NCBCC Loans into a trust
established under the Pooling Agreement for the benefit of the holders of a
series of pass-through certificates to be issued pursuant to the Pooling
Agreement.
The Pooling Agreement provides that NCCB is to act as master
servicer and special servicer for certain of the NCBCC Loans (in these
capacities, NCCB will be referred to herein as the "Coop Master Servicer" and
"Coop Special Servicer"; and the NCBCC Loans that are to be serviced by NCCB,
either as Coop Master Servicer or Coop Special Servicer, will be referred to
herein, collectively, as the "NCBCC Coop Loans"). NCCB's Servicing Fee as Coop
Master Servicer will be payable monthly on a loan-by-loan basis from interest
received, will accrue at a rate of 0.10% per annum, and will be computed on the
same basis as the related NCBCC Coop Loan on the Stated Principal Balance of
such NCBCC Coop Loan. Additional servicing compensation in the form of (i) any
and all Net Default Charges accrued with respect to a Performing Mortgage Loan,
(ii) 50% of any and all Net Assumption Application Fees, Net Application Fees,
modification fees, extension fees, consent fees, waiver fees and fees paid in
connection with defeasance, (iii) any and all charges for beneficiary statements
or demands, amounts collected for checks returned for insufficient funds and
other loan processing fees, (iv) any and all Prepayment Interest Excesses and
(v) other customary charges, in each case only to the extent actually paid by
the related Borrower, shall be retained by NCCB in its capacity as Coop Master
Servicer.
NCCB as Coop Special Servicer shall receive, among other
compensation, a Special Servicing Fee with respect to each Specially Serviced
Loan at a rate of 0.25% per annum computed on the same basis as the related
NCBCC Coop Loan on the Stated Principal Balance of such NCBCC Coop Loan.
Neither the MLPA nor the Pooling Agreement provides for a
termination, revocation or avoidance of any transfer of the NCBCC Loans by NCBCC
to CSFB or provides for the retention by NCBCC of any interest whatsoever in the
NCBCC Loans, except that, in the event that there exists any Material Document
Defect or Material Breach with respect to any NCBCC Loan, NCBCC is required ,
pursuant to the terms of the MLPA and Pooling Agreement, to cure such Material
Document Defect or Material Breach or repurchase such NCBCC Loan at the Purchase
Price.
You have requested our opinion as to whether, in a case under
the United States Bankruptcy Code (Title 11, U.S.C.) in which the Bank is the
debtor, a court would hold that the transfer of the Mortgage Loans by the Bank
to the Purchaser in the manner set forth in the Agreement would
D-2C-2
constitute an absolute transfer of the Mortgage Loans, rather than a borrowing
by the Bank secured by the Mortgage Loans.
We have assumed that the Bank is eligible to be a debtor in a
case under the Bankruptcy Code. This opinion is based solely upon the documents
described in this opinion and our examination of such matters of law as we have
deemed necessary for purposes of rendering the opinions set forth herein.
We have examined copies of the following documents:
1. the MLPA;
2. the Pooling Agreement; and
3. such other documents, records, certificates and papers as
we have deemed necessary and relevant as a basis for this opinion.
To the extent we have deemed necessary and proper regarding
matters of fact not within our knowledge, we have relied without independent
investigation upon representations and warranties contained in the certificate
of an officer of the Bank provided to us, and in the MLPA, the Pooling Agreement
and in all other instruments, certificates, and agreements executed by or on
behalf of NCBCC in connection with the subject transaction. The opinions set
forth herein are based solely upon the state of the law and facts existing as of
the date hereof.
In rendering the opinions below, we have assumed (i) the due,
proper, authorized and complete execution and delivery of all instruments
referred to above and to the instruments referred to therein (collectively, the
"Documents") by all parties other than NCBCC, and that the Documents are valid,
binding and enforceable in accordance with their respective terms against such
other parties; (ii) the genuineness of all signatures on the Documents, except
those on behalf of NCBCC; (iii) that all copies of the Documents conform to the
originals thereof; (iv) that all Documents which were to have been recorded were
properly recorded and the title policies issued in connection therewith, if any,
properly reflect all recording information and the correct status of the matters
set forth therein and that all required mortgage taxes and recording charges
have been paid in full; and (v) that you have not received notice of defects,
defenses, claims or other material information which would impact on the below
opinions.
We have not examined the Mortgage Loan Documents, and we
express no opinion concerning the conformity of any of the Mortgage Loan
Documents to the requirements of the MLPA.
Based on the considerations set forth above, we have assumed
the following, without investigation:
A. The Bank will have been the sole owner of the Mortgage
Loans with full right and authority to sell the same, free and clear of any and
all pledges, liens, security interests, claims, participation interests or other
equities or encumbrances of any nature.
B. Each Mortgage Note will have been endorsed in a manner
which satisfies any requirement of endorsement in order to transfer all right,
title and interest of the party so endorsing, as
D-2C-3
noteholder or assignee thereof, in and to that Mortgage Note. Each assignment of
a Mortgage will be in recordable form and will be sufficient to effect the
assignment of and transfer to the assignee thereunder the benefits of the
assignor, as mortgagee or assignee thereof, under each Mortgage to which such
assignment relates.
C. No Mortgage Loan Document will reflect any interest which
is inconsistent with the sale and transfer of the Mortgage Loans by the Bank to
the Purchaser as provided in the MLPA.
D. The amount of the consideration received by the Bank upon
the sale of the Mortgage Loans to the Purchaser pursuant to the MLPA constituted
reasonably equivalent value and fair consideration for the Mortgage Loans sold,
being fair market value arrived at on an arm's length basis.
E. No fraud, mistake, breach of covenant or illegality on the
part of any party to the MLPA affecting any Mortgage Loan or otherwise in
connection with any transaction contemplated by the MLPA will have occurred.
F. No party to the MLPA has taken or will have taken prior to
the Closing Date any action which is unreasonable, arbitrary or capricious, or
which has not been in good faith or in a commercially reasonable manner, in
enforcing or attempting to enforce or performing or attempting to perform any of
its rights or obligations under any Mortgage Loan or the MLPA or the Pooling
Agreement.
G. The MLPA, the Pooling Agreement and all related documents
evidence the intention by the Bank and the Purchaser to effectuate an absolute
transfer of the Mortgage Loans. There is not, and will not be, any other
agreement between or among the Bank and the Purchaser, that supplements or
otherwise modifies the intention of such parties, as expressed in the MLPA and
the Pooling Agreement, and the agreements specifically referred to therein.
H. The Bank has an appropriate business reason for selling the
Mortgage Loans, as provided in the MLPA and the Pooling Agreement, rather than
obtaining a secured loan with the Mortgage Loans as collateral.
I. The Bank will not have any right to modify or alter the
terms of the sale of the Mortgage Loans to the Purchaser.
J. The price to be paid for the Mortgage Loans by the
Purchaser to the Bank will be paid in full at the time of the sale pursuant to
the MLPA, and no agreement or arrangement will exist which permits the
modification of the consideration for the Mortgage Loans subsequent to the date
of the sale. The Bank will have no right or obligation to repurchase any
Mortgage Loan after such sale, except in the event of a Material Document Defect
or Material Breach with respect to a Mortgage Loan, the Bank will be required,
pursuant to the terms of the MLPA, to cure or repurchase such Mortgage Loan. In
addition, pursuant to the Pooling Agreement, NCCB may, at its option, elect to
purchase all of the Loans and each REO Property remaining in the Trust Fund by
giving written notice to the Trustee and the other parties to the Pooling
Agreement within 60 days prior to the anticipated date of purchase provided that
the aggregate Stated Principal Balances of the Mortgage Pool is less that 1.00%
of the Initial Pool Balance.
D-2C-4
K. Under generally accepted accounting principles, the Bank
will report its transfer of the Mortgage Loans to the Purchaser, pursuant to the
MLPA, as a sale of all its right, title and interest in and to the Mortgage
Loans. The Bank also will so report the transfer in all filings and reports with
any applicable regulatory agencies. For federal income tax purposes, the Bank
will treat the transfer of the Mortgage Loans to the Purchaser as a sale of all
its right, title and interest in and to the Mortgage Loans. (excluding only its
right to collect the Master Servicing Fee and the Special Servicing Fee, if
appropriate).
L. The Bank will take no action which is inconsistent with the
Purchaser's ownership of the Mortgage Loans.
M. As reflected in the MLPA, the Bank intends to relinquish,
in the sale of the Mortgage Loans, all rights to possess, control and monitor
the Mortgage Loans. Promptly after the closing date, there will be filed in the
appropriate recording offices, the assignments of the Mortgages by the Bank to
the Purchaser, as and to the extent required under the MLPA. The respective
obligations of the Bank and the Purchaser under the MLPA will be customary in
the industry for the type of transaction contemplated.
N. The Bank will have no obligation to the Purchaser with
respect to the Mortgage Loans except for the obligations of the Bank under the
MLPA, and the Purchaser has no other recourse or right of chargeback to the Bank
with respect to the Mortgage Loans.
SALE ANALYSIS
In considering the opinions expressed below, it should be
understood that, to our knowledge, there is no directly controlling statute or
regulation or judicial precedent. In addition, certain judicial decisions which
we have examined may be viewed as inconsistent with those opinions. Furthermore,
in determining whether a sale would be characterized as a sale or a loan, courts
have expressed divergent views on both the nature of the inquiry that a court
should make as well as the significance of a variety of factual elements.
In making a determination of whether the transfer of rights to
payment, such as notes secured by real property, is an absolute sale or a
secured borrowing, courts have examined "all the facts and circumstances
surrounding the transactions at issue." In re Golden Plan, 829 F.2d 705, 709
(9th Cir. 1986). Accord, Major's Furniture Mart v. Castle Credit Corp., 602 F.2d
538, 544 (3rd Cir. 1979). The courts which have addressed this issue have
weighed a number of factors in reaching their decisions, including the transfer
of the risk of loss, the transfer of the opportunity for gain, the manner in
which the interest rate received by the transferee is determined, the intent of
the parties, the form of the transaction, whether the transferor continues to
service the transferred loans, and whether the transfer is recorded.
Of these various factors, one of the most important is the
transfer of the risk of loss; that is, whether the credit risk that the notes
will not be paid by the obligors has been shifted from the transferor of the
notes to the transferee. See, e.g., In re The Xxxxxxx Co., 813 X.0x 000, 000-00
(0xx Xxx. 1987); Golden Plan, 829 F.2d at 709-10; Major's Furniture Mart, 602
F.2d at 545; XxXxx v. Western Plains Corp., 823 F.2d 1395, 1399 (10th Cir.
1987).
Courts have held that the risk of loss is not shifted to the
transferee if the transferee has full recourse to the transferor in the event
the obligors on the notes fail to make the required payments.
D-2C-5
E.g., Xxxxxxx Co.; Major's Furniture Mart; In re Executive Growth Investments,
40 B.R. 417 (Bankr. C.D. Cal. 1984). In certain circumstances, limited recourse,
if such limited recourse is substantial, has been held to mean that the risk of
loss has not been shifted. E.g., In re S.O.A.W. Enterprises, 32 B.R. 279 (Bankr.
W.D. Tex. 1983) (70% recourse with guaranties); In re Hurricane Elkhorn Coal
Corp. II, 19 B.R. 69 (Bankr. W.D. Ky. 1982) (20% recourse), aff'd in part &
rev'd in part, 32 B.R. 737 (W.D. Ky. 1983), aff'd, 763 F.2d 188 (6th Cir. 1985).
The MLPA transfers the Bank's interests in the Mortgage Loans
to the Purchaser without recourse to the Bank. As discussed below, if obligors
on the Mortgage Loans fail to make the required payments, any resulting losses
will be borne ultimately by the Certificateholders, not the Bank. In similar
circumstances, the courts have found that the transferor no longer bears the
risk of loss. E.g., Golden Plan.
The Bank does have certain limited obligations with respect to
the Mortgage Loans, but these obligations should not be significant enough to
conclude that the risk of loss remains with the Bank. The Bank is obligated to
repurchase Mortgage Loans which, in breach of the Bank's representations and
warranties, do not have specified attributes. This obligation is designed to
ensure that the Mortgage Loans in fact have the attributes which the Bank, as
seller, represented they have. This obligation does not relate to defaults by
the obligors. Accordingly, the repurchase obligations of the Bank should not be
significant enough to conclude that the risk of loss remains with the Bank. But
see XxXxx, 832 F.2d at 1398-99 (required repurchases of mortgages may in certain
unspecified circumstances indicate that the risk of loss remained with
transferor and that the transaction is not an absolute sale).
A second important factor considered by the courts is whether
the opportunity for gain or loss, that is, the risk that the value of the
obligations transferred will fluctuate due to changes in the market, has been
shifted from the transferor to the transferee. If the opportunity for gain or
loss has been so shifted, the transaction is more likely to be characterized as
an absolute sale. See, e.g., In re Xxxxxxxx Aircraft Corp. (56 B.R. 339, 374-76
(Bankr. D. Minn. 1985) (aircraft), aff'd on this ground & rev'd on others, 850
F.2d 1975 (8th Cir. 1988).
The Bank has no interest in the Mortgage Loans. Furthermore,
the Bank has no right to obtain the return of the Mortgage Loans except pursuant
to the limited repurchase obligations described above. Accordingly, any change
in the market value of the Mortgage Loans will not be for the benefit or
detriment of the Bank.
A third important consideration is the manner in which the
interest rate received by the transferee is determined. Xxxxxxx, 813 F.2d at
272. In Xxxxxxx, the court ruled the transfer of mortgage notes was a secured
borrowing because, inter alia, the interest rate received by the transferees
varied by between one and six percent from the rate on the mortgage notes, and
the transferees' interest rate was based on the rate at which the transferor
could borrow funds. 813 F.2d at 272. See also S.O.A.W. Enterprises, 32 B.R. at
282 (secured loan where inter alia transferees received an interest rate higher
than that on transferred mortgage notes). Here, the Certificateholders will
receive all interest payments made on the Mortgage Loans, except that a
reasonable servicing fee will be paid to NCCB as compensation for servicing the
NCBCC Coop Loans, as discussed above. (NCCB, as Coop Master Servicer, will also
receive certain additional charges under the NCBCC Coop Loans, as additional
servicing compensation.) The interest rates on the Mortgage Loans are based on
the current market rates
D-2C-6
for comparable mortgage loans at the time of origination of such Mortgage Loans.
The rate of return on each Mortgage Loan is not based on the rate at which the
Bank could obtain a secured loan.
A fourth important factor is the form of the transaction.
While substance is more important than form, Major's Furniture Mart, 602 F.2d at
543, the courts, particularly in the area of assignment of mortgages, have
looked closely at the form of the transaction. See, e.g., Golden Plan, 829 F.2d
at 709; In re Columbia Pacific Mortgage, 20 B.R. 259 (Bankr. W.D. Wash. 1981);
In re Lemons Associates, Inc., 67 B.R. 198 (Bankr. D. Nev. 1986). See also In re
Xxxxxx, Xxxxxxx & Xxxxxxxx Asset Management Corp., 67 B.R. 557, 596-98 (D.N.J.
1986) (form very important in determining whether repurchase agreement was sale
or secured loan, particularly where parties to agreement were sophisticated).
The MLPA uses the form and language of sales transactions. For
accounting and tax purposes, the Bank will treat the transfer as an absolute
sale. Except for the repurchase obligations, the Bank has no duty to satisfy the
obligations to the Purchaser using its own funds. Instead, payments will be
received from funds generated by the Mortgage Loans. See In re Evergreen Valley
Resort, 23 B.R. 659, 661 (Bankr. D. Me. 1982) (secured loan if transferor can
use any source of funds to pay transferees rather than expected repayment from
obligors.)
After the sale pursuant to the MLPA, the Bank will have very
few rights with respect to the Mortgage Loans. Except for the repurchase
obligations described above, the Bank has no liability with respect to the
Mortgage Loans. The Bank has no right to payment from collections on the
Mortgage Loans.
A fifth important consideration is the intent of the parties.
E.g., In re Xxxxxxx Xxxxxxx, Inc., 65 B.R. 602, 604-05 (S.D. Fla. 1986); In re
Xxxxx Xxxx Corp., 38 B.R. 571, 575-77 (Bankr. S.D.N.Y. 1984). The MLPA provides
that it is intended that the transfer of the Mortgage Loans by the Bank to the
Trustee be an absolute sale rather than a secured borrowing. The factors
discussed above with respect to the form and structure of the transaction are
further evidence of this intent.
Sixth, some courts have indicated that if the transferor is
the servicer of the transferred loans, or if the transfer is not recorded, then
the transfer is more likely to be characterized as a secured borrowing. E.g., In
re Mid Atlantic Fund, 60 B.R. 604 (Bankr. S.D.N.Y. 1984); In re Xxxx Commercial
Corp., 327 F. Supp. 1315 (S.D.N.Y. 1971). Other courts have rejected this view.
E.g., Xxxxxxx, 813 F.2d at 272 (fact that transferor services mortgage loans is
consistent with absolute sale). Here, NCCB, the parent of the Bank, is servicing
the NCBCC Coop Loans. However, all assignments of the Mortgages will be
recorded, the notes will be endorsed and the Trustee will maintain possession of
the Mortgage Documents on behalf of the Certificateholders.
Section 541(d) of the Bankruptcy Code provides:
Property in which the debtor holds, as of the commencement of
the case, only legal title and not an equitable interest, such
as a mortgage secured by real property, or an interest in such
a mortgage, sold by the debtor but as to which the debtor
retains legal title to service or supervise the servicing of
such mortgage or interest, becomes property of the estate
under subsection (a) (1) or (2) of this section only to the
extent of the debtor's legal title to such property, but not
to the extent of any equitable interest in such property that
the debtor does not hold.
D-2C-7
In enacting Section 541(d), Congress stated that its intention
was to "confirm the current status. . . of bona fide secondary mortgage market
transactions as the purchase and sale of assets. Mortgages or interests in
mortgages sold in the secondary market should not be considered as part of the
debtor's estate." S. Rep. No. 989, 95th Cong., 2d Sess. 83-84 (1978) In
particular, Congress wanted to be sure that sales of mortgage loans would not be
challenged by "trustees asserting that a sale of mortgages is a loan from the
purchaser to the seller." 124 Cong. Rec. S17,413 (daily ed. Oct. 6, 1978).
Accordingly, Congress made it clear that several factors were "irrelevant": the
fact that the transferor performed the servicing, the fact that the assignments
of mortgages were not recorded and the notes not endorsed, and the fact that the
transferor retained possession of the notes and mortgages. The transactions
contemplated by the MLPA and the Pooling Agreement are bona fide secondary
mortgage market transactions which should be protected by the principles
underlying Section 541(d), particularly where, as here, in fact the assignments
were recorded, the notes endorsed and possession of the notes and mortgages have
been transferred to the Trustee.
We are aware of the decision in Octagon Gas Systems, Inc. x.
Xxxxxx (In re Meridian Reserve, Inc.), 995 F.2d 948, 957 (10th Cir.), cert.
denied, 000 X. Xx. 000 (X.X. 1993), in which the Tenth Circuit held that
"because, under Article 9 [of the Uniform Commercial Code], a sale of accounts
is treated as if it creates a security interest in the accounts, accounts sold
by a debtor prior to filing for bankruptcy remain property of the debtor's
bankruptcy estate." We do not believe, however, that this case would be
controlling with respect to the sale of the Mortgage Loans. First, the Octagon
case involved the sale of accounts; we do not believe that the court's
reasoning, even if correct with respect to accounts, applies with equal force to
the sale of mortgage loans, the effect and recordation of which is ordinarily
governed primarily by state real property laws and not the UCC. Second, the
Octagon decision appears to be at variance with many of the authorities cited
above. Third, the Octagon decision is not binding on courts outside the Tenth
Circuit. We note that the Bank's principal place of business, and its principal
assets, are located outside the Tenth Circuit.
We are also aware of the decision in In re Xxxx, 24 B.R. 542,
545 (Bankr. D. Idaho 1982), in which the Court relied on Section 541(a)(6) of
the Bankruptcy Code to invalidate an assignment that was absolute under state
law. This statement by the bankruptcy court was arguably dicta, but in any
event, the better-reasoned view is that put forth by the United State Court of
Appeals for the Fifth Circuit in In re Louisiana World Exposition, 832 F.2d
1391, 1401 (5th Cir. 1987): Section 541(a)(6) "does not give the bankrupt's
estate property the debtor would not own if it were solvent."
Based on and subject to the foregoing, as well as the further
qualification that there is no definitive judicial authority confirming the
correctness of the analysis, we are of the opinion that, should the Bank become
the debtor in a case under the Bankruptcy Code, if the matter were properly
briefed and presented to a court, the court would hold that the transfer of the
interests of the Bank in the Mortgage Loans to the Purchaser in the manner set
forth in the MLPA would constitute a sale of the Mortgage Loans and not a
borrowing by the Bank secured by the Mortgage Loans, so that the Mortgage Loans,
the payments thereunder and proceeds therefrom, would not be property of the
Bank's bankruptcy estate pursuant to Section 541(a) of the Bankruptcy Code, and
the Certificateholders' rights to the Mortgage Loans (and the collections
thereon) would not be impaired by the operation of Section 362(a) of the
Bankruptcy Code.
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D-2C-8
We do not express any opinion herein as to any matter not
governed by the federal laws of the United States of America and New York State
Law. This opinion is solely for benefit of the addressees and may not be relied
upon or used by, circulated, quoted, or referred to, nor any copies hereof be
delivered to, any other person without our prior written approval, provided,
however, that the opinion may be delivered to any person when required by law or
any regulatory authority. We disclaim any obligation to update this opinion
letter for events occurring or coming to our attention after the date hereof.
Very truly yours,
D-2C-9
EXHIBIT D-2C
FORM OF LETTER OF XXXXXXXX XXXXXXXXX XXXXXX XXXXXXXX & XXXXXX LLP,
PURSUANT TO SECTION 7(ix)
November 13, 2001
Credit Suisse First Boston Mortgage Xxxxxx Brothers, Inc.
Securities Corp. 000 Xxxxxx Xxxxxx
00 Xxxxxxx Xxxxxx Xxxxxx Xxxx, Xxx Xxxxxx 00000
Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse First Boston Corporation McDonald Investments, Inc.
00 Xxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxxx, Xxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.
Commercial Mortgage Pass-Through Certificates, Series
2001-CKN5
Ladies and Gentlemen:
We have acted as special counsel to National Consumer
Cooperative Bank ("NCCB") in connection with the Pooling and Servicing Agreement
("POOLING AND SERVICING AGREEMENT") dated as of November 12, 2001, among Credit
Suisse First Boston Mortgage Securities Corp., as Depositor (the "DEPOSITOR"),
KeyCorp Real Estate Capital Markets, Inc., d/b/a Key Commercial Mortgage, as
General Master Servicer, ORIX Real Estate Capital Markets, LLC, as General
Special Servicer, NCCB, as Coop Master Servicer and Coop Special Servicer, and
Xxxxx Fargo Bank Minnesota, N.A., as Trustee, and in connection with the
Mortgage Loan Purchase Agreement (the "NCCB MLPA") dated as of November 1, 2001,
between NCCB, as Seller, and the Depositor, as Purchaser. We have also acted as
special counsel to and NCB Capital Corporation ("NCBCC") in connection with the
Mortgage Loan Purchase Agreement (the "NCBCC MLPA") dated as of November 1,
2001, between NCBCC, as Seller, and the Depositor, as Purchaser. The NCCB MLPA
and the NCBCC MLPA are referred to herein, collectively, as the "LOAN PURCHASE
AGREEMENTS." This letter is delivered to you at the request of NCCB and NCBCC
pursuant to the Loan Purchase Agreements.
We understand that the Certificates to be issued by the
Depositor pursuant to the Pooling and Servicing Agreement are divided into
classes. The Certificates of Classes X-0, X-0, X-0, X-0, X, X, X and E
(collectively, the "PUBLICLY OFFERED CERTIFICATES") will be sold to the
Depositor, Credit Suisse First Boston Corporation ("CSFB"), Xxxxxx Brothers, and
McDonald Investments as Underwriters (in such capacity, collectively, the
"UNDERWRITERS") pursuant to an Underwriting Agreement (the "UNDERWRITING
AGREEMENT") dated November 1, 2001, and pursuant to the Certificate Purchase
Agreement ("CERTIFICATE PURCHASE AGREEMENT") dated November 1, 2001, between the
Depositor and CSFB. The Publicly Offered Certificates will be offered for sale
to the public pursuant to a prospectus dated October 22, 2001 ("BASE
PROSPECTUS"), as supplemented by a prospectus supplement
D-2D-1
dated November 1, 2001 ("PROSPECTUS SUPPLEMENT" and along with the Base
Prospectus, the "PROSPECTUS"). The Certificates of Classes F, G, H, J, K, L, M,
N, O, A-X and A-CP (collectively, the "PRIVATELY OFFERED CERTIFICATES" and,
along with the Publicly Offered Certificates, the "Certificates") will be sold
to CSFB pursuant to the Certificate Purchase Agreement. CSFB will offer the
Privately Offered Certificates pursuant to a confidential offering circular
dated November 1, 2001 (the "CONFIDENTIAL OFFERING CIRCULAR"). Capitalized terms
not otherwise defined herein are defined as set forth in the Underwriting
Agreement or the Pooling and Servicing Agreement, as applicable.
The purpose of our professional engagement was to advise with
respect to legal matters and not to determine or verify facts. Many of the
determinations involved in the preparation of the Prospectus Supplement and the
Confidential Offering Circular were factual. We have not independently verified,
do not make any representation as to, and do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Prospectus Supplement or the Confidential Offering Circular.
In connection with the delivery of this letter, we have
examined originals or copies, certified or otherwise identified to our
satisfaction, of the Prospectus, the Confidential Offering Circular, the Loan
Purchase Agreements, the Pooling and Servicing Agreement, and other such
documents and records as we have deemed relevant or necessary as the basis for
the views expressed in this letter. We have obtained such certificates from and
made such inquiries of officers and other representatives of NCCB and NCBCC as
we have deemed relevant or necessary as the basis of the views expressed in this
letter. We have relied upon and assumed the accuracy of, such other documents
and records, such certificates and the statements made in response to such
inquiries, with respect to the factual matters upon which the views expressed in
this letter are based.
We have also assumed (i) the truthfulness and accuracy of each
of the representations and warranties as to factual matters contained in the
Loan Purchase Agreements and the Pooling and Servicing Agreement and underlying
the assumptions set forth below or that are otherwise factually relevant to the
opinions expressed in this letter, (ii) the legal capacity of natural persons,
(iii) the genuineness of all signatures (except for the signatures of officers
of NCCB and NCBCC) and the authenticity of all documents submitted to us as
originals, (iv) the conformity to the originals of all documents submitted to us
as certified conformed or photostatic copies, (v) the due authorization by all
necessary action, and the due execution and delivery, of each of the Loan
Purchase Agreements and the Pooling and Servicing Agreement by the parties
thereto and the constitution of each of the Loan Purchase Agreements and the
Pooling and Servicing Agreement as the legal, valid and binding obligations of
each party thereto, enforceable against such party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, liquidation, and similar laws relating to or affecting the
enforceability of creditors' rights generally, the effect of general equitable
principals (in equity or at law), and the availability of equitable remedies,
(vi) the compliance with the relevant provisions of each of the Loan Purchase
Agreements and the Pooling and Servicing Agreement by the parties thereto, (vii)
the conformity, to the requirements of each of the Loan Purchase Agreements and
the Pooling and Servicing Agreement, of the Mortgage Loan Documents delivered to
the Depositor by NCCB and NCBCC, as the case may be, (viii) the absence of any
agreement that supplements or otherwise modifies the agreements expressed in
each of the Loan Purchase Agreements and the Pooling and Servicing Agreement,
and (ix) the conformity of the text of each document filed with the Securities
Exchange Commission through the XXXXX system to the printed documents
D-2D-2
reviewed by us. In rendering this letter, we do not express any view concerning
the laws of any jurisdiction other than the federal laws of the United States of
America.
In the course of acting as special counsel to NCCB and NCBCC
we have responded to inquiries from time to time by their respective closing
coordinators, reviewed title insurance commitments and surveys and prepared most
of the loan documents for a majority of the Mortgage Loans (as defined in the
Loan Purchase Agreements) originated by NCCB and NCBCC. In addition, we have
participated in the preparation of the Prospectus Supplement and the
Confidential Offering Circular and, although we assume no responsibility for the
accuracy and completeness of the Prospectus Supplement or the Confidential
Offering Circular, based upon such participation but without independent review
or verification, nothing has come to our attention which causes us to believe
that, as of their respective dates or as of the Closing Date, either the
Prospectus Supplement or the Confidential Offering Circular contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that we express
no opinion as to (i) the financial statements and related notes, financial,
statistical and accounting data and supporting schedules included therein or
other information of that nature contained in or omitted from the Prospectus
Supplement or the Confidential Offering Circular, or (ii) information contained
in the computer diskette or the CD-ROM accompanying the Prospectus Supplement
which we assume, but have not verified, does not vary from and is not different
in any way from the information contained in the Prospectus Supplement. In that
connection, we advise you that we have, as to materiality, relied to the extent
we deemed appropriate on the judgment of officers and other representatives of
NCCB and NCBCC and their affiliates. In addition, in that connection we call to
your attention that, with your knowledge and consent, we have not (except as
described above) examined or otherwise reviewed any of the Mortgage Files in
connection with the transactions contemplated by the Pooling and Servicing
Agreement and the Loan Purchase Agreements, any particular documents contained
in such files or any other documents with respect to the Mortgage Loans.
In basing our opinions and other matters set forth herein "to
our knowledge," or words of similar import, the words "to our knowledge," or
such words of similar import signify that, in the course of our representation
of NCCB and NCBCC in the transactions contemplated by the Loan Purchase
Agreements, the Prospectus Supplement and the Confidential Offering Circular and
inquiry of the lawyers within our firm familiar with the transactions
contemplated by such documents, no information has come to our attention that
would give us actual knowledge or actual notice that any such opinions or other
matters set forth herein are not accurate. Except as otherwise stated herein, we
have undertaken no independent investigation or verification of such matters.
All opinions set forth herein are subject to, and may be limited by, future
changes in the factual matters set forth herein, and we undertake no duty to
advise you of the same.
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D-2D-3
This letter is solely for the benefit of the addressees and may not be relied
upon or used by, circulated, filed with any governmental authority or other
regulatory agency, quoted or referred to, nor may copies hereof be delivered to,
any other person (except to the parties involved in the Transactions and their
respective counsel as part of the closing set related to the Transactions)
without our prior written approval. We disclaim any obligation to update this
letter for events occurring or coming to our attention after the date hereof,
notwithstanding that such changes may affect the views or beliefs expressed in
this letter.
Very truly yours,
D-2D-4
